SMBs Sound the Alarm: 85% of Small Business Owners Fear Recession
ADA, Okla.--(BUSINESS WIRE)--Small business owners across America are increasingly concerned about economic uncertainty and the impact of potential tariffs, according to a new national study released by LegalShield. The study, which polled small business owners and managers, reveals mounting anxiety about a potential recession and significant worry about trade policy changes.
Key study findings:
94% of small business owners and managers are worried about a potential recession
85% are concerned that tariffs may impact their business
55% anticipate direct legal implications from tariff policy changes
64% expect supply chain and partner agreement disruptions
47% believe they could face workforce adjustments, including potential downsizing
"Small businesses are the backbone of the American economy, yet they're increasingly caught in the crosshairs of economic uncertainty and shifting trade policies," said Mike Fiffik, LegalShield provider lawyer with Fiffik Law Group, PC. "These businesses often lack the legal resources of larger corporations to navigate complex regulatory changes, leaving them particularly vulnerable during periods of economic volatility."
The study also revealed that small business owners are particularly concerned about:
Supply chain renegotiations (58% concerned)
Workforce adjustment planning (44% concerned)
Compliance with evolving trade regulations (40% concerned)
"Small business owners are facing a perfect storm of economic challenges," said Fiffik. "We're seeing many begin to develop response strategies, including diversifying supply chains, renegotiating contracts, and carefully evaluating inventory management practices."
From Concerns to Action: LegalShield's Unique Small Business Insights
While national study data captures what small business owners are worried about, LegalShield has a unique window into what actions they're taking. As a leading provider of small business legal services, LegalShield handles approximately 50,000 calls monthly from small business members to its nationwide network of provider law firms. These service requests create a proprietary dataset that serves as a real-time barometer of small business legal challenges.
This internal service data shows a notable increase in small business members seeking legal assistance for financial-related issues, validating the concerns expressed in the study:
Q1 2025 showed significant year-over-year increases in collection-related inquiries
March 2025 data reveal substantial increases in billing disputes, collections, and bankruptcy-related inquiries
April 2025 data saw a 12% increase in bankruptcy-related inquiries compared to April 2024
These inquiry patterns are at levels not seen since 2020
'Small business owners are bracing for legal and operational challenges as economic uncertainty looms,' said Matt Layton, senior vice president of consumer analytics at LegalShield. 'Billing disputes and collection inquiries are leading indicators of future bankruptcy requests from SMB owners. Consumers feel the financial pain first, then they pull back on spending which can lead to negative impacts on businesses.'
As economic uncertainty grows, LegalShield continues to monitor these trends while providing small businesses with the legal support to weather potential challenges ahead.
Study Methodology: LegalShield surveyed 255 small business owners and managers across the United States, completed on April 15, 2025. Respondents ranged in age from 25-78 years, balanced according to basic U.S. Census demographic data. The sample included representation from all U.S. regions. All respondents self-identified as owners or managers of small-to-medium businesses.
About LegalShield:
For more than 50 years, LegalShield has provided everyday Americans with easy and affordable access to legal advice, counsel, protection, and representation. Serving millions, LegalShield is one of the world's largest platforms for legal, identity, and reputation management services protecting individuals and businesses across North America. Founded in 1972, LegalShield, and its privacy management product, IDShield, has provided individuals, families, businesses, and employers with tools and services needed to affordably live a just and secure life. Through technology and innovation, LegalShield is disrupting the traditional legal system and transforming how and where people receive legal guidance and services, with access to hundreds of qualified, trusted attorneys and law firms. LegalShield and IDShield are products of Pre-Paid Legal Services, Inc. To learn more about LegalShield and IDShield, visit LegalShield.com and IDShield.com.
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