Small and medium-sized business owners in the United States are showing cautious optimism for the coming year, with 74% expecting an increase in revenue and nearly 60% planning to expand their businesses. These findings come from Bank of America’s 2025 Business Owner Report, conducted in collaboration with the Bank of America Institute.
About half of surveyed business owners believe that local (53%), national (48%), and global (45%) economies will improve over the next year. Many respondents indicated that their confidence could be strengthened by factors such as stable tariff policy (53%), lower inflation (52%), reduced interest rates (52%), and stronger supply chains (39%).
“Business owners are approaching the coming year with confidence and a clear focus on growth,” said Sharon Miller, President of Commercial Banking at Bank of America. “Many plan to retain their current staff and hire more, forecasting improvement in local, national, and global economies.”
The report highlights several key challenges facing small and medium-sized businesses:
– Labor market pressures: About 61% reported being affected by labor shortages. Of those impacted, half are working longer hours due to lack of staff, while 40% have increased wages to attract competitive talent. Only 1% expect to lay off employees in the next year; instead, 43% plan to hire more staff.
– Adoption of artificial intelligence: AI has become essential for business operations, with 77% integrating it into their activities over the past five years. Business owners use technology services for marketing (50%), content production (38%), customer service (37%), and inventory management (28%). According to Bank of America Institute data, small business spending on technology services—including AI—increased by nearly 8% year-over-year in October.
– Supply chain issues: Seventy-five percent said they are affected by supply chain problems. Among these, 52% are raising prices for goods and services, while 38% struggle to obtain them.
– Managing inflation: A majority—88%—said they continue to feel the impact of inflation. As a result, many are raising prices for goods or services (64%) and reassessing cash flow and expenses for the upcoming year (39%).
Looking ahead over the next five years, business owners remain moderately optimistic about growth and innovation. Their main priorities include expanding their customer base (47%), increasing product or service offerings (39%), and exploring new marketing tactics (35%). Nearly all respondents—91%—expect to implement more digital tools and artificial intelligence during this period to further modernize operations, support growth, and improve employee efficiency.
Plans among these business owners include accepting more forms of digital payment (52%), improving employee workflows for daily tasks (47%), implementing additional digital marketing strategies (45%), and enhancing cybersecurity measures (30%).
When it comes to succession planning, opinions are divided: most business owners (70%) do not focus on an exit strategy within the next five years. While 60% have a succession plan in place, 40% have yet to prepare for their company’s future. Among those with a plan, about one-third intend to transfer ownership to a family member; another 38% expect to sell their businesses.
The survey was conducted online by Ipsos between September 11–23, 2025. It included responses from a national sample of small business owners with annual revenues between $100,000–$4.99 million and two to ninety-nine employees as well as medium-sized businesses with annual revenues between $5 million–$49.99 million and two to four hundred ninety-nine employees.
Bank of America serves approximately four million small business owners through various online products and services designed for ease of use across its U.S., territorial, and international operations.
“Business owners are approaching the coming year with confidence and a clear focus on growth,” said Sharon Miller, President of Commercial Banking at Bank of America.“Many plan to retain their current staff and hire more, forecasting improvement in local, national, and global economies”.
