Small businesses are crucial to modern economies and in the European Union alone, 99% of businesses are classified as small and provide 50% of employment in that trading bloc. The past year did prove to be challenging to small businesses but continued resilience and optimism have always been essential traits for successful small business owners and leadership and just over 33 million small businesses exist in the United States in 2024. That optimism and resilience carries over into 2025 as businesses start to look within for solutions to dicey economic conditions and high consumer expectations. Small businesses are seeking ways to differentiate themselves in the marketplace as well as efficiencies in operations to help mitigate rising costs and lingering inflationary impacts.

A Challenging 2024 for SMBs

The global economy continues to teeter as inflationary pressures reappear and consumers pull back on spending. The economic imbalance in 2024 created numerous challenges for small businesses. A recent NerdWallet survey reported that 54% of respondents said their biggest challenge was finding and retaining customers. Other noted challenges from the survey were:

Having to raise prices for products or services due to increasing costs (32%)

Building social media profiles and presence through consistent engagement (24%)

Hiring and retaining quality frontline staff (23%)

Entry level hiring challenges continue to have negative impacts on service levels as customer facing business content with service quality gaps caused by vacancies on the frontline. These challenges are set to continue into 2025 as owners and leadership try to identify solutions and opportunities to counter the negative effects on the business.

Small Business Wins in Technology

Technology plays a major role in small business operations and is used in all facets of the business. From payment systems to inventory management to customer service processes, 2024 saw continued adoption of AI backed technologies to create efficiencies and drive productivity. Scalable solutions and small business specific technologies have enabled small business easier and affordable access to cutting edge innovations. Web creation services, social media networks and eCommerce platforms continue to add functionality and simplify their products and services, enabling small businesses a fast and efficient method to establish an online presence. Small businesses are also investing in branded mobile apps to extend marketing depth and capture new business through mobile avenues.

Building Better Businesses in 2025

The new year brings fresh optimism to small businesses and focusing energies on revenue generation and increasing brand awareness. Small businesses will be seeking advantages that give them an edge in crowded online and storefront marketplaces. Specific priorities for small businesses in 2025 are:

Upskilling front line staff to maximize customer interactions

Evaluating and improving customer experiences

Consistent social media marketing engagement

Creating better work environments to drive productivity and motivation

Looking from within, small businesses will be pushing the envelope in service and productivity from existing resources and human assets as ‘leaner and meaner’ becomes the mandate for 2025.

The Bottom Line

2024 was a challenging year for small businesses but brought with it opportunity as well. Economic and inflation pressure potentially led to slowdowns in consumer spending but small businesses have always used their size to pivot and adapt to changing conditions. Optimism continues and owners and leadership will focus energies on improving experiences and controlling costs heading into 2025. As economies stabilize and consumer confidence returns, small businesses are in an advantageous position to capture more market share by elevating experiences and creating efficiencies. Technology will also play a major role in improving business prospects and operational productivity as small businesses look for deeper marketing penetration through digital means. The cliche ‘make your own luck’ has never been more applicable to the state of small businesses.