Taxes are now the second-biggest worry for American small business owners, cited by 21% in October, the highest share since May 2021.
That number comes from the National Federation of Independent Business monthly survey released Tuesday morning, seven weeks before year-end. If your store runs through an LLC or S corp, its profit lands on your personal return, so the owners in that survey are worried about the same bill you are. For the high-ticket store owners I teach at Ecommerce Paradise, the report also carries signals on pricing, hiring and credit going into the holidays.
The headline index barely moved. The details underneath it moved more. Owners say they plan to raise prices, they still cannot find good people, earnings are weak and credit is a little harder to get. If you sell $1,000 to $10,000 products, the kind of store I break down in my guide to high-ticket dropshipping, each of those touches your margin before Dec. 31.
Tax worry on Main Street just hit a five-year high, and the owners who sleep best in April are the ones with clean books in December. Put your store’s sales, ad spend and supplier costs in one ledger so your CPA plans from real numbers. Set up your store’s books in QuickBooks →
NFIB October Index Slips to 97.8 as Taxes Climb to 21%
The NFIB Small Business Optimism Index fell 0.1 points to 97.8 in October, down from 97.9 in September and below 98.2 a year earlier, according to Finimize. The reading sits just under the survey’s 53-year average of 98.0, per Breaking The News.
Economists expected about this. The consensus forecast was 97.7, and the October reading was the lowest since June, according to Trading Economics. NFIB Chief Economist Bill Dunkelberg summed it up plainly: “There was little change in optimism among small businesses in October.”
The bigger shift was in what owners called their single most important problem. Labor quality or availability stayed on top at 25%, down one point, the fourth straight month it led the list, per Trading Economics. Taxes jumped to 21%, the highest share since May 2021 and a notable climb from September.
The other October components moved in both directions, as reported by Finimize. Current job openings rose four points to a net 36% of owners, and plans to expand rose four points to a net 11%. The earnings trend sat at a net negative 23%, meaning far more owners reported falling profits than rising ones. Credit conditions came in at a net negative 5%, a more pessimistic reading on getting loans.
Dunkelberg described the month as “little overall change while day-to-day pressures linger,” per Finimize.
Expectations improved slightly. A net 8% of owners expect better business conditions over the next six months, up two points after two straight months of decline, according to Trading Economics.
NFIB also tracks how uncertain owners feel about the future. That Uncertainty Index dropped six points to 84, its lowest reading since December 2025, according to a summary of the report published by Academic Capital. The same summary reports that a net 37% of owners plan to raise selling prices, that 15% rate their business as excellent and 54% as good.
One sourcing note. NFIB’s own release page and its full monthly PDF did not load for me this morning, so these figures come from the outlets above, which published within hours of the release. The price-plans figure appears in only one of those summaries, so treat it as reported, not confirmed, until NFIB’s full report is readable. FX.co also reported the 97.8 reading and described owner sentiment as “broadly stable.”
From 98.2 a Year Ago: How Main Street Sentiment Drifted to 97.8
The index has hovered around 98 for months. September’s reading came in at 97.9 under an NFIB headline saying uncertainty grew and optimism faded slightly. October reversed the uncertainty half of that and held the optimism half.
Taxes have also been in the news nonstop for small business owners this fall. On Nov. 5 the IRS released its 2027 inflation adjustments covering almost 70 provisions, which I broke down in my post on the 2027 brackets and the new Section 179 limit. State fights added to it. Colorado’s Amendment 87 was holding 51% of the vote as of Friday, which I covered in my Colorado top-rate breakdown.
Washington voters also decided on Nov. 3 whether to repeal a 9.9% tax on household income above $1 million, which I laid out in my preview of the Washington vote. NFIB’s survey does not say why owners picked taxes, so any link between these headlines and the 21% figure is my inference, not the survey’s finding.
Rates are the other backdrop. The Federal Reserve held rates steady at its Oct. 28 meeting despite elevated inflation, according to KTTC. Market odds of a Dec. 9 hike ran between 71% and 85% in the days after, as I covered in my note on Fed hike odds and the prime rate.
Now the counterpoint, because there is a real one. A 0.1-point move is noise. The index has a long history, and a one-tenth change tells you almost nothing about the economy by itself. Several components actually improved: job openings, expansion plans and six-month expectations all rose, and uncertainty fell to its lowest level since late last year. The survey also measures how owners feel, not what they spend, and it reflects NFIB’s membership, which skews toward local, owner-operated firms rather than online stores. Read it as a mood check on the people who run businesses like yours, not as a forecast.
What a 21% Tax Worry Means for a High-Ticket Store’s Year-End
My read is that the tax number is the one to act on, because it is the one with a deadline. Most decisions that change your 2026 bill have to happen before Dec. 31. Equipment purchases, retirement contributions, prepaid expenses and how you pay yourself all get decided in the next seven weeks. I am not a tax advisor, and none of this is tax advice. Take your numbers to a CPA. The point is that you cannot have that conversation without numbers.
This is where a lot of store owners get stuck. They know revenue to the dollar from Shopify. They do not know net profit until March. If your books live in three places, pull them into one ledger like QuickBooks first. Stores that want bookkeeping built for ecommerce can look at Finaloop instead. Either way, get the year-to-date P&L clean before you book the CPA meeting.
