Survey: Small business owners are less confident about year-end profits

Business owners are heading into the last quarter of 2025 — often the most important time of year for retail, e-commerce, restaurants and hospitality — with less confidence in profit growth expectations than this time last year, according to a recent NEXT Insurance survey.

This year, just under half of business owners (49%) expect their profits to increase, down from 55% in 2024. That six‑point drop may reflect that small business owners continue to grapple with rising uncertainty across demand, inflation, policy and costs.

In the survey, NEXT asked 1,500 business owners in August about their outlook and planning for the end of the year.

Inflation concerns among small business owners reached record highs and economic outlooks are murky due to rising costs and slowing demand.

At the same time, business owners not expecting any change in profits jumped from 27% to 35%. This swing could suggest many owners are concerned about growth. Slightly fewer business owners expect profit shortfalls at year’s end compared to 2024 (16% vs.18% last year).

Business owners could be watching the economy closely before they get too optimistic about big-numbers expansion and growth.

Business investment spending is flat across the board

More business owners say they have extra income to reinvest compared to 2024. However, there were only nominal changes in the five key investment areas we track:

• Customer acquisition
• Product and service development
• Equipment/technology
• Hiring and retaining
• Risk management

The most significant change reported by business owners is a 3% increase in hiring and retraining employees.

Business owners plan to hire more workers

While the percentage of business owners who said they were hiring in 2024 and 2025 remains flat, the number of employees businesses plan to hire has increased as we approach the holiday sales quarter.

Thirteen percent of business owners who plan to hire said they would hire 10 or more new workers and 12% said they will hire six to 10 new employees. Both have a 3% increase compared to last year.

Those that said they were bringing in just one to five new employees has dropped 5%.

Of course, not every employer is looking to fill their ranks. Some respondents said they don’t need to hire (26%) or can’t afford to (18%), both roughly in sync with 2024 numbers.

It’s getting easier to hire and find new employees

Only 8% of owners said they are not hiring in the final months of this year because it’s too hard to find employees. This is a significant drop from 15% of employers who reported it was too hard to find talent last year at this time.

First half of 2025 profits remained steady

The first half of 2025 brought a slightly better mix of results as compared to last year.

The number of businesses that exceeded profit expectations ticked up slightly from 22% compared to 20% last year. The largest group of respondents said profits met expectations at 42%.

Fewer business owners reported worse-than-expected profits (36% in 2025 vs. 38% in 2024).

These findings line up with broader national trends. In 2024, the Federal Reserve found just 46% of small businesses turned a profit, while 35% operated at a loss, and more reported revenue declines (41%) than gains (38%) — the first time that’s happened since 2021.

Though profits aren’t yet dropping, slowing demand, rising expenses and economic uncertainty could keep business owners holding steady.

How NEXT supports business growth

NEXT makes it fast, easy and affordable to protect your small business — and you can do it all online.

We’ll ask a few questions about your business and give you a quote. You can select your coverage options and buy your policy in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Start a free quote with NEXT.