By Andy Medici – Senior Reporter, The Playbook, The Business Journals
Small-business owners are worried about how long they could survive a potential recession, but many believe AI tools like ChatGPT could help them weather an economic downturn.
A survey of 700 business owners by B2B Reviews found about 25% of businesses believe they couldn’t last more than three months if hit with a financial crisis. By comparison, about 31% believe they could survive more than a year.
But the survey also found business owners are hopeful AI tools like ChatGPT will keep their business running longer in the event of a recession — although experts say businesses need to be careful with how they implement the technology.
About 28% said they believe ChatGPT could help them keep the lights on in the event of a downturn, while 30% have already started automating tasks to save money.
Businesses that have automated have saved an average of around $4,000, with the top tasks automated including accounting and bookkeeping; invoicing and bill payments; and social media management. Just 13% said they have automated HR tasks such as payroll and employee onboarding — an area in which experts believe companies should tread carefully.
“What we’re learning with all the chatter around ChatGPT is the historic method of scaling business output through growing headcount can now be shortcut with a handful of AI tools, said Steven Rydin, CEO at B2B Reviews.
But he stressed that using AI tools to boost the production of existing employees could also lead to burnout.
“Unfortunately, for many teams this could mean longer days and more responsibilities. It might take the end of a recession for entrepreneurs to realize that just because you can do more with AI, doesn’t mean you always should,” Rydin said.
As we’ve reported, many businesses are turning to ChatGPT to slash their labor costs, but experts say that’s another area where companies should be cautious, as many employees are already nervous about those prospects.
READ MORE: How businesses should — and shouldn’t — use ChatGPT
Why some business owners are worried
B2B Reviews’ survey also shed light on small business owners’ shifting sentiments.
While business owners remain generally optimistic about their own prospects in an economic downturn, the ongoing debt ceiling debate has many of them on edge, with about 76% of businesses surveyed by the Small Business for America’s Future’s network saying a debt ceiling “default” would negatively impact their business.
In short, the “debt ceiling” is an artificial cap on borrowing set by Congress. As Congress authorizes spending, the Treasury Department sells debt to pay it — until it hits the debt cap.
About 59% of business owners said a default could result in higher interest rates and a harder time getting financing, and 66% believe a debt ceiling default could lead to a recession. Another 67% said such a default would stall the progress they have made in recovering from the pandemic.
But the earlier bank failures and a choppy economy are already threatening access to capital for small businesses. Here’s what companies need to know about navigating the capital crunch as lenders turn cautious and borrowers face more scrutiny — as well as questions businesses should be asking their bankers.
Most small businesses want Congress to raise the debt ceiling without any preconditions — Republicans have offered up spending caps set to 2022 levels in exchange for passing an increase — or a temporary debt ceiling bill to provide more time for negotiations.
Treasury Secretary Janet Yellen said the United States could hit the debt ceiling as soon as June 1.
“Small businesses are the backbone of our economy, and Congress must listen to their concerns and act responsibly to settle the debt limit debate,” said Shaundell Newsome, a small-business owner and Co-Chair of Small Business for America’s Future. “The uncertainty surrounding the debt ceiling is causing unnecessary stress and anxiety for small business owners who are trying to recover from the pandemic and strengthen our economy.”
Here are some small business grants you can apply for right now. Here are some other tax credits small businesses might want to take a closer look at.