Small Business Decline in 2026

Small Business Decline in 2026

 

Small businesses are the heart of the United States and with the everchanging economy they are at jeopardy of declining in the upcoming years. We saw the beginning stages of small business decline through the COVID-19 pandemic and it is ongoing. 


As a society we have grown to need instant gratification and quick fixes to our problems which is why large corporations such as Amazon, Target, Walmart, Costco, etc. are so frequented. If we can get everything we need delivered to our doorstep in two days or brought out to our cars in the parking lot, why is it important that we continue to support small businesses?


Small businesses according to an SBA (Small Business Administration) report in 2025 make up 99.9% or 36.2 million of all businesses in the United States. 


Small Businesses:

  • Support local character of each community

  • Donate to local charities

  • Keep neighborhoods personal and connected

  • Are responsible for job growth

  • Innovate at 12 to 15 times the rate of larger corporations

  • Create individual fixes to problems as opposed to promoting generic products. 

 

What’s Going Right

There is contradictory evidence as to the state of small businesses in the beginning of 2026 but with the evolving technological advancements and growing economic concerns I think it is fair to say that if they are not at jeopardy in this very moment they will be soon. 


The majority of small businesses reported steady revenue in the beginning of 2026 according to the Small Business Expo. We will also see the application of The One Big Beautiful Bill act to reduce tax burdens on small businesses. 


The Act signed into law on July 4, 2025 increased the small business tax deduction to 23%, increased the expensing cap, and increased the estate tax exemption. 

 

What’s Going Wrong

Although this bill was a huge win for small businesses there is also the weight of higher tariffs looming over them. 


For small businesses that are not prepared or have the resources to withstand higher tariffs they are at risk for closure. 


Higher tariffs means tighter profit margins and higher consumer prices (and we all know how expensive everything has gotten already!). 


Turning Wrong to Right

The best advice that I have for small business owners is to be prepared, utilize your connections within the community, and foster human-AI collaboration. 


AI and technology is the future but we are still in a time where creativity and innovation is best coming from humans. 


Use technology to your advantage instead of fighting against it and hopefully it will allow small businesses to continue to thrive through the future. 


LouisvilleGeek gives 6 Technological Essentials for Small Businesses

  • AI (Artificial Intelligence): automate customer service responsibilities, quick response time at all hours, and personalize customer interactions

  • IoT (Internet of Things): A myriad of devices or sensors that can collect and share information through different networks to keep track of inventory, monitor system health, adjust chain systems, and automate security system responses based on the situations

  • AR and VR (Augmented Reality and Virtual Reality): Great for training and allow customers to visualize a product

  • Automation Software: Used to eliminate time-consuming and cumbersome manual tasks; business intelligence data collection, decision making, accounting processes, marketing routines, and generate reports

  • Blockchain: Transactions are recorded and stored within public ledgers that are shared across independent computers across the Internet.

  • CRM (Customer Relationship Management): Better track activities and effectively manage customer communications

    • Method, Microsoft Dynamics 365 Business Central, Salesforce, SugarCRM, ZohoCRM

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