Published October 13, 2026 at 6:38 PM EDT

Economic growth for small businesses in Michigan has stagnated, Brian Calley, president and CEO of the Small Business Association of Michigan, said Tuesday.

Calley said with regulations, tariffs, and high energy costs, business owners are in a tough spot.

“So there's pressure for them to keep their prices down because their customers can't afford to pay more, but there's pressure with all their costs rising,” he said.

Many small businesses would like to grow because doing so is a way to outpace rising costs, but Calley said it’s not worth it right now.

“A lot of the time, the small business owners are at a point where they have to wait and see what happens or pass up opportunities to grow, because the cost of growth exceeds the amount of cash flow or income available with that growth,” Calley said.

That uncertainty is largely self-inflicted in the U.S.

The cost of diesel fuel has gone up considerably after the U.S. and Israel attacked Iran. Plus, the ongoing trade war with Canada has driven up prices on a host of goods and raw materials, especially in Michigan, where cross-border trade is critical to key industries. Calley said small businesses just can’t keep up.

“Entrepreneurs are innovators just by nature, and they'll adjust and they'll do what they have to do to operate in that new environment. But … there have been so many new policies at the state and local, state and federal levels, that small businesses have a very, very difficult time navigating them.”

Calley said the state Legislature needs to act. He says one way is to allow small businesses to band together to share the burden of providing health insurance to employees.

“They could allow small businesses to organize their health insurance the same way that big businesses do,” Calley said. “Let them self-insure together with one another, that would be a big advantage that small businesses don't have today.”

He also recommends the Legislature give exemptions to the state’s paid sick time law to the state’s smallest businesses.