网曝吃瓜

The 2024 Small Business Problems and Priorities data were collected four years after the Covid-19 pandemic began. The health crisis and following state and federal policy responses created shocks that continue to reverberate through the economy, impacting small business. Immediately after the onset of the pandemic, the federal and many state governments severely restricted business activity and deployed extensive economic support programs for individuals and businesses, especially small businesses.

The initial response to the pandemic prompted a short lived, but severe recession. Consumer spending fell dramatically, the household saving rate spiked to 33 percent, and as the economy opened back up, consumers returned but to a business environment with fewer employees. Since then, business owners have had to adjust business operations to accommodate an ongoing labor shortage and inflation. The effects of this massive economic disruption are still noticeable in owners鈥� assessment of the list of 75 business problems. However, many top concerns among small business owners remain constant problems irrespective of the economic shifts over the last four years.

The 鈥淐ost of Health Insurance鈥� continues to be the number one small business problem, a position it has held since 1986. In 2024, 41 percent of small business owners cite the 鈥淐ost of Health Insurance鈥� as critical, a 10-point decrease from 2020. Despite the decline, the percent who find it a critical problem beats the second-highest ranking problem, 鈥淐ost of Supplies/Inventories鈥� by 21 points. The percent of small businesses offering health insurance has steadily increased since 2017, reversing a nearly two decade long trend of declining offer rates, as shown in Chart 1. Non-offering small businesses are often at a competitive disadvantage attracting talent but overwhelmingly cite the cost of health insurance as the main reason they do not offer the benefit.

The problem 鈥淐ost of Supplies/Inventories鈥� moved up in importance from ranking 12th in 2020 to its current second place ranking. Inflation and post-Covid supply chain disruptions have left many small business owners with higher costs. The percent of owners who find it a critical problem increased from 9 percent in 2020 to 20 percent in 2024. This move up the ranking tracks 网曝吃瓜鈥檚

Small Business Economic Trends monthly survey that finds that still, one-in-five small business owners find inflation as the biggest problem in operating their business1. 鈥淯ncertainty over Economic Conditions鈥� and 鈥淯ncertainty over Government Actions鈥� both moved up in importance from 2020. Small business owners rank 鈥淯ncertainty over Economic Conditions鈥� as the 3rd most severe problem facing their business up from its ranking of 9th in 2020. Twenty-two percent of small business owners report it as critical. 鈥淯ncertainty over Government Actions鈥� ranks 8th and is critical for 23 percent.Tax-related issues continue to be problematic for small business owners. Two of the top 10 problems cited are tax-related. The most severely ranked tax problem is 鈥淔ederal Taxes on Business Income.鈥� It ranks 4th, down one position from 2020. A quarter of small business owners think it is a critical problem, 5 points higher than four years ago. 鈥淪tate Taxes on Business Income,鈥� ranks as the second most severe tax issue. This problem fell two positions from 7th in 2020 to its current position of 9th. Twenty-two percent report it as critical, up from 19 percent four years ago.

鈥淟ocating Qualified Employees鈥� moved down in importance from ranking 2nd in 2020 to its current 5th place ranking. The percent finding it a critical problem decreased from 31 percent in 2020 to 28 percent in 2024. The

鈥淐ost of Natural Gas, Propane, Gasoline, Diesel, Fuel Oil鈥� is the 6th most severe problem cited by small business owners, moving up from its 19th place ranking in 2020. Nearly a quarter (24 percent) report it as critical. Similarly, 鈥淓lectricity Costs (rates)鈥� is also a top issue for small business owners, ranking 10th in 2024 and reported critical by 16 percent.

鈥淯nreasonable Government Regulations鈥� moved down in importance from 2020 to 6th place. Nearly onequarter (24 percent) of small business owners cite these regulations as critical.

The 10 problems of least concern tend to be issues small business owners don鈥檛 often experience.

鈥淓xporting My Products/Services鈥� holds onto the 75th ranking, a position held for nine of ten editions that it has been listed as a problem. It was ranked 74th in 2000. In 2024, only 4 percent of small business owners find exporting a critical problem, 1 point higher than in 2020. Fifty-three percent do not find it to be a problem. Small business owners tend to be uninterested in exporting, and if they are, they are able to find adequate resources to assist them.

鈥淚mporting My Products/Services鈥� is the second least severe problem with a 74th ranking, the same spot it held in 2020 when the issue was introduced to the survey. Only 3 percent of owners find it a critical issue and 47 percent report that it is not a problem.

The 73rd ranked problem in the survey is 鈥淥ut-of-State Sales Tax (e.g., internet sales),鈥� an issue introduced to the questionnaire in 2016. Five percent find it a critical problem compared to 48 percent who do not find it a problem. This issue was ranked 72nd in 2020.

