Current Challenges

Inflation remains the top challenge this quarter, with 54% of small businesses saying it is their biggest concern. After a decline in concern at this time last year, this is now the third consecutive quarter where at least 50% have cited inflation as a top challenge.

By generation, Gen X owners (59%) are more likely than Gen Z or Millennial owners (48%) to say inflation is a top challenge.

Revenue remains the second most cited concern at 24%, followed by supply chain issues (16%). Affording employee benefits or healthcare (14%) has eased six percentage points from last quarter (20%) and is back in line with its readings for much of 2025. Twelve percent of respondents rate access to capital, which we began tracking for the first time this quarter, as a top challenge.

On revenue, smaller businesses feel more pressure, with 28% of those with fewer than five employees citing it as a top challenge compared to 16% of those with 20 or more. Concern about affording employee benefits follows the opposite pattern, as businesses with 5-19 (23%) and 20 or more (21%) employees are more likely to say it is a challenge than those with fewer than five employees (9%).