Executive Summary

According to the poll conducted between August 4–18, small businesses report stable business health and cash flow. In fact, more rate their business’ health as very good compared to last quarter and seven in ten small businesses report that their business is in good health. A similar percentage report being comfortable with their cash flow (72%). Twenty-two percent are very comfortable, up from last quarter (16%) but still down from Q3 2025 (31%).

While the overall Index score increased, worries over inflation and the broader business environment persist. A majority (at least 50%) of small businesses say that inflation is the biggest challenge for the third consecutive quarter. Also, small business views of the national and their local economies remain muted: Just 27% of small businesses believe that the national economy is in good health (in line with Q2 2026), while 33% say the same about their local economy (unchanged from last quarter).

Additionally, slightly fewer small businesses expect increased revenue in the next year, and all future expectation measures (revenue, staffing, and investment) are well below where they were at this time last year. In line with last quarter, thirty-eight percent report that they are planning to increase investment in the next year. Similarly, 36% anticipate increasing staff, in line with Q2 2026 (35%). However, both respective measures are down from Q3 2025 (47% and 44%, respectively).

Continuing what is now a year-long trend, older small business owners tend to be more pessimistic than those businesses owned by younger generations. For example, small businesses owned by Baby Boomers or older individuals are more pessimistic than their Gen Z or Millennial counterparts across every measure of future expectations: Revenue (51% vs. 71%), staffing (19% vs. 46%), and investment (18% vs. 50%). Similarly, when looking at a business’s length of operation, younger businesses hold more positive views of the future than older businesses.

Taken together, the above small business responses highlight the real-time resilience and strength of the U.S. economy even as inflation is causing small business owners to be more cautious in their future plans.

Turning to our spotlight topic this quarter, nearly all small businesses recognize the importance of offering benefits for the overall employee experience. Overwhelming majorities of small businesses say that benefits not only demonstrate care for employees and their families, they also boost productivity, engagement, and morale. They also see benefits as helping to retain employees and to attract new ones.

While the number of small businesses offering benefits has not changed, there has been an uptick across many of the types of benefits offered, including healthcare, paid vacation, and retirement. In fact, more small businesses report offering health insurance (46%, up from 41% in Q2 2025), paid vacation days (40%, up from 30%), dental/vision insurance (31%, up from 21%) and retirement plans (27%, up from 22%) compared to last year. Most small businesses are also investing in the growth and development of their employees. 75% of small businesses report investing in training or growth opportunities for their employees. But 45% also say that they don’t have the time or resources to focus on their employees the way they would like.

Finally, most (67%) small business owners wish they had outside help with selecting benefits, and many report experiencing strain from challenges keeping up with pay demands to stress and burnout. Most small businesses believe their employees would rate the workplace culture and leadership at their business as good, but fewer feel they would say the same of their total compensation package.