The 72nd ranking belongs to 鈥淐osts and Frequency of Lawsuits/Threatened Lawsuits,鈥� which fell three positions from 2020. Only 6 percent of small business owners report that it is a critical issue for their business.

鈥淐redit Rating/Record Errors鈥� remains at the 71st ranking position, unchanged since 2016. Four percent report this problem as critical problem for their business.

鈥淲inning Contracts from Federal/State/Local Governments鈥� ranks 70th of the 75 listed problems, unchanged from 2020.

The 69th ranking belongs to 鈥淏ad Debts (not delinquencies) and/or Bankruptcies,鈥� down from 66th place in 2020. Only 4 percent find this issue critical to their business.

鈥淥btaining Short-Term (less than 12 months or revolving) Business Loans鈥� and 鈥淥btaining Long-Term (5 years or more) Business Loans鈥� remains generally unchanged from 2020. The former moved up to 67th and the latter moved down one ranking to 68th.

A new issue introduced this year to the questionnaire, 鈥淐ost and Availability of Child Care,鈥� ranks 66th of the 75 listed problems. Seven percent of small business owners consider the issue critical compared to 40 percent who think it is not a problem.

The 2024 edition of Problems and Priorities includes several notable swings in issue importance from 2020 that reflect dramatic changes in the economy and government priorities impacting small businesses.

鈥淚nterest Rates鈥� leads as it moved up 43 positions from 56th to 13th. The percent of owners assessing it as a critical issue has increased significantly from 6 percent in 2020 to 22 percent in 2024. Since 2022 the Federal Reserve has been increasing interest rates to combat post-Covid inflation. Although it is not a top-cited issue for small businesses, it is becoming increasingly difficult to navigate. 网曝吃瓜鈥檚 December 2023 Financing Sales Survey found that 80 percent of small business owners reported high interest rates as their largest financing complaint.

The problem with the second-largest change from 2020 is 鈥淧ricing My Goods/Services鈥� which jumped 15 positions to 21st. The rising costs of supplies, inventories, labor costs, and energy have been challenging for small business owners in figuring out how much and how often to raise prices on their good and services and remain competitive.

Issues with the largest change that became less difficult in 2024 include 鈥淭raining Employees鈥� and 鈥淐ompetition from Large Businesses,鈥� both of which fell 12 positions.
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² 网曝吃瓜, 鈥淔inancing Sales Survey,鈥� https://strgnfi bcom.blob.core.windows.net/nfi bcom/Financing-Sales-Survey.pdf

The standard deviation, a measure of the difference from the statistical average or mean, is used in Table 3 to determine which problems are agreed on by small business owners and which problems are not. The smaller the standard deviation, the greater the consensus. This table lists the top 10 problems with the most consensus and the top 10 problems with least consensus.

Problems tied for 4th with a standard deviation of 1.75 are 鈥淯ncertainty over Economic Conditions,鈥� 鈥淧rojecting Future Sales Changes,鈥� 鈥淓lectricity Costs (rates),鈥� and 鈥淗andling Business Growth.鈥� The 8th ranked problem of greatest consensus is 鈥淭elephone Costs and Service,鈥� followed by 鈥淩educing Energy Use in a Cost-Effective Manner.鈥� 鈥淐ost of Outside Business Services (e.g., accountants, lawyers, consultants)鈥� rounds out the top 10 with a standard deviation of 1.78.

The problems that yield the greatest consensus generally appear near the top and bottom of the ranking. Eight problems in this category are the same as in 2020 and two are new to the list.

鈥淐ost of Supplies/Inventories鈥� tops the list as the problem with the greatest consensus among small business owners with a standard deviation of 1.71. It also ranks as the second most important business problem for small business owners.

The vast majority of small business owners also agree on the severity of 鈥淜eeping Up on Business and Market Developments.鈥� This problem ranks second for the greatest consensus and ranks 40th out of the 75 small business problems.

鈥淚mporting My Products/Services鈥� ranks 3rd, after ranking the top issue with the greatest consensus in 2020. This problem is cited as one of the least critical issues for small business owners in 74th place. Most small business owners do not find this problem an issue in operating their business.

Problems tied for 4th with a standard deviation of 1.75 are 鈥淯ncertainty over Economic Conditions,鈥� 鈥淧rojecting Future Sales Changes,鈥� 鈥淓lectricity Costs (rates),鈥� and 鈥淗andling Business Growth.鈥� The 8th ranked problem of greatest consensus is 鈥淭elephone Costs and Service,鈥� followed by 鈥淩educing Energy Use in a Cost-Effective Manner.鈥� 鈥淐ost of Outside Business Services (e.g., accountants, lawyers, consultants)鈥� rounds out the top 10 with a standard deviation of 1.78.

The problems that yield the greatest consensus generally appear near the top and bottom of the ranking. Eight problems in this category are the same as in 2020 and two are new to the list.

