Nearly 70% of Owners Rate Their Business Health Good — But Tax Worries Hit a 5-Year High

Small business owners are feeling better about their own companies than they have in months, even as the bills keep climbing. The National Federation of Independent Business (NFIB) released its October survey on November 10, and it shows nearly 70% of owners rating their business health as good or excellent, up from around 60% a month earlier.

The same survey shows tax worries at their highest level since May 2021. Here is what the numbers say, why the two trends can coexist, and how to use them when you plan the final stretch of 2026.

The headline numbers

Optimism Index: 97.8. That is down just 0.1 points from September and a hair under the long-term average of 98. Over the past few years, the index has ranged from a high of 105.1 to a low of 88.5.
Uncertainty Index: 84. It fell 6 points in October to its lowest level since last December. It is still well above its historical average of 68.
Business health: nearly 70% of owners rated their overall business health as good or excellent, compared with around 60% in September.

Holly Wade, NFIB's executive director of research, said the decline in uncertainty is a meaningful shift. Owners are more comfortable making decisions when they feel confident about what comes next. She described the split between owners who felt more certain and those who felt less certain as about equal.

What owners say is hurting most

NFIB asks owners to name their single most important problem. In October the top three were:

Labor quality or availability: 25%.
Taxes: 21%. This is the highest tax reading since May 2021.
Inflation: 17%.

Taxes now sit second, ahead of inflation. Wade noted that some owners may be wary that Democratic wins in last week's federal and state elections could mean heavier tax and regulatory burdens, while others are hopeful the new Congress will put partisan differences aside to address affordability. She said November's survey will offer the first look at how owners feel after the election.

Prices: owners are passing costs along faster than usual

The survey shows continued price pressure. Wade said small businesses are raising their prices faster than normal to blunt the effect of rising costs. The question owners keep asking, in her words, is how much of those higher input costs they can pass along, and how often, without eroding their customer base.

That tension matches the broader data. KPMG chief economist Diane Swonk estimates that consumer prices rose about 4.2% over the past year, versus an implied 3.1% in average hourly wages. The Bureau of Labor Statistics did not publish a year-over-year figure for October because it could not collect last October's prices during the government shutdown, so that number is an interpolation. Even so, it explains why customers feel squeezed, and why raising prices carries real risk.

Hiring: more owners are trying, but few find qualified people

NFIB's separate October jobs report, based on 759 member responses through October 29, showed a rebound after a weak September:

56% of owners reported hiring or trying to hire, up 5 points.
A net 18% plan to add jobs over the next three months, up 1 point.
36% reported job openings they could not fill, up 4 points and 12 points above the historical average.
48% reported few or no qualified applicants, which is 86% of those trying to hire.
The Small Business Employment Index rose 0.2 points to 100.8, below the 2025 average of 101.2 but above its historical average of 100.

One agricultural owner in Ohio put it bluntly in the survey: "The quality of help to hire is terrible." The takeaway is that demand for workers is strong while the supply of skilled applicants remains thin.

A warning sign hidden in the good news

Wade pointed to one small concern: more owners said they have too much supply or inventory on their shelves, and they plan to reduce it. If you stocked up for the holidays based on last month's numbers, now is the time to check how fast items are actually moving.

What to do with this information

Here is a practical checklist for the next 30 days.

Run a tax checkup before year-end. With taxes the second-biggest concern, ask your accountant what can still be done before December 31. Choosing the right structure matters, so revisit LLC vs. S corp if your income has changed.
Review your pricing line by line. If your costs rose in 2026 and your prices did not, you are absorbing the gap. Raise the items where customers are least price sensitive first.
Check inventory turns. Compare what you ordered with what has sold since September, and adjust reorders now rather than in January.
Update your numbers. A current profit and loss statement shows whether higher prices are actually reaching your bottom line.
Be careful how you fill labor gaps. If you turn to freelancers, make sure you classify them correctly. See our guide to independent contractor vs. employee.
Keep cash flexible. If you may need financing in 2027, look at your SBA loan options before borrowing costs move.

The bottom line

October's survey is a mixed but encouraging picture. Owners feel healthier, uncertainty is easing, and hiring picked back up. Meanwhile, taxes, labor and inflation are all squeezing margins. The owners who come out ahead in the holiday season will probably be the ones who price carefully, watch inventory closely, and get their tax planning done before the calendar turns.

Sources

The National News Desk: Small-business optimism steady in face of persistent price, labor and tax pressures (Nov. 10, 2026)
NFIB: October 2026 Jobs Report
KPMG Economics: October inflation cinches December rate hike (Nov. 10, 2026)

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