In a country built on entrepreneurship and hard work, small businesses are often called the backbone of the American economy. But a new report from the Federal Reserve shows something troubling: small businesses are starting to stall.
According to the survey, more small businesses saw their revenues decline than rise in 2024 — a reversal from previous years. For the first time since the pandemic recovery began, revenue losses have outpaced gains. Meanwhile, hiring has slowed down, and fewer small business owners are turning a profit. Only 46% were in the black last year, while 35% actually lost money.
Rising costs, overregulation, and ongoing policy uncertainty are squeezing small business owners across the country. Inflation, still lingering despite White House claims of a strong economy, has driven up the cost of goods, labor, and rent. Meanwhile, confusion around taxes, mandates, and compliance requirements continues to mount — especially for family-run or solo operations without large legal or accounting departments.
And while the current administration points to strong jobs numbers and GDP growth, this report suggests the reality for small business owners is very different. It’s hard to feel confident when your profit margins are shrinking and you don’t know what new policy might hit your bottom line next.
Interestingly, while existing businesses are struggling, entrepreneurship is still alive. In February 2025, new business applications rose by nearly 8% — a sign that Americans still believe in free enterprise and self-reliance, even if the current climate makes it harder than it should be.
This shows that the American spirit isn’t broken. People still want to take charge of their futures, build something from the ground up, and contribute to their communities. But they need policies that support them, not bureaucratic red tape and top-down mandates that favor large corporations and overseas competition.
According to a recent Barron's article, small businesses employ nearly half of all American workers and are responsible for over 40% of the country’s economic output. When they hurt, the whole economy feels it. If Main Street is struggling while Wall Street continues to climb, it raises real concerns about who benefits most from current policies.
Policymakers in Washington would do well to tart listening more to the people actually running the businesses that fuel our towns, cities, and neighborhoods. America’s economic health depends not just on numbers on a spreadsheet, but on whether small business owners can grow, hire, and thrive without being buried in taxes, inflation, or red tape.
If we want real, lasting economic strength, we have to start supporting the people who built this country — not just the corporations that bought the biggest lobbyists.