鈥淐ost of Supplies/Inventories鈥� tops the list as the problem with the greatest consensus among small business owners with a standard deviation of 1.71. It also ranks as the second most important business problem for small business owners.

The vast majority of small business owners also agree on the severity of 鈥淜eeping Up on Business and Market Developments.鈥� This problem ranks second for the greatest consensus and ranks 40th out of the 75 small business problems.

鈥淚mporting My Products/Services鈥� ranks 3rd, after ranking the top issue with the greatest consensus in 2020. This problem is cited as one of the least critical issues for small business owners in 74th place. Most small business owners do not find this problem an issue in operating their business.

Small business problems tend to fall within one of 10 problem clusters. Each cluster contains all the survey鈥檚 problems related to that topic, although several problems fit into more than one. The 10 problem clusters in Table 4 are listed in order of importance.

The importance of the clusters is based on the average overall mean of the cluster鈥檚 assigned problems. The clusters appear in descending order of importance as follows:

1. Taxes
2. Employees
3. Costs
4. Regulations
5. Information
6. Management
7. Technology
8. Competitors/Competition/Markets
9. Finance
10. Public Services/Responsibility

The series of eleven Problems and Priorities surveys spans 42 years from 1982 to 2024. During this period, the U.S. economy has experienced a wide range of business conditions causing some problems to become less and some more severe. This is attributed to business cycles, technology, and general changes in the economy.

Six of the 11 surveys were either conducted during or directly following an economic recession. 网曝吃瓜 conducted the first publication in 1982, on the heels of the second most severe recession at that time. The 1991 survey found itself in a similar position but on the tail end of a more modest recession. The 2008 survey was conducted at the beginning of the recession that began in December of 2007 and a few months before the financial crisis. The 2012 survey was conducted almost three years into its recovery. The 2016 edition is seven years into the recovery, but for much of it, small businesses experienced subpar economic growth. The 2020 edition was conducted mostly in February, the last month of the longest economic expansion in recorded U.S. history. The 2024 edition was conducted in February – April 2024, four years after the initial outbreak of the Covid-19 pandemic, public policy responses to the pandemic, and related economic shocks that followed including a steep but short-lived health-crisis-driven recession and subsequent economic recovery. The four remaining surveys conducted in 1986, 1996, 2000 and 2004 also occurred in relatively strong economies.

Table 5 presents all evaluated problems in each of the eleven surveys in rank order. The majority of listed problems in the survey have remained the same over the survey鈥檚 42-year history. However, occasionally problems found to be uninteresting are replaced with more topical ones.

The problem areas most closely related to business cycles are sales, financing, and employment. During a recession, sales and financing generally increase in problem severity while employment issues generally become less of a problem. The pattern is reversed during times of economic expansion. Sales and employment problems illustrate these patterns more clearly than financing. Problems related to financing have generally eased over time as lending standards have become more standardized in the advent of credit scoring and financial services deregulation, and the cost of borrowing has decreased sharply except for in the current 2024 edition.

During recession periods, 鈥淧oor Earnings (profits)鈥� and 鈥淧oor Sales鈥� generally rise in the ranks of concerns. Beginning with the 1982 survey and moving forward, the rankings of the former are 9th, 14th, 13th, 22nd, 20th,12th, 14th, 14th, 16th, 20th and most recently 31st. 鈥淧oor Earnings (profits)鈥� eased in severity in 1996, 2000, 2020, and again in 2024, at its least critical rating ever reported. However, it increased in severity in 2008, 2012, and 2016.

The rank of 鈥淧oor Sales鈥� follows a similar pattern and continued to ease in severity in 2024. Over the past ten surveys it has ranked 29th, 27th, 26th, 48th, 50th, 33rd, 35th, 26th, 45th, 49th, and 51st in 2024. The dramatic increase in severity in 2008 and 2012 illustrates the magnitude of the recession. The current ranking is similar to the 2020 ranking but is the least severe of all years published. 鈥淧rojecting Future Sales Changes鈥� is also more of a burden in recessions versus expansions with the exception of the 2020 survey. Beginning in 1982, the problem ranked as follows: 10th, 22nd, 21st, 27th, 26th, 25th, 20th, 17th, 18th, 17th, and now in 20th position.

