93% of small businesses fear recession, survey finds

2,500 small business owners will gather at the 10,000 Small Business Summit in Washington DC

HOUSTON — In the heart of the Heights, Alli Jarrett’s restaurant — Harold’s on 19th Street — has been serving Southern cuisine and Southern hospitality since 2013.

“Really good shrimp and grits, great burgers, salads,” she said.

She spent a year remodeling the century-old building and pays homage to its former occupant, another small business – Harold’s in the Heights – which has existed for more than 60 years.

“It’s a thriving, wonderful neighborhood where you share sugar with your neighbors,” Jarrett said.

But even after surviving the pandemic, companies like his must now prepare for a possible recession.

“It’s looming, and I think the best thing we can do is try to work smart,” she said.

Among the issues it faces are hiring and supply chain issues.

According to a new survey by Goldman Sachs, 93% of small businesses “fear a coming recession”.

That’s why Jarrett and thousands of small business owners are heading to Washington DC this week to attend the 10,000 Small Business Summit – where they can meet government officials face-to-face – amid so much uncertainty. .

“Try to bring about change collectively with our voices so that we advocate for ourselves and for our staff members and for all the families we feed,” Jarrett said.

John Diamond is the Director of Public Finance and Kelly Fellow in Public Finance at Rice’s Baker Institute and he said small businesses face a universal labor shortage on top of other factors that make fear of a recession.

“We’re facing unprecedented levels of inflation, and the Fed is committed to getting that inflation under control…they’re going to do it by putting slack in the economy, raising interest rates,” Diamond said. .

And if a recession hits, it’s even harder for small businesses to pull through.

“Lenders aren’t willing to lend them the money they need to get through the recession, but they don’t have as many options for cutting expenses as big corporations do,” Diamond said.

But they are essential to the economy and, he said, they are often seen as the engine of job growth.

“They’re going to be about one-third of wages and one-third of employment, so they’re a big chunk of employment in the United States and that’s going to be even more true in Houston,” Diamond said.

This is something Jarrett knows firsthand.

“That’s what small business is…that’s that we’re job creators,” Jarrett said.

And as she continues to push, she does so for herself and for the future of her employees.

“That’s probably what my grandma told me years and years ago, is just pull your boots up and don’t cry and keep going,” Jarrett said. .

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