Small Business Survey Reveals Cautious Optimism Amid High Costs and Slow AI Adoption

The August 2025 installment of the Main Street Business Survey, powered by the Freedom Economy Index, reveals that only half of small business owners have begun exploring artificial intelligence implementation, while their primary concern remains rising costs reflecting persistent inflationary pressures. The survey indicates businesses are moving from defensive postures to cautious growth strategies, with hiring increasing but qualified talent remaining difficult to find.

Michael Seifert, CEO of PublicSquare, noted that small business owners have endured inflation, supply chain disruptions, and mandates, seeking not bailouts but rather reduced government interference to allow free market function. Andrew Crapuchettes, CEO of RedBalloon.work, observed that while businesses are making cautious growth investments, persistent high costs and policy uncertainty continue to slow decision-making, with owners wanting stable rules for long-term planning regarding AI, expansion, or hiring.

Cost increases and reduced consumer demand dominate business concerns, with 25% of respondents citing rising costs as their top worry and 22% identifying declining consumer demand as their primary issue. Only 12% cited access to affordable capital as their main concern. The survey shows substantial room for AI growth, as 45% of business owners report not using AI in their operations. Among adopters, 32% find AI most helpful for marketing and advertising, while 9.2% benefit in business operations, 7.9% in customer engagement, 3.6% in financial management, and 2% in workforce management.

Staffing impacts are already evident, with 26.6% of AI adopters reporting reduced staffing needs, suggesting significant labor market implications as AI adoption expands. The survey also measured opinions on political matters, finding that 91% of business owners agree with balancing the federal budget, though only 34% support opposition to raising the debt ceiling. Business owners expressed concern about third-party political movements, with a three-to-one ratio viewing such plans as bad for America's economic future.

The Freedom Economy Index introduced the new State of Main Street Index, debuting at 57 on a 100-point scale, indicating positive momentum through assessment of current economic health, customer traffic, revenues, and forward-looking expectations for growth, inflation, and hiring. Now in its fourth year, the survey represents a joint project of multiple organizations including PublicSquare and RedBalloon.work. View the full results of the August Freedom Economy Survey here.