Two other business cycle related problems are 鈥淥btaining Short-Term (less than 12 months or revolving) Business Loans鈥� and 鈥淥btaining Long-Term (more than 5 years or more) Business Loans.鈥� The rankings over time for the former are 45th, 54th, 53rd, 64th, 69th, 70th, 72nd, 58th, 70th, 68th and most recently 67th. The latter ranked 38th, 44th, 46th, 63rd, 66th, 68th, 56th, 69th, 67th, and 68th in 2024. Both problems鈥� rankings have hardly changed from 2020.
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Employment issues show the clearest business cycle pattern as owners often struggle to find and retain employees in strong economies and less so in economic downturns. Small Business Problems & Priorities contains three major employment-related problems: 鈥淟ocating Qualified Workers,鈥� 鈥淔inding and Keeping Skilled Employees,鈥� and 鈥淓mployee Turnover.鈥� 鈥淟ocating Qualified Employees鈥� ranks as follows over the last ten surveys: 15th, 23rd, 20th, 11th, 3rd, 11th, 12th, 32nd, 10th, and now 2nd. 鈥淔inding and Keeping Skilled Employees,鈥� or employee retention, ranked 52nd in 1982, then 36th, 35th, 29th, 18th, 28th, 17th, 38th, 14th, and currently 5th. And since 1986, the problem of 鈥淓mployee Turnover鈥� ranked 52nd, 56th, 47th, 43rd, 53rd, 51st, 72nd, 59th, and 50th in 2020. The strong labor market pushed all of these issues up the ranking. Clearly labor quality has become a much more important problem as the economy has been stronger for a long period of time in the last expansion and with increasing reliance on new technologies and issues with our educational system.

Small business owners are increasingly burdened by higher minimum wage costs. 鈥淢inimum Wage/鈥橪iving鈥� Wage鈥� has moved from its ranking of 63rd in 1986 to 25th in 2024. Although the federal minimum wage has increased seven times over this period, the last time it was changed was 2009. Therefore state and local minimum/living wage rates are likely the main contributors to the recent escalation in problem severity.

鈥淐yber Crime (viruses, hacking, etc.)鈥� is another problem that has increased in severity for small business owners. The problem was first introduced in 2012 and ranked 63rd. The following editions have it ranked 51st, 48th, and 41st in 2024. Ten percent of small business owners cite this problem as critical in 2024. As technology becomes more commonly used and advanced, small business owners have seen the threat of cyber crime increasing.

Two cost-related problems have seen signifi cant declines in severity over the years. These include 鈥淭elephone Costs and Services鈥� and 鈥淔ICA (Social Security Taxes).鈥� Telephone communication has evolved quite a bit over the past few decades with new services and price options for small business owners. Over the past surveys, 鈥淭elephone Costs and Services鈥� ranked 4th, 5th, 15th, 18th, 15th, 16th, 24th, 33rd, 33rd, 30th, and now 39th in 2024.

鈥淔ICA (Social Security Taxes)鈥� has also declined in severity over recent years; although in 2024, it rose two rankings. Introduced in 1991, this problem has declined 20 positions from its highest ranking. The problem ranked 6th, 5th, 5th, 13th, 19th, 24th, 21st, 28th, and now 26th.

Another issue that has declined in importance over the recent years is 鈥淒elinquent Accounts/Late Payments.鈥� Since 1982, this problem ranked 16th, 21st, 28th, 40th, 44th, 34th, 45th, 46th, 54th, and 58th in 2020 and 2024. Over the past few decades there has been an increase in financing options and expanded use of credit cards that has eased many payment issues previously faced by small business owners.

Finally, 鈥淐ash Flow鈥� is another problem of declining importance. Since 2004 it has fallen 30 positions. In 2004 this problem ranked 7th place and has ranked 11th, 13th, 25h, 26th, and now 37th since. Cash flow issues may be due to lack of cash reserve, costly borrowing, uncontrolled business growth, and/or inaccurate estimating and accounting practices. New and advanced accounting software and payment solutions have likely contributed to the severity of this issue declining.

Another issue that has declined in importance over the recent years is 鈥淒elinquent Accounts/Late Payments.鈥� Since 1982, this problem ranked 16th, 21st, 28th, 40th, 44th, 34th, 45th, 46th, 54th, and 58th in 2020 and 2024. Over the past few decades there has been an increase in financing options and expanded use of credit cards that has eased many payment issues previously faced by small business owners. Finally, 鈥淐ash Flow鈥� is another problem of declining importance. Since 2004 it has fallen 30 positions. In 2004 this problem ranked 7th place and has ranked 11th, 13th, 25th, 26th, and now 37th since. Cash fl ow issues may be due to lack of cash reserve, costly borrowing, uncontrolled business growth, and/or inaccurate estimating and accounting practices. New and advanced accounting software and payment solutions have likely contributed to the severity of this issue declining.

3 United States Department of Labor, Wage and Hour Division, ,

Small businesses are diverse. Owners assess business problems based on their unique set of circumstances and business characteristics. Chapter 2 of Problems and Priorities presents problem ranking by groups within selected classifications of small businesses and their owners.

The selected business classifications picked for the survey represent the most widely used classifications and a few that are unique. The classifications include firm size, industry, sales change, primary customer, population density, years of ownership, gender, and legal structure.

Cost-related problems affect smaller businesses more than larger ones due to economies of scale. Larger businesses have more purchasing power than smaller ones and are more able to absorb unexpected changes in business costs.

