2025 Business Leaders Outlook: Preparing for action in uncertainty

With the recent presidential election behind us, there is a sense of cautious optimism for small businesses as they prepare for action and opportunity. The election has brought an expectation of movement, and small business owners are ready to face whatever comes their way. Their resilience and agility — built over years of navigating uncertainty — position them to keep moving forward, even in changing times.

The latest Business Leaders Outlook survey by Chase Insights reveals no major shifts in sentiment are evident, reflecting a deeper focus on stability. Business leaders are turning inward, concentrating on their operations and areas within their control. They stand ready to adapt to the unfolding realities of an unsure economic landscape.

Navigating economic uncertainty with strategic planning

Economic uncertainty remains a significant consideration for business leaders, but many are meeting it with cautious optimism. More than two-thirds of respondents (68%) believe that small businesses will continue to be the driving force of economic growth, reflecting confidence in their resilience and adaptability.

Other key findings include:

• 60% are optimistic about the local economy, up slightly from 57% in the 2024 midyear pulse survey, with many leaders seeing opportunities within their immediate communities.
• Respondents from businesses with black owners and Hispanic owners are even more confident, reporting significantly higher optimism scores at nearly all levels.
• 42% expect interest rates to decline significantly in the coming year, providing some relief to businesses navigating financing challenges.

While leaders remain optimistic about their own operations, they are closely monitoring external factors such as inflation, interest rates and geopolitical developments. Strategic planning and flexibility remain vital tools for navigating these complexities.

Resilience: The core of small business strategy

Resilience continues to be a cornerstone for small business leaders in 2025. The survey reveals that 77% of respondents believe they can “weather any storm,” pointing to their strong teams and loyal customers as the source of their confidence.

To strengthen their positions amid the current uncertainty, leaders are focusing on key operational adjustments. These include improving cash flow management, adjusting pricing strategies and streamlining operations to mitigate rising costs and external pressures. For many, these moves are about not just surviving challenges but ensuring long-term growth and sustainability.

Confronting inflation head-on

Inflation remains the most significant challenge for small business owners in 2025, and most expect that higher costs are here to stay. Businesses are feeling the pressure on multiple fronts, with 59% of respondents identifying wages as their primary cost driver, marking a 10 percentage point increase since the previous survey.

To adapt, businesses are employing a range of strategies:

• 56% have raised prices strategically to offset higher costs.
• Others are streamlining operations and exploring new suppliers to manage expenses without compromising quality.

Wages, benefits and energy costs top the list of cost pressures that are forcing many leaders to make difficult but necessary adjustments to remain profitable. Despite these challenges, most leaders remain confident in their ability to effectively manage inflation’s impact on their businesses.

AI: Going mainstream

Artificial intelligence is no longer a buzzword — it’s becoming a cornerstone of small business strategy. In 2025, 48% of respondents plan to add AI tools into their operations, with a particular focus on customer-facing applications such as chatbots and customer service automation.

The survey identified several key applications on which AI is expected to make a substantial impact:

• Marketing and content creation (56%) to enhance brand presence and engage audiences effectively
• Customer service automation (47%) to streamline operations and improve customer satisfaction
• Data analysis (44%) to inform decision-making and optimize resources

Despite the promise of AI, many are apprehensive. Of those surveyed, 46% expressed concern about its impact on their operations, signaling the need for businesses to approach AI adoption thoughtfully.

Fraud and cybersecurity: A growing priority

With cyberthreats evolving in sophistication, fraud is top of mind for small business leaders. Among respondents, 19% identified payments fraud as their greatest cyber risk (up 7 percentage points from May 2024), followed by 15% who cited theft of intellectual property or confidential data. These statistics reflect the critical need for robust cybersecurity measures.

Data suggests that leaders may be increasingly connecting fraud prevention with broader cybersecurity strategies, recognizing that these areas are converging into an integrated risk landscape. In response to these challenges, 33% of businesses have implemented fraud prevention products, 31% have conducted employee education and training to bolster defenses, and 28% have purchased cyber insurance.

As businesses invest in technology to protect against these threats, there’s the potential for AI-driven fraud detection tools to play a pivotal role in safeguarding operations. This dual focus on prevention and adaptation underscores the urgency of staying ahead in a constantly shifting threat environment.

Workforce evolution: Hiring and retention strategies

Attracting and retaining skilled talent is a top priority for business leaders in 2025, but it remains a persistent challenge. Of those responding, 40% expressed significant concern about finding candidates with the right skill sets, reflecting the ongoing mismatch between available talent and business needs. This challenge may also partly stem from the rise of AI, while businesses experiment with automation in HR processes. More intuitive AI tools may streamline recruitment but also reshape candidate behavior and skill requirements, making talent landscape a space to watch as technology becomes further embedded in the workplace.

To tackle the current hiring challenges, businesses plan to or are taking proactive steps:

• 47% plan to increase wages to remain competitive in the labor market.
• 40% are offering flexible work arrangements to attract a wider pool of candidates.
• 35% plan to increase benefits such as healthcare, 401(k)s and child care.

It’s also notable that, while remote work has gained prominence in recent years, this trend is starting to reverse. In fact, there was an 8 percentage point drop in respondents who say they allow their employees to work remotely, suggesting a return to hybrid or in-office policies.

What’s next for business leaders?

The survey outlines several priorities for small businesses in 2025 as they prepare for the future:

• Continued investment in AI and technology to enhance efficiency and competitiveness
• Strategic hiring and retention efforts to address talent shortages and build strong teams
• Resilience-focused strategies to adapt to inflation and other economic pressures

By embracing innovation, planning for uncertainty and staying adaptable, small businesses are positioning themselves for success in the years to come.

Where did we come from?

See how business leaders’ expectations have changed by exploring the Chase 2024 Midyear Business Leaders Outlook Survey.

About the 2025 Business Leaders Outlook survey

The 2025 Business Leaders Outlook survey was conducted by Chase Insights from November 11 to November 15, 2024, and includes responses from 1,003 business leaders across industries such as professional services, retail and technology. The results are statistically valid with an error margin of ±3.1% at a 95% confidence level.