Small Business Predictions for 2025
In this episode, Matt Wagner breaks down seven key predictions that will impact Main Street businesses and entrepreneurs in 2025.
Small business owners are celebrating success and anticipating challenges this year. © Christiann Koepke
In October, we launched the 2024 Small Business Success and Support survey, our fall survey of small business owners across the U.S. We heard from 681 small business owners in 44 states plus the District of Columbia. As usual for our network, responses came from very small businesses: Two-thirds of the businesses had only one or two full-time employees, and 87% had fewer than five full-time employees. Main Street America’s small business surveys stand apart from other national surveys this way. For example, 38% of respondents in the October 2024 quarterly report from the National Federation of Independent Businesses had up to five full-time and part-time employees, while 68% of respondents to our survey were as small. Over 40% were retailers, and 20% were food and beverage businesses. Professional service businesses (10%), arts and entertainment organizations (7%), and personal service businesses (6%) were also well represented.
As is typical of our network, we heard from a mix of newly launched businesses and long-established community institutions, and from people of a variety of backgrounds. Thirty-six percent of the responding business owners represented enterprises launched in 2020 or more recently, and 38% had been in business for ten years or more. About 70% of respondents were women, 25% were men, and 2% were non-binary or gender nonconforming. Asked about other important parts of their identities, 7% of responding business owners indicated they were part of the LGBTQIA+ community, 5% were disabled persons, 4% were veterans, and 4% were immigrants.
Small Business Use of Artificial Intelligence
At Main Street America, we keep a keen eye on innovation and technology adoption, so in this survey, we tried to peek into the future and see how small business owners are adopting AI for their businesses. About two-thirds of respondents indicated they do not currently use AI for their businesses. Twenty-nine percent indicated they used ChatGPT. Google’s Gemini tool was the second most popular, with 7% of respondents saying they’d used it for their business.
We dug further and asked what small business owners use artificial intelligence tools for. Over one-fifth indicated that they’d used AI to generate marketing ideas or content, 25% used AI to develop business-related communications, 9% used AI to help generate business plans or operational ideas, and 2% used AI to analyze financials such as costs or revenue.
© Main Street America
Business strengths and rewarding experiences
When asked what they consider to be their business’s three greatest strengths, 61% celebrated building strong relationships with customers, 53% touted offering high quality and/or unique products or services, and 42% noted providing exceptional customer service. A third or more emphasized having deep knowledge of their products and services (38%) and highlighted being an anchor in their community (33%).
We also asked small business owners to share one of the most rewarding parts of their past year as a business owner. We heard responses related to their community connection and support, their customers’ appreciation and satisfaction, their growth and success, perseverance and resilience, their efforts to give back and have a social impact, and the awards and recognitions they received.
Challenges and Diminishing Confidence
Successes and rewarding experiences came amid a hard year and economic headwinds. We asked small business owners about the top three challenges they were currently facing. Fifty-seven percent pointed to increasing costs associated with inflation, labor shortages, and technology upgrades. One-third signaled that generating profit was a challenge and that attracting or retaining customers was difficult, and 26% pointed to the high cost of renting or maintaining their business location. Challenges keeping their businesses relevant and competitive (20%), facing online competition (19%), and struggling with employee hiring and retention (17%) were also often cited.
Business owner confidence took a hit. We have consistently asked the same question of small business owners over our last five twice-annual surveys: “As you think about the next three months, how confident are you that your business will perform successfully?” The results from the current survey were our lowest — down from an average score of 7.7 (out of ten) in Fall 2023 to 7.2 in the current survey. Where 61% of respondents indicated a confidence level between 8 and 10 in Fall 2023, only 50% rated their confidence that high this year.
We note that there are some disparities in business owner confidence hinging on their business sector. Owners of arts and entertainment businesses had the lowest average confidence score (6.6), whereas owners of fitness and outdoors (7.5), personal services (7.7), and professional services (8.8) were among the highest. Retail (6.9) and food and beverage businesses (7.1) had moderate confidence in this spectrum.
© Main Street America
Support received and the importance of Main Street relationships
We are always interested in understanding the types of support small business owners are getting from the Main Street network and the types of support that would be most valuable in the future. The survey results show that connections with local Main Street organizations matter. More than 60% of respondents indicated that they saw their relationship with their local Main Street organization as either important or very important to their business’s success. Only 8% said it was not important.
About one in four respondents to the survey (24%) indicated they’d received business promotion support from the network, whether by appearing in a business directory or participating in business promotion events. Just under one-fifth (18%) of small business owners had received support with financial opportunities, including grant opportunities and loan assistance. Smaller proportions of business owners received support with business networking and learning (14%), business operations (9%), or their business location (8%).