Industry is also one of the most popular classifications to use in analyzing small business. Each industry experiences its own set of problems based on its unique industry characteristics especially those related to labor, land use, and customer base.

Economic conditions can magnify these differences. This is especially true in light of the strong expansion experienced by many in the last four years. Labor intensive industries found employment issues far more severe than others. The strong economy is certainly far preferred than a sluggish one, but it does come with its unique set of challenges for many businesses.

Employee issues yield significant industry differences in problem severity. These differences are generally related to labor and the level of skills required for the majority of positions within the business. For example, the ranking of 鈥淟ocating Qualified Employees鈥� ranges from 23rd in agriculture to second in five of nine industry categories. 鈥淔inding and Keeping Skilled Employees鈥� follows a similar pattern ranging from 51st in agriculture and fifth in five other industry categories.

Owners of agriculture-related businesses rank many of the 75 listed problems very differently than the overall population. Most of the variance in problem ranking between these businesses and the rest of the population is structural in nature.

The structural differences between agriculture-related businesses and most others are their use of land and capital-intensive equipment. Another difference is that its products tend to be more dependent on international markets than businesses in other industries with the exception of manufacturing. The variation in ranking for these structural-related problems remains fairly consistent throughout previous editions.

The problem with the largest variation from the overall population is the 鈥淓state Tax.鈥� It ranks 52nd overall and 19th for the industry, the most severe of any of the reported industries. The ranking climbed three positions from 22nd in 2020 with 20 percent of owners claiming it is a critical problem, to 19th position with 28 percent finding it critical.

Regulations are problematic for small businesses in general, however owners in the agriculture-related industries rank 鈥淓nvironmental Regulations (e.g., EPA)鈥� and 鈥淶oning/Land Use Regulations鈥� more severely than the overall population. Small businesses in this industry rank 鈥淓nvironmental Regulations (e.g., EPA)鈥� 13th in severity compared to 45th overall. Twenty-three percent of small business owners in the Agriculture, Forestry and Fishing industry report it a critical problem. 鈥淶oning/Land Use Regulations鈥� is also more of a concern for those in this industry. It ranks 35th for those businesses compared to 60th for overall, a difference of 25 positions.

The agriculture industry is heavily influenced by international markets and trade. The two related problems in the list 鈥淐ompetition from Imported Products鈥� and 鈥淓xporting My Products/Services鈥� are more difficult for this industry than the overall population. 鈥淐ompetition from Imported Products鈥� ranks 63rd overall but 41st for those in the industry. Twelve percent cite it as critical. And while 鈥淓xporting My Products/Services鈥� ranks last for the overall population it ranks 56th for the industry.

Additionally, there were also some problems with a signify can’t variation that appeared less of a concern for those in the agriculture industry than overall. 鈥淐redit Card Payment Processing Costs鈥� ranks 50th for firms in the agriculture industry and 22nd overall. Similarly, 鈥淔inding and Keeping Skilled Employees鈥� ranks 39th for these firms compared to 14th. These issues seem to be less problematic for agriculture-related firms.

The differences between the construction industry and overall small business population are much smaller than those in agriculture. Firms in the construction industry report 鈥淗ealth/Safety Regulations (e.g., OSHA)鈥� as the 20th most severe problem facing their business, compared to 36th overall. Construction firms face significant safety regulations due to the nature of the work. This is also true for 鈥淥btaining Licenses, Permits, etc.,鈥� which ranks 36th for construction firms but 50th overall.

While all small firms experience labor-related challenges, firms in the construction industry have reported these issues as more severe. 鈥淟ocating Qualified Employees鈥� ranks second for firms in the construction industry, with 35 percent finding it a critical issue compared to 28 percent of the overall population. Another labor-related problem, 鈥淔inding and Keeping Skilled Employees,鈥� also follows this trend with 33 percent in the industry finding it a critical issue compared to the overall reading of 24 percent. This is also true for 鈥淓mployee Turnover,鈥� which proves to be more difficult for construction firms with a ranking of 35th for the industry and 42nd overall. Of all industries, construction ranks 鈥淯ndocumented Workers鈥� the most severe. It ranks 57th for the industry and 65th overall. The percent of small businesses in the construction industry citing it a critical problem is 15 percent, 4 points higher than for the overall population.

For small businesses in the manufacturing sector the problem with the greatest variation between the industry and overall population is 鈥淐ompetition from Imported Products.鈥� It ranks 63rd overall and 42nd for the industry, up from 47th in 2020.

Another problem that affects manufacturing firms more than the overall business population is 鈥淩educing Energy Use in a Cost-Effective Manner.鈥� Of all the industries manufacturing ranks this issue the most severe at 41st. This is 16 positions higher than the overall small business population ranking of 57th.

