The unpredictable economic times around sustained inflation, cautious consumers and volatile trade policy have small businesses more concerned for the balance of the year.
A small business survey in late July by KeyBank found 23% of small business owners are stuck in survival mode are are not focused on long-term planning. Nearly half (46%) feel that performance fell short of expectations in the first half of 2025.
Half of small business owners told KeyBank their top concern is inflation and rising costs, far outpacing other factors. One third named competition, 25% said cash flow and 23% were most concerned about labor shortages and hiring challenges. The survey also found that one in four business owners is raising prices for customers in light of the recent tariffs and other rising costs.
Despite cost pressures, 40% of small business owners are cautiously planning for their futures, while another 46% say they are certain they could cover one month of operating expenses if an emergency arose. This metric improved slightly from 49% in KeyBank’s fall survey, suggesting that business owners are preparing for stability and sustainability despite uncertainties, the survey notes.
While 72% of small business owners are “very concerned” that upcoming federal legislation will have an impact on their operations, 80% said they feel confident to make informed decisions amid economic and policy uncertainty, though they do admit they might be second-guessing at times.
“Navigating the current economic environment has proven to be no small feat for small business owners,” said Mike Walters, president of business banking at KeyBank.
Looking ahead, 21% of small business owners agree they’d feel more secure by having regular conversations with their business bankers, with a third looking for guidance on cash flow and the same number wanting help with financial planning and 31% seeking help with tax strategy.
Other areas of concern for small business owners include cybersecurity. Four in 10 respondents cited payment fraud as their top concern, followed by phishing and email scams by 27% and 26% named identity theft as a major concern.
Small business sales tracked by the Fiserv Small Business Index in August remained unchanged despite a 1.4% uptick in foot traffic compared to the year-ago period. Average ticket values declined 1.5% compared to July, driven by consumers prioritizing value-driven purchases.
“August saw consumers continue to show up to small businesses, but often spending less at checkout compared to July,” said Prasanna Dhore, chief data officer at Fiserv. “This shift to budget-conscious decisions was prevalent in restaurants, as consumers opted for fast and affordable options when dining out. In other industries, such as wholesale trade, where macroeconomic pressure is pushing ticket sizes higher, foot traffic is declining.”
Year-over-year sales rose 3.9% and transactions increased 3.7% in August. Average ticket sizes rose 0.3% compared to 2024.
Small business retail sales increased 1.1% and foot traffic rose 0.9% month over month in August. Month over month, small business sales shifted toward goods, rising 0.6% in August, while services slipped 0.5%. Groceries, gasoline, and clothing led goods growth, while professional services and small contractor services saw pullbacks. Compared to August 2025, services sales growth rose 4.8%, and outpaced goods, which rose 2%.
Fiserv Small Business Index’s is derived from point-of-sale transaction data, including card, cash and check transactions in-store and online across approximately 2 million U.S. small businesses.