American Express has issued its new Amex Trendex: Small Business Edition, finding that small businesses anticipate a period of stability in 2025, while they invest in technology to drive business growth.
“In 2024, small businesses demonstrated resilience in the face of uncertainty, reinforcing confidence in their ability to grow through changing times,” said Anna Marrs, Group President, Global Commercial Services at American Express. “For them, 2025 will be defined by innovation, leaning deeper into artificial intelligence and social media as essential tools for reaching customers and future-proofing their businesses.”
Small Business Feel Prepared as they Enter 2025
Looking back on 2024, 70% of small businesses say their business became stronger following a period of uncertainty, and nearly three-quarters (74%) expect a period of stability for their business in 2025.
Feeling prepared for the year ahead, 91% of small businesses say they feel confident in their ability to grow their business – with nearly three-quarters (73%) saying they feel more confident than ever – and 92% are confident in their ability to prepare their company for the future. Small businesses also remain confident in their company’s future financial success (90%) and in their company staying ahead of trends or changing customer preferences (89%).
When asked what they think businesses should be doing to set themselves up for success in 2025, small businesses believe that they should be investing in technology and their customers, including prioritizing setting concrete goals (42%), meeting with customers (41%), conducting customer research (33%), upgrading their IT solutions (29%), refreshing their website and social media (29%), and hiring talent (29%).
Tech and Social Media Remain Top Priorities for Millennial and Gen-Z Small Businesses
In 2025, digitally-native Millennial and Gen-Z generations plan to grow their small businesses through tech investments. Compared to Gen-X and Baby Boomer-owned small businesses, younger business owners plan to increase their investments in financial platforms to help manage their cash flow (52% Millennials and Gen-Z vs. 39% Gen-X and Baby Boomers) and digitization to reach new customers (51% vs. 45%).
While growing their social media footprint remains a key focus area across all generations in 2025, Millennial and Gen-Z small businesses especially recognize the potential to build their brands and engage with customers on social media, with 71% saying that it’s a dream of theirs to see their business go viral. Compared to Gen-X and Baby Boomers, more Millennial and Gen-Z small businesses say that the things they see on social media inspire ideas for their business (74% vs. 56%), and more have made changes to their business in response to something they saw on social media (67% vs. 48%).
Generational attitudes continue to differ when asked about 2025 priorities. Compared to Gen-X and Baby Boomers, Millennial and Gen-Z small businesses cited growing their employee base (32% Millennials and Gen-Z vs. 22% Gen-X and Baby Boomers), introducing a new product or service (26% vs. 21%), and growing their business’ physical footprint (25% vs. 18%) as their goals for 2025.
Small Businesses Leverage AI for Growth and Competitive Edge In 2025
Millennial and Gen-Z small businesses are leading the charge when it comes to embracing Artificial Intelligence (AI) for their businesses. More Millennial and Gen-Z small businesses, compared to Gen-X and Baby Boomer small businesses, say they are currently using AI for their businesses (68% vs. 45%) and expect their investments in AI to increase in 2025 (46% vs. 36%).
Small businesses equipped with AI feel that the technology is not just a valuable tool for business growth, but a competitive advantage. Half (50%) of small businesses using AI expect the total number of employees for their business to increase in 2025, compared to 36% of businesses who don’t use AI.
As they look ahead to 2025, the small businesses that use AI are more likely than those who don’t to list upgrading their technology solutions (38% vs 22%), increasing their share of the market (30% vs 20%), and introducing a new product or service (29% vs 16%) as their goals for 2025.
METHODOLOGY
This survey was conducted between October 9 – 15, 2024 among a sample of 1106 Financial Decision Makers composed of the following: 501 Small FDMs (<10 employees), 403 Medium FDMs (11 – 100 employees), and 202 Large FDMs (101 – 500 employees). The interviews were conducted online. Results from the full survey have a margin of error of plus or minus 3 percentage points.
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Tags: Accounting, Small Business
