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Yahoo
18-07-2025
- Business
- Yahoo
58% of Gen Z workers say their job is a ‘situationship'
This story was originally published on To receive daily news and insights, subscribe to our free daily newsletter. For many Gen Z workers, a job isn't a career — it's what they would call a 'situationship,' a temporary arrangement with no long-term commitment. That's according to a survey of 1,008 professionals conducted by invoice factoring service Gateway Commercial Finance. Researchers found nearly six in 10 (58%) Gen Z respondents described their current role as a 'situationship,' a short-term job they never intended to stay in for the long term. Of those planning to leave their roles, nearly half (47%) said they expect to exit within the next year, and half of that group said they're ready to quit at any moment. Gen Z, those born between 1997 and 2012, has entered the workforce in an environment marked by economic uncertainty and skepticism about long-term institutional promises like ROI on their college education, individual home ownership and the availability of Social Security benefits. Though efforts have been made for the future income of Generation Beta, those born between 2025-2039, Gen Z'ers started their careers in a transformation of the essence of corporate America and amidst major result, as researchers indicate, is a cohort of workers with a transactional approach to their careers, often choosing flexibility and short-term gains over traditional values like perks and job security. Short tenures mean real costs Gen Z tenure is extremely low. The survey revealed that the average job tenure for Gen Z professionals is just 1.8 years. Their attitude towards leaving is also untraditional, as nearly a third of Gen Z employees (30%) have 'ghosted' an employer, quitting without any notice or explanation. The two-week notice period, a post-World War II human resources implementation that has entrenched itself in corporate ethics, isn't resonating with younger employees, as some thought leaders argue that it is not owed because it is not reciprocated by the employer. While that behavior reflects changing values around job loyalty, it also presents business leaders with a serious material human capital risk. From a finance leader's perspective, high turnover carries a direct cost. Every short-lived hire means lost onboarding expenses, lost productivity and added pressure on teams forced to pick up the slack. As Gen Z enters mid-level positions and eventually into leadership roles, retention is no longer just HR's problem. It can develop into long-term margin pressure, particularly if Gen Z's habits trickle into future generations in the years to come. Though the idea of changing jobs frequently, known as job hopping, has recently been labeled as a way to grow salary quickly, Gen Z job-hoppers report lower levels of satisfaction than their more tenured peers. Job hoppers are 65% more likely to report feeling burned out (38% vs 23%). Non-hoppers also have better work-life balance, job satisfaction, mental health and financial stability. For CFOs, that kind of disengagement often means spending more on hiring, training and covering for people who burn out or leave too soon. This shift in tenure and dip in engagement puts pressure on workforce planning, the sustainability of current staffing models and the long-term dependency of leadership pipelines. Data indicates that down the line, finance leaders will need to build more flexibility into predictions around labor costs, rework retention benchmarks and ensure that short cycles of employment throughout the organization don't erode areas like the organization's mission and its institutional knowledge. Salary transparency and job stability Multiple datasets, including Gateway research, have indicated that those in Gen Z can see through the corporate jargon that can often cloak the foundation of the employee-employer relationship. To them, it's about the lifestyle and the money. Less than half (46%) of Gen Z workers said they believe staying loyal to one employer is rewarded in today's job market. That skepticism is reshaping how they view compensation and career paths. In unrelated research on a similar topic from earlier this year, 71% of Gen Z workers said salary transparency is essential, and 58% said they won't apply to jobs that don't list a pay range. Many are also more comfortable discussing pay with coworkers, creating friction in workplaces where more tenured leaders may view those conversations as workplace taboo. That same report also showed that some Gen Z professionals are supplementing their income through areas like OnlyFans streaming and online gambling. This shift reflects a broader rethinking of financial independence, job loyalty and what 'stability' really looks like. Even some of the top-performing Gen Z workers are bypassing traditional finance and accounting roles entirely in favor of pursuing entrepreneurship. Other Gen Zers are likely still interested in corporate roles and leadership positions if it comes with transparency, mentorship and