Small businesses are the heartbeat of the U.S. economy. We fuel innovation, create jobs, and bring vibrancy to our local communities. We make up 99.9% of all U.S. businesses and employ nearly half of the private sector workforce. (Source: business.com). Our contributions are vast- from occupying vacant storefronts and generating tax revenues to hiring local talent and filling critical gaps across industries.
As we enter 2025, small business owners are navigating a rapidly evolving landscape. Economic fluctuations, shifting customer expectations, and technological advancements are creating both challenges and opportunities. To stay competitive and thrive, we must embrace change, adopt smarter solutions, and strengthen our customer relationships. Whether it’s leveraging the latest technology, expanding through e-commerce, refining our workforce strategies, or optimizing operations to work smarter—not harder—we must find innovative ways to grow and adapt.
37 Oaks is a commerce development and learning laboratory that educates and prepares product-based businesses for success through e-commerce, storefronts, wholesale, and pop-up markets. Building profitable, sustainable, and scalable small businesses is not only our mission, it's our responsibility. In 2024, we facilitated 240 hours of 37 Oaks University courses and 613 one-on-one coaching sessions for entrepreneurs nationwide. (Learn more here.) With this deep insight and experience, I've compiled twelve trends that we believe will shape the landscape for small businesses in 2025.
1. Adoption of Artificial Intelligence (AI)
AI has been a hot topic for some time, but many of our small businesses are just beginning to truly grasp its potential. Understanding what AI is, how it can add value, and the ways it can effectively integrate into daily operations has taken time. Fortunately, widely used platforms like Canva, Facebook, and Shopify have incorporated AI-driven features, allowing us to experience firsthand how it can simplify tasks, enhance efficiency, and ultimately drive growth. But this is just the tip of the iceberg.
In 2025, we will see more of the small businesses we work with embrace AI to enhance content creation, customer engagement, research, and administrative tasks. As familiarity and comfort with this technology grow, they will them explore more advanced features, such as strategic planning, inventory management, and financial forecasting. 37 Oaks University's recently launched study hall workshop, AI: Practical Applications for Small Businesses, provides hands-on guidance and actionable insights which makes it easier for entrepreneurs to adopt and implement AI in meaningful ways. With resources like this, small businesses will embrace AI faster and with more confidence, turning it into a powerful tool for growth and efficiency. AI is no longer a luxury—it’s a critical tool for staying competitive and driving efficiency.
"AI is my favorite employee!" A solopreneur referring to AI technology.
2. Emphasis on Mental Wellness
Running a small business means wearing many hats and constantly pushing forward, which is why mental wellness will be a top priority in 2025. With 36% of small business owners citing work-life balance as a major challenge, it's clear that prioritizing well-being is no longer optional—it’s essential. We realize that in order to build a sustainable business for the long haul, we need to take care of ourselves first. If we are not at our best, our business won’t be either.
This growing awareness will drive small business owners to embrace more mental wellness practices such as mindfulness techniques and dedicated mental health support. Resources like virtual counseling, stress management apps, and professional coaching will become must-have tools in the entrepreneurial toolkit. Beyond personal well-being, many business owners will also foster a culture of wellness within their teams. Prioritizing mental health not only helps reduce burnout but also boosts productivity and enhances overall business performance. Taking care of ourselves and our teams is no longer a luxury—it’s a strategic advantage.
3. Working Smarter, Not Harder
For many small business owners, our journey begins with hard work—wearing multiple hats, figuring things out as we go, and learning through experience. I know mine did. In those early days, working smarter wasn’t always an option because we’re busy laying the foundation and doing whatever it takes to keep things moving. It often takes years before we feel confident enough to shift our focus toward efficiency.
But today, things are different. Thanks to advancements in technology, small businesses have the opportunity to work smarter, sooner. Automation tools and modern solutions are changing the game, helping us streamline operations, reduce manual tasks, and improve accuracy. Instead of trying to do it all ourselves, more of us are embracing tools that automate key functions—whether it’s marketing, accounting, customer service, or inventory management. These technologies not only save time and resources but also free us up to focus on what truly matters: growing our businesses, creating new opportunities, and even taking time to focus on ourselves. By working smarter, we’re not just making our businesses more efficient—we’re setting ourselves up for sustainable success and a better quality of life.
