Under 10 Employees, the Top Problem Is Customers. From 20 Up, It Is Finding and Keeping Staff.

A Federal Reserve survey of 6,425 employer firms shows the most common operational challenge changing with size: customers for the smallest firms, staff from 20 employees up.

Two challenges, five sizes of firm

Every year the Federal Reserve Banks ask small employer firms which operational challenges they faced in the previous 12 months. Firms can pick several from a list: reaching customers and growing sales, hiring or retaining qualified staff, supply chain issues, using technology, complying with regulations, and health and safety. Across all employer firms in the survey fielded in autumn 2025, reaching customers came first at 57% and staff second at 46%. Split by size, those two swap places. The share naming customers runs 58%, 61%, 55%, 49%, 49% from the smallest band to the largest. The share naming staff runs 37%, 50%, 60%, 62%, 64%.

Below 10 employees the hard part is finding the customers. From 20 up, it is finding and keeping the people who serve them.

Where the switch happens, and how sure the survey is

The survey publishes a 95% confidence interval for every share, so the comparison can be made carefully. Here two shares are only called different when their intervals do not overlap. On that test, customers lead staff for firms with 1–4 employees (58% against 37%) and with 5–9 (61% against 50%). At 10–19 employees staff is ahead on the point estimate, 60% to 55%, but the intervals overlap, so the two are level. From 20 employees up staff leads clearly: 62% against 49% at 20–49 and 64% against 49% at 50–499. The biggest single move is the first one: the share naming staff goes from 37% at 1–4 employees to 50% at 5–9.

Young firms look like small firms

Cut by firm age instead of size, the pattern is similar at the young end. Among firms aged 0–2 years, 65% named reaching customers and 43% named staff; at 3–5 years it was 64% and 49%; at 6–10 years, 58% and 51%. In all three, customers lead clearly. The share naming customers then falls with age, to 48% among firms 21 years or older, where it is level with staff at 45%. Unlike the size cut, staff never clearly leads by age. Size and age overlap (young firms tend to be small), and this table cannot separate the two.

What to take from this if you run a small firm

If you have fewer than ten people, the most common problem among firms like yours is the front end: finding customers and growing sales. Somewhere between ten and twenty people the most common problem changes to the team. The practical reading: if you are growing past ten, put hiring, training and keeping people into the owner’s week before the firm reaches twenty, rather than waiting for it to become the most common complaint. Regulation follows the same direction: 22% of the smallest firms named it, against 39% at 50–499 employees.

Four limits worth holding. The survey is a convenience sample, not a random one; the Federal Reserve weights it to match the population of employer firms with 1–499 employees by size, age, industry, geography and owner demographics. Firms could pick more than one challenge. The question asks which challenges a firm had, not which mattered most or what it did about them. And it covers employer firms only, not one-person businesses.

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.