meaningful impact. What CFOs can do Leadership, particularly those involved in the hiring process, plays a big role. The Gateway Research study found that only 25% of hiring managers say they view short tenures on Gen Z resumes as a red flag. However, 36% said they've already chosen not to hire a Gen Z candidate due to concerns about job-hopping. Still, many employers are adjusting their approach. The most common retention strategies include offering flexible schedules (48%), establishing clearer advancement paths (42%), expanding mentorship programs and benefits (34% each) and providing raises or bonuses (25%). CFOs have a key role to play in enabling those strategies. Budgeting for retention programs, measuring the ROI of employee engagement efforts and partnering with HR in any fashion must now involve those making decisions within the finance function. Unless finance leaders adapt to these changing dynamics, the 'situationship' mindset may remain the default for Gen Z and the incoming generations of workers. Recommended Reading 76% of workers have seen senior colleagues resist new tech Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-06-2025
- Business
- Yahoo
How to stress test your small business finances (before it's too late)
When the economy takes a hit, small businesses usually feel it first. Inflation, rising interest rates, or global disruptions can shrink margins fast. During one recent slowdown, the Fiserv Small Business Index showed a 2.9% drop in sales across small firms, a clear sign of how quickly spending habits shift and ripple through local economies. Still, many small business owners stay in reactive mode. They wait until the pressure mounts (when cash reserves run low or debt payments stack up) before making changes. By then, options are limited. Without a backup plan, businesses risk layoffs, deep cuts, or shutting down altogether. That's where financial stress testing comes in. Once reserved for big corporations and banks, stress testing lets you run 'what if' scenarios — like a 20% sales dip or a sudden spike in costs — to see how your business would hold up. It's a forward-looking tool that helps you spot weaknesses, build contingency plans, and avoid last-minute scrambles. In this guide, Gateway Commercial Finance, an invoice factoring company, walks you through how to build a stress test from scratch, which metrics to track, and how to use the results to keep your business steady, no matter what the economy throws your way. Most small business owners know how to budget, forecast, and manage day-to-day finances. But fewer use financial stress testing, a tool that helps businesses prepare for serious economic shocks. Unlike the complex, federally mandated tests used by big banks, stress tests for small businesses are simple models that simulate worst-case scenarios, like a sudden drop in revenue or a surge in costs. Stress testing isn't about predicting the future. It's about spotting weak spots so you can act before trouble hits. According to accounting firm Kreischer Miller, these tests help businesses: Catch vulnerabilities early. They can reveal heavy dependence on a single revenue stream or costs that can't flex in a downturn. Visualize worst-case outcomes. For example, what happens to your cash reserves if sales fall 25%? Build resilience. With that data, you can tweak spending, policies, or staffing before you're forced to react under pressure. There's no one-size-fits-all approach to stress testing, but most small businesses can start by modeling three core risks: Revenue drops. What if your sales fall by 10%, 20%, or even 30% over a quarter? Rising costs. How would your margins hold up if supplier prices or payroll costs spiked? Delayed payments. Can your business handle a 60-day payment delay from a key customer? Regularly testing these kinds of shocks helps you pivot with less pain and more control. Running a solid stress test starts with watching the right numbers. Focus on three core metrics: liquidity ratios, cash burn rate, and debt service coverage ratio (DSCR). Together, they give a clear picture of how long your business can hold up under pressure and where things might break down. Liquidity ratios tell you if you've got enough assets to cover your short-term bills. The two big ones are: Current ratio. Divide current assets by current liabilities. A number above 1.0 means you should be able to pay what's due in the near term. Quick ratio. This takes out inventory and looks only at the most liquid assets. It's especially useful if your inventory takes time to turn over. Take your current assets and subtract inventory and prepaid expenses. Then, divide that by your current liabilities. Think of liquidity ratios as an early warning system. If your current ratio drops below 1.0, it could mean cash is running tight. FreshBooks notes that most healthy small businesses aim for a current ratio between 1.2 and 2.0. A burn rate tells you how quickly you're spending your cash reserves and how long you can keep the lights on if revenue drops. Gross burn rate looks at monthly operating expenses alone. Net burn rate