Why Small Business Owners Are Still in Survival Mode (and How to Fix It)
A new KeyBank survey shows something alarming: nearly one in four small business owners (23%) are still stuck in survival mode heading into 2025.
Even after years of “post-pandemic recovery,” most entrepreneurs haven’t found stable ground — and that’s a warning sign for Main Street America.
Host Micah of The Common Cents Show breaks down why this is happening, what it means, and what you can do to protect your business.
🚨 1. The State of Small Business in 2025
According to the survey:
46% of business owners say their performance fell short of expectations.
50% are increasing prices due to tariffs and rising costs.
41% cite payment fraud as a major cybersecurity concern.
Only 46% could cover one month of operating expenses if an emergency hit.
Despite the gloom, 80% remain optimistic about 2026.
But optimism alone isn’t a strategy — small businesses must adapt faster than ever before.
💰 2. Rising Costs and Cash Flow Crises
Inflation and higher material costs have become existential threats. Many small businesses simply don’t have the cash flow to absorb price hikes.
Micah points out that this is where discipline in cash flow management separates survivors from casualties.
“Too many small business owners are paying yesterday’s bills with tomorrow’s sales. That’s a recipe for collapse.”
He recommends using an envelope-style system:
Every time revenue comes in, divide it — some for operations, some for materials, some for taxes, and a portion for reinvestment.
Avoid “borrowing” from one category to pay another. It’s how businesses quietly bleed out.
👷 3. The Labor Squeeze Is Real
Even with low unemployment, owners are struggling to find reliable workers.
Fewer applicants mean higher wages — and many small businesses can’t compete.
Labor quality, not just availability, is a major concern. When training and turnover eat into profits, automation becomes the natural next step.
🤖 4. Adapt or Be Left Behind
Micah’s advice: embrace AI and automation tools that can replace repetitive tasks and reduce payroll costs.
“When everyone around you is moving toward automation, you can’t afford to stand still.”
There are countless low-cost or free tools that help with bookkeeping, marketing, scheduling, and even customer engagement.
Use them to run lean and focus your human effort where it matters most — creativity, service, and strategy.
📈 5. The Washington State Shockwave
The National Federation of Independent Business (NFIB) warns that Washington State is about to experience the largest tax increase in its history.
New or higher taxes on:
Business & Occupation (B&O)
Sales tax expansion
Capital gains and estate modifications
Electric vehicle credits and luxury goods
…will hit entrepreneurs hard starting October 2025.
If your business is in Washington, prepare now. Talk to your accountant, adjust pricing, and factor the new rates into your forecasts.
💡 6. Fantastic Failure of the Week: Quibi
Micah resurrects his old segment “Fantastic Failures” — and this week’s case is the infamous streaming startup Quibi.
Quibi launched in 2020 with $1.8 billion in funding and Hollywood backing.
Its fatal mistake? Timing and arrogance.
Launched a commuter-focused app… during a pandemic.
Offered mobile-only short videos while everyone was bingeing Netflix at home.
Burned through cash on flashy content that nobody liked.
The lesson: never assume you can change consumer behavior.
Listen to the market. Adapt before it’s too late.
🔑 7. The Takeaway: Survive by Being Smarter
If you survived COVID, you can survive this economy — but not by coasting.
Micah’s formula for the modern entrepreneur:
Run lean. Cut fat, automate tasks, and keep reserves.
Stay informed. Follow NFIB, SBA, and small-business newsletters.
Diversify revenue. Don’t rely on one product or one customer type.
Plan ahead. Know your numbers, taxes, and expenses before they hit.
“We can’t wait for someone to save us. Small business owners have to create our own path — not just to survive, but to win.”