Small businesses in the US account for approximately half of the country’s jobs, so when small businesses are doing well, it’s likely that the economy is doing well. Media reports recently indicated that many small businesses are challenged by Trump’s tariffs, ongoing inflation, labor shortages and higher financing costs. So how are small businesses doing so far in 2025? Not great. But not that bad either.
In just the past two months, there have been no less than seven comprehensive surveys conducted by well-known companies and brands that altogether surveyed or drew from their internal data of tens – even hundreds – of thousands of small businesses. And they give a pretty good idea of how they’re doing.
Wealth management firm Principal Financial’s Well-Being Index from June found that 56% of the companies they surveyed reported business growth and 90% of employers have either maintained or grown their workforce over the past year, with 49% increasing wages in just the past three months.
However, optimism remains tempered by a weakening outlook on future economic growth and many have reported “significant declines” in the financial health of their business, their local economy and the US economy, “eroding the sense of optimism expressed in years past”.
According to a survey by accounting giant EY, 95% of those polled were “confident in business growth” over the next year. Additionally, 73% of entrepreneurs reported experiencing revenue growth this year compared with last year, with 29% reporting growth of 20% or higher. However, 43% said that current economic conditions are hurting them, but many still plan to pursue funding and strategic transactions, with investment in AI and M&A considerations leading the list.
Software provider Intuit’s QuickBooks Small Business Index draws on actual information from its customers, derived from anonymized employment and payroll data. The company found that job growth among small businesses – the great majority of their customer base – was stable, with employment increasing in seven of the 12 sectors tracked. That’s good, but unfortunately the study also found that average real monthly revenue for small businesses with one to nine employees decreased about 0.06% from the month before.
Like Intuit, HR services giant Paychex said in its Small Business Employment Watch reports that job growth derived from its 350,000-plus customer database in May “stayed flat” month over month and hourly earnings growth decreased to a four-year low. “Caution persists” in both wage and hiring trends.
The closely watched Small Business Optimism Index published monthly by the National Federation of Small Businesses reported a tick up in small business optimism in May to a level above its 51-year average. The survey found that the top concerns of the federation’s members shifted from inflation to taxation and that although sales expectations and hiring plans were “improving”, uncertainty remained.
Finally, in its June Small Business Perspective report, US Bank said that 96% of the small business owners it surveyed reported their business as currently successful and 88% saw growth in the past year. Two-thirds said the country’s economy was “moving in the right direction”, with only 18% saying it was going in the wrong direction.
Interestingly, this sentiment was even stronger among younger business leaders (gen Z and millennial), with 74% saying it was moving in the right direction, versus 52% of leaders from older generations (gen X and boomer). Although four out of five owners felt at least “somewhat stressed” about tariffs, those leaders were “slightly more likely to anticipate a positive rather than negative impact”.
My take? Despite all the headwinds and uncertainties such as tariffs, federal and local policies, geopolitical conflicts, inflation, labor shortages and other challenges – small businesses, so far, in 2025 remain optimistic about the future and are maintaining employment levels mostly reporting average financial results. Few are jumping for joy. But it seems that fewer are jumping off the ship.
