(The Center Square) – The economy and inflation are some of the top concerns for Michigan small business owners.
This is according to the Small Business Association of Michigan’s quarterly survey, which was recently released.
It found that 89% of the survey respondents said their business is facing either somewhat or substantial higher costs compared with past years.
“Small business owners are being crushed on both ends – higher costs, but a need to invest in technology and employee retention,” said Brian Calley, president and CEO of the association.
Rising expenses aren’t just on the operational side of these businesses. It also means increasing costs for payroll and healthcare.
The survey found that 70% of the survey respondents saw an increase of more than 5% in the cost of compensation, which includes benefits such as healthcare.
As a part of that, 40% said health insurance premiums rose by 10 to 15% over last year, while 37% saw increases of 16% or more.
Calley applauded small businesses for standing by their employees by helping support these increased costs, despite the impact on their businesses.
“Despite significant cost increases, our state’s small businesses continue to invest in their staff by offering health care benefits and higher wages, but these pressures limit their expansion, which is bad news for our state’s overall economic forecast,” he said.
The survey found that the overall economy was the biggest concern facing small businesses, with inflation and the availability or quality of labor coming in second.
Confidence in the future of their businesses is also an ongoing concern.
Overall, in 2025, 24% said the confidence in the future of their business increased, while 27% say their confidence decreased. The remaining 48% was unchanged.
Small business owners are uniquely susceptible to economic changes, according to the association.
“Smaller businesses are more vulnerable to cost increases and faced with making drastic decisions, such as curbing employee benefits or considering business closure,” it explained in a press release about the report.
Additionally, the report found that 51% of small businesses are having challenges with maintaining staffing, 66% are preparing for a possible recession, and 32% saw a decline by more than 5% in their gross revenues.
Of the survey’s respondents, 80% had 50 employees or less. The Small Business Association of Michigan has over 33,000 members across Michigan.