Manufacturing firms also have a more difficult time training and managing employees. 鈥淭raining Employees鈥� ranks 44th overall and 33rd for the industry, with 10 percent citing it a critical problem. 鈥淢anaging Employees (e.g., performance, absenteeism, appearance, etc.) followed with a nine-position difference between overall and the industry ranking. Manufacturing firms rank this issue 34th compared to 43rd overall.

鈥淐ompetition from Internet Businesses鈥� continues to be more problematic for the retail industry than the general business population and ranks more severe than any other industry. This issue ranks 61st overall and 16th for the industry. Eighteen percent report it as a critical problem for their business compared to the overall reading of 8 percent.

The retail sector also reports more difficulties with advertising and promoting business products and services compared to the overall firm. The 鈥淎bility to Cost-Effectively Advertise鈥� ranks 20th for small retail businesses, which is 26 rankings higher than overall and also the most severe of all industries. Twelve percent of small businesses in this sector cite this as a critical problem. A similar problem, 鈥淯sing Social Media to Promote Business (Facebook, Twitter, Yelp, Google, etc.),鈥� ranks 56th overall and 36th for the industry. The only other industry ranking this issue this severe was Finance and Real Estate.

The fourth problem with the greatest difference in severity for the retail sector compared to overall is 鈥淐redit Card Payment Processing Costs.鈥� The retail sector has the most severe ranking (5th) of all industries and is 17 positions above the overall population ranking of 22nd. Over a quarter (26 percent) of small businesses in this industry cite this as critical, the highest of all industries (except for non-professional services which was also 26 percent).

Small retail businesses also tend to struggle with competing with larger firms. 鈥淐ompetition from Large Businesses鈥� ranks much more difficult for retail firms than overall, with a ranking of 19th for the industry compared to 33rd overall. Although there is a 14-position difference between both groups, the problem has declined in severity from the last report when it ranked 4th for the industry.

The problem with the largest rank difference from the general population in transportation/warehousing is 鈥淭raffic, Highways, Roads, and Bridges.鈥� This problem ranks 48th overall, 13th for the industry and is critical for 28 percent of them. Although its severity has eased for the industry since 2020, when it was ranked 6th.

Another problem that has a notable difference in rank is 鈥淓nvironmental Regulations (e.g., EPA)鈥� with a ranking of 45th for the overall population and 25th for the industry. Seventeen percent of small business owners in this industry report this as a critical problem.

Finally, 鈥淐ost of Government Required Equipment/Procedures鈥� ranks 34th overall and 19th for the transportation/warehousing industry. Seventeen percent of the industry cite it as a critical problem. Small businesses in transportation/warehousing rank this problem the most severe of any other industry.

The problem with the largest rank difference from the general population in the finance, insurance, real estate, rental industry is 鈥淐ompetition from Internet Businesses.鈥� It ranks 20th place for the industry, but 61st overall. Thirteen percent of small business owners in the industry report it as a critical problem, the second highest of all industries following retail. Tax preparation and other financial software competes with small businesses in the finance sector. Additionally, online mortgage and interest rate services are likely to affect many firms in the real estate industry.

鈥淐yber Crime (viruses, hacking, etc.)鈥� is also a much bigger problem for this industry, since financial information is often a target for theft and hacking. The problem ranks 12th for the industry, the most severe ranking of any of the industries, and ranks 41st for the overall population. Although this issue is more severe for this industry the ranking has eased from 3rd place in 2020.

Two closely related problems that rank notably higher in the financial services industry than the general population are the 鈥淎bility to Cost-Effectively Advertise鈥� and 鈥淯sing Social Media to Promote Business (Facebook, Twitter, Yelp, Google, etc.).鈥� Both problems however eased from 2020 for the industry. The 鈥淎bility to Cost-Effectively Advertise鈥� ranks 22nd for the industry, 46th overall, and 10 percent find it a critical problem. This problem ranked 14th for the industry in 2020. Owners in the finance industry also find 鈥淯sing Social Media to Promote Business (Facebook, Twitter, Yelp, Google, etc.)鈥� a more burdensome problem than the general population, with a ranking of 36th for the industry compared to 56th overall. This was a significant ranking decline for the industry from 2020, which was at 18th place.

The professional services sector includes legal, engineering, management, accounting, advertising, architectural, private education, health services and social assistance services. The problem with the most notable difference between this industry and the general business population is 鈥淭raining Employees.鈥� This problem ranks 24th for the industry and 44th for overall.

Owners in this sector also have a harder time getting paid which is reflected in the industry鈥檚 ranking of 鈥淒elinquent Accounts/Late Payments.鈥� This problem ranks 58th overall, 39th for the industry, and 8 percent find it critical.

Finally, 鈥淐yber Crime (viruses, hacking, etc.)鈥� proves to be more difficult for firms in the professional services sector than the overall population. The overall ranking for this problem is 41st, while it ranks 27th for the industry.

