Founder Data Report83.7% of Four-Person Firms Expect No Change in Headcount. Only 8.7% Expect to Hire.
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Census asks every business the same six-month question. On demand and on prices, the smallest firms answer almost exactly like the biggest. On their own headcount, they answer completely differently.
In the latest Census cycle, 83.7% of businesses with 1–4 employees said they expect no change in their number of paid employees six months from now, against 55.5% of businesses with 250 or more. Only 8.7% of the smallest firms expect to add anyone, against 33.7% of the largest — a 3.9x gap. But on demand, on the prices they charge and on the prices they pay, the two groups answer within 3.5 points of each other.
- 83.7% of firms with 1–4 employees expect no change in headcount six months out. At 250+ employees it is 55.5%.
- Only 8.7% of the smallest firms expect to add anyone. 33.7% of the largest do — 3.9 times as many.
- The gap is confined to labour: headcount (+28.2 points) and hours worked (+16.1 points).
- On demand, on the prices they charge and on the prices they pay, the smallest and largest answer within 3.5 points of each other.
- The headcount gap has been at least 28 points in every one of the four years the survey has run.
There is one question where size changes the answer
Every business in the Census sample gets the same question: six months from now, how do you think your number of paid employees will have changed? Increased, decreased, or no change. It is a plain question about the thing an owner has the most direct control over.
The answers separate almost perfectly by size. 83.7% of firms with 1–4 employees say no change. It falls at every step up the size ladder — 73.8% at 5–9, 69.1% at 10–19, 63.7% at 20–49 — and lands at 55.5% for firms with 250 or more employees. Put the other way round: 44.5% of the largest firms expect their headcount to move in some direction, against 16.3% of the smallest. That is 2.7 times as many.
The orange bar is the smallest size class. Every other bar is shown neutrally. The series falls at every step from 1–4 up to 100–249 and is essentially flat between 100–249 and 250+.
Source: U.S. Census Bureau, Business Trends and Outlook Survey (BTOS), response estimates by employment size class, question 17, cycle collected August 24 – September 6, 2026.
It is not a mood, and it is not about control
The obvious reading is that small firms are gloomier, or simply expect less to happen to them. The survey lets you test that, because it asks the same six-month question about five different things: headcount, hours worked, demand, the prices the business charges, and the prices it pays.
On the two labour questions, the gap between the smallest and largest firms is +28.2 points for headcount and +16.1 points for hours worked. On the other three it is +0.1 points for demand, -1.0 points for the prices they charge and -3.5 points for the prices they pay. The smaller of the two labour gaps (16.1 points) is bigger than the largest of the other three (3.5 points), with nothing in between. So it is not a mood: a four-person firm forecasts demand and inflation almost exactly the way a thousand-person firm does.
It is not simply about control, either. The price a business charges is its own decision, and there the smallest and the largest answer alike. The gap is narrower than that, and more specific: it is about labour — how many people work there and how many hours they work.
The first two rows are the labour questions; the last three are everything else. The two sets of gaps do not overlap — every labour gap is wider than every other gap.
Source: U.S. Census Bureau, Business Trends and Outlook Survey (BTOS), response estimates by employment size class, questions 17, 18, 21, 22 and 23, cycle collected August 24 – September 6, 2026. All five questions offer the same three answers, so the shares are directly comparable.
A flat forecast is still a forecast
The hiring line is the one worth sitting with. 8.7% of firms with 1–4 employees expect to add a person in the next six months. 33.7% of firms with 250 or more do. The largest firms are 3.9 times more likely to be planning to grow their team than the smallest.
Some of this is arithmetic and should be said plainly: at four employees one hire is a 25% change in headcount, so the bar for reporting any change at all is genuinely higher than it is at 250. Both directions are suppressed, which is what that explanation predicts — 7.7% of the smallest firms expect to lose someone against 10.8% of the largest. This data cannot separate a lumpy headcount from a settled plan, and it would be wrong to claim otherwise. What it can say is what the answer is: at your size, 83.7 owners in every 100 are describing the next six months as a period in which the team does not change.
Rises at every step from 1–4 through 100–249. The orange bar is the smallest size class; every other bar is neutral.
Source: U.S. Census Bureau, Business Trends and Outlook Survey (BTOS), response estimates by employment size class, question 17, answer “increased”, cycle collected August 24 – September 6, 2026.
You forecast the market like everyone else. The labour line is the one that never moves.
Why this is worth your attention
A forecast is not a prediction you are graded on. It is a statement about which moves are on the table. When 84 out of 100 owners at your size say the team will be the same size in six months, what they are mostly saying is that changing it is not currently a live option — not that they have modelled it and concluded no.
That matters because capacity is the constraint most small businesses actually hit. Whatever the cause, the shape of the answer is the same: if the next six months contain no change to who does the work and no change to how many hours they work, then every bit of growth in that plan has to come from the same people working differently.
The gap is also not new, which is the part that makes it structural rather than a bad quarter. The survey has run since 2023, and in every one of its four sample years the smallest firms have been at least 28 points more likely than the largest to expect no change in headcount (range 28.1 to 38.3 points).
Source: U.S. Census Bureau, Business Trends and Outlook Survey (BTOS), response estimates by employment size class, questions 17 and 21–23, cycle collected August 24 – September 6, 2026.
Frequently Asked Questions
What share of small businesses expect to hire in the next six months?
In the latest Census Business Trends and Outlook Survey cycle, 8.7% of businesses with 1–4 employees expected their number of paid employees to increase over the following six months. 7.7% expected a decrease and 83.7% expected no change. Among businesses with 250 or more employees, 33.7% expected to add staff.
Why do the smallest firms say “no change” so much more often?
A large part of it is likely arithmetic: at four employees a single hire is a 25% change in headcount, so the threshold for reporting any change is higher than at a large firm. Both directions are suppressed in the data, which is consistent with that — 7.7% of the smallest firms expect a decrease against 10.8% of the largest. The survey does not ask owners to explain their answer, so the published figures cannot separate a lumpy headcount from a genuinely settled plan.
Does this mean small businesses are more pessimistic?
The data does not support that reading. On demand, on the prices they charge and on the prices they pay, the smallest and largest firms answer within 3.5 percentage points of each other. The difference appears only on the two labour questions — headcount and hours worked.
Is this a recent development?
No. The Business Trends and Outlook Survey has run since 2023. In every one of its four sample years, firms with 1–4 employees have been at least 28 percentage points more likely than firms with 250+ to expect no change in headcount, ranging from 28.1 to 38.3 points.
What is the Business Trends and Outlook Survey?
It is a U.S. Census Bureau survey of business conditions, run fortnightly since September 2023 and published with results broken out by employment size class, sector and state. The figures here come from its 78th published cycle, collected August 24 to September 6, 2026. Census draws a new sample each survey year, so the levels of some series shift when the sample refreshes; the comparisons in this article are between size classes within the same cycle, which is not affected by that.
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This article is for educational purposes and is not a substitute for professional financial or legal advice.