Matt Wagner (01:02) Hey everyone, welcome to another episode of the Main Street Business Inside podcast. Grateful to be your host, Matt Wagner, Chief Innovation Officer at Main Street America. And since the pandemic in 2020, a time in which we also launched our first ever dedicated research department, we've conducted a number of national surveys examining the overall confidence, health, and challenges of America's main street, small businesses, and entrepreneurs. And over the last few years, we've kind of settled into this cadence of having a national fall and spring survey. But this is the first time we've actually released the survey findings through the podcast. So it's a great opportunity to share with you firsthand and actually enter in a dialogue ⁓ with my guests today. So it's with great pleasure that I have with me to discuss really what we've learned from the more than 1,500 responses in this spring survey. welcome Dr. Mike Poe, Senior Director of Research. I'm going to call him a hit workout guru and just an all-out amazing ⁓ member of our team and so grateful you could join Mike. Welcome to the show. know, for the listeners out there, maybe tell us a little bit about yourself and your background, then we'll start to dive into some of the findings and analysis from the survey. Mike Powe (02:27) Yeah, sure. So I've been working in the kind of preservation, historic preservation, community development, economic development, research world for. About 12 years, a little over a dozen years. My background is actually not preservation. I'm sort of surprised to be in preservation world. It means, you know, it's about old buildings, but it's about a lot of other things. My background is in city planning policy. did masters, a doctorate in planning. But I was still a younger man and started working for the trust in 2013 and then jumped over to work with the esteemed host here in 2020, actually a week before the pandemic started. Right. ⁓ Matt Wagner (03:28) Yeah, yeah. mean, we had to, for the folks out there, if you remember that time, and I'm sure you do, we were working fast and furious because, as you can imagine, a lot of folks were really deeply interested and certainly concerned about what was happening to small businesses along our downtowns and neighborhood commercial districts. And I think that year, Mike, you did like four national surveys and even an SMS survey or something like that in 2020. And so ⁓ You know in some respects I think ⁓ one there's obviously been and continues to be a lot of national dialogue around Main Street businesses just overall and sometimes it's centered you know from a policy perspective or in a Main Street versus Wall Street and I think what's really interesting about ⁓ our work is that we have an opportunity I think to really properly define what a Main Street business ⁓ is, as well as, I think, provide really credible data as to the general health or confidence or obviously challenges that are particular ⁓ to Main Street businesses overall and not how we think about small business at the US Chamber level or even the National Federation of Independent Business level. Mike, I wonder if you could provide a little bit of context about who is that, who is the main street business, how do we define that based on who's responding to our surveys. Mike Powe (05:11) yeah sure yeah i agree you know there's a lot of uh... Talk about small businesses and mainstream businesses. think we have sort of maybe the best read on the situation. of the best network obviously of folks across the country. So you know, over the years since 2020, we've probably heard from 15,000 small business owners, which hopefully are multiple survey takers. But yeah, this most recent one are from 1,500 plus, close to 1,600 respondents in 47 states plus the Columbia. think it more than 500 communities. So we're really getting a widespread reach and small towns and big cities alike. When we think about mainstream businesses, the really big thing that sets us apart, of sets mainstream businesses apart, is that they're very small. So more than half of response to this survey had just one or two full-time staff, including the owner. So mom and pop, know, truly. Matt Wagner (06:13) It's the definition for sure. Mike Powe (06:18) 93 % fewer than 20 total staff, including part time and seasonal or temporary employees. We asked for the first time in this survey, whether folks lean on family or friends for unpaid labor and more than half that they do on a frequent or occasional basis. of gets you to think about whether, you know, is that unpaid labor sustainable sort of like the practices sometimes like the mobile government induct tape that holds things Matt Wagner (07:03) Okay. Mike Powe (07:05) So yeah, these are truly small businesses. I think it's also important to say that we tend to hear from demographically a certain segment. mostly Gen X, or Gen X was the modal group we heard by age, 45%. Close to a quarter are millennials, close to a quarter are... Matt Wagner (07:30) Yeah. Mike Powe (07:30) So across all kinds of surveys, we hear generally about 70 % of respondents for women. And this survey, think it's 60, 69%. So just about 70 % of the business owner respondents for women. About two thirds are renters. About a third were started in 2020 or later. So the code for near kind of. Matt Wagner (07:53) yeah. Mike Powe (07:54) Co-court still continues. I think if you add in last 10 years, think it's something closer to 60%. So pretty new businesses, women-like businesses, tend to be renters, tend to be very, very small. Matt Wagner (08:09) Yeah. I think that matches really observationally, especially on women owned businesses that over the last decade, ⁓ I think have profoundly ⁓ led a charge of ⁓ in terms of how we think about revitalization efforts and small business activity on main streets. ⁓ know, given their importance to our communities and frankly, the nation's ⁓ economy, I think the statistic I saw at the US Small Business Administration is like, if you think about this cohort, less than 20 employees, it's like close to 90 % of all US businesses, including those that are self-employed, fall into this. So it's a big part of the economy overall. And I wonder if you could explore what the data is suggesting about just current concerns in the performance in 2025 thus far. Mike Powe (09:08) Let's go. Interesting we started talking about COVID and started the conversation. It's a little bit of a COVID like most the In so many ways, but the concerns we heard from folks, the kind of confidence that folks feel, some of the challenges they're having are acute. Matt Wagner (09:14) Yeah Yeah. Mike Powe (09:33) beginning something that looks pretty severe. Yeah. So we asked, you know, from a list of concerns, what are folks kind of as business owners? The top three, so more three responses got more than half of all response to answer the check. So that was cost of supplies, inventory or equipment with 72 % decreasing customer spending and impacts of potential new tariffs. And I think this this trio of concerns are really intertwined. I think you probably understand this better than me, Matt, but like, you know, obviously... potential tariffs or current tariffs are going to shake the supply chain, they're slow things down, it's gonna lead to higher costs. So those two right off the bat. I think the degree to which the economy is in the conversation, degree to which ⁓ some folks are finding their employment situations changing, the threat of decreasing customer spending, It's both real and think something that folks are on the lookout for. I think we're sort of at beginning of something that might worsen. ⁓ That's obviously the fear. Matt Wagner (11:00) Yeah, yeah. Mike Powe (11:01) We asked about other stuff related to immigration policy and theft and safety and crime and those, you know, those concerns showed up, I think, but most of those were 20 % or less of all respondents. Some stuff like business debt or borrowing costs and rent, those things were sort of in between this 20 % and 50 % mark, but really I think those big three really did. Matt Wagner (11:27) Yeah, yeah. Mike Powe (11:29) just to continue a little bit, so. where we start to see actual sort of not just concerns, but how folks are kind of fairing. We asked how business finances have changed over the last three months, both in terms of revenue and in terms of net profit. And 48 % of respondents said their net profit had decreased over the last three months. 40%, 39 % said revenues were down. Just for comparison, in 2023, a couple of springs ago, we asked a similar kind of question. asked how revenue changed from 2021 to 2022. So year over year. And then only 21 % reported declining revenue. And again, in this survey, that was 39%. Matt Wagner (12:19) Wow, big difference. Yeah, Sizeable. Mike Powe (12:22) It really seems like the sort of receipts are reflecting this. And then just one more point on this. Close to two thirds or more than two thirds of businesses said they already raised their prices. so in the midst of concerns about consumer appetite, spending. also needing to raise your price of this. Yeah, sort of a, a tenuous, it's a tenuous moment. Matt Wagner (12:57) Exactly. Yeah, there's, yeah, there's only so much like sort of pricing elasticity that a business can can migrate to when consumer spending is also sort of crunched. ⁓ So pricing