How Small Businesses Can Clear the Economic Hurdles Ahead
Shifting rules on taxes, trade and regulation are creating uncertainty for SMBs. Owners can overcome that by focusing on efficiency, flexibility and investment.


When Coldplay’s Chris Martin sang, “Nobody said it was easy,” he could well have been referring to owning a small-to-midsize business (SMB).
According to the U.S. Chamber of Commerce, SMBs account for an estimated 99.9% of all firms in the United States, and it often seems like the owners are managing this vital sector of the economy single-handedly.
They need to get up every day, ready to out-compete and out-hustle larger competitors that have greater scale and resources.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Furthermore, owners must satisfy customer expectations, meet payrolls and manage cash flow — and do all of that while trying to figure out how to grow their business (and closely tied personal finances) to the next level.
In 2025, business owners face yet another challenge. The new administration’s tax, trade, regulatory and other policies are still evolving, and it may be some time before their full impact is known.
Many of the new initiatives will likely be positive for SMBs in the long term, but the short-term path is paved with uncertainty.
For example, SMBs are waiting for news about tax-relief measures, including whether the 20% income tax deduction for qualifying businesses will be extended. It is too soon to tell how proposed tariffs will affect the cost of goods for businesses and their customers, as well as the availability of products and materials that are currently sourced from global supply chains.
Many owners are hoping for an easing of some burdens given the administration’s deregulatory agenda, but the future is uncertain.
Inflation, interest rates and the overall health of the economy also rank high on the list of uncertainties for SMB owners.
For SMB owners seeking to chart a course through this uncertain landscape, a few key principles are important to keep in mind:
- Focus on those factors that are under your control. Keep a close watch on your workforce, employee sentiment and customer sentiment to ensure the company is as efficient and productive as possible during times of uncertainty.
- Maximize your financial and operational flexibility, so you are less vulnerable to shifting rules and regulations and their consequences.
- Don’t put off strategic investments that are needed to grow the business. Rather, base decisions on a solid ROI analysis. Leverage technology to offset potential labor or supply chain deficiencies.
Control supply sources, costs and cash flow
Many owners are responding to uncertainty by taking more control of their supply sources.
For example, they are stockpiling inventories of products and materials to lock in availability and costs ahead of any disruption in global trade.
Some are thinking about diversifying their supply chains, while others may want to consider developing their own manufacturing capacity to replace or augment current providers.
You can also invest your time in further developing meaningful relationships with vendors, from accountants to landlords to suppliers.
Getting a handle on cash flow is one of the most important steps an owner can take. Now is the time to really analyze cash flow, simplify the payment cycle, accelerate payments and forecast upcoming cash flow needs.
But not all businesses have access to that depth of information and analysis. Work with your bank or other financial institutions to find platforms that can support the analysis of real-time information.
From internal reporting to payment functionalities, maintaining a comprehensive understanding of your cash flow requirements is essential for making informed business decisions.
Maintain financial flexibility
Reliable access to financing at a reasonable cost is a critical piece of navigating uncharted territory. SMB owners should look carefully at their current credit facilities and whether their lines are adequate for a range of possible eventualities.
They also may want to reach out to their lenders for better credit terms or more flexible loan covenants.
One approach could be to consolidate more of the company’s financial relationships with its primary bank, to provide leverage to negotiate more favorable pricing and/or better terms and conditions. Spending time talking through strategy and plans for the year ahead with your banker or financial adviser provides a clear starting point.
An external resource can help to reveal blind spots to improve both your business strategy and operations.
Invest in growth
It may be tempting to put off investing in the business during a period of uncertainty. However, select investments can help an SMB become more efficient, resilient and productive. Owners should consider certain investments, as long as they are backed up by a solid cost/benefit analysis. Knowing how the investment will pay off over several years is key.
One investment to consider is the use of technology to offset anticipated labor shortages. While demand for workers remains high due to the underlying strength of the U.S. economy, an aging population will continue to limit the growth of the working-age population.
Changes in immigration policies can also potentially impact the availability of labor for some businesses. Owners may want to assess technology investments, with an eye toward automating functions to improve employee productivity.
SMB owners don’t have the luxury of waiting for a clearer picture to emerge about possible changes in official policies and priorities. Focus on the factors you can control, maintain financial and operational flexibility, and invest prudently to optimize efficiency, productivity and growth.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Mark Valentino is President and Head of Business Banking at Citizens. Under his leadership, the Business Banking team brings comprehensive advice and solutions to help small businesses operate at every stage of their journey. Mark rejoined Citizens in October 2023 after leading a privately owned healthcare provider in Southern California. During that time, including his role as CEO of LA Downtown Medical Center, he dedicated his energy and efforts to expanding mental health access to the underserved communities of greater Los Angeles.
-
Get Netflix, Hulu and Apple TV Plus for Free by Joining T-Mobile
T-Mobile customers save up to $35/month on streaming services thanks to this Netflix, Hulu and Apple TV Plus bundle. Here’s how to get it.
By Rachael Green
-
Missed Tax Day? You Could Still Be Eligible for These Valuable Tax Refunds
Tax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
By Gabriella Cruz-Martínez
-
When Should You Hand Over the Keys — to Your Investments?
The secret to retirement planning? "The best time to hand over the keys is before you’ve realized you need to hand over the keys."
By Maurie Backman
-
Going to College? How to Navigate the Financial Planning
College decisions this year seem even more complex than usual, including determining whether a school is a 'financial fit.' Here's how to find your way.
By Chris Ebeling
-
Financial Steps After a Loved One's Alzheimer's Diagnosis
It's important to move fast on legal safeguards, estate planning and more while your loved one still has the capacity to make decisions.
By Thomas C. West, CLU®, ChFC®, AIF®
-
How Soon Can You Walk Away After Selling Your Business?
You may earn more money from the sale of your business if you stay to help with the transition to new management. The question is, do you need to?
By Evan T. Beach, CFP®, AWMA®
-
Two Don'ts and Four Dos During Trump's Trade War
The financial rules have changed now that tariffs have disrupted the markets and created economic uncertainty. What can you do? (And what shouldn't you do?)
By Maggie Kulyk, CRPC®, CSRIC™
-
I'm Single, With No Kids: Why Do I Need an Estate Plan?
Unless you have a plan in place, guess who might be making all the decisions about your prized possessions, or even your health care: a court.
By Cynthia Pruemm, Investment Adviser Representative
-
Most Investors Aren't as Diversified as They Think: Are You?
You could be facing a surprisingly dangerous amount of concentration risk without realizing it. Fixing that problem starts with knowing exactly what you own.
By Scott Noble, CPA/PFS
-
My First $1 Million: Literacy Interventionist, 59, Colorado
Ever wonder how someone who's made a million dollars or more did it? Kiplinger's new My First $1 Million series uncovers the answers.
By Joyce Lamb