4. Data, Data, Data
In 2025, data will be more crucial than ever in shaping our growth and success. With every interaction—whether online through websites, in person at a pop-up market or in-store through a wholesale account, we need to gather valuable customer information. But collecting data is just the beginning; managing it wisely and securely is what truly matters. As privacy regulations continue to tighten, small businesses will focus on collecting first-party data directly from their customers through channels like loyalty programs and email sign-ups. Doing so not only ensures compliance but also builds trust and deeper relationships with customers.
Now that we have this valuable information, what do we do with it? Advancements in AI are making it easier to analyze data and gain actionable insights, allowing us to make informed decisions around sales, marketing, and operations. Real-time analytics are becoming more accessible, giving small businesses the ability to monitor trends and adapt strategies quickly, staying responsive to customer needs and market changes.
However, with greater access to data comes a greater responsibility to protect it. Strengthening privacy measures, safeguarding customer information, and being transparent about how data is used will be more in focus this year in maintaining trust and credibility. By embracing smart data strategies, we can work more efficiently, stay competitive, and deliver meaningful, personalized experiences that truly resonate with our customers.
5. Implementing Lean Operation Strategies
This is a trend that holds true year after year—running a lean operation is always a smart move, but in times of change and uncertainty, it becomes essential. With fluctuations in the current business environment, many small businesses will continue to tighten their budgets, waiting for more clarity on how economic conditions and policies will impact them. This can mean holding off on major, long-term investments or decisions that could add fixed costs to their bottom line. Instead, small business owners will focus on staying agile and minimizing risk.
Prioritizing efficiency doesn’t just help us weather uncertain times—it also creates a foundation for sustainable growth. Studies show that lean businesses are 30% more profitable than their non-lean counterparts. By streamlining operations, managing expenses, and optimizing resources, we can remain resilient and ready to seize opportunities when the time is right. Working smarter and staying lean is not just about survival; it’s about building a business that can thrive in any economic climate.
6. E-commerce Expansion
The digital economy is thriving, and more small businesses are jumping into or expanding in e-commerce—and for good reason. It’s an incredible way to expand reach, connect with new customers, and diversify revenue streams without breaking the bank. We've seen consistent growth in this space over the years, and the opportunities just keep coming. At this point, e-commerce isn’t just an option; it’s where our customers are —so it’s where we need to be.
Whether it’s creating an easy-to-navigate website, tapping into online marketplaces like Amazon and Etsy, or leveraging the power of social commerce on platforms like Instagram and TikTok, we will be finding smart, effective ways to meet customers right where they are this year. By embracing e-commerce, we’re not just keeping up with trends—we’re staying ahead and building stronger, more resilient businesses for the future. With e-commerce sales projected to make up 22% of global retail sales by 2025, the opportunities for us to grow and scale through online channels are greater than ever.
Free 37 Oaks University Helpful Resources: Join our free community to access:
E-commerce Site Audit
E-commerce Readiness Assessment
E-commerce Conversion Calculator
7. Email Optimization
Let’s now talk about email marketing. Despite the dominance of social media, email remains one of the most powerful tools for engaging customers and driving business growth. It's no longer just about sending emails—it’s about reaching the right people with the right message at the right time. In 2025, more small businesses will lean into segmentation, automation, and personalization to craft targeted campaigns that truly resonate.
Think about the impact of an optimized email marketing strategy: increased sales and profits, higher transaction values, shorter transaction cycles, and more repeat customers. The benefits are endless, and when done right, it’s a game-changer for us. With an impressive average ROI of $42 for every dollar spent, email marketing remains one of the most cost-effective ways to stay connected with customers and scale a business without breaking the bank. If optimizing email marketing isn’t already a key part of your strategy, it’s time to make it one.
Free 37 Oaks University Helpful Resources: Join our free community to access:
37 Oaks University Bob + Weave Series offers a free catalog of videos to help you navigate punches small business ownership can throw. Check out some of the episodes on email marketing and more!
8. Owning the Customer Relationship
We've talked about some of the top ways small businesses will reach and engage with both new and existing customers the year, and one thing is clear—collecting data is key. The right data can shape major strategies and planning decisions, giving businesses the insights they need to grow. However, depending on the platform or channel uses, the data small business owners really want may not always be available.