sensitivity working in there. It's, you know, you mentioned, you know, again, sort of the pandemic and some of the lightness, I think one of the more kind of interesting parts is that during the pandemic, like the pace of change was so so quick. ⁓ And things were always I remember comments from small business owners of like, I don't know what's going to happen tomorrow. And I think both in terms of maybe some policy, ⁓ some policy and sort of the uncertainty. ⁓ That's fairly consistent. But I think I also pick up on ⁓ something somewhat unique, at least in conversations that revolve around I'm feeling sort like stuck. or frozen, especially in terms of just like making orders or something like that, because I'm unsure about what that price is gonna look like when I take delivery or what have you, or am I gonna get a price increase ⁓ later on down the road? And I wonder on the qualitative side of our work, in particular to this survey, kind of what you picked up on, anything that you can share in terms of comments some of the business owners. Mike Powe (14:31) Yeah, yeah, think the just just you're saying, you know, I think what kind of you might expect or fear is what folks are. So for instance, almost exactly to what you said, there was a quote from a business owner in Indiana, said, I've received emails now from most all of my wholesale suppliers, nearly all are imposing price increases or surcharges due to the tariff situation. We had some we sent off the data to some kind of advisors for kind of comment and quote and reaction. And I know Mindy I think is a former pod. Matt Wagner (15:10) Yeah, Mindy's been on the show. Mike Powe (15:15) said the results were like exactly how I'm uneasy seems like every week brings a new wave emails about price increases or shipping delays or even freight increases. It's hard to predict what the next few months will hold for products and supply chains. you know, exactly like you say, there's sort of a moment of so much unpredictability that can lend to inertia can lend to sort of just being kind of frozen. Matt Wagner (15:40) Yeah. Mike Powe (15:42) There are other things other ways that the concerns kind of show up in the quantitative remarks and I should say I'm really grateful that we have so many business owners respond of course, but kind of lean in and tell us a little bit more about what's going on. This is first time we've sort of leaned on the quality of data to this extent. I think, I hope folks, you know, read through the results and really kind of feel thanks a little bit more than just the data numbers might show, the charts might show. availability of equipment and products gone up ⁓ debt. There's hiring staff. Housing crisis has made me difficult to get additional employees to find housing. Yeah, the folks just saying their green costs are up. lot of folks saying that they're concerned about shutting down whether you know, can go to business said next six months, machine business, they can't survive another year. They know this for a Matt Wagner (16:40) Okay. Mike Powe (17:05) years including the pandemic so yeah it feels really unfortunately like ⁓ Matt Wagner (17:14) Yeah, yeah, yeah. the you know, we've been running this survey, you know, as a series for well since as we mentioned, May of 2020. And I think over the last three years in particular, in our typical, you know, spring and fall cycle, one of the things that we've tried to get at a little bit more is some more longitudinal, how can we see and forecast trends ⁓ over over time or see trend lines ⁓ over time. And ⁓ one in particular, we've we've asked is along confidence. ⁓ So there is the I think it's the University of Michigan, although I hate to say the Michigan people know I went to Ohio State, you know, consumer confidence survey that they're they're known for. And I feel like we're developing our own here in the Main Street business confidence ⁓ rating. I wonder if you could talk a little bit about this data point in particular, what you're seeing in this year's or this, you know, springs data, but also how does that compare and relate to what we've seen in the past? Mike Powe (18:26) you Yeah, sure. So yeah, this is one question that we sort of like not touched since we started asking. And sometimes you feel like we could have made this question a little bit better. But so we asked as we think about the next three months, how confident are you that your business will perform successfully? And between fall 2022, spring 2023, fall 2023, pretty consistent, pretty high. So we asked them 10 point scale numbers. averages were 7.6 7.7 7.7. And as we sort of got into 2024, we started to see the numbers dropped to 7.5 7.2 and fall 2024 and then kind of as