Updated
March 31, 2025
Published
November 25, 2024
Higher costs are souring the mood for small businesses on Main Street.
Just released! The Q1 2025 MetLife and U.S. Chamber Small Business Index is live. Find the latest data on small business confidence, top challenges, and a special section on workforce readiness insights.
Corporate Transparency Act (CTA) reporting requirements suspended: The Treasury Department announced that it will not enforce any penalties or fines associated with the beneficial ownership information reporting rule for U.S. reporting companies under the CTA. Our guide on CTA requirements is here with updates and information.
This Week's Highlights
- Inflation remains the strongest headwind for small businesses and higher costs anticipated by new tariffs is cause for concern.
- Plans for growth are declining, but small business owners remain confident in their local economy. 48% of small employers plan on increasing staff this year despite economic concerns.
New Small Business Data
MetLife & U.S. Chamber of Commerce Small Business Index for Q1 (March 26, 2025)
Summary: Confidence of local economy remains steady as uncertainty pushes other small business perceptions downward and plans for growth on Main Street stall.
- 29% of small business owners are positive about the nation’s economic health (3 points lower than last quarter).
- 37% of small business owners are positive about the health of their local economy (1 point lower than last quarter and 1 point lower than this time last year).
- 58% of small business owners rank inflation as their top concern (3 points higher than last quarter and the 13th consecutive quarter where inflation tops the list).
- 35% of small business owners rank revenue as their biggest challenge (10 points higher than last quarter and highest percentage in 4-years).
- 63% of small businesses are confident in the health of their own business (4 points lower than last quarter) and 66% are comfortable with their current cash flow (6 points lower than last quarter).
- 20% of small businesses increased staff over the past year (2 points lower than last quarter).
- 94% of small business owners say that trade schools or technical colleges do a good job preparing new employees to enter the workforce. 72% say the same for colleges and universities and 51% say that high school does a good job preparing students for jobs.
- 63% of small business owners are more likely to hire an entry-level employee if they have internship or work-study experience.
- 67% of small business owners offer flexible working hours to attract talent and pay transparency ranks second (62%) in offerings by small employers to recruit good workers followed by higher pay (55%), paid sick leave (55%) and employee referrals (50%).
WSJ / Vistage Small Business CEO Confidence Index (March 26, 2025)
Summary: Post election bump was reversed and small business confidence is at last summer’s level.
- 21% of small business owners say the economy has improved (9 points lower than February) and 42% say the economy has gotten worse (20 points worse than February).
- 27% of small business owners believe the economy will improve in the next 12 months (19 points lower than February) and 43% believe the economy will worsen (11 points worse than February).
- 48% of small businesses plan on increasing employees this year (2 points higher than February).
- 36% of small businesses are expecting to increase fixed investments in the next 12 months (2 points higher than February).
- 59% of small businesses expect increased revenues in the next 12 months (6 points lower than February) and 47% believe profitability will improve (7 points lower than February).
- 8% of small business owners believe that across-the-board tariffs will have a positive impact on their business (3 points lower than February). 64% believe tariffs will have a negative impact (10 points higher than February).
Federal Reserve’s 2024 Small Business Credit Survey (March 27, 2025)
Summary: Survey of 7,600 small employer firms, made possible through an annual collaboration of all 12 Federal Reserve Banks, shows that inflation remains front-and-center on small businesses’ radar.
- 75% of small businesses cited rising costs of goods, services, and/or wages as their biggest challenge. This is the 4th year in a row that rising costs topped the list.
- More small firms reported revenue decreases than revenue increases in 2024, marking a departure from the previous 2-years.
- There was not much of a difference in application volume and approval rates for small business loans in 2024 compared to the previous year. However, loan applications at large banks declined by 5%.
- The share of firms with no debt (29%) remained unchanged and the share of firms with over $100,000 in debt also remained unchanged from 2023.
- 59% of firms sought new financing in the 12-months leading up to the survey. 41% received the requested amount. 36% received some of what they requested and 24% were denied financing.
Registered Agents, Inc. Monthly Business Formation Report for December 2024 (March 10, 2025)
Summary: Data aggregated from federal and state Corporations Division data provide a look into state and national trends for new business formation.
- Month to month: new business formations in December increased 3% compared to November, totaling 389,215 new registrations nationwide.
- Year to year: new business formations in December decreased 5% compared to December 2023, totaling 7,043 fewer registrations nationwide.
- Utah experienced a 42% surge of new registrations in December compared to the previous month (rebound from a mid-2024 slowdown). North Dakota experienced a 26% increase in December (record oil production) and Oklahoma saw a 20% increase (greater focus on pro-business policies).
- New Mexico, Louisiana, and Vermont experienced December’s sharpest drops in new businesses.
- Colorado’s business formation numbers top this list as a percentage of population and Florida is also a top contender fueled by construction activity as the state recovers from hurricanes.
National Federation of Independent Business (NFIB) Small Business Optimism Index (March 11, 2025)
Summary: Small business owners’ downward slide steepens. Labor quality overtakes inflation as top concern.
- 37% of small business owners expect the economy to improve (10 points lower than January).
