Founder Data ReportSmall Business Owners Just Named Their Biggest Problem. Last Month It Was a Different One.
You can’t afford to risk your business without a Sidekick at your side.
In July 2026, 27% of owners said labor quality was their single most important problem. In June, the top answer was inflation. The honest finding in forty years of this survey is not which problem wins — it is how fast the winner changes.
Quick answer: In July 2026, small business owners named labor quality or availability as their single most important problem — 27% chose it, up 8 points in one month and 15 points above its 12% historical average. Taxes came second at 16% and inflation third at 14%, after inflation fell 7 points from June, when it had been the top problem. Those three, plus poor sales, the cost of labor and the cost of insurance at 8% each, are where almost all of the answers sit. But the ranking is a snapshot, not a standing fact: it changed hands between June and July, and over the 40 years NFIB has asked this question every one of these problems has been both near-zero and near the top.
- July 2026: labor quality 27%, taxes 16%, inflation 14%. Those are the top three.
- In June it was inflation first. Inflation fell 7 points in one month and labor quality rose 8 — the largest one-month moves in the table.
- Owners pick one problem, so the ten answers compete for the same 100 points. A problem climbing means another one is being demoted, not solved.
- Labor quality at 27% sits 15 points above its own 12% historical average, and 2 points below its all-time high of 29%.
- Since 1986 inflation has ranged from 0% to 41% of owners, financing and interest rates from 0% to 37%, poor sales from 2% to 34%. Every problem on this list has had its turn.
- So the question “what is the biggest problem facing small business” has no durable answer. Which means running your business off this month’s headline is running it off noise.
What owners actually said in July
NFIB has asked the same question every month since 1986: what is the single most important problem facing your business? Not rank these, not rate the severity — pick one. That constraint is what makes the answer useful. Ten problems are competing for a hundred points, so a share going up always means something else went down.
In the July 2026 survey, 887 owners answered, and labor quality or availability took 27% of them. Taxes took 16%. Inflation took 14%. Then a cluster of three at 8% — the cost of labor, poor sales, and the cost or availability of insurance — followed by government regulation and competition from large businesses at 7% each. Financing and interest rates, the problem that dominates most conversations about small business, took 2%.
Source: NFIB Research Center, “Small Business Economic Trends,” July 2026 monthly report, Single Most Important Problem table. 887 NFIB owner/members responded to the July 2026 survey. Owners select one problem, so the shares compete for the same 100 points.
That is a clean, quotable ranking, and it is the answer to the question as asked. It is also the part of this data that gets repeated for the next eleven months as though it were a description of small business rather than a description of July.
The top problem changed hands in a single month
Compare July to June and the ranking does not drift — it reorders. Inflation, which in June had its highest reading since October 2024 at 21%, fell seven points. Labor quality rose eight. Taxes fell three. That is a different top problem than the month before, from the same survey, asking the same people the same question.
The cost of labor and the cost or availability of insurance were unchanged at 8% each and are not plotted.
Source: NFIB Research Center, “Small Business Economic Trends,” July 2026 monthly report. June figures are recovered from the report’s own stated month-over-month changes (“up 8 points from June,” “down 7 points from June”), so both months come from this one publication.
Nothing happened to American small business in thirty days that justifies a fifteen-point swing across two categories. What moved was attention. Inflation news cooled, hiring season arrived, and the same owners re-sorted the same set of problems. The problems did not change rank because they changed size. They changed rank because they changed volume.
A problem climbing this list does not mean it got worse. It means something else got quieter.
Every problem on the list has already had its turn
The strongest argument against treating any single month as the answer is in two columns most people never read: the survey high and the survey low, running from January 1986 to today. Inflation has been named by 41% of owners and by 0%. Financing and interest rates, at 2% in July, once took 37%. Poor sales has ranged from 2% to 34%. Taxes, the most stable line in the table, has still run from 8% to 32%.
Each bar runs from zero to that problem’s highest reading since January 1986; the white tick marks where it stands in July 2026.
Source: NFIB Research Center, “Small Business Economic Trends,” July 2026 monthly report, Single Most Important Problem table. Survey high and survey low span January 1986 to July 2026.
