KeyBank Survey: Small Business Owners Absorb Costs to Maintain…

Event summary

33% of small business owners are absorbing rising costs out of their own paychecks rather than passing them on to customers.
88% of owners remain motivated by their original business dream despite economic challenges.
53% of owners cite inflation and rising costs as their dominant threat, up from 50% in 2025.
54% of owners can fund one month of operating expenses from cash reserves, up from 33% in 2024.
28% of owners are actively investing for long-term growth, up from 22% in 2025.

The big picture

KeyBank's survey highlights the resilience of small business owners in the face of persistent inflation and rising costs. Despite economic challenges, many owners are prioritizing customer relationships and long-term growth. The data suggests a broader trend of financial stabilization among small businesses, with improved cash flow and reduced survival-mode operations. This resilience is critical for the overall health of the economy, as small businesses play a significant role in job creation and community development.

What we're watching

Cost Absorption Sustainability: How long small business owners can continue absorbing costs without compromising their financial health.
Cash Flow Trends: The pace at which small businesses are rebuilding their cash reserves and reducing debt.
Long-Term Investment: Whether the increase in long-term investment indicates a shift towards growth-oriented strategies.