Small Businesses Tighten Cost Controls as Consumers Grow More Discerning
Event summary
- 76% of small business owners feel prepared to absorb financial shocks over the next year, per First Internet Bank's Do More Business™ Report.
- 46% cite inflation and rising expenses as their top concern, surpassing worries about customer demand or cash flow volatility.
- Half of businesses have raised prices, while 23% absorb higher costs to maintain competitiveness.
- 96% of consumers say supporting local businesses matters personally, but nearly 1 in 5 abandon purchases when preferred payment methods aren't available.
The big picture
First Internet Bank's report highlights a resilient but cautious small business sector navigating inflationary pressures. While digital banking tools have met basic expectations, the demand for financial education and proactive guidance signals an opportunity for banks to differentiate themselves in a constrained economic environment. The findings reflect broader trends of cost-conscious consumers and businesses prioritizing stability over aggressive growth.
What we're watching
- Cost-Pressure Dynamics
- How small businesses will balance pricing adjustments with customer retention amid rising costs.
- Banking Partnerships
- Whether banks can deepen relationships by offering strategic guidance beyond transactional services.
- Consumer Selectivity
- The pace at which payment flexibility and convenience will influence spending decisions.