Small and mid-sized business owners are cautiously optimistic about 2026, with 74% expecting revenue increases and nearly 60% planning to expand their businesses, according to the new 2025 Bank of America “Business Owner Report.” Conducted in partnership with the Bank of America Institute, this data corresponds with Bank of America Institute data that found profitability growth for small businesses has remained resilient throughout 2025.

Approximately half of business owners surveyed believe that local (53%), national (48%), and global (45%) economies will improve over the next year. Many noted their own confidence would improve with stabilization of tariff policy (53%), cooling inflation (52%), lower interest rates (52%), and stronger supply chains (39%).

“Business owners are approaching the coming year with confidence and a clear focus on growth,” Sharon Miller, president of Business Banking at Bank of America, said in a statement. ”Many plan to retain their current staff and hire more, and anticipate that local, national, and global economies will improve.”

Here are four other key findings of the report:

  • Roughly 3 in 5 business owners (61%) say they are currently being impacted by labor shortages. Those affected are personally working more hours due to staff shortages (50%) and raising wages to attract more competitive talent (40%). Because the labor market is tight, only 1% of business owners are planning to lay off employees in the next 12 months, with 43% planning to hire more.
  • AI has become essential to business owners, with 77% having integrated it into their operations in the past five years. Those who have are using AI for marketing (50%), content production (38%), customer service (37%), and inventory management (28%). According to the Bank of America Institute, small business payments to tech services, including AI, were up nearly 8% year-over-year as of October.
  • A full three-quarters of business owners say they are being impacted by supply chain issues. Of those impacted, 52% are raising the prices of goods and services, while 32% are having difficulty sourcing products and services.
  • Most business owners (88%) say they are being impacted by inflation, consistent with last year. As a result, they are raising prices of goods and services (64%), as well as reevaluating cash flow and spending for the year ahead (39%).

Crystal-ball gazing

Looking further into the future, business owners’ focus on growth and innovation over the next five years signals cautious optimism. During the remainder of the decade, their priorities include expanding customer bases (47%), expanding products and services (39%), and exploring new marketing tactics (35%).

What’s more, nearly all business owners (91%) plan to adopt more digital tools — including AI — over the next five years. Their strategies include accepting more forms of digital payments (52%), improving employee workflows to make daily tasks more efficient (47%), implementing more digital-first marketing strategies (45%), and increasing cybersecurity measures (30%).

Business owners are divided when it comes to succession planning, with the majority (70%) not focused on an exit strategy in the next five years. While 60% have a succession plan in place, 40% have yet to prepare for the future of their business. Among those with a succession plan in place, one-third (32%) plan to transition their business to a family member, while 38% plan to sell the business.

The “Business Owner Report” is based on a national sample of 819 small business owners in the United States with annual revenue between $100,000 and $4,999,999 (and employing between two and 99 employees) and 253 medium-sized business owners in the United States with annual revenue between $5,000,000 and $49,999,999 (and employing between two and 499 employees).

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