06/16/2025 | Press release | Distributed by Public on 06/16/2025 17:30
MINNEAPOLIS - U.S. Bank released its third Small Business Perspective survey report today, revealing how owners across the country are responding to an environment defined by rapid change. The nationwide survey of 1,000 small business owners explored how they are navigating challenges ranging from economic stressors to the rise of generative AI, all while remaining focused on long-term growth, succession planning, and leaving a lasting legacy.
"This year's survey makes it clear that small business owners are committed to future-proofing their businesses in response to today's economic climate and rapid technological change," said Shruti Patel, U.S. Bank's Chief Product Officer for Business Banking. "From embracing generative AI to responding to shifting economic conditions like tariffs and thinking proactively about succession, owners are serious about the future of their businesses. There is a real opportunity - and responsibility - for financial institutions to show up as strategic partners in helping small businesses navigate what's next."
Handing the Reins to the Next Generation
With more than half of U.S. small business owners now over age 55, succession planning is becoming increasingly urgent. While many owners are not yet ready to step away - with only 54% having created a succession plan - new generations are preparing to take their place: more than one-third (36%) of Gen Z and Millennial owners say they plan to acquire a business from a retiring owner.
The report reveals a striking gap between intention and action. While 85% of surveyed participants say they originally became an owner to create something they could pass on, and 84% wanted to create generational wealth for their family, only 54% have a formal succession plan in place.
A growing number of owners (62%) have seen their retirement timelines accelerate in the past five years. But for many, navigating succession is a challenge:
Owners with strong business performance were more likely to have a succession plan in place: 64% of those with a plan reported significant growth over the past year, compared to 50% of those without a plan.
Nearly 4 in 10 small business owners (37%) say they plan to sell their business in the next 12 months, suggesting how quickly transitions of ownership may be approaching for some businesses. However, retiring business owners are not the only ones looking to sell, with a higher number of Gen Z and Millennial owners (41%) than Boomers and Gen X (33%) saying they plan to sell their business.
While the small business landscape has changed dramatically over the years, the motivations that originally inspired owners still drive them today. Most remain deeply committed to their work: 86% want to continue running their business as long as possible, and 87% are hopeful they'll leave behind a positive legacy when they eventually step away.
Economic Pressures are Influencing How Owners Operate
The need for small business owners to make long-term plans is reinforced by the day-to-day worries they are facing. Respondents reported their top macroeconomic stressors as:
Among other stressors small business owners cited, 4 out of 5 (81%) owners felt at least somewhat stressed about tariffs.
Despite these stressors, 96% of owners reported their business as currently successful and 88% saw growth in the past year. To manage pressures and position their businesses for the future, many owners are prioritizing key steps in the year ahead, including focusing on revenue (48%), ensuring enough staff (33%), improving company efficiency and cost-effectiveness (32%), and reacting to the general economic landscape such as inflation and recession risk (29%).
To get a pulse check on the most current sentiment, U.S. Bank conducted a follow-up survey of 500 small business leaders during the month of May. While stress levels on the economic environment were similarly high, two-thirds (66%) said the country's economy is moving in the right direction, with only 18% saying it's going in the wrong direction. This sentiment was even stronger among younger business leaders (Gen Z and Millennial), with 74% saying it was moving in the right direction, vs. 52% of leaders from older generations (Gen X and Boomer).
Despite this optimism, a majority (58%) of the leaders expressed at least some concern that tariffs may impact their business operations, and 57% expect their input costs to go up as a result of tariffs with most expecting a cost increase between 1-10%. At the same time, leaders were slightly more likely to anticipate a positive rather than negative impact from tariffs across several business factors - including cost of goods, customer demand, margin profitability, capital investments, and labor/HR - but these expectations were generally modest, with most leaders expressing a neutral or only slightly positive outlook on the potential effects of tariffs.
Small Business Owners are Turning to Gen AI and Digital Tools to Stay Competitive
As small business owners look to create long-term success for their businesses, they are embracing generative AI (Gen AI) and digital tools. Nearly 6 in 10 (57%) are currently using or plan to implement Gen AI solutions in the next year. Among those using it, the top applications include content creation (44%), data analysis and information gathering (41%), and marketing and sales strategies (39%).