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.
Related: Small Business Owners Are Taking 3 Creative Actions to Achieve Their Goals in 2024, According to a New Report
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.
Related: Amazon CEO Mandates Employees Work in the Office 5 Days Per Week Starting January: 'Strengthening Our Culture Remains a Top Priority'
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
Local News
