We Asked 500 Small Business Owners What They Thought About the Economy, Inflation and the Upcoming Election. Here Are the Results. Our survey of 500 small business owners revealed how business is going, what the biggest threats to their companies are and more.
By Jason Feifer Edited by Jessica Thomas
Key Takeaways
- Survey reveals 51% of small business owners find business improving from 2023, with 84% holding a bright outlook for 2025.
- Small business owners report that the biggest threats to their businesses are inflation, rising costs and economic uncertainty.
- Most small business owners (81%) are following the presidential election news closely.
The past four years have been marked by a uniquely challenging set of circumstances for small business owners — a once-in-a-generation pandemic, supply chain headaches, high (though somewhat dwindling) inflation and increasing labor costs, among other setbacks.
In the run-up to the consequential 2024 presidential election, Entrepreneur wanted to know how small business owners feel about topics ranging from the economy, to hiring, to stress and sleep habits. So, in partnership with Talker Research, we surveyed 500 small business owners to get some answers. We'll dive into the full results below, but first, the good news: Half (51%) of small business owners report that their business is doing better compared to 2023, and 84% are optimistic that 2025 will be better for business than 2024.
What small business owners are thinking about right now
In general, small business owners across the country feel optimistic about their businesses' prospects — with the most optimistic business owners located in the Northeast (56%) and Midwest (54%).
Two in five (43%) small business owners believe inflation will improve. Millennial small business owners are the most optimistic, with 49% reporting they believe it will get better.
Nearly half (48%) of respondents believe the economy will become stronger over the next 12 months.
- Men were more likely to believe that the economy would become "much stronger" in the next 12 months (21% versus 13%).
- Democrats were much more likely to believe in this, with 63% feeling it'll become stronger, versus 49% of Republicans and 39% of Independents.
Related: 6 Ways to Protect Your Small Business From Inflation Pressure
How business owners feel about AI
The majority (74%) of small business owners report feeling optimistic about artificial intelligence, with 28% saying AI is helping their business become more efficient, 27% saying AI will create new business opportunities and 19% saying AI is saving them money.
- 46% of baby boomer small business owners report that AI is not relevant to their business.
- 84% of millennial business owners see AI as helping their business in some way.
- 60% of small business owners say shifts in artificial intelligence, social media and search algorithms have not meaningfully impacted their businesses.
Related: AI for the Underdog — Here's How Small Businesses Can Thrive With Artificial Intelligence
What small business owners think about hiring
Although roughly half (47%) of respondents are not currently recruiting new employees, small business owners who are working to gain new talent are doing so by increasing wages (28%), offering the ability to work remotely (19%) and offering the ability to work fewer hours (16%).
About 20% of millennial business owners are providing additional professional development compared to Gen X (12%) and baby boomers (3%).
Most small business owners (71%) believe that the cost of goods will increase over the next 12 months, while 63% believe labor costs will increase.
What challenges small business owners are facing
Of those businesses reporting downward performance versus last year, the average business owner believes they can last 11.9 months.
- 20% believe they can only sustain the current state of the business for less than three months.
- 40% believe they will last under a year.
The top threats to small businesses reported by their owners are inflation (53%), rising operations costs (43%) — including housing, taxes, etc. — and economic uncertainty (41%).
Over half of respondents (51%) said they reacted to inflation over the past year by cutting non-essential spending.
- 38% say they raised their prices.
- 26% say they adjusted to lower profitability.
- Male owners (17%) were twice as likely as female owners (7%) to respond to inflation by renegotiating with suppliers.
- When it comes to experiencing cash shortfalls, it appears to go one way or the other — 47% had experienced a cash shortfall this year, while the same number (47%) reported this not being a problem so far this year.
- Owners in the Northeast (44%) were least likely to experience a cash shortfall.
Of the respondents who experienced a cash shortfall, almost half (46%) dug into their personal savings, while 30% said they stopped paying themselves. Others asked friends, family or investors for money (23%) and took out a line of credit (17%). Almost twice as many male owners (14%) got a bank loan as female owners (8%).
The majority of respondents (70%) say they are concerned the U.S. will enter a recession in the next two years. Concern about impending recession among business owners increases with age when looking at millennials (27%), Gen X (30%) and baby boomers (38%).
Related: The Most Common (and Preventable) Mistakes Small Businesses Make — and How to Avoid Them
How stress affects small business owners
A whopping 61% of small business owners report feeling stressed about the current state of their small business.
- Male owners were slightly less stressed overall (57%) versus 64% of female owners.
- Democrats were least stressed (52%) versus Republicans (67%) and Independents (61%).
- Younger businesses were more likely to indicate stress with 72% of businesses under one year reporting this versus 64% of 1-5 year businesses, 58% of 6-10 years, and 55% of 10 years plus.
Related: 9 Ways High-Performing Entrepreneurs Handle Stress
Of those respondents who report feeling stressed, 56% say they are getting less sleep because of it, while 38% say they are struggling to focus.
- Sleep affected younger generations most, with 61% of millennials, 52% of Gen Xers and 50% of boomers reporting less sleep.
- Millennials were most likely to report a loss of focus (43%) and say stress leads them to spend more money they can afford (41%).
- Gen Z were most likely to cite stress as a reason they are experiencing mental health issues (34%).
The average stressed small business owner loses seven hours of sleep per week.
- 20% of stressed small business owners say they lose three to four hours of sleep weekly.
- Millennial owners lose the most sleep (7.5 hours).
- Stressed male owners lose slightly more sleep each week than stressed female owners (7.3 hours versus 6.9).
How small business owners feel about the election
Most small business owners (81%) follow election news closely, with 45% reporting daily monitoring.
- More baby boomers (95%) than millennials and Gen X (80%) are following the election closely.
Related: 10 Significant Ways Your Taxes Will Be Impacted by a Kamala Harris Administration
Two in five (40%) respondents believe the policies of the next president of the United States could improve their business and expect that they will, while 39% don't have faith that any helpful policy will be passed.
- Equally, Democrats (15%) and Republicans (15%) believe government policy cannot materially improve their businesses, while Independents were slightly more pessimistic at 29%.
Related: 10 Significant Ways A Second Trump Administration Could Impact Your Taxes