When considering prospects for future support, business owners expressed the greatest interest in financial opportunities (64%), business promotion (50%), business operations, including access to market data and assistance with e‑commerce or digital marketing (37%), business networking and learning (33%), and business location support (26%). Only 3% of respondents indicated that none of the listed types of support would be valuable to them or their businesses.
Recent national reporting indicates a “silver tsunami” of retiring business owners may be approaching the U.S. Although 26% of our survey respondents came from the Boomer Generation (born 1946 – 1964) or the Silent Generation (1925−1945), only 1% of responding small business owners had received support related to business succession. Fifteen percent said they saw this type of support as potentially valuable in the future. When exploring interest in assistance with business succession by respondent age, we find that 21% of older respondents born between 1925 and 1964 were interested in business succession assistance, compared to 13% of respondents born in 1965 or later.
Though we see clear evidence that the relationship between small business owners and local Main Street organizations is important to business success, we also find clear room for growth in support for small business owners from the Main Street network. Twenty-one percent of respondents said they had never received any support from the network, and 17% indicated that they didn’t have a relationship with a local Main Street organization at all.
© Main Street America
Conclusions
In the face of economic uncertainties, the small business owners responding to this survey still tout their strengths with pride. They strengthen and are strengthened by their communities, and many respondents reflected on the resilience they’d built in recent years. Still, rising costs, labor shortages, continuing challenges attracting and retaining customers, and difficulties finding affordable business spaces took their toll, reflected in the diminished business owner confidence in relation to our previous surveys over the past few years.
There is room for growth and to boost partnerships between business owners and Main Street leaders. Main Street America aims to continue supporting entrepreneurs not only through grant programs and business promotion, but through focused attention to the entrepreneurial ecosystems that germinate new businesses and continued successes, and by delivering market insights and analysis of emerging business trends, like AI. State, county, and citywide Main Street coordinating programs, alongside Main Street leaders in our cities and towns, are eager to step up and assist.
We will continue to engage these challenges and any other new difficulties that emerge for small business owners. Please follow our social media accounts and keep an eye on our email newsletters for additional small business resources, training, and outreach.
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National Black Business Month Spotlight: The Four Way and L. May Creations
We spoke with two Black entrepreneurs in UrbanMain commercial districts: L. May Creations in the Austin neighborhood of Chicago and The Four Way in south Memphis, Tennessee.
Memphis, TN © Four Way
Main Spotlight: Supporting Black-Owned Businesses in Biddeford, Maine
Heart of Biddeford shares the strategies they developed to support Black-owned businesses in their community.
Biddeford, ME © Heart of Biddeford
Community Spotlight: Main Streets Love Farmers Markets
We heard from organizations across the nation about the incredible impact their markets have had on community engagement, entrepreneur and small business support, and keeping their district vibrant.
Main Street: A Place for a More Connected Economy in a World of Dispersion
The global pandemic gave us all a glimpse of a further dispersed future – a time when you don’t sit in a classroom at school, watch movies in a theater, or even go to the grocery store. Where do Main Streets fit in that model?
Main Spotlight: Get Used to It — The Pivot Is Not Going Away
The COVID-19 pandemic has long-lasting effects on the economy. Here are 11 changes that small business owners should continue to remain competitive.
Reflecting on the History, Legacy, and Future of Black Wall Street in Tulsa
This May marked the 100th anniversary of the Tulsa Race Massacre in the Greenwood neighborhood of Tulsa, Oklahoma. We explored the impact and legacy of this tragic event.
Tulsa, OK © Dr. Tiffany Crutcher
Main Spotlight: Creating a Community for Inclusive Entrepreneurship in Fremont, CA
Learn about the various programs and initiatives that Fremont is using to promote inclusive economic development.
Fremont, CA © Fremont Economic Development
For an Inclusive Recovery, We Need Support for Small Business and the Groups that Help Them
BDOs are place-based organizations that help small businesses and entrepreneurs to flourish. They have been on the frontline of support for the country’s hardest-hit entrepreneurs throughout the pandemic and have been working to enable thriving commercial corridors throughout the crisis.
Main Spotlight: Five Takeaways on Supporting Entrepreneurship from Matthew Wagner, Ph.D.
Matthew Wagner, Ph.D., Chief Program Officer at Main Street America, was featured on Breaking Down Barriers: a podcast from Startup Space highlighting stories of community leaders who break down barriers to entry for underserved and unrepresented entrepreneurs.
Main Spotlight: Windows of Opportunity — The Transformation of Empty Storefronts on Main Street
A vacant storefront is the perfect stage to creatively promote the available space or to showcase other businesses and events in the area.
