LANSING – Michigan small business owners have serious concerns about the state and national economy, according to responses and data compiled through the Small Business Association of Michigan’s (SBAM) quarterly survey.
At the same time, Michigan small businesses are looking out for their employees, with sixty-seven percent reporting they’ve increased wages over the last year to help staff meet emerging economic challenges. While wages have gone up, nearly half – 48 percent – of small businesses are taking steps to reduce overall expenses and another twenty-three percent are delaying capital expenditures to help prepare for the possibility of a recession.
“Small businesses across Michigan are seeing troubling signs on the economic horizon, and they’re taking active steps to prepare,” said Brian Calley, President and CEO of SBAM. “The good news is that they’re making those preparations while they support their teams, increasing wages and working to maintain staffing levels.”
Seventy-nine percent of SBAM survey respondents report either expanding their own workforce or keeping staffing levels basically unchanged.
Survey respondents were split on the impact of tariffs on their own businesses. Fifty-three percent identify tariffs as a threat to their local business, while 34 percent do not believe they are relevant to their own operations. Thirteen percent believe federal trade policy changes could present positive opportunities for their business.
The survey also found that legislation in Lansing to restrict the ability of individuals to work as independent contractors could have an outsized impact on Michigan small business. Seventy-seven percent of respondents report that they either use or operate as independent contractors.
“What happens in Washington, D.C. and at the state capital has a real impact on small businesses,” said Calley. “Right now, those businesses are pointing to trouble on the horizon. Policymakers should listen.”
The survey was conducted in March 2025. 86 percent of respondents have 50 employees or less.