There’s no doubt that social media and third-party platforms are essential for expanding reach and building brand awareness. But in an era where data drives everything from planning to risk management, many of the small businesses we work with are realizing more and more the importance of owning their customer relationships directly. By leveraging tools like loyalty programs and direct communication channels such as email and SMS, we will begin creating stronger, more personal connections with their customers in 2025. These channels not only provide valuable insights but also help build trust and long-term brand loyalty. Studies show that businesses investing in CRM tools experience a 29% increase in sales.
While it's important to utilize various platforms for visibility, establishing direct customer relationships puts small businesses in the driver’s seat—giving us more control over our growth and success.
9. Diversifying in Many Areas
In 2025, diversification will be more of a key strategy for small businesses looking to stay resilient and ready for whatever comes their way. Diversifying isn't just about adding new revenue streams like subscription services or omnichannel strategies—it’s about expanding in every direction. Whether it’s introducing new product categories, expanding geographical markets, lining up multiple sourcing partners, exploring private and public partnerships, or expanding into different customer segments, small businesses are realizing that diversification is their best defense against uncertainty.
The business environment is changing fast—on all fronts. Diversifying helps mitigate risk, opens up new opportunities, and strengthens the overall business model. In fact, 64% of businesses that diversify report higher profitability. The ability to pivot quickly is crucial in today’s market, and small businesses will be embracing agile methodologies, continuous improvement strategies, and customer feedback loops to stay flexible and responsive.
10. Growing Through Partnerships
Strategic partnerships and collaborations are becoming an increasingly popular way for small businesses to scale and reach new audiences. When we team up with complementary brands, we can cross-promote products and offer bundled deals that provide more value to customers while expanding our market presence.
Beyond traditional partnerships, this year, we see more small businesses tapping into influencer collaborations and industry alliances to boost credibility and visibility. We will also see a rise in co-hosted events and webinars, which not only create brand awareness but also foster valuable business relationships. It’s no surprise that 67% of businesses consider partnerships crucial to their growth strategy. In today’s interconnected world, growth often happens through collaboration.
11. Leveraging Online and Retail Marketplaces
Online and retail marketplaces have become invaluable for small businesses looking to expand their reach without the overhead costs associated with traditional retail models. Online platforms such as Amazon, Etsy, and Walmart, along with retail marketplaces like Target, Macy's, and Kroger stores—as well as local co-ops, retail incubators, and farmers markets—provide access to a larger customer base, streamlined logistics, and essential back-end and marketing support that make scaling easier and more efficient.
These platforms give small businesses the opportunity to test new products, gather valuable customer feedback, and take advantage of built-in marketing tools to boost sales. As a result, more small businesses are turning to these ecosystems not only to grow but also to alleviate the challenges of managing logistics and distribution on their own. Marketplaces offer a lower-risk, cost-effective way to expand and evolve in today's competitive landscape.
12. Designing Creative Workforce Strategies
As the labor market continues to evolve in 2025, small businesses are facing increasing pressure to stay competitive with wages and benefits, while managing rising costs. With economic fluctuations, inflation concerns, and evolving employee expectations, wage growth is becoming a significant factor for small business owners. Many businesses are finding themselves at a crossroads—how to attract and retain top talent without overextending their financial resources.
With the cost of living on the rise, employees are seeking more value in their compensation packages. Small businesses that can creatively structure their offerings to balance financial sustainability with employee satisfaction will be in a better position to attract top talent and retain their workforce in 2025.
As we move into 2025, small businesses continue to be the driving force behind innovation, economic growth, and community impact. Our resilience and adaptability have always been our greatest strengths, and as the business landscape evolves, we must remain proactive and open to new opportunities. Whether it’s leveraging AI to streamline operations, focusing on mental wellness to sustain ourselves and our teams, or embracing diversification to navigate uncertainty—our ability to adapt will determine our success.
At 37 Oaks, we understand the unique challenges and opportunities that small businesses face. That’s why we are committed to providing the education, resources, and support needed to help entrepreneurs build profitable, sustainable, and scalable businesses. The insights shared in this article are not just trends—they are actionable strategies that can empower small business owners to make informed decisions and take meaningful steps toward growth.
The road ahead may bring challenges, but with the right tools, mindset, and support, small businesses can continue to thrive, innovate, and make an impact. Here’s to embracing change, working smarter, and making 2025 a year of growth and opportunity.
Founder/CEO
37 Oaks
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