May 2025 Small Business Data Outlook: Rising Uncertainty is Causing Concern

Summary: Solopreneurs work long hours, but do not regret choosing entrepreneurship.

• 20% of small business owners work more than 50 hours per week compared to 28% of solopreneurs who work more than 50 hours weekly.
• 75% of entrepreneurs launched their firms to be their own boss. 71% launched their firms to set their own schedule, and 49% started their firms to have greater financial security.
• Nearly 3 in 5 entrepreneurs report a better work-life balance since transitioning from a full time job to running their own business.
• Almost 50% of entrepreneurs find it difficult to disconnect while taking time off.
• Of the 82% of entrepreneurs who have trouble sleeping due to work stress, 61% are stressed out by financial worries.
• 65% of entrepreneurs’ top goal is increasing revenue and profitability in 2025 followed by 49% who set their top goal as improving efficiency/productivity.
• 53% of small business owners use artificial intelligence (AI) in their workflow compared to 62% of solopreneurs.

Learn more about this data from Adobe 2025 Work-Life Balance Report Of Solopreneurs and Small Business Owners, published on May 30, 2025.

Summary: Concerns over inflation is lower and anxiety over tariffs is higher. Pressure on Congress to ease small business uncertainty by delivering on tax bill grows.

• 15% of small business owners expect the economy to improve (6 points lower than March).
• 9% of small business owners believe it is a good time to expand their business (no change from March).
• –8% of small business owners reported higher sales in the past 3-months (3 points better than March) and -1% are expecting higher sales (4 points lower than March and 4 consecutive months of decline).
• -4% of small business owners are planning inventory investment in the next 3-months (3 points lower than March and lowest reading in 11 months).
• 19% of small business owners reported labor quality their top concern in April, above taxes (16%) and inflation (14%).
• 34% of small businesses reported job openings they could not fill (6 points lower than March) and 85% of those trying to hire reported few or no qualified applicants (no change).
• 33% of small business owners raised compensation in the past 3-months (5 points lower than March) and 17% plan on raising compensation in the next 3-months (2 points lower).
• 25% of small businesses raised their prices (1 point lower than March).
• 58% of small business owners reported capital outlays in the last 6-months (1 point lower than March) and 18% are planning capital purchases in the next 3-months (3 points lower than March and lowest point since April 2020).
• -7% of small business owners expect better credit conditions in the next 3-months (3 points worse than March).
• The average rate paid for short maturity loans was 8.9% (no change from March) and 26% of small business owners report borrowing on a regular basis (2 points lower than March).
• 3% of small business owners reported that financing was their top problem (no change from the past three months).

Learn more about this data from National Federation of Independent Business (NFIB) April Small Business Optimism Index, published on May 9, 2025.

Summary: Slow growth in new business formations, compared to an erratic January-February, may bode well for steady increases in the months ahead.

• Month to month: new business formations in March increased 7% compared to February, with Vermont marking the top percentage gain of 91%.
• Year to year: new business formations in March increased 5% compared to 2024, with North Dakota marking the top percentage gain of 68%.

Learn more about this data from Registered Agents, Inc. March Business Formation Report, published on May 9, 2025.

Summary: More small business owners are confident in their financial future than not, but the percentage hits a low point because of economic uncertainty.

• 40% of small business owners report that the economy is the same or better than 6-months ago and 49% of small business owners believe the economy is the same or better than 12-months ago.
• 51% of small business owners anticipate a recession in the next 12-months (4 points lower than 2024’s report) and 27% anticipate an economic expansion (2 points lower than 2024).
• 59% of small business owners are confident in the financial future of their business (lowest point in survey’s 16-year history).
• Three times as many small business owners (31%) expect growth opportunities in 6 to 12 months as those who expect growth within the next 3-months (10%).
• Economic uncertainty tops the list of small business growth challenges (59%) compared to U.S. political instability (36%), decline in customer spending (33%), inflation (26%), tariffs on foreign goods (22%), and lack of available capital (19%).
• 58% of small business owners increased employee compensation over the past year and 31% expect to add employees this year.
• 49% of small business owners are expecting increased revenues this year and 30% expect revenues to drop.
• 50% of small businesses do not have outstanding loans and of those getting loans, 60% secured adequate financing.  23% were turned down for a loan or line of credit.

Learn more about this data from National Small Business Association (NSBA) Small Business Economic Report, published May 7.

Summary: The rise in small business sales slows down, but remain positive.

• Month-over-month sales at small businesses in April rose 0.4% from March and year-over-year sales at small businesses rose 3.2% compared to April 2024.

Learn more about this data from Fiserv Small Business Index, published May 5.

Summary: Small business owners curb their hiring enthusiasm because of economic uncertainty. Main Street employers’ hesitation to hire is latest economic red flag as uncertainty has pushed small business outlook downward.

• 34% of small businesses reported job openings they could not fill in April (6 points lower than March and lowest percentage in 3 years).
• 56% of small businesses hired or tried to hire in March (3 points higher than March).  Of those hiring, 85% of those hiring reported few or no qualified job applicants (down 2 points from March).
• 13% of small business owners are planning to create new jobs in the next 3-months (1 point higher than March).
• 33% of small businesses raised wages in April (down 5 points from March) and 17% plan on raising compensation in the next 3 months (down 2 points from March and the lowest percentage in 3 years).
• 29% of small businesses have openings for skilled workers (down 4 points from March) and 13% have openings for unskilled workers (unchanged for past 3 months).
• 57% of small businesses in construction have a job opening they can’t fill (1 point higher than March)

Learn more about this data from National Federation of Independent Business (NFIB) April Jobs Report, published May 1.