If you’re a small business owner, you’ve probably had a turbulent past few years.

For the businesses that survived the worst of the Covid-19 pandemic shutdowns and supply chain issues, the economic recovery brought back customers willing to spend.

But, more recently, business-owners have had to contend with record inflation driving up the cost of doing business while also making customers think twice about their spending habits.

The result has been something of a mixed bag: Small business owners nearly doubled their revenues between July 2021 and July 2022, according to a new report from Kabbage, the small business lender owned by American Express.

However, while revenues grew by 87% over that time, small businesses’ profits were almost stagnant during that period, actually dropping by 4%.

The reason: Higher cost of goods and a competitive labor market that favors workers have forced small businesses to increase spending to remain competitive, eating into any profits they might have enjoyed from the large overall jump in revenue.

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