The non-professional services industry includes a wide range of business types including repair services, barber shops, fitness trainers, parking services, and miscellaneous personal services. It also includes restaurants, motels, convenience stores, and temporary help agencies. Although these services are diverse, they are all labor-intensive. This sector generally follows the ranking of the overall population with a few exceptions.

The problem of 鈥淐redit Card Payment Processing Costs鈥� is more burdensome for non-professional services than the overall population, with a ranking of 10th compared to 22nd overall. Over a quarter (26 percent) of small businesses in this sector cite this as a critical problem. Another problem with a notable difference between the sector and overall population is

鈥淯nemployment Compensation,鈥� which ranks 35th overall, 24th for the industry, and 13 percent cite it a critical problem. Lastly is the problem, 鈥淎bility to CostEffectively Advertise鈥�, which ranks 46th overall and 35th for the sector. Although it is worth noting this is a significant drop for the industry from 2020 when it ranked 17th.

Another distinguishing characteristic of small businesses is their customer base. The survey asked respondents to identify their primary market and presented them with five options from which to select. They were: one or two firms, one or two industries, business in general, the public, and government. These results appear in Table 8.

Over half (53 percent) of small businesses surveyed primarily sell to the public. Nineteen percent sell to business in general and 16 percent sell to one or two industries. Eight percent sell to one or two firms and a mere 3 percent sell to government/non-profit organizations.

The ranking for firms that sell to the public is similar to the overall ranking. Part of the reason is that most of the respondents fall into this category; however there are some exceptions. The problem 鈥淎bility to Cost-Effectively Advertise鈥� has a 13-ranking difference between firms that sell to the public and the overall population. Firms that sell to the public rank this problem 33rd compared to 46th overall. Nine percent of firms in this category report this problem as critical. Another problem, 鈥淐redit Card Payment Processing Costs,鈥� also appears to be more difficult for this category than overall. It ranks 14th for firms that sell to the public compared to 22nd overall. For firms that sell to business in general, the problem 鈥淒elinquent Accounts/Late Payments鈥� is more severe than the overall population, with a ranking difference of 14 positions. It ranks 58th overall, 44th for those that sell to business in general, and is critical for 8 percent. For firms that sell to government agencies and/or non-profit organizations, 鈥淲inning Contracts from Federal/State/Local Governments鈥� is significantly more difficult. While the overall business population ranks 70th overall and 30th for firms that sell to the government.

Thirty-six percent of small business owners experience declining sales over the last three years, fewer than in 2020. Many problems for this group are ranked differently than those firms with an increase in sales. Small businesses with declining sales find problems related to sales to be the most severe. The problems with the greatest rank difference between those with decreasing sales of 10% or more and the overall population are 鈥淧oor Sales,鈥� 鈥淧oor Earnings (profits),鈥� and 鈥淐ash Flow.鈥� 鈥淧oor Sales鈥� leads with a 35-rank difference between the overall population (51st) and this group (16th) and 19 percent citing it a critical problem. By contrast, firms with increasing sales of 50% of more rank this problem 63rd. A closely related problem, 鈥淧oor Earnings (profits)鈥� ranks 31st overall and 12th for firms with declining sales of 10% or more. Lastly, the problem of 鈥淐ash Flow鈥� is also more severe for these firms with a ranking of 37th overall compared to 22nd for this group.

On the other side, small businesses with increasing sales find employee-related problems and those related to business growth to be more problematic. 鈥淗andling Business Growth鈥� is significantly more severe for those with increasing sales of 50% or more than the overall population. This problem ranks 53rd overall and 22nd for this group. Firms with increasing sales may often expand their business and/or hire more employees. This can make employee-related problems more prevalent and/or severe. Firms with increasing sales of 50% or more rank 鈥淭raining Employees鈥� 17th, whereas it ranks 44th overall. Similarly, 鈥淢anaging Employees (e.g., performance, absenteeism, appearance, etc.)鈥� ranks 34th for firms with increasing sales of 10-24%, but 43rd overall.

Thirty-six percent of small business owners experience declining sales over the last three years, fewer than in 2020. Many problems for this group are ranked differently than those firms with an increase in sales. Small businesses with declining sales find problems related to sales to be the most severe. The problems with the greatest rank difference between those with decreasing sales of 10% or more and the overall population are 鈥淧oor Sales,鈥� 鈥淧oor Earnings (profits),鈥� and 鈥淐ash Flow.鈥� 鈥淧oor Sales鈥� leads with a 35-rank difference between the overall population (51st) and this group (16th) and 19 percent citing it a critical problem. By contrast, firms with increasing sales of 50% of more rank this problem 63rd. A closely related problem, 鈥淧oor Earnings (profits)鈥� ranks 31st overall and 12th for firms with declining sales of 10% or more. Lastly, the problem of 鈥淐ash Flow鈥� is also more severe for these firms with a ranking of 37th overall compared to 22nd for this group.