The pricing number matters next. If a net 37% of owners really do plan to raise prices, your suppliers are in that group. Manufacturers usually publish new price lists and MAP updates in January. Freight is already moving that way, with LTL carriers pushing rates up, as I covered in my post on Saia’s 10.8% contract renewals.
Here is a hypothetical to make it concrete. Say you sell a $3,000 product at a 25% gross margin, so your cost is $2,250 and you keep $750. If your supplier raises cost 4% in January, that is $90 more per unit. Hold your price and your margin drops to $660 an order, a 12% cut to gross profit on that SKU. Across 300 orders a year, that is $27,000 gone without a single extra sale. These are illustrative numbers, not reported figures, but the math holds for most high-ticket stores.
You also have to watch Amazon while you reprice. Its Black Friday Week runs Nov. 19 to Nov. 30, which I covered in my Amazon Black Friday breakdown. Buyers will price-check you for nearly two weeks, so a price increase lands better in January than the week before Thanksgiving.
Credit is the third signal. A net negative 5% on credit conditions means owners who borrowed found it a bit harder. Stack that on top of a possible December hike and anything you carry on a variable-rate card costs more next quarter. If you fund ad spend or supplier deposits on a card, read my guide to financing growth without hurting cash flow before you lean on it harder. My revenue-based financing guide covers the main alternative, along with what it really costs.
The earnings reading, net negative 23%, is the quiet one. Weak profits plus rising tax worry is exactly the setup where owners start thinking about selling. If an exit is anywhere in your next three years, clean books add real value, which I explained in my post on clean books and exit value.
Labor stays the top problem at 25%. Online stores have an advantage here, because your customer service rep and listing VA do not have to live in your town. Where you hire matters too. Upwork’s take rate climbed to 20% while its active clients fell, as I covered in my Upwork Q3 breakdown. For full-time help, a direct-hire platform like OnlineJobs.ph skips that marketplace cut.
If all of this sounds like a second job on top of the store, that is because it is. Taxes, supplier pricing, credit and staffing hit at the same time every Q4. That is the reason my turnkey done-for-you store service exists, so the build, suppliers and launch get handled by a team that does this every week.
Not sure whether to raise prices, cut ad spend or hire before January? Talk it through with me one on one. Book a private coaching session →
Five Year-End Moves for Store Owners After the NFIB Report
What I’d do this week, in this order:
- Book your year-end CPA meeting now. Get on the calendar before Dec. 15, when every accountant fills up. Bring a clean year-to-date P&L, and if your Shopify data is not syncing to your ledger yet, my Shopify QuickBooks integration guide walks through the options.
- Email your top five suppliers about 2027 pricing. Ask for new price lists, MAP changes and any freight surcharges by Dec. 1. Products touched by China tariffs need extra attention, since the trade truce only runs to Jan. 10, as I covered in my post on the tariff truce.
- Run a margin check on your top 20 SKUs. Plug a 3% to 5% cost increase into each one and flag any SKU that falls under your minimum margin. Those are the products to reprice in January, not this month.
- Separate your tax money from your operating money. Move a fixed share of every payout into a separate account so the April bill never eats your ad budget. A separate business account at Mercury works well as a simple tax reserve.
- Plan your Q4 staffing gap. If labor is your bottleneck too, hire a VA for order processing or customer service before the holiday rush. If you want help deciding what to hand off first, book a discovery call with my team.
Frequently Asked Questions
What is the NFIB Small Business Optimism Index?
It is a monthly survey of small business owners run by the National Federation of Independent Business, built from 10 components such as hiring plans, sales expectations and credit conditions. The October 2026 reading was 97.8, just under its 53-year average of 98.0.
Does a 97.8 reading mean a recession is coming?
No. A 0.1-point drop is within normal monthly noise, and several components improved in October. It tells you owners are cautious, not that the economy is shrinking.
Why should an online store owner care about a Main Street survey?
Your suppliers, freight carriers and many of your customers are small businesses. When a net 37% of owners say they plan to raise prices, some of that shows up in your cost of goods next year.
Should I raise prices before Black Friday?
Usually not for high-ticket products. Shoppers compare prices hardest during holiday sales, so most stores do better repricing in January once new supplier price lists arrive, which also protects the conversion work I cover in my Google Shopping conversion guide.
How do taxes reach my store if it is an LLC?
A single-member LLC or S corp usually passes its profit through to your personal return, so federal and state income tax changes hit you directly. I am not a tax advisor, so confirm your setup with a CPA.
Is high-ticket dropshipping still worth starting with sentiment this flat?
Yes, if you pick the right niche and suppliers. Flat sentiment hurts thin-margin stores most, and higher order values give you more room to absorb cost increases. My free high-ticket niches list is the place to start.
Already selling and want 2027 to be your biggest year despite rising costs? My team adds suppliers, runs your ads and grows the store you already have. See the scaling service →
That’s the October read on Main Street. Sentiment is flat, taxes are climbing the worry list and prices are heading up. Get your books clean and your supplier conversations started now, and January gets a lot easier. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.
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Trevor Fenner is an ecommerce entrepreneur and world traveler from Seattle, Washington, and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.
He maintains homes in Seattle and Bali, spends most of the year overseas, and usually returns to Seattle for about a month each summer.