subtracts revenue from those expenses to show your actual cash loss. Both numbers matter. Once you know your burn rate, you can calculate your cash runway, which is how many months you can last without more income. We recommend checking this monthly, especially during unstable periods. Your debt service coverage ratio (DSCR) shows whether your business earns enough to cover its debt payments: DSCR = Net operating income ÷ Total debt service A DSCR of 1.25 means you're bringing in 25% more than you need to cover your debts. That's usually the minimum lenders want to see. A DSCR under 1.0 is a red flag. It means you're either taking on more debt to stay afloat or cutting into operations to make payments. Stress testing doesn't have to be complicated. With a clear process, you can spot weak points and build realistic backup plans before things get bumpy. Here's a four-phase approach to help you create and run a small business financial stress test that actually works. Begin by building a simple three-column spreadsheet to get a clear picture of your business's financial footing. List all of your expected revenue (recurring income streams) over the next 12 months in column one. Document your projected expenses for the same period, including fixed and variable costs, in the next column. In the third one, record any cash you currently have on hand and the outstanding invoices you're expecting to collect (your accounts receivable). Once your numbers are laid out, total each column and compare your anticipated income to your projected expenses. If revenue exceeds costs, you're in a stable position. If not, check whether the funds in your third column can help cover the gap. The goal of this exercise is to define your business's financial baseline so you know where things stand before testing more stressful scenarios. Now, think through the risks that could hit your business hardest. What happens if sales drop 25% for two quarters? What if labor costs spike or suppliers raise prices overnight? Tailor your scenarios to your industry. A restaurant might test for a sudden jump in food costs. A contractor might model what happens if a major client delays payment. The key is to pick realistic threats — not doomsday fantasies — that would seriously test your financial resilience. With your scenarios set, plug the changes into your spreadsheet and track how they affect your financials. Will you still have enough cash to cover payroll? Will your DSCR drop below 1.0? Use adjusted financial forecasts and break-even analysis to see how bad things could get. Adjusted forecasts are updated versions of your financial projections that reflect each 'what if' scenario you've mapped out. They help you see the road ahead under different conditions. A break-even analysis shows the minimum amount of revenue you need to cover your expenses. It answers the question: How much do I need to earn to avoid losing money? This is especially useful when planning for a downturn. Number Analytics suggests flagging any red-line metrics, like a current ratio under 1.0 or negative cash flow. These signals tell you where the real trouble might start. The real value in stress testing comes from action. For each scenario, outline a quick, cost-effective response plan. That might mean tightening expenses, negotiating longer payment terms, delaying new hires, or opening a credit line before you need it. Consider ranking actions by how fast and cheap they are to implement. That way, you know exactly what levers to pull when time and cash are tight. You don't need to run a stress test every week, but doing it at least once a year (or quarterly during turbulent times) can give you a real edge and help you feel more prepared for whatever you may face ahead. Recent disruptions have shown just how fast economic conditions can change and what happens when businesses aren't ready. Here are two powerful examples with clear takeaways. When the pandemic hit, the U.S. restaurant industry saw an almost instant collapse in foot traffic. Within six months, over 100,000 restaurants closed permanently or for the long haul. Millions of jobs disappeared. Cash flow dried up. Fixed costs like rent and payroll kept coming, even with zero revenue. The restaurants that made it through moved fast and pivoted from their usual operations. Some downsized or renegotiated leases. Others launched delivery and curbside models to stay afloat. While some bounced back in the years that followed, the early days of COVID-19 exposed just how fragile the industry was, especially without a contingency plan or a stress-tested playbook. Across the Atlantic, the U.K. hospitality sector has faced its own crisis. A 2.4% contraction in the industry collided with rising labor costs and post-Brexit rules. For many, margins were already razor thin. Add in supply chain delays, inflation, and staffing shortages, and the pressure became overwhelming. Businesses that had run stress tests and modeled cost increases were more prepared. They moved faster, adjusted operations, and found ways to stay open. Others were caught off guard, couldn't react in time, and had