Economic collapse: Small business owners can no longer make a living from their work

This is evidenced by the continued increase in failures over the last four years as well as that of voluntary business closures.

Very small businesses represent nearly 95% of the French economic fabric and form the foundation of employment and activity in local areas. Their vulnerability therefore extends far beyond the entrepreneurial sphere and raises a central question for the real economy, local employment, and the vitality of local communities.

Activity and profitability of very small businesses are declining

More than 56% of the executives surveyed report a decrease in their revenue in 2025 compared to 2024. Crucially, profitability is no longer improving. Margin increases remain very marginal, affecting only 7% to 8% of respondents, while nearly 60% report stable or declining net margins.

This discrepancy highlights a key phenomenon. The added value produced by very small businesses no longer covers all costs. The increase in energy and raw material costs is no longer offset by business activity.

The personal situation of the leaders has deteriorated.

This economic pressure directly impacts executive compensation. By 2025, over 53% report monthly salaries below the minimum wage. For many, a decrease in personal income appears to be the only way to maintain business activity.

The managers of very small businesses continue to work but no longer live off their work.

Job and recruitment stalled

In this context, recruitment plans are largely frozen. 82% of managers do not foresee creating any new positions in 2026.

Access to credit is declining and banks are engaging in self-censorship.

The survey also highlights a rise in self-censorship regarding bank loans. 24% of executives have refrained from applying for credit in recent months in anticipation of being refused.

This financial caution severely limits the ability of companies to invest, plan for the future, and grow.

According to the executives surveyed, acceptance rates for cash and real estate loans are declining.

Administrative burdens and regulatory environment: electronic invoicing is anxiety-inducing and costly

Administrative complexity is identified as a major obstacle by 62% of respondents. The widespread adoption of electronic invoicing is perceived by a large majority as an additional constraint generating recurring costs and administrative time without any immediate productivity gains.

Artificial intelligence: still hesitant adoption

The survey shows that artificial intelligence is beginning to take hold in the practices of very small businesses. 40% of managers report using an AI tool in their professional activities, primarily general-purpose solutions. These uses are mainly geared towards writing, management, or organizational tasks, with a regular frequency for the majority of users.

This adoption reflects a desire for greater autonomy and simplification in the face of administrative burdens and economic pressures. However, it remains constrained by a lack of time, financial resources, and the low added value generated by the activity. For very small businesses, AI appears less as a driver of transformation than as a tool for compensation in an increasingly complex environment.

Antisocial behavior and insecurity

Furthermore, insecurity is now emerging as a significant economic factor. 69% of business leaders have observed an increase in incivilities or acts of delinquency, with direct impacts on customer traffic, security costs, and investment decisions.

Mindset and perspectives

The mindset of business leaders is one of the most worrying indicators of the survey. 96% report feeling exhausted, worried, or discouraged. Under these circumstances, 21% are considering ceasing operations during the first half of 2026. These closures are mostly voluntary and linked to a lack of profitability, the burden of expenses, and personal exhaustion.

Exiting the business becomes a rational decision, not a failure.

A national economic and political issue

Long considered a problem confined to the smallest businesses, business failures are now appearing in a different light. The year 2025 marks a turning point, with difficulties extending to SMEs and mid-sized companies. This observation confirms that the weakening of very small businesses is neither marginal nor sector-specific, but reveals a fundamental economic and political problem for the country.

Methodology

Online survey conducted among members of the Union of Independent Workers and Very Small Businesses. The results reflect the complete voluntary responses collected on the date of collection.

Illustrative image of the article via Depositphotos.com.