Small business owners on the rise: hope despite the burden of bureaucracy!

Small business owners on the rise: hope despite the burden of bureaucracy!

The current study by VR Smart Finance and the Steinbeis University shows that small businesses in Germany are gradually overcoming their low mood. The small business index recorded an increase of three points to zero in the 12-month review. However, despite this positive trend, the index remains at a low level.

The outlook for the future is overall optimistic. The outlook for the future rose by six points to plus 19. Around 44 percent of those surveyed expect an improvement in their economic situation and increasing orders. However, this positive development could be clouded by various challenges that are currently weighing on companies.

Bureaucracy and economic burdens

Like the study by CNN Money added, high bureaucracy, taxes, duties and energy costs are the main reasons for the still skeptical attitude of many small business owners. Over 66 percent find the German legal and bureaucratic space stressful. In addition, 90 percent of those surveyed expressed dissatisfaction with the existing tax obligations, and more than two thirds felt disadvantaged by data protection and approval procedures.

Economic uncertainty is an important issue: 55 percent of small business owners fear that new debt could endanger economic stability. 74 percent see bureaucracy as the biggest obstacle to investment, followed by market uncertainty and general economic policy. These factors significantly inhibit small businesses' willingness to invest.

Need for investment despite challenges

Despite these adversities, 61 percent of those surveyed signal a need for investment. The focus here is on business equipment (71 percent), followed by product and service expansions (62 percent) and digitalization and automation projects (61 percent). A third of those surveyed hope that possible higher depreciation options from the government will provide an incentive for investment.

Another interesting finding is that 50 percent of respondents plan sustainable investments in the next few months. This willingness to invest could help improve the economic situation of many small businesses in the coming year, provided the political framework is adjusted accordingly.

The need for an investment-friendly climate that includes reducing bureaucracy and reducing taxes and contributions is undisputed. Only by improving these conditions can small businesses look to the future with confidence and thus make an important contribution to the economy.

The survey, which was carried out from March 28th to April 9th, 2025 among 300 small companies with an annual turnover of up to six million euros, shows that despite significant challenges, a basic mood of optimism prevails.