On the other side, small businesses with increasing sales find employee-related problems and those related to business growth to be more problematic. 鈥淗andling Business Growth鈥� is significantly more severe for those with increasing sales of 50% or more than the overall population. This problem ranks 53rd overall and 22nd for this group. Firms with increasing sales may often expand their business and/or hire more employees. This can make employee-related problems more prevalent and/or severe. Firms with increasing sales of 50% or more rank 鈥淭raining Employees鈥� 17th, whereas it ranks 44th overall. Similarly, 鈥淢anaging Employees (e.g., performance, absenteeism, appearance, etc.)鈥� ranks 34th for firms with increasing sales of 10-24%, but 43rd overall.

Small business problems also vary by the years of ownership. Problem severity often varies depending on the maturity of the business.
 
Newer firms tend to rank problems related to advertising and financing more severely than older firms and the overall business population. There is a 31-rank difference between the newest firms (three years or fewer) and the oldest (21 years or more) for the problem 鈥淎bility to Cost-Effectively Advertise.鈥� The newest firms rank this issue 21st and 13 percent cite it as a critical problem compared to 52nd for older firms and 5 percent reporting the problem critical. Middle-aged businesses (6-10 years) rank this problem 34th. Newer firms often have trouble with credit and financing since they tend to be less stable and profitable than more mature firms. This is reflected in the rankings of these issues. 鈥淐redit Rating/Record Errors鈥� ranks 46th for firms owned for three years or less versus 71st overall and 72nd for those owned for 21 years or more. Two other problems ranking more burdensome related to financing are 鈥淥btaining Long-Term (5 years or more) Business Loans鈥� and 鈥淥btaining Short-Term (less than 12 months or revolving) Business Loans. These problems rank 49th and 48th respectively for the newest firms compared to 68th and 67th.
 
Problems that rank more difficult for the oldest firms (those with 21 years or more) include the 鈥淓state Tax鈥� and 鈥淓nvironmental Regulations (e.g., EPA).鈥� The 鈥淓state Tax鈥� ranks 39th for the oldest firms, 67th for middle-aged firms (6-10 years), and 70th for the newest firms. Twenty percent of small business owners who have owned their business for 21 or more years report this as a critical problem. As firms become older, estate planning becomes more important. Another problem that follows this pattern is 鈥淓nvironmental Regulations (e.g., EPA)鈥� which ranks 35th for the oldest firms and 63rd for the newest firms. Thirteen percent of the oldest firms report this is a critical problem compared to 4 percent of the newest firms.
 

Problem severity also differs based on the gender of the owner(s) of a business. This is likely due to the industry and number of employees, although other differences are less clear. In this report, over half (55 percent) of small business owners are male, 14 percent are female, and 31 percent are equally male and female. Most of the problems are similar in ranking with 80 percent of them within 9 positions or less. Problems that are more burdensome for male owners include 鈥淓nvironmental Regulations (e.g., EPA)鈥� and 鈥淲orkers鈥� Compensation鈥� whereas female-owned businesses fi nd 鈥淯sing Social Media to Promote Business (Facebook, Twitter, Yelp, Google, etc.),鈥� and the 鈥淎bility to Cost-Effectively Advertise鈥� more problematic.

The complete list of problem ranking by male owned, female owned, and equally male/female owned are shown in Table 12.

Small business owners legally structure their business in one of five ways: proprietorship, partnership, corporation (C-corporation), sub-chapter S-corporation (S-corporation), or limited liability corporation (LLC). These legal forms of businesses differ in the severity of certain issues. The main factors that differentiate one form of business from another are tax rules, liability exposure, formality, and ownership control. A proprietorship is the simplest to establish and least expensive option, whereas C-corporations are more formal and costly. Two other distinguishing characteristics of the legal forms of business are the size of the firm and number of owners, as proprietorships and partnerships tend to have fewer employees.

Employment-related problems tend to be harder for small businesses legally structured as S-corporations and LLCs. All of the employment-related questions in this survey rank the most severe for S-corporations and second for LLCs. 鈥淔inding and Keeping Skilled Employees鈥� has the largest ranking difference between two legal forms of businesses of all the employment-related questions. This problem ranks 4th for S-corporations and 43rd for proprietorships. The percent citing this a critical problem was double for S-corporation (28 percent) compared to proprietorships (14 percent). LLCs rank this problem 14th, and 23rd for both C-corporations and partnerships. S-corporations rank 鈥淟ocating Qualified Employees鈥� as the second most important problem, with 31 percent reporting it a critical problem. This compares to 7th place for LLCs, 9th for C-corporations and partnerships, and 17th for businesses classified as proprietorships. This pattern continues for other employment-related questions including: 鈥淢anaging Employees (e.g., performance, absenteeism, appearance, etc.),鈥� 鈥淭raining Employees,鈥� and 鈥淲orkers鈥� Compensation.鈥