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A small business owner’s assessment of the economy doesn’t always reflect how their own business is performing. Understanding this disconnect is an important part of evaluating the small business economic outlook.
A new Small Business Expo Research Team survey of 423 small business owners found that 50.1% report conflicting assessments of their business and the broader economy. Most of those reporting a disconnect describe their own business as strong despite viewing the economy as weak.
The findings highlight an important distinction between broader economic sentiment and individual business conditions, raising questions about how much economic perceptions actually influence small business owners’ outlook.
Highlights
- 50.1% of respondents report a mismatch between their business performance and their assessment of the economy.
- 35.5% describe their business as strong despite viewing the economy as weak.
- 61.5% say their own business results have the greatest influence on their outlook.
- Just 5.2% identify the national economy as the primary influence on their outlook.
Where the Business–Economy Disconnect Appears
When asked to characterize their current situation, respondents reported four combinations of business performance and economic sentiment:
- 35.5% — Business strong / economy weak
- 26.5% — Business strong / economy strong
- 23.4% — Business weak / economy weak
- 14.7% — Business weak / economy strong
The largest group consists of respondents who report strong business performance despite unfavorable perceptions of the economy.
This group is more than twice the size of those reporting the opposite situation: a weak business despite a strong economy.
Overall, 61.9% characterize their own businesses as strong, even as 58.9% describe the broader economy as weak.
These findings illustrate why economic sentiment alone may not accurately reflect how individual businesses are faring.
National research provides additional context. The National Federation of Independent Business tracks small business optimism and uncertainty through its monthly surveys, while the Federal Reserve’s Small Business Credit Survey examines firms’ financial conditions, challenges, and expectations.¹ ²
The Small Business Expo findings underscore the value of considering these dimensions separately when assessing the small business economic outlook, rather than assuming that unfavorable economic sentiment necessarily indicates poor business performance.
What Shapes the Small Business Economic Outlook?
The survey also asked respondents which factor has the greatest influence on their outlook.
A clear majority, 61.5%, selected their own business results, substantially exceeding every other response.
Industry performance ranked second at 14.4%, followed by customer sentiment at 11.1% and the local economy at 7.8%.
The national economy ranked last, selected by just 5.2% of respondents.
This distribution adds important context to the findings on economic sentiment. Although many respondents express negative views of the broader economy, relatively few identify national conditions as the leading influence on their outlook.
Instead, respondents appear to prioritize factors more directly connected to their own operations.
The results suggest that business owners can recognize economic challenges without allowing those perceptions to determine how they evaluate their individual circumstances.
Customer Sentiment Matters More Among Respondents Facing Weak Conditions
A closer look at the responses reveals that the factors influencing outlook differ depending on how owners assess their circumstances.
Among the 99 respondents who describe both their business and the economy as weak, 22.2% identify customer sentiment as their greatest influence.
By comparison, customer sentiment is the leading factor for just 7.7% of respondents outside that group.
The difference suggests that customer perceptions may carry greater weight for owners experiencing unfavorable conditions within both their businesses and the broader economy.
Own-business results remain the most frequently selected influence even among this group, but their share falls to 46.5%, compared with 61.5% across all respondents.
These subgroup findings should be interpreted cautiously, given the smaller number of responses. Nevertheless, they point to a potentially meaningful difference in how owners evaluate their outlook under varying business conditions.
Final Takeaway
The survey illustrates why the small business economic outlook cannot be understood through economic sentiment alone.
Owners’ perceptions of the broader economy, their assessments of their own businesses, and the factors shaping their outlook are related but distinct measures.
For researchers and policymakers evaluating small business conditions, the findings reinforce the importance of examining owners’ direct experiences alongside broader economic indicators.
A negative view of the economy does not necessarily mean a business is struggling, just as a positive economic outlook does not guarantee strong individual performance.
Footnotes
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National Federation of Independent Business. Small Business Economic Trends. https://www.nfib.com/surveys/small-business-economic-trends/
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Federal Reserve Banks. 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey. https://www.fedsmallbusiness.org/reports/survey/2026/2026-report-on-employer-firms/
Related: 64% of Small Businesses Expect Disruption Without Their Owner