to shut down or seek emergency funding. A one-time stress test is helpful, but making it part of your regular routine is what really pays off. With the right tools and templates, you can turn stress testing into a habit that strengthens your business long-term. A simple dashboard gives you a quick read on how your business is holding up. Focus on the KPIs that matter most: liquidity ratios, gross and net cash burn, revenue trends, and spending volatility. You can build your dashboard in Excel, Google Sheets, or through cloud-based platforms like QuickBooks and Xero. Tracking liquidity ratios regularly is one of the best ways to catch early signs of trouble and act before things get worse. What to include in your dashboard: Current ratio and quick ratio side by side Monthly cash inflows vs. outflows Upcoming loan payments and DSCR status Projected vs. actual revenue and expenses These snapshots help you stay proactive, not reactive. Stress testing only works if you revisit it often. Set up monthly reviews to monitor short-term shifts, and quarterly sessions to update scenarios and adjust plans. You'll want to update your stress test whenever: You land (or lose) a major client. Input costs suddenly rise. Economic trends signal a downturn. Key financial metrics dip below safe levels. To stay on track, create a recurring calendar reminder or automate a financial report. When stress testing becomes routine, you're much more likely to spot issues early and deal with them on your terms. While many small businesses wait for a crisis to check their financial health, the ones that plan ahead ride out downturns with less stress and fewer surprises. You don't need fancy tools to get started with financial stress testing. Use what you already know, like your cash flow, costs, and weak spots, and build simple 'what if' models around them. A few hours of planning now can prevent months of scrambling later. Make stress testing part of your regular rhythm. Add key metrics to your monthly dashboards. Refresh your scenarios every quarter. As your business grows and changes, your risks will also shift, so your prep needs to keep up. Businesses that test early adapt faster, survive, and keep moving forward, even when the economy doesn't. This story was produced by Gateway Commercial Finance and reviewed and distributed by Stacker. 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Miami Herald
26-06-2025
- Business
- Miami Herald
How to stress test your small business finances (before it's too late)
How to stress test your small business finances (before it's too late) When the economy takes a hit, small businesses usually feel it first. Inflation, rising interest rates, or global disruptions can shrink margins fast. During one recent slowdown, the Fiserv Small Business Index showed a 2.9% drop in sales across small firms, a clear sign of how quickly spending habits shift and ripple through local economies. Still, many small business owners stay in reactive mode. They wait until the pressure mounts (when cash reserves run low or debt payments stack up) before making changes. By then, options are limited. Without a backup plan, businesses risk layoffs, deep cuts, or shutting down altogether. That's where financial stress testing comes in. Once reserved for big corporations and banks, stress testing lets you run "what if" scenarios - like a 20% sales dip or a sudden spike in costs - to see how your business would hold up. It's a forward-looking tool that helps you spot weaknesses, build contingency plans, and avoid last-minute scrambles. In this guide, Gateway Commercial Finance, an invoice factoring company, walks you through how to build a stress test from scratch, which metrics to track, and how to use the results to keep your business steady, no matter what the economy throws your way. What financial stress testing means for small businesses Most small business owners know how to budget, forecast, and manage day-to-day finances. But fewer use financial stress testing, a tool that helps businesses prepare for serious economic shocks. Unlike the complex, federally mandated tests used by big banks, stress tests for small businesses are simple models that simulate worst-case scenarios, like a sudden drop in revenue or a surge in costs. What stress testing is really for Stress testing isn't about predicting the future. It's about spotting weak spots so you can act before trouble hits. According to accounting firm Kreischer Miller, these tests help businesses: Catch vulnerabilities early. They can reveal heavy dependence on a single revenue stream or costs that can't flex in a worst-case outcomes. For example, what happens to your cash reserves if sales fall 25%?Build resilience. With that data, you can tweak spending, policies, or staffing before you're forced to react under pressure. Scenarios worth testing first There's no one-size-fits-all approach to stress testing, but most small businesses can start by modeling three core risks: Revenue drops. What if your sales fall by 10%, 20%, or even 30% over a quarter?Rising costs. How would your margins hold up if supplier prices or