MINNEAPOLIS—Even as they express concerns over President Trump’s tariffs, a majority of small business owners believe the economy is moving in the right direction, with just one in five saying it’s going the wrong way, according to the 2025 U.S. Bank Small Business Perspective report from U.S. Bank.
Sixty-six percent of small business owners were positive about the economy’s prospect, with the sentiment strongest among younger business leaders (Gen Z and Millennial), with 74% saying it was moving in the right direction, vs. 52% of leaders from older generations (Gen X and Boomer).
“Despite this optimism, a majority (58%) of the leaders expressed at least some concern that tariffs may impact their business operations, and 57% expect their input costs to go up as a result of tariffs with most expecting a cost increase between 1-10%,” U.S. Bank reported. “At the same time, leaders were slightly more likely to anticipate a positive rather than negative impact from tariffs across several business factors – including cost of goods, customer demand, margin profitability, capital investments, and labor/HR – but these expectations were generally modest, with most leaders expressing a neutral or only slightly positive outlook on the potential effects of tariffs.”
Turning to Digital, AI
In its analysis, U.S. Bank said that as small business owners look to create long-term success for their businesses, they are embracing generative AI (Gen AI) and digital tools, with 57% saying they are currently using or plan to implement Gen AI solutions in the next year.
Among those using it, the top applications include content creation (44%), data analysis and information gathering (41%), and marketing and sales strategies (39%), according to the survey.
“The majority of owners using Gen AI have found that adoption doesn’t require a massive investment,” U.S. Bank said of its survey findings. “Nearly seven in 10 (68%) Gen AI users report spending less than $50 a month on it, and 18% are using free tools or subscriptions. These tools allow users to spend more time on the personal connection they have with their customers (88%).
“Still, the rise of AI is not without tension. Over eight in 10 (81%) report keeping up with technological advancements such as Gen AI is stressful, and 56% worry their business (or products / services) will be replaced by Gen AI or automation,” according to U.S. Bank.
More Essential Than Ever
Beyond AI, digital tools are seen as essential now more than ever, the survey found.
“The number of owners who view digital tools as very important or essential jumped a striking 15 percentage points from last year (87% in 2025 vs. 72% in 2024),” U.S. Bank reported. “At the same time, 63% say they’re overwhelmed by the number of tools needed to run their business and 82% say consolidating them is a priority.”
Looking at payment methods, 48%)of owners still report cash as a primary method of in-person payment, but newer methods of payment are catching up with 42% reporting tap-to-pay as a primary method.
Few Regrets
Despite all the struggles and challenges, business owners said they do not regret their decisions.
When asked why they launched their business, 90% said they wanted to be their own boss, 88% cited a desire to control their financial future, and 86% wanted their passions to be part of their work, the survey found.
“Legacy has also played a defining role. More than two-thirds (67%) of owners come from a family of entrepreneurs, and 62% took over a relative’s business to carry on their family legacy,” U.S. Bank reported. “For Gen Z and Millennial entrepreneurs, however, the path to ownership has often been shaped by necessity. More than half (52%) of younger owners say they became business owners because they couldn’t find a job elsewhere, compared to 44% of Gen X and Boomer owners.”
Would Do It Again
When asked if they’d do it all over again, 80% of owners say they’d still start their business today, U.S. Bank found.
“This confidence is particularly notable given challenges they see in today’s environment,” the bank stated. “Almost eight in 10 (79%) say there is greater market competition today than when they started and 70% say that securing funding and capital is more difficult now.”