Read that chart as a list of every emergency small business owners have been told to organise around since 1986. Each one was, at its peak, the obvious answer to what is wrong with small business. Each one then fell to single digits without most owners noticing it had stopped being the emergency.
The one line worth pausing on is labor quality. At 27% it is sitting 2 points off the highest reading in the history of the series, and 15 points above its own 12% average. That is not noise. Whatever else is rotating, the difficulty of finding people who can do the work is genuinely near a four-decade extreme.
Source: NFIB Research Center, “Small Business Economic Trends,” July 2026 monthly report, Single Most Important Problem table. 887 NFIB owner/members responded to the July 2026 survey. Owners select one problem, so the shares compete for the same 100 points.
What to do with a moving target
The practical read is not “ignore the survey.” It is genuinely useful — it tells you what your peers are worried about this month, and if you are hiring right now, a 27% labor-quality reading tells you the market you are hiring into is as tight as it has been in forty years. Use it as weather, not as climate.
The mistake is structural. An owner reads that inflation is the number one problem and spends a quarter on pricing. Next quarter it is labor and they spend it on recruiting. The quarter after it is regulation. None of those are wrong things to work on. But a business steered by whatever is currently loudest never finishes anything, and the founder ends up exhausted by motion that produced no compounding.
The alternative is unglamorous: pick the two or three constraints that are actually binding on your business — not the survey’s business — and work them until they stop binding. Your gross margin. Your one oversized customer. The role you have not filled. Those do not reorder monthly. They sit there until somebody deals with them.
The hardest part of that is not the analysis. It is that deciding which two problems are real, while nine others are being described as urgent by everyone around you, is a judgment call — and most owners make it with nobody to check the read. That is the actual problem this survey cannot measure, and in my experience it is the one underneath all ten of the answers.
I have watched a lot of owners chase the top line of this list for years at a stretch. The ones who got somewhere were not better at forecasting which problem would win. They were better at ignoring nine of them.
Frequently Asked Questions
What is the biggest problem facing small businesses right now?
In the NFIB Small Business Economic Trends survey for July 2026, the most commonly named single most important problem was the quality or availability of labor, chosen by 27% of owners. Taxes followed at 16% and inflation at 14%. The cost of labor, poor sales, and the cost or availability of insurance were tied at 8% each, government regulation and competition from large business at 7% each, and financing and interest rates at 2%. The survey asks owners to name only one problem, and the ranking changes from month to month — in June 2026 inflation was the top answer at 21%.
How often does the top small business problem change?
Frequently, and by large margins. Between June and July 2026 the share naming inflation fell seven points, from 21% to 14%, while the share naming labor quality rose eight points, from 19% to 27% — a change of the top-ranked problem within a single month. Over the full series running from January 1986, every category has had both a near-zero reading and a reading near the top of the table. Inflation alone has ranged from 0% to 41% of owners.
Why do the percentages in the NFIB problem survey add up to 100?
Because owners are asked to select a single problem rather than rate every problem independently. That makes the ten categories directly comparable and it means the shares are competing for the same hundred points. The practical consequence is that a problem rising in the ranking does not prove that problem got worse in absolute terms — it can rise simply because another problem became less pressing and released share.
Is the labor shortage getting worse for small businesses?
By this measure it is close to the worst it has been. At 27% in July 2026, the share of owners naming labor quality or availability as their single most important problem is 15 points above the category's 12% historical average and 2 points below its all-time high of 29% in the series that began in January 1986. Separately, the cost of labor was named by 8%, so roughly a third of all owners named some labor issue as their number one problem.
How many businesses are in the NFIB survey?
The July 2026 report was based on responses from 887 NFIB owner/members. Monthly response counts vary substantially through the year because NFIB surveys a larger panel in quarter-opening months: in 2026 the monthly counts ran from 405 in June to 959 in January. NFIB members are small and independent businesses, so the results describe that population rather than all US firms.
Published by The Lonely Entrepreneur — the community and coaching platform for entrepreneurs who are building alone. lonelyentrepreneur.com
This article is for educational purposes and is not a substitute for professional financial or legal advice.