- 1 in 5 (20%) small and medium sized business (SMB) leaders say they may be forced to close their business in the next year as inflation remains their top concern.
- 87% say economic conditions have changed how they operate their business, leading 83% of SMBs to increase prices to offset rising costs.
- 57% still expect their business to remain stable over the next year, highlighting a growing disconnect between business confidence and decisions.
HOUSTON, July 29, 2026 (GLOBE NEWSWIRE) -- A new report from G&A Partners reveals that economic headwinds, recent federal and state legislation, and federal enforcement priorities are putting small and medium-sized businesses (SMBs) under compounding pressure, causing 87% to change how their businesses are run and 46% to lose confidence in achieving the “American Dream” even as many remain optimistic about the future.
According to the 2026 SMB Readiness Report, 1 in 5 (20%) SMBs say they may be forced to close their business in the next year, and 83% have increased prices to offset rising costs. Yet, the report also underscored resilience, with over half of SMB leaders (57%) predicting stability for their business over the next 12 months and 40% anticipating growth or expansion. Even as many businesses plan to freeze hiring or reduce the size of their workforce, a sizable portion plan to invest in their employees.
Based on a survey of 350 U.S. SMB decision-makers, the report illuminates the challenges causing more than 2 in 5 (41%) to regret or question whether owning a small business in America is worth it.
The Tradeoff Economy
Economic stress is climbing for SMBs, who say they’re most concerned about inflation, rising energy and fuel costs, and interest rates. Financial fears are causing 70% to delay expansion plans, and that figure only rises for SMBs operating in hospitality (86%), manufacturing (74%), and skilled trades (71%). To stay afloat, SMBs have taken out loans to sustain operations (51%) and hired (or are considering hiring) legal counsel to help recoup losses from tariffs (44%).
“One of the biggest takeaways from this report is that SMB leaders aren't managing one challenge at a time—they are navigating overlapping issues that demand a holistic approach and solution,” Jeff Williams, President and CEO at G&A Partners, said. “To recognize what SMB leaders are really up against, it’s important to understand how workforce gaps, economic volatility, and political uncertainty are interconnected. The reality is that SMBs are operating in a tradeoff economy, where nearly every decision to preserve stability comes at the expense of growth. Every investment carries greater uncertainty than it did just a few years ago.”
Growing Workforce and Labor Uncertainty
Labor shortages and disruption have also hit SMBs, causing them to delay or stop hiring (77%) and conduct layoffs (57%) to survive. As hiring slows, SMB operational strains grow:
- More than half (53%) have had to rely on fewer workers
- Almost half (47%) have reassigned employees into different roles
- More than one-third (40%) have turned away work or delay services due to staffing pressures
While not the sole factor, the survey reveals that immigration enforcement added new layers of complexity for SMBs. Across all survey respondents, more than 1 in 4 (26%) have had enforcement agents show up to their place of business, and 1 in 5 (20%) report agents detaining their employees. Even amid this environment, nearly half (47%) of SMBs that currently employ or have recently employed foreign workers say those employees have strengthened their business.
Division on Policy and Regulation
Survey results also show that SMB leaders are split about the impact of the One Big Beautiful Bill Act (OBBBA) on their businesses. Half of SMBs (50%) say the legislation has been positive for their business, while 46% report the OBBBA has had negative implications. OBBBA supporters say the legislation has made it easier to operate due to changes to gift and estate taxes (54%) and improved worker morale from overtime and tipping changes (46%). Meanwhile, OBBBA detractors say the legislation is making it harder to operate by increasing operation costs (68%), raising prices (61%), and creating administrative burdens (58%).
“Our findings show that today’s economy is affecting every small business differently, creating an increasingly divided small business landscape,” Williams said. “This is a tale of two SMB realities, where many leaders still believe in the long-term promise of their business, but they’re forced to make short-term decisions that prioritize stability over growth. That tension is a hallmark of the environment many SMBs are currently operating in.”
These financial and workforce challenges are prompting SMB leaders to prioritize:
- Cost reduction and operational efficiency (63%)
- Maintaining current revenue without taking on additional risk (59%)
- Investing in AI or emerging technology (20%)
Despite these pressures, SMB leaders remain cautiously optimistic about the future. Even as many businesses plan to freeze hiring or reduce the size of their workforce over the next year, these SMBs plan to face ongoing difficulties head on by investing in better benefits and healthcare (41%), increasing hiring (40%), increasing compensation (34%), and allocating or reallocating resources to compliance, HR, and risk management (28%).
The survey underscores that readiness isn’t defined by avoiding disruption — it's measured by how businesses adapt. To learn more about how SMBs are preparing for what’s next, download the full State of SMB Readiness Report.
Methodology
The G&A Partners SMB Readiness Report surveyed 350 small and medium-sized business decision-makers across the United States in May 2026 to better understand their perceptions of the economic, workforce, and strategic planning challenges they face.
About G&A Partners
G&A Partners, a leading national HR outsourcing provider and professional employer organization (PEO), has been helping entrepreneurs grow their businesses for over 30 years. By delivering world-class services in HR administration, benefits, payroll, and compliance, small and mid-sized businesses gain the time and freedom they need to focus on what matters most — their employees, products and services, and their customers. Headquartered in Houston, G&A Partners operates a network of regional offices across the U.S., delivering localized support through a national infrastructure of trusted HR experts.
Media contact
G&A Partners Public Relations
G&APartners@shiftcomm.com