Ripon, WI © RetailWorks, Inc
Small Businesses E‑Commerce Usage Continues to Increase as Holiday Revenues Were Mixed: Results from Our January 2021 Survey of Small Business Owners
We heard from 289 business owners in 35 states plus the District of Columbia in our new text message-based survey of small business owners across the network.
Community Spotlight: Paving the Path from Pop-up to Permanent at the Batavia Boardwalk Shops
The Batavia Boardwalk Shops are freestanding, purpose-built structures acting as seasonal pop-up locations for entrepreneurs, offered in tandem with a business incubator program.
Batavia, IL © April Duda Photography
Business Spotlight: Black Entrepreneurs Leading By Example in Chicago
For Black History Month, we want to recognize and celebrate the Black business owners and entrepreneurs who have overcome challenges and obstacles in launching and running their own businesses, thanks to resilience, creativity, and hard work.
Main Spotlight: Pop-Up Retail: Not Just For Start-Ups, And Other Learnings From Its Evolution
As a vital place factor within an entrepreneurship ecosystem, pop-up programs allow for emerging businesses to test their product, gain consumer feedback, and promote their brand at an extremely low cost. In essence, allowing for a ‘fail-fast’ product development cycle.
Asheville, NC © Ablohkin
Coping with the COVID Crisis in the Midst of the Holiday Rush: Nine Takeaways from Our December Surveys of Small Business Owners and Main Street Programs
In early December, as the COVID-19 crisis intersected with a peak moment in the holiday shopping season, we surveyed small business owners and Main Street programs to learn more about how they were managing.
© Cindy Shebley
Jump off the Business Recruitment Train: The Real Returns are in Cultivating Local Entrepreneurship
New research by Main Street America suggests greater returns on our missions and resources can be had by transitioning to more deliberate economic vitality work centered on cultivating new business development from within our own communities and neighborhoods.
Community Spotlight: Storefront Activation Through Storytelling in Fredericksburg, VA
Fredericksburg Virginia Main Street (FVMS) is taking storefront activation to a new level with their new initiative, the Scan & Love Project, which tells the stories of business owners through personal and engaging videos.
HartBeat of Main Street Grant Program: Spotlighting Tina’s Timeless Threads
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Center of the Yarniverse
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting The Bankery
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting BuzzBomb Brewing
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting The Owl Wine Bar & Home Goods
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting Griff Goods
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting Mockingbird Bar and Tacos
Meet a recipient of the HartBeat of Main Street Grant Program
Economic Gardening Takes Root: Redesigning the Bricks & Clicks Business Retention Program During the Pandemic
Harrisonburg Downtown Renaissance explores how they redesigned their Bricks & Clicks Business Retention Program during the pandemic.
Business Spotlight: Women-Owned Businesses on Main Street (Part 3)
Meet some amazing women business owners!
New Survey Results: How Small Businesses are Managing the Pandemic and Social Unrest
Read the results of our survey aimed at understanding how business owners are managing the recovery from COVID-19 and responding to recent protests and social unrest related to police violence against Black Americans.
Research Spotlight: Black-Owned Businesses on Main Street and Beyond
Our research team dug into some of the data about the state of Black-owned businesses on Main Street, the structural challenges they face, and how Main Streets can support them.
Main Spotlight: Holiday Shopping During COVID: What Should Main Streets Expect?
Matt Wagner explores how the pandemic may affect the shop small holiday weekend.
Main Spotlight: How Rural Economies Can Leverage the Rise in Remote Work
COVID-19 has led to a rise in remote working. How can small and rural towns leverage this shift to create vibrant local economies?
The Impact of COVID-19 on Small Businesses: Follow-up Survey Report
Detailed findings from our follow-up survey on the impacts of COVID-19 on small businesses to better understand the continued challenges businesses face as the crisis evolves.
Main Spotlight: Recovery and Revitalization Depend on Understanding Human Psyche
How does psychology impact the recovery of our downtowns after the COVID-19 pandemic?
Local Impact: Small Business Saturday
Small Business Saturday® is more than a day to shop. It’s a nationwide movement that shines a spotlight on the importance of supporting small businesses in communities across America.
Community Spotlight: Benson, North Carolina
The Town of Benson started a special project to highlight their downtown businesses.
Community Spotlight: Berkley, Michigan
The Berkley Downtown Development Authority (DDA) proudly debuted its Downtown Berkley Shopping Bag for a Cause through a partnership between Better Life Bags.
