The National Federation of Independent Business (NFIB) has released the 11th edition of its quadrennial report, Small Business Problems and Priorities, which provides a detailed analysis of the challenges facing small business owners across the United States. This year’s report, based on a nationwide survey of 2,873 small business owners conducted from February through mid-April 2024, highlights the significant pressures small businesses continue to face, with inflation, tax burdens, and uncertainty topping the list of concerns.
Cost Pressures Dominate Concerns
Here’s a rundown of the top concerns small business owners have identified, according to the NFIB report:
Cost of Health Insurance: Consistent with trends since 1986, the “Cost of Health Insurance” remains the top chronic issue for small business owners.
Cost of Supplies/Inventories: Ranking 2nd in 2024, this issue surged in importance due to recent inflation, rising from 12th place in 2020. The percentage of owners citing it as a critical problem more than doubled from 9% in 2020 to 20% in 2024.
Cost of Fuel and Electricity: The “Cost of Natural Gas, Propane, Gasoline, Diesel, Fuel Oil” is now the 6th most severe problem, with nearly 25% of respondents identifying it as critical. Similarly, “Electricity Costs” ranks 10th, with 16% of owners labeling it a critical issue.
Interest Rates: Significantly increasing in importance, “Interest Rates” jumped from 56th in 2020 to 13th in 2024, reflecting the impact of rising borrowing costs on small businesses.
Tax Issues Remain Prominent
Federal Taxes on Business Income: Ranking 4th overall, this remains the most severe tax-related issue for small businesses. A quarter of owners report it as a critical problem, a 5-point increase from 2020.
State Taxes on Business Income: Ranked 7th overall, with 22% of respondents citing it as a critical concern, up from 19% four years ago.
Uncertainty and Workforce Challenges
Economic and Government Uncertainty: “Uncertainty over Economic Conditions” rose from 9th in 2020 to 3rd in 2024, with 22% of small business owners considering it a critical issue. “Uncertainty over Government Actions” ranks 8th, critical for 23% of respondents.
Locating Qualified Employees: Workforce challenges continue to be a significant concern, ranking 5th overall, with 28% of owners finding it critical.
Implications for Policymakers
Holly Wade, Executive Director of the NFIB Research Center, emphasized the importance of understanding these challenges as policymakers at both the state and federal levels consider legislation that impacts small businesses. “This survey helps the public understand the issues affecting the small business sector. Small businesses employ nearly half of the private sector workforce, and this publication makes clear where lawmakers should focus their attention to strengthen Main Street and every community in which they operate,” Wade stated.
The NFIB report provides valuable insights into the priorities of small business owners, offering guidance to lawmakers on crafting pro-small business policies that address the most pressing concerns identified in the survey.
This article, “New NFIB Survey Reveals Top Concerns for Small Businesses: Inflation, Taxes, and Uncertainty Lead the List” was first published on Small Business Trends