- 12% of small business owners believe it is a good time to expand their business (5 points lower than January).
- -12% of small business owners reported higher sales in the past 3-months (2 points better than January) and 14% are expecting higher sales (6 points lower than January).
- -1% of small business owners are planning inventory investment in the next 3-months (down 1 point from January).
- 19% of small business owners reported labor quality as their top concern, overtaking inflation’s spot as the top concern for the first time in 4-years.
- 38% of small businesses reported job openings they could not fill (3 points higher than January).
- 33% of small business owners raised compensation in the past 3-months (no change from January) and 18% plan on raising compensation in the next 3-months (down 2 points from January).
- 32% of small businesses raised their prices (10 points higher than January) and 29% are planning on raising prices in the next 3-months (3 points higher than January).
- 58% of small business owners reported capital outlays in the last 6-months (no change from January) and 19% are planning capital purchases in the next 3-months (down 1 point from January).
- -3% of small business owners expect better credit conditions in the next 3-months (1 point better).
- The average rate paid for short maturity loans was 8.8% (down 0.6 (60 basis points)) and 24% of small business owners report borrowing on a regular basis (down 3 points from January).
- 3% of small business owners reported that financing was their top problem (no change from January).
Goldman Sachs 10,000 Small Business Voices National Survey (March 6, 2025)
Summary: Small business owners are positive about their finances, but are pausing expansion plans because of inflation.
- 69% of small business owners feel positive about their financial outlook in 2025.
- 46% of small businesses expect to add jobs this year.
- 88% of small business owners believe that lower interest rates will help their business.
- 54% of small businesses believe that the Trump Administration should address inflation, making it the top small business priority.
- 57% of small business owners believe their business is being held back by regulatory red tape.
- 60% of small business owners want Congress to simplify the tax code and 74% want Congress to prevent the 20% deduction that applies to most small businesses from expiring at the end of 2025.
Fiserv Small Business Index (March 3, 2025)
Summary:Growth in spending slowed in February.
- Month-over-month sales at small businesses in February rose 0.1% from January and year-over-year sales at small businesses rose 2.1% compared to February 2024.
Small Business Fast Facts
CNBC | SurveyMonkey Small Business Survey for Q1 2025 (February 18, 2025)
Summary:A growing percentage of small business owners expect inflation to rise, and higher prices are curbing Main Street employers’ appetite to add staff.
- Inflation continues to top the list of concerns by small business owners. 63% believe inflation will continue to rise (5 points higher than last quarter) and 36% of small business owners believe inflation has peaked (4 points lower than last quarter).
- 76% of small business owners rate the economy from fair to excellent and 52% of small business owners expect increased revenue in the next 12 months (wiping out the 11-point gain experienced last quarter).
- 55% of small business owners follow Diversity Equity and Inclusion (DEI) practices, with largest percentage (38%) citing anti-discrimination or harassment policies as examples. Workplace culture was cited as the top benefit (70%) from following DEI practices.
- 28% of small business owners expect to increase staff in the next 12 months (down 8 points from last quarter) and 10% plan on decreasing the number of full-time employees.
- 37% of small business owners expect that changes in tax policy in the next 12 months will have a positive effect on their business (5 points lower than last quarter) and 33% believe changes will have a negative effect (5 points higher than last quarter).
- 24% of small business owners expect that trade policy in the next 12 months will have a positive impact on their business, compared with 43% who expect a negative impact.
- 42% of small business owners expect that developments in technology that occur in the next 12-months will positively impact their business, compared with 13% who expect a negative impact.
JPMorganChase 2025 Business Leaders Outlook (January 7, 2025)
Summary: While small business owners are bullish for 2025, workforce shortage challenges threaten to keep costs high.
- 66% of small business owners are predicting higher sales in 2025 and 67% expect higher profits in 2025.
- 64% are investing in increased sales by adding products (35%), increasing advertisement spend (34%), and increasing social media campaigns (31%).
- Nearly 80% of small business owners are either already implementing artificial intelligence (AI) or considering adopting AI this year.
- 60% of small business owners are optimistic about the local economy (up 3 points from the mid-year report) and 69% of small businesses are not expecting a recession in 2025.
- 40% of small business owners say they are facing labor shortage challenges, including recruiting and retaining quality employees.
- 47% plan on increasing wages to be competitive in the labor market. 40% are offering flexible working arrangements. And, 35% plan on increasing benefits such as healthcare, 401(k)s, and child care.
- 59% of small business owners view wages as their most significant cost driver and 56% have raised prices to try and offset increased costs.
Honoring America's Top Small Businesses
Looking for More Small Business Insights?
Watch Tom Sullivan talk all things small business with Jim Fitzpatrick on ASBN (America's Small Business Network), including the latest news and policy updates for Main Street business owners. New episodes are added every month so that you can watch them anytime.
Small Business Forecast: The Podcast
The U.S. Chamber of Commerce's Tom Sullivan and National Federation of Independent Business's Holly Wade summarize what’s going on with small businesses and provide their forecast every week on the Small Business Forecast: The Podcast.
From Main Street
About the authors
Thomas M. Sullivan
Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.
