Current Challenges

This quarter, inflation remains the top challenge cited by a majority of small businesses. Fully 57% of small businesses say inflation is their biggest concern, up slightly from last quarter (53%) and significantly from Q4 2025 (45%).

However, small businesses in services (66%), retail (59%), and manufacturing (58%) are more likely to cite inflation as a challenge than those in professional services (46%).

When asked why they selected inflation as their top issue, many business owners cited the cost pressures that come as a result:

“Inflation costs have made goods and services more expensive for everyone which has made our costs greater and also given our customers less disposable income.” – Survey respondent

Revenue continues to be the second most cited challenge (26%), followed by affording employee benefits and healthcare (20%). Concerns about employee benefits are more acute among businesses in professional services (23%) than retail (14%).