What Are the Top Issues Facing Small Businesses Right Now?

As of mid-March 2026, small businesses in the US continue to show resilience despite ongoing economic pressures. The NFIB Small Business Optimism Index was at 98.8 in February, slightly above the long-term average, with many owners reporting higher sales, increased profits, and less uncertainty than earlier in the year. Surveys from groups like the Small Business & Entrepreneurship Council and Bank of America indicate strong confidence—over 90% expect their own business to improve or stay steady, and 74% foresee revenue growth.

That said, challenges still remain, heightened by persistent inflation (around 2.4–2.7%), geopolitical issues like the Iran conflict pushing energy prices higher, tariff policies, and recent legislative policy changes. Here’s a summary of the main issues facing small businesses today, based on NFIB surveys, industry reports, and expert analyses in early 2026.

Inflation and Rising Operating Costs

 Inflation remains the top concern for many, cited by 31% in recent polls as a major challenge. Even as it eases, costs for materials, fuel, electricity, and supplies stay high—especially with oil prices fluctuating due to the ongoing Middle East conflict. Small businesses continue to face pressure on margins, forcing them to raise prices or cut costs. Health insurance premiums are also a major issue, with 50% experiencing higher renewal costs this year, and many blame insurers for limited options and high prices.

Labor Quality and Talent Shortages

Finding and retaining skilled workers remains challenging, though it’s slightly easing (15% of owners cite it as their biggest problem in February, down from previous months). Tight markets in sectors such as tech, healthcare, and logistics persist, with 33% of employers unable to fill open positions. Anti-immigration policies could worsen shortages by limiting labor inflows, driving up wages, and increasing hiring costs. Many owners work longer hours to make up for it, and employee burnout raises retention risks.

Tariffs and Policy Uncertainty

Tariff policies are a major concern (62% worry about the future direction). New or expanded tariffs raise input costs, disrupt supply chains (59% still feel impacts), and create uncertainty—especially for importers or those relying on global goods. Alongside regulatory changes (like BOI reporting and labor mandates), this makes long-term planning more difficult.

Competition from Large Businesses and Poor Sales Expectations

Competition from big corporations is increasing, with 8% citing it as their top issue, the highest in years. Many small firms struggle against economies of scale, online dominance, and aggressive pricing from larger companies. Recent reports show a rise in pessimistic sales expectations, as some owners note softer consumer demand amid higher daily costs such as gas and groceries.

Access to Financing and Cash Flow

Higher interest rates make borrowing more expensive, although credit conditions are improving slightly. Cash flow remains a priority (29% in some surveys), as companies balance rising costs with unpredictable revenue. Access to credit affects strategies for 37% as they prepare for the year.

Cybersecurity, AI, and Tech Risks

Cyber threats are increasing as digital reliance grows, and small businesses face higher risks of shutdowns and data breaches. AI adoption offers benefits like improved efficiency and automation, but also brings challenges: potential misuse, governance gaps, implementation costs, and the need for workforce reskilling.

Supply Chain Disruptions and Other Pressures

While improving, lingering issues from global events still cause costs and delays. Other problems include credit card swipe fees, regulatory burdens, and sector-specific trends (e.g., declining alcohol demand affecting bars and restaurants).

Overall, the mood is cautiously optimistic—small businesses are adjusting with lean operations, AI tools, and a focus on efficiency. Many rely on potential tax relief, deregulation, and stabilized energy prices to reduce their burdens.