folks might expect. And this spring survey we felt 6.7. So from 7.2 to 6.7 a half point drop. change in the record, know, as far as the six surveys we asked this question, the biggest kind of survey to survey ⁓ delta. And obviously, it's the lowest number we've heard. We did look at the cross tabs a little bit. Matt Wagner (19:45) Okay. Mike Powe (19:48) Businesses that watched the last five years those folks tend to be well less confident as 6.6 average businesses with only one or two employees the mom and pops which so many of them ⁓ are 6.5 average and retail businesses I think as the sort of segment were the lowest 6.4 average. Still about a third of our overall sample of retail businesses. Matt Wagner (20:11) . Yeah. Mike Powe (20:18) Yeah, pretty distressing. mean, it's, it's, ⁓ Matt Wagner (20:24) I think awesome. Mike Powe (20:26) Yeah, yeah, but it's just sort of like somebody's headlines are not ⁓ I think we're on our heels. Matt Wagner (20:34) Yeah, exactly. Yeah, it does have that that 2020 vibe ⁓ to it. And I think ⁓ the fortunate thing, hopefully, is that ⁓ businesses are hopefully, you know, developed kind of that muscle of agility, resiliency ⁓ shifts. But I think it's, you know, a lot of our listeners are, you know, downtown professionals, you know, working in main streets or what have you. And what can we do as communities ⁓ to support them through this through this challenging ⁓ time? And ⁓ it's really not a big surprise. I it's interesting to hear some of the segmentation there on this data that your older businesses may have either greater diversity ⁓ of business ⁓ revenue lines or more padding perhaps or even access to capital because of track record where our newer businesses may still be in that ⁓ particular phase of their journey and have ⁓ less nimbleness or access. to resources as a result, especially in terms of size. And then on the retail front, so susceptible to consumer spending ⁓ challenges and inventory that might be ⁓ more prone ⁓ for sort of global supply chain. So really fascinating to see the breakdown there. You know, is we wrap up and, know, during the... go Mike Powe (22:40) But we're not in a rush to build vaccines. We're not unable to be in person. In so many ways, this is not the pandemic. So how you say, reason for optimism, if you look forward, is sort of like, this is not, this is not insurmountable in the same way. This is not human health. This is not a contagion. This is, Matt Wagner (22:50) Correct. Mike Powe (23:09) sort of a matter of like supply chains that sort of folks getting the barracks, you know, to some extent, consumer spending might not really drop off. I so far, I the jobs data nationally is not super discouraging. You know, there's still always like the sort of wondering what the next month's report's gonna say. But so far, things have not, ⁓ the bottom hasn't dropped out. I feel like this data tells us that folks are freaked out. ⁓ But yeah, I just I still find a little open that we're not sort of reimagining all of our public spaces and our workspaces and we're not like building Matt Wagner (23:48) Yes! Mike Powe (23:51) This is different kind of crisis in the making perhaps. ⁓ It's not on a point. It's just going to take us years to develop. Matt Wagner (23:57) Yeah, I- Exactly. Exactly. It is different in that realm and I think there is certainly reason to be ⁓ optimistic and hopeful. One, because I think there's a lot of support and I think we gained a lot of recognition, frankly, as an outgrowth of the pandemic about the importance of Main Street small businesses to our local communities and kind of just like quality of life in many respects, because we did see things when they were closed down and not wanting to see that again. ⁓ you know, there's some economic transitions. ⁓ in ⁓ I guess in the market. And so it sort of leads me to our kind of a wrap up that, you know, this is what we do. This is what research, you know, one of your aims obviously is kind of keep a tab on ⁓ what's happening in this particular sector. And I'm wondering how you're thinking about kind of what comes next given ⁓ maybe both ⁓ some uncertainty and then potential lags. some of the economic figures. What's your expectation for research as you think about 2025 then? Mike Powe (25:46) research i think think it's fair to say we'll follow up likely multiple times with business owners i want to make sure we're not wearing out our welcome you know i do think mainstream america we gotta think about what we can do to assist so yeah i think it's easy enough it's really easy to be a researcher right it's easy to ask these questions and you know ⁓ So I don't want to wear a welcome and ask too many times for people to give