payroll costs spiked?Delayed payments. Can your business handle a 60-day payment delay from a key customer? Regularly testing these kinds of shocks helps you pivot with less pain and more control. Key metrics every small business should track Running a solid stress test starts with watching the right numbers. Focus on three core metrics: liquidity ratios, cash burn rate, and debt service coverage ratio (DSCR). Together, they give a clear picture of how long your business can hold up under pressure and where things might break down. Liquidity ratios show your short-term safety net Liquidity ratios tell you if you've got enough assets to cover your short-term bills. The two big ones are: Current ratio. Divide current assets by current liabilities. A number above 1.0 means you should be able to pay what's due in the near ratio. This takes out inventory and looks only at the most liquid assets. It's especially useful if your inventory takes time to turn over. Take your current assets and subtract inventory and prepaid expenses. Then, divide that by your current liabilities. Think of liquidity ratios as an early warning system. If your current ratio drops below 1.0, it could mean cash is running tight. FreshBooks notes that most healthy small businesses aim for a current ratio between 1.2 and 2.0. Cash burn rate shows how long you can last A burn rate tells you how quickly you're spending your cash reserves and how long you can keep the lights on if revenue drops. Gross burn rate looks at monthly operating expenses burn rate subtracts revenue from those expenses to show your actual cash loss. Both numbers matter. Once you know your burn rate, you can calculate your cash runway, which is how many months you can last without more income. We recommend checking this monthly, especially during unstable periods. DSCR tells you if you can keep up with debt Your debt service coverage ratio (DSCR) shows whether your business earns enough to cover its debt payments: DSCR = Net operating income ÷ Total debt service A DSCR of 1.25 means you're bringing in 25% more than you need to cover your debts. That's usually the minimum lenders want to see. A DSCR under 1.0 is a red flag. It means you're either taking on more debt to stay afloat or cutting into operations to make payments. A step-by-step guide to running your own financial stress test Stress testing doesn't have to be complicated. With a clear process, you can spot weak points and build realistic backup plans before things get bumpy. Here's a four-phase approach to help you create and run a small business financial stress test that actually works. Phase 1: Collect your data and set a baseline Begin by building a simple three-column spreadsheet to get a clear picture of your business's financial footing. List all of your expected revenue (recurring income streams) over the next 12 months in column one. Document your projected expenses for the same period, including fixed and variable costs, in the next column. In the third one, record any cash you currently have on hand and the outstanding invoices you're expecting to collect (your accounts receivable). Once your numbers are laid out, total each column and compare your anticipated income to your projected expenses. If revenue exceeds costs, you're in a stable position. If not, check whether the funds in your third column can help cover the gap. The goal of this exercise is to define your business's financial baseline so you know where things stand before testing more stressful scenarios. Phase 2: Build your worst-case scenarios Now, think through the risks that could hit your business hardest. What happens if sales drop 25% for two quarters? What if labor costs spike or suppliers raise prices overnight? Tailor your scenarios to your industry. A restaurant might test for a sudden jump in food costs. A contractor might model what happens if a major client delays payment. The key is to pick realistic threats - not doomsday fantasies - that would seriously test your financial resilience. Phase 3: Run the numbers and measure the impact With your scenarios set, plug the changes into your spreadsheet and track how they affect your financials. Will you still have enough cash to cover payroll? Will your DSCR drop below 1.0? Use adjusted financial forecasts and break-even analysis to see how bad things could get. Adjusted forecasts are updated versions of your financial projections that reflect each "what if" scenario you've mapped out. They help you see the road ahead under different conditions. A break-even analysis shows the minimum amount of revenue you need to cover your expenses. It answers the question: How much do I need to earn to avoid losing money? This is especially useful when planning for a downturn. Number Analytics suggests flagging any red-line metrics, like a current ratio under 1.0 or negative cash flow. These signals tell you where the real trouble might start. Phase 4: Create a response plan for each scenario The real value in stress testing comes from action. For each scenario, outline a quick, cost-effective response plan. That might mean tightening