Main Spotlight: Learnings from the ESHIP Summit
Supporting new and existing small businesses, and the entrepreneurs who run them, represents a vital aspect of the revitalization of downtowns and neighborhood business districts.
Creating Equitable, Inclusive and Transparent Cities: A Year in Review
The Equitable Economic Development Fellowship is a two-year, one million-dollar effort funded by the Surdna Foundation and the Open Society Foundations to help equity, transparency, sustainability and community engagement become driving forces in local economic development efforts.
Community Spotlight: Mini-Grants Offered to Small Businesses in Jefferson, Iowa
The Jefferson Rotary Club partnered with Jefferson Matters: Main Street to offer mini-grants for building facades and storefront signage to two dozen businesses for up to $500 each.
A Memorable Makeover on Main Street
The Wisconsin Economic Development Corporation (WEDC) partnered with Retailworks, Inc., a commercial interior design, display and branding firm headquartered in Milwaukee, to launch Wisconsin’s Main Street Makeover Contest.
Creative Discovery on the Maker Trail in Enid, Oklahoma
Kelly Tompkins of Main Street Enid shares more about the Maker Trail project and how it inspired creativity and helped people discover downtown.
City Sidewalks, Dressed in Holiday Style
Too often, as we’re strolling our favorite Main Street, we pass empty or dark shop windows that make us want to hurry home a little bit faster. Imagine instead, a charming streetscape adorned with vibrant, lively window displays, showcasing retailers’ favorite products and seasonal gift ideas.
Community Spotlight: #ShopSmall in Goldsboro, North Carolina
Small Business Saturday promo pic from Downtown Goldsboro, North Carolina, showing all the folks who took the pledge support a small business in their community.
Using Local Search Trends to Attract More Customers to Your Main Street
We’ve put together a practical list of some of the things that local store owners can do right now to help them capitalize on this increasing trend in local searches.
Network Spotlight: Main Street Iowa Restaurant Week
From authentic comfort food to farm-to-fork fresh and everything in between, these restaurants, bars, and cafes are key to the thriving social, business, and residential life in the historic commercial districts in Main Street Iowa communities.
Fab Lab Sparks Rural Opportunities
Located in southeast Kansas, Independence (pop.8,799) is home to Fab Lab ICC, which is on track to be the world’s leading innovator in combining entrepreneurial mindset education with a fab lab maker space.
Community Spotlight: Morganton, North Carolina
The craft beer industry is playing a key role in the rebirth of Main Streets and neighborhood commercial districts across the county.
Rethink Storefront Accessibility to Rethink Community Viability
Appealing to mobility-challenged shoppers yields benefits beyond the store.
Sparking a Movement in Small Business and Small Towns
Being the only person in the know can be fun, exhilarating even. Except when you are the one person out of 600+ in a room and you know bad news is coming.
The Lowdown in Downtown LaBelle
Fritz the dog has made his way into the hearts of the residents of LaBelle, Florida, and helped our Main Street Community find a way to make what we do more noticeable.
Pop-Up Altavista 2.0
Altavista On Track, the local Main Street organization, is working to cultivate and sustain local entrepreneurs with an educational business launch competition, Pop-Up Altavista 2.0.
The Bright Center: A Space for Winchester’s Bright Minds to Create, Innovate and Thrive
In Winchester, Virginia, one woman’s vision and commitment to downtown’s revitalization created an innovative community space for the Creative Class.
Why Business Retention and Expansion Plans are Important for Downtowns
A business retention and expansion plan, properly implemented, not only helps keep businesses open but possibly even helps them expand.
Business Investment Guides: “Think B.I.G.”
The first rule of conducting business is “make it simple.” The easier it is to pay for merchandise, get entertainment or obtain a service, the more likely it is that people will take advantage of those options.
Small Box – A Creative Retail Project
Main Street communities across the country are no stranger to seeking creative strategies to solve their most nagging issues – vacant buildings, marketing downtown, bolstering retail to name a few.
Supporting Immigrant Entrepreneurs in the Heart of Boston’s Main Streets
To understand the role that immigrant business owners play in Boston’s small business ecosystem, you need only to walk through any Boston Main Streets district.
Measuring the Economic Impact of Storefront Improvements
Façade appearance is a critical aspect of the overall aesthetic appeal and unique character of downtown.
Sign Design Guidelines
A lot of signs are necessary to make a downtown work well, but not every community knows what a good sign system looks like, or how instrumental it can be to the creation of a successful downtown.
Improving Performance in Main Street Iowa Communities
Main Street Iowa, a program of the Iowa Economic Development Authority’s Iowa Downtown Resource Center, created a one-of-a-kind three-year program to provide help for performance venues located in Main Street districts.
