Small business owners across the country are entering 2026 with cautious optimism after a difficult year marked by slow job growth, economic uncertainty and delayed hiring decisions.
Employment at businesses with fewer than 50 employees declined by 107,000 in 2025, according to data from ADP, making it one of the slowest years for small-business job growth in recent memory. wners say uncertainty surrounding tariffs, costs and the broader labor market forced them to cut back or hold off on expanding their workforce.
Kyle Lafond, a small business owner in Wisconsin, said 2025 brought unexpected challenges that made planning difficult.
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“Last year was very, very hectic. There were a lot of twists and turns and things thrown at us that we had not planned on,” Lafond said.
Lafond said uncertainty tied to President Trump’s tariffs and rising import prices played a major role in his decision not to hire additional employees last year.
“If we had any degree of stability or certainty in terms of tariffs and price increases on imports, that would lend itself to me making some decisions to bring more people on board,” he said.
His experience reflects a broader trend among small businesses. Just 53% of small business owners reported hiring or trying to hire in December, down three points from November, according to recent data. Analysts say the slowdown could signal deeper challenges in the labor market.
Businesses with fewer than 250 employees made up roughly three-quarters of the workforce last year, underscoring the outsized role small businesses play in job creation.
“Typically, small business is our hiring engine for the economy,” said Richard Trent, executive director of the Main Street Alliance. “So when the hiring engine of the economy is bleeding jobs like that, I think it's a serious indication that we are doing something terribly wrong.”
There were some signs of improvement at the end of the year. After shedding 120,000 jobs in November, small businesses added 9,000 jobs in December, raising hopes that conditions may begin to stabilize
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The National Federation of Independent Business reported that its Small Business Optimism Index rose slightly in December, though the share of owners planning to create new jobs in the next three months declined.
“More small business owners are expecting business conditions to improve over the next 6 months,” said Holly Wade, executive director of the NFIB Research Center. “But you know the labor market is still a challenge for a lot of small business owners still about one in five are saying that it's their. Single biggest problem in operating their business.”
As 2026 begins, small business owners say they are hoping for less uncertainty and more opportunities to grow.