expenses, negotiating longer payment terms, delaying new hires, or opening a credit line before you need it. Consider ranking actions by how fast and cheap they are to implement. That way, you know exactly what levers to pull when time and cash are tight. You don't need to run a stress test every week, but doing it at least once a year (or quarterly during turbulent times) can give you a real edge and help you feel more prepared for whatever you may face ahead. Real-world lessons from recent economic shocks Recent disruptions have shown just how fast economic conditions can change and what happens when businesses aren't ready. Here are two powerful examples with clear takeaways. What COVID-19 revealed about the restaurant industry When the pandemic hit, the U.S. restaurant industry saw an almost instant collapse in foot traffic. Within six months, over 100,000 restaurants closed permanently or for the long haul. Millions of jobs disappeared. Cash flow dried up. Fixed costs like rent and payroll kept coming, even with zero revenue. The restaurants that made it through moved fast and pivoted from their usual operations. Some downsized or renegotiated leases. Others launched delivery and curbside models to stay afloat. While some bounced back in the years that followed, the early days of COVID-19 exposed just how fragile the industry was, especially without a contingency plan or a stress-tested playbook. How U.K. hospitality felt the squeeze Across the Atlantic, the U.K. hospitality sector has faced its own crisis. A 2.4% contraction in the industry collided with rising labor costs and post-Brexit rules. For many, margins were already razor thin. Add in supply chain delays, inflation, and staffing shortages, and the pressure became overwhelming. Businesses that had run stress tests and modeled cost increases were more prepared. They moved faster, adjusted operations, and found ways to stay open. Others were caught off guard, couldn't react in time, and had to shut down or seek emergency funding. Tools and templates to keep stress testing running smoothly A one-time stress test is helpful, but making it part of your regular routine is what really pays off. With the right tools and templates, you can turn stress testing into a habit that strengthens your business long-term. Build a dashboard to monitor financial health in real time A simple dashboard gives you a quick read on how your business is holding up. Focus on the KPIs that matter most: liquidity ratios, gross and net cash burn, revenue trends, and spending volatility. You can build your dashboard in Excel, Google Sheets, or through cloud-based platforms like QuickBooks and Xero. Tracking liquidity ratios regularly is one of the best ways to catch early signs of trouble and act before things get worse. What to include in your dashboard: Current ratio and quick ratio side by sideMonthly cash inflows vs. outflowsUpcoming loan payments and DSCR statusProjected vs. actual revenue and expenses These snapshots help you stay proactive, not reactive. Set a regular review schedule and stick to it Stress testing only works if you revisit it often. Set up monthly reviews to monitor short-term shifts, and quarterly sessions to update scenarios and adjust plans. You'll want to update your stress test whenever: You land (or lose) a major costs suddenly trends signal a financial metrics dip below safe levels. To stay on track, create a recurring calendar reminder or automate a financial report. When stress testing becomes routine, you're much more likely to spot issues early and deal with them on your terms. Build resilience before you need it While many small businesses wait for a crisis to check their financial health, the ones that plan ahead ride out downturns with less stress and fewer surprises. You don't need fancy tools to get started with financial stress testing. Use what you already know, like your cash flow, costs, and weak spots, and build simple "what if" models around them. A few hours of planning now can prevent months of scrambling later. Make stress testing part of your regular rhythm. Add key metrics to your monthly dashboards. Refresh your scenarios every quarter. As your business grows and changes, your risks will also shift, so your prep needs to keep up. Businesses that test early adapt faster, survive, and keep moving forward, even when the economy doesn't. This story was produced by Gateway Commercial Finance and reviewed and distributed by Stacker. © Stacker Media, LLC.
Yahoo
23-06-2025
- Business
- Yahoo
How small businesses are navigating rising uncertainty in 2025
Small businesses make up nearly half of all private-sector jobs in the U.S. They help drive local economies, spark innovation, and keep communities running. Because of their impact, their mood often reflects bigger shifts in the economy. Right now, that mood isn't great. The NFIB Small Business Optimism Index has consistently dropped from January to April 2025. Rising labor costs, persistent inflation, and tighter access to credit are creating major planning challenges for many small business owners. To understand how small businesses are