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Small business owners struggle with inflation, KeyBank survey reveals

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October 8, 2026

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Small business owners are continuing to fight inflation and rising costs, with one-third absorbing higher expenses directly out of their own paychecks rather than passing them on to customers, according to the 2026 KeyBank Small Business Survey.

Despite economic challenges, small business owners reported strong momentum, according to a press release. Ninety-four percent claimed at least one key accomplishment over the past year, including maintaining stable prices, improving efficiency, expanding services or growing revenue. Additionally, 88% said they remain as motivated by their founding dream as when they first opened.

Inflation remains the primary challenge, cited by 53% of owners, up from 50% in 2025. However, cash flow and financial stability show signs of improvement. More than half of respondents (54%) can fund at least one month of operating expenses from cash reserves alone, a significant increase from 33% in 2024. Furthermore, 28% are actively investing in long-term growth, while the share of businesses operating in "survival mode" dropped to 17% from 23% last year.

Beyond bottom-line metrics, 51% of owners define success through freedom and autonomy, while 46% focus on financial security and 34% aim to build a family legacy.

"Resilience is at the heart of every successful small business story," Oliver Kardos, chief operating officer of business banking at KeyBank, said in the release.