Good news, small business owners! As 2025 wraps up, there’s a slight uptick in optimism across the nation. The latest Small Business Optimism Index registered a modest increase, with nearly two-thirds of businesses feeling good or excellent about their current health. It seems a quiet sense of hope is brewing despite the ongoing challenges.
However, it’s not all smooth sailing. The “I” word – inflation – is making a big comeback. More businesses reported raising their prices last month than ever before in a single month-over-month jump. This isn’t just a blip; inflation is now the second-biggest headache for small business owners, trailing only labor quality as a concern. Tariffs are also playing a role, adding to the pressure.
Many owners are struggling to absorb these higher costs, trying hard to avoid passing everything on to customers. It’s a constant tightrope walk: how to stay competitive on price while still making a profit. “That’s the balance that small business owners have to deal with every day,” notes Holly Wade from the NFIB.
On the brighter side, there are a couple of small wins. Gas prices have recently dipped, and financing rates for businesses have declined. These savings offer a welcome breather, helping to offset some of the other rising expenses.
Still, the overall outlook remains cautious. Expectations for better economic conditions have fallen significantly since the start of the year, and not many owners feel it’s the right time to expand operations. While optimism shows a slight recovery, it’s clear small businesses are navigating a complex landscape, keeping a close eye on their budgets and the ever-present shadow of inflation.
