Executive Summary

According to the findings of an Ipsos poll conducted between February 25 – March 11, 2026 (all but three days of the two-week survey period were after the start of military action against Iran), small business views of their own business health remain stable. However, views of the national and local economies are more pessimistic.

This quarter, nearly seven in ten (69%) small business owners rate their business as being in good health. However, 28% of small businesses surveyed say the U.S. economy is in good health, down ten percentage points from Q4 2025 (38%) and in line with this time last year (29%). Thirty-five percent now say their local economy is in good health, down eight percentage points from last quarter (43%) and stable from Q1 2025 (37%).

Additionally, compared to last quarter, significantly fewer small businesses report planning to increase staff or investment in the next year. Thirty-seven (37%) percent of small businesses expect to increase investment in the next year, down from last quarter (44%) and Q1 2025 (43%). Likewise, 30% anticipate increasing staff in the next year, a twelve-percentage point drop from Q4 2025 (42%).

This quarter, inflation continues to be the top challenge small businesses say they face. After three consecutive quarters under 50%, a majority once again say inflation is their biggest concern (53%, up from 45% last quarter). Revenue remains the second most cited challenge at 30% (unchanged from last quarter). Notably, businesses in services and professional services have less favorable views across many measures than those in manufacturing and retail.  

Meanwhile, more small businesses are concerned about affording employee benefits. Nearly one in five (19%) say affording employee benefits or healthcare is a top challenge, up from 14% at this time last year. This is highest reading for this measure since tracking began in Q1 2023.