Survey: Inflation, rising costs top-of-mind for small businesses
Economic headwinds, including rising costs and tariff uncertainty, have small business owners concerned about the future.
KeyBank’s new 2025 Small Business Survey revealed that almost a quarter (23%) of small business owners are stuck in “survival mode,” and aren't focused on long-term planning. Almost half (46%) feel their performance fell short of expectations in 2025.
Half (50%) of small business owners told KeyBank their top concern is inflation and rising costs, far outpacing factors like competition (33%), cash flow (25%) and labor shortages and hiring challenges (22%). A quarter (25%) of small business owners are increasing prices for customers in light of recent tariffs and rising costs.
[READ MORE: Numerator: Most consumers still plan to make tariff-related spending changes]
Cybersecurity also remains a key issue for small business owners, with 41% citing payment fraud as their top concern, followed by phishing and email scams (27%) and identity theft (26%).
Despite cost pressures, 40% of small business owners are cautiously planning ahead for their businesses' futures, while another 46% say they are certain they could cover one month of operating expenses if an emergency arose, down just slightly from KeyBank's Fall 2024 Small Business Survey (49%). KeyBank says this suggests that they are preparing for stability and sustainability despite uncertainties.
While a majority (72%) of small business owners are “very concerned” that upcoming federal legislation will have an impact on their operations, 80% say they feel confident to make key, informed decisions amid today's economic and policy uncertainty, though they do admit they might be second guessing at times.
Looking ahead, 21% of small business owners agree they'd feel more secure by having regular conversations with their business bankers, with many looking for guidance on cash flow (33%), financial planning (33%) and tax strategy (31%).
"Navigating the current economic environment has proven to be no small feat for small business owners," says Mike Walters, president of business banking at KeyBank. "It's reassuring to see small business owners' passion and perseverance, despite the challenges that have come their way. Their ability to adapt – whether through tightening expenses, finding new ways to serve customers, or preparing for regulatory shifts – shows the grit and creativity at the heart of the small business community. It's that determination that allows them to build the foundation needed for long-term growth."
KeyBank’s survey was conducted online with Survey Monkey and included 2,144 respondents, ages 18-99, from across the United States who own or operate a small-to-medium size business with an annual gross revenue of less than $10 million. The survey was completed in July 2025.
