Small and medium-sized business owners are cautiously optimistic about the coming year, with 74% expecting increased revenues and nearly 60% planning to expand their businesses. These findings come from Bank of America's 2025 Business Owner Report, conducted in partnership with the Bank of America Institute. The report’s results align with other data from the Institute showing that small business profitability growth has remained strong throughout 2025.
About half of surveyed business owners believe local (53%), national (48%), and global (45%) economies will improve over the next year. Many indicated that their confidence could increase if there is more stability in tariff policy (53%), reduced inflation (52%), lower interest rates (52%), and stronger supply chains (39%).
“Business owners are approaching the next 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, and they forecast improvement in local, national, and global economies.”
The report highlights several trends among business owners:
- Adjusting to a tight labor market: About 61% say they have been affected by labor shortages. Of those impacted, half are working longer hours due to lack of staff, while 40% are raising wages to attract more competitive talent. Only 1% expect to lay off employees in the next 12 months; instead, 43% plan to hire additional personnel.
- Adopting artificial intelligence: AI has become essential for business operations, with 77% integrating it into their processes over the past five years. Technology services are being used 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—rose by almost 8% year-over-year in October.
- Optimizing supply chains: Seventy-five percent report being affected by supply chain issues. Among those impacted, 52% have raised prices for goods and services while 38% struggle to obtain them.
- Managing inflation: Most business owners (88%) continue to feel the effects of inflation as they did last year. In response, 64% have raised prices for goods or services and 39% are reassessing cash flow and expenses for the coming year.
Looking ahead over the next five years, moderate optimism persists as entrepreneurs focus on growth and innovation. Their priorities include expanding their customer base (47%), broadening product or service offerings (39%), and exploring new marketing tactics (35%).
Nearly all respondents (91%) expect to implement more digital tools and artificial intelligence within five years to further modernize operations, support growth, and improve employee efficiency. Plans include accepting more digital payment methods (52%), improving employee workflows for daily tasks (47%), implementing additional digital marketing strategies (45%), and increasing cybersecurity measures (30%).
Succession planning remains divided among business owners; most (70%) are not focused on an exit strategy within five years. While 60% have a succession plan in place, 40% have yet to prepare for their company’s future. Of those with a plan, one-third intend to transfer ownership to family members while another 38% plan to sell.
The survey was conducted online by Ipsos between September 11–23, 2025. It included a national sample of U.S.-based small business owners earning between $100,000–$4,999,999 annually with two to ninety-nine employees; as well as medium-sized businesses earning $5 million–$49,999,999 annually with up to four hundred ninety-nine employees.
Bank of America serves approximately seventy million customers—including around four million small business owners—through various financial centers across the United States and operates in more than thirty-five countries worldwide.