Inflation Persists as Top Concern, But Revenue Worries Gain
Concerns About Attracting and Retaining Talent Rise
At the same time, concerns about revenue saw a slight uptick this quarter from 26% to 30%. Revenue concerns now sit at the second highest level since 2021, only beat by Q1 2025 (35%).
Meanwhile, concerns with retaining employees (17%) and attracting talent (14%) continue to rise. Overall, roughly one in four small business owners select one of these items as their top concern.
Attracting talent has risen eight percentage points compared to this time last year (6% in Q4 2024); retaining employees has risen five percentage points over the same time period (12% in Q4 2024). Notably, the percentage that selected either retaining employees or attracting talent has risen from 16% in Q4 2024 to 26% this quarter.*
By industry, inflation concerns are the highest among retail businesses (53%) and lowest among manufacturing businesses (38%). Minority-owned businesses (55%) and small businesses with 20-500 employees (53%) also express high levels of concern over inflation.
Revenue concerns are highest among businesses in the service industry (38%), businesses owned by Baby Boomers and older (38%), and businesses with less than 5 employees (34%).
* In Q4 2024, this option was asked as “Lack of applicants for job openings”.
Alloy Precision Technologies, Inc.
Mentor, Ohio
Most Say This Holiday Season Is Vital for Their Bottom Line
Many businesses continue to view the holiday season as incredibly important for their bottom line—and even more so this year. Nearly four in five (79%) say the holiday season is important for their overall profit this year, up nine-percentage points from Q4 2024 (70%).
A majority across all demographics hold this sentiment, though there are some differences. Small businesses in the Midwest (69%) are less likely than their counterparts in the Northeast (84%), West (81%) and South (80%) to view this holiday season as important. By sector, businesses in retail (91%) place the greatest importance on the holiday season—a trend we see each year—followed by manufacturing and resources (83%). Additionally, businesses owned by Gen Zers/Millennials (89%) and Gen Xers (79%) are significantly more likely than those owned by Baby Boomers or older (50%) to stress the importance of the season.
As businesses stress the importance of this holiday season, more are also planning activities to help bring revenue in. Compared to Q4 2024, more plan to offer seasonal discounts (56%, up 9 percentage points), extend hours (48%, up 9 percentage points), and hire seasonal employees (29%, up 7 percentage points).
Interest in doing these activities varies by demographics and business sector. Businesses with fewer than five employees are least likely to report planning to do these activities. By generation, Gen Z/Millennial and Gen X owned businesses are significantly more likely to do these activities than those owned by Baby Boomers and older. By sector, retail businesses are more likely than their counterparts to offer seasonal discounts (73% vs. 48-55%), and those in retail and manufacturing are more likely to hire seasonal employees than those in services (38% and 32% vs. 22%, respectively).
Majority Expect to Raise Prices During Holidays Due to Inflation
Many businesses expect challenges due to inflation this holiday season.
Fifty-eight percent expect to raise prices during the holiday season due to inflation, and 52% expect lower revenue, though both measures have declined since Q4 2022 (69% and 61%, respectively). Similarly, 47% expect supply chain disruptions to make it difficult for their business this holiday season, a significant portion but still much lower than this time in 2022 (61%). Notably, businesses in retail and manufacturing are more likely to agree with these statements than those in services and professional services.
Majorities Report Giving in 2025 and Plan to Give this Holiday Season
This holiday season, most small businesses plan to give back to their community or volunteer. Two in three (65%) plan to donate to charitable organizations, up eleven percentage points from Q4 2024 (54%). In the same vein, 51% plan to volunteer for charitable organizations, also up significantly from this time last year (40%).
Larger businesses are more likely to factor charitable giving into their holiday plans. For example, businesses with fewer than five employees are less likely than those with five or more employees to plan to donate (60% vs. 70-83%) or volunteer (46% vs. 56-64%) for charitable organizations. By generation, Gen Z/Millennial (55%) and Gen X (51%) owned businesses are more likely than those owned by Baby Boomers and older (39%) to report planning to volunteer for charitable organizations.
Small businesses also value community engagement beyond the holiday season. Three in five businesses say they have donated to local charities (64%), encouraged shopping at local small businesses (62%), and sponsored or donated goods/services to local events (60%) in the past year. A slim majority (53%) also report forming partnerships with local businesses in the last year.
Top Shelf Services
Park City, Utah