Small Business Confidence Climbs into the New Year [WSJ/Vistage Dec 2025]

Looking into the new year, small businesses continue to gain momentum. On the heels of resolving the government shutdown, followed by a third interest rate cut from the Federal Reserve in December, the WSJ/Vistage Small Business CEO Confidence Index rose to 94.3.

While economic sentiment among small businesses remains more pessimistic than optimistic, leaders see a clear distinction between the economy’s performance and how their businesses perform. Once again, small business optimism about revenue and profit expectations is boosting overall confidence. As a result, many businesses are planning to expand their workforce.

Demand Gains Momentum as Price Increases Protect Margins

Why are so many small business leaders expecting increased revenue? There are several factors. First, there is increased demand in specific industries. Gary Bales, President and CEO of Aurora Boardworks in Aurora, Nebraska, reports, “Inflation is relatively in check, interest rates are coming down, and manufacturing activity is picking up.”

Another contributing factor to increased revenue is price increases, a common strategy for small businesses to mitigate costs and protect margins. This practice will continue in 2026, with over half of small business leaders (54%) planning to increase prices in the next 3 months. To protect their margins, many are passing rising costs — such as wages, health insurance, and vendor and supplier prices — on to customers.

Analysis of open-ended responses to planned price increases shows they are overwhelmingly defensive rather than opportunistic. Of those planning to increase prices, most fall within the 4%-6% range, slightly above inflation. As Cathy Moulton, president of Thomas Wynne LP and CLM Coaching based in Wynnewood, Pennsylvania, notes, “All of our costs have gone up, many in double digits. I can’t pass all of that on to the customer, but I need to narrow the gap.”

Nearly 7 in 10 small business leaders cite inflation and rising labor costs as a primary driver of their price increases, indicating that their pricing decisions are aimed to keep pace with higher wages, benefits, and general cost-of-living pressures to protect — rather than expand — margins.

While tariffs remain a significant force for specific industries, particularly manufacturing, construction, and import-dependent businesses, small business leaders view tariffs as unavoidable costs that must be passed through due to thin margins and limited ability to absorb them. The data shows a positive trend: tariffs are less of a factor in price increases and are instead combined into the rising cost landscape.

A small number of small businesses report raw material volatility, supplier-driven increases, or demand-based pricing power as their primary reasons for higher prices. Businesses are affected by which phase of the business cycle they are in.

This analysis reveals a clear message: price increases continue to be driven by structural cost pressures, not opportunistically in response to strong demand or strategic repositioning. Small businesses are conservative about raising prices, often raising them incrementally and frequently, following contractual or CPI-indexed frameworks to avoid pricing themselves out of the market. As many Vistage members have learned over the past few years, the strongest performers will normalize modest, structured increases; communicate transparently; and selectively raise prices while improving efficiency.

Small Businesses Address Talent Shortage with Overseas Hires and Contractors

With the ratio of open jobs to available talent at 1:1, finding qualified talent remains a challenge for small business leaders. In fact, qualified talent is the number one challenge reported by small business leaders.

One source of talent that has gained popularity in recent years for small businesses is the use of contractors and employees outside the U.S. Currently, one-third of small businesses have employees (12%) or contractors (21%) outside the U.S., while an additional 5% plan to hire employees or engage with contractors outside the U.S. in the new year. Looking at how the past 5 years have changed the hiring landscape, nearly 1 in 5 (18%) small business leaders say their global talent sourcing has increased over that time.

December Highlights

The December WSJ/Vistage Small Business CEO Confidence Index was calculated from an online survey sent to CEOs and other key leaders who are active U.S. Vistage members. The survey, conducted between December 1 and 15, 2025, collected data from 602 respondents with annual revenues ranging from $1 million to $20 million. The Index is calculated based on favorable minus unfavorable responses from this set of standard questions, plus 100, anchored to June 2012 = 100.

• Current Economy: Sentiment about the current economy has stabilized, with 22% of small business leaders reporting they believe the U.S. economy has improved over the past year. In contrast, the proportion that believes it is worse holds at 43%.
• Future Economy: Looking ahead, sentiment among small business leaders is shifting toward the positive. A third (33%) believe the economy will improve, while 26% believe it will worsen in the next 12 months.
• Revenue Projections: Optimistic revenue projections continue to climb, with nearly 7 in 10 (69%) of small business leaders anticipating revenue growth in the year ahead. Meanwhile, just 8% anticipate revenue declines, a 3-point change from last month.
• Profitability Projections: Matching the increase in revenue projections, the proportion of small business leaders expecting increased profitability rose to 57% in November, a 15-point increase from last month. More notably, the proportion of those who expect declines drops 10 points to 15%.
• Fixed Investment Plans: Fixed investment plans have remained stable all year; one-third (33%) of small businesses plan to increase fixed investments in the next 12 months, while 13% expect to scale back.
• Workforce Expansion Plans: Workforce expansion plans continued to rise, with nearly 6 in 10 (59%) small business leaders indicating that they plan to add staff in the next 12 months. Notably, just 5% are planning reductions, reversing a trend in workforce contraction that the data revealed through the spring and summer months.

To explore the full December 2025 WSJ/Vistage Small Business data set, visit our data center or download the infographic.

The January 2026 WSJ/Vistage Small Business CEO Confidence Index will be calculated from responses to the monthly WSJ/Vistage Small Business CEO survey, conducted from January 5-12, 2026, from Vistage member companies reporting $1-20 million in annual revenue.

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