BofA report finds business owners hopeful for growth
Small and mid-sized businesses throughout the country are “cautiously optimistic” as the new year approaches, according to Bank of America’s 2025 Business Owner Report.
Released on Nov. 18, the report interviewed 819 small business owners with revenue between $1 million and $5 million and 253 medium-sized business owners with revenue between $5 million and $50 million between Sept. 11 and Sept. 23 to gather its insights.
The report found that, despite inflation, labor shortages, and supply chain pressures, small and mid-sized business owners are charging ahead, with 74% expecting revenue increases and nearly 60% planning to expand their businesses.
Additionally, the report highlighted that approximately half of the business owners surveyed believe that local (53%), national (48%), and global (45%) economies will improve over the next year.
Many noted their confidence would improve with: stabilization of tariff policy (53%), cooling inflation (52%), lower interest rates (52%) and stronger supply chains (39%), according to the report.
“Business owners are approaching the coming year with confidence and a clear focus on growth,” said Sharon Miller, president of Business Banking at Bank of America. “Many plan to retain their current staff and hire more, and anticipate that local, national and global economies will improve.”
That doesn’t mean small businesses won’t be without their share of struggles as 75% of business owners said they are being impacted by supply chain issues. Of those impacted, 52% are raising the prices of goods and services and 32% are having difficulty sourcing products and services.
Inflation is also a problem as 88% say they are being impacted. As a result, they are raising prices of goods and/or services (64%) and reevaluating cash flow and spending for the year ahead (39%).
According to the report, roughly three in five business owners (61%) also 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%), the report read. 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, according to the report.
Other things companies want to do is invest more in technology. According to the report, 77% of companies have integrated some form of artificial intelligence into their operations in the past five years.
Of those, they are using it 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.
Even with all these issues, these companies are still focused on their five-year roadmap. During the remainder of the decade, their priorities includeexpanding customer bases (47%), expanding products and services (39%) and exploring new marketing tactics (35%), according to the report.
Nearly all business owners (91%) plan to adopt more digital tools, including AI, over the next five years to further modernize, increase growth and improve employee efficiency. These business owners plan to accept more forms of digital payments (52%); Improve employee workflows to make daily tasks more efficient (47%); Implement more digital-first marketing strategies (45%) and increase cybersecurity measures (30%), according to the report.
Business owners are also divided when it comes to succession planning, with the majority (70%) not focused on an exit strategy in the next five years, according to the report.
While 60% have a succession plan in place, 40% have yet to prepare for the future of their business, according to the report.
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, according to the report.
email: [email protected]
“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.