us feedback, to give us share their insights and share other feelings. I think it could be a good time to go to maybe not actually SMS or text messages. There's certain ways to try to get during COVID, you alluded to it, to try to get folks to kind of respond very quickly. We know folks don't have much time. I don't know if we'll go back to that, but I think we could go to really share Matt Wagner (26:32) Yeah. Mike Powe (26:46) short short surveys, you know, in the order of just three to five questions or something just to check in. Yeah, I don't really know. It's a tough it's a tough moment in so many ways. You know, mainstream America offers a lot of resources to small business. We got more coming. But with the sort of current moment, I think we're going to need our own agility. Matt Wagner (27:13) Exactly. Mike Powe (27:14) I think this is part of the new innovation division between America and how we can sort of act quickly, respond quickly, pilot things out, see what's kind of worked and what's helping. I don't know. It's tough. Matt Wagner (27:24) Great. Yeah, I don't think this will be the last time our audience ⁓ hears ⁓ from us ⁓ in terms of ⁓ sort of data points or just more, ⁓ I could see, you qualitative. We do talk with so many small businesses out there and sometimes it's just better to understand kind of where they're at on their unique journey ⁓ as really critical insight and representative of many others in so many respects. ⁓ I know by the time that this show as you're listening to this or watching it on YouTube, we will have already put out to media and to the network Mike's write up and blog and the findings from the survey and more details. So what we'll do is we'll make sure that we attach all of that within the show notes if you want to download it. Or obviously you can reach out to us at Main Street America and we can certainly send a copy out but it will be available. on our website as well as in the show notes here is part of the podcast. So Mike, I just want to thank you so much again for ⁓ all the work and a shout out to Emmy and Eva on your team who are just tremendous, I know, resources to you and to the organization at Main Street America. And so we're so thankful for all their hard work and diligence here in supporting the small business world and certainly for the podcast ⁓ here. And so yeah. Yeah, just a big shout out and thanks for joining the show. Mike Powe (29:01) Yeah, thanks for having me. Yeah, and thank you for shout out, Amy. Amy, my retail colleague in Seattle really did help us take through the survey. And thank you to the folks out there who served as advisors. Catherine Ross, our friend in Tacoma, Washington, really helped us with questions. you know, no one wants to celebrate these findings, but I'm really grateful for the folks we're working with, folks around us. We're for you, Matt. ⁓ Matt Wagner (29:27) Yeah, you bet. Anytime. We'll have you back on. All right. Thanks, Mike. I'm going to do a little quick close out here for all of you. You know, as always, we're so appreciative for joining the show and, you know, for hopefully you've gained a lot of insights and can reflect from the data that was presented. That's really going to do it for this episode, of course. But as always, if you're a business owner and likewise to my place professional colleagues out there, I hope this episode has provided plenty of new insights, solutions, and inspiration. And as consumers, please continue to support your local small businesses and of course tell their stories. They're so really important to our local and national economies and most importantly, they promote and provide quality of living to the places we all call home. quick plug ⁓ for checking out our library, our growing library of podcasts and training videos on our YouTube channel. And if you're enjoying this content, we just ask that you please hit the subscribe button wherever that is on your screen, or in your Spotify or iTunes account and rate and review us and as always, be sure to tell your friends, family, even pets, neighbors and colleagues so you all can catch the next episode. So thanks for listening. And for all the support. Matt Wagner (30:54) How is your Main Street planning to celebrate America's 250th? Beacon Design partners with communities like yours to create custom, American-made keepsakes that raise funds and celebrate local pride. These keepsakes turn historic moments into lasting memories, and they're perfect for any community event. Beacon Design will help you create a memorable keepsake that's crafted in the USA and trusted by communities nationwide. So visit beacondesign.com to learn more. Don't just mark the moment, make it memorable.