New “Check Up” Survey: Resilient Small Business Performance in 2025 Fuels Momentum for 2026

By SBE Council at 24 February, 2026, 12:10 pm

Revenue Focus, AI Adoption, Pro-Growth Policies Boost Competitiveness and Bottom Lines through Easing Headwinds

FOR IMMEDIATE RELEASE

Washington, D.C. – America’s small business employers experienced a financially strong 2025 and have entered 2026 in a solid position, according to the latest “Small Business Check Up Survey” released today by the Small Business & Entrepreneurship Council (SBE Council). In the survey, 71% of small business owners reported that the financial performance of their business improved in 2025 compared to 2024, and 84% said their performance met or exceeded expectations. According to SBE Council President & CEO Karen Kerrigan, resilient small business owners and their teams are confidently tapping into new technologies and pursuing growth strategies that are helping them navigate challenges, opportunities, and lingering uncertainties.

“Over the course of last year consistent concerns such as inflation, economic uncertainty, and tariffs lingered over decision-making, but small business owners confidently pursued new technologies and investments that helped them boost revenue and compete more effectively. These actions bolstered their financial health over the course of 2025, setting many businesses up for a strong 2026. In fact, 92% of small business owners describe their current condition as stable or growing,” said Kerrigan.

Kerrigan pointed to tax relief and incentives provided by the Working Family Tax Cuts Act (One Big Beautiful Bill), which served as a foundation for stability and investment. According to the survey, 61% of small business owners reported positive cash-flow effects from the tax cuts, with permanency of the 20% small business deduction and lower personal rates cited as the most beneficial in 2025. Looking forward, 73% anticipate a positive impact from the tax provisions – primarily through improved cash flow, stronger financial stability, and price competitiveness. Small business owners are continuing to absorb the benefits and use of various tax provisions for 2026, but 78% stated they are currently benefiting from at least one provision.

TRUMP Accounts Gaining Traction: The survey reveals noteworthy interest and engagement in the new accounts advanced as part of the July 2025 tax bill: 16% of small business owners indicate they will make contributions to the accounts as a benefit, and 36% are currently researching the possibility.

Headlines have focused on the role that big companies are playing in funding these accounts, but Kerrigan observed that small businesses have the potential to be the biggest players in jumpstarting the American Dream. For example, if 16% of all small employers make Trump Account contributions this year, that equates to more than a million small businesses that will help fund accounts*.

“Small business owners are hunting for new and creative ways to reward and support their employees. Contributions to Trump Accounts are a simple and meaningful way to support team members and their families. Even small contributions will be appreciated by employees and can add up to big balances over the lifetime of the account for their children. I am not surprised that small business owners are signaling they could play an outsized role in the reach and impact of Trump accounts,” said Kerrigan.

*According to the latest Census Bureau data (2022), there are 6,281,253 employer firms that have 2-100 employees (the sample of this survey). Based on SBE Council calculations and survey responses, if 16% of small employers make contributions to Trump Accounts, this would total 1,005,000 small businesses making contributions. Moreover, 36% of small employer firms researching Trump Accounts, means that an additional 2,261,251 small businesses are looking into the possibility.

See: Trump Accounts and Small Business: Jumpstarting the American Dream

2026 Outlook. While small business owners are optimistic about their own prospects for 2026, their view of economic conditions is somewhat nuanced: 48% rate the U.S. business climate as good or excellent, 28% as average, compared with 23% who view it negatively. Still, 90% state that the financial position of their business will improve (52%) or remain steady (38%) over the next six months. And, 81% of small business owners express confidence that 2026 will be a positive financial year for their firms.

Top Issues. Inflation, economic uncertainty and tariff policy remain top concerns for small business owners. However, over time, inflation and economic uncertainty have eased in intensity. (See chart below.)

When asked about inflation and whether it has eased over the past 6 months, 51% of small business owners responded that this has been the case. Forty-six percent of owners take the opposite view with 26% disagreeing somewhat and 20% strongly. In general, small business owners remain concerned about inflation – 73% express as much – yet concern appears to be moderating with 46% somewhat concerned. However, 27% remain very concerned.

Regarding tariffs, 62% express concern about the direction of tariff policy over the next 12 months. The direct impact on their firms is mixed: 41% report that tariffs are having no impact on their business, 37% report a slight negative impact, and 11% describe the impact as significant.

How They Did It. For small business owners who reported positive performance and balance sheets for 2025 (87% of respondents), their focus on revenue generation was the top factor contributing to their success (51%). That was followed by the adoption of new technologies such as AI (38%), expanding capacity to grow (32%), the expansion into new markets or new product/service offerings (31%), spending cuts (31%), and paying off or reducing debt (27%).

In terms of AI adoption, many small business owners noted its transformational effect. The following comment made by one owner captured the sentiment of many: “We started to implement AI technology, which lowered overhead costs and enhanced productivity. Projects that took weeks to do are now done in a couple of days.”

AI and Workforce Impact. The adoption of AI among small businesses is a development SBE Council has tracked since 2023. Adoption and the deeper embedding of AI are growing, and owners continue to report significant benefits. In this survey, approximately 77% report using AI tools, and owners continue to convey that its role is more transformative rather than destructive when it comes to jobs: 56% report AI is creating new opportunities or reshaping roles without reducing headcount, while 19% believe it is eliminating more jobs than it creates.

Constraints. Not surprisingly, the survey indicates that cost pressures associated with providing health insurance are pervasive: 50% of small business owners report that renewal costs increased for this year, including 17% who say costs increased significantly. Sixty-one percent of small business owners believe health insurance companies are most responsible for high costs and limited choices in the marketplace.

Access to capital remains a challenge for many small businesses. A significant share of respondents (43%) stated that the lack of capital or financing is limiting their ability to invest, grow, or pursue new opportunities.

“Rising health care costs and access to capital are two areas where policy reforms and solutions are needed to strengthen the small business economy,” Kerrigan said. “With half of small employers reporting higher renewal costs, the need for solutions like the House-passed Lower Health Care Premiums for All Americans Act is urgent, as it will help to lower premium costs and expand affordable coverage options. Moreover, the House-passed INVEST Act must rise as a priority for the Senate. The bipartisan bill will support startups and small to mid-size businesses at various stages of growth, and across all sectors. It is low hanging legislative fruit that will positively impact many small businesses and the U.S. economy,” added Kerrigan.

Labor shortages remain a challenge for many small businesses, but intensity various among respondents: 33% report no impact on operations, 34% report slight impacts that are manageable, 24% report moderate impacts with noticeable effects on the business, and the remaining report major or severe impacts. As noted by Kerrigan, workforce gaps and shortages affect operational capacity, competitiveness, and small businesses disproportionately affected miss out on opportunities.

“While some small business owners have turned to AI to fill workforce gaps, an actual human is needed for many jobs. There are many jobs that AI cannot replace and will not replace. The longstanding and current challenge faced by small business owners in finding the skilled individuals they need to operate, grow, and compete is testament to that,” added Kerrigan.

About the Survey

The SBE Council “Small Business Check Up Survey” of 539 small business employers (employee size 2-99) was conducted online by TechnoMetrica from February 10-13, 2026, with a credibility interval of +/- 4.4 percentage points.

CONTACT: Karen Kerrigan, kkerrigan@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For more than 30 years, SBE Council has advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. X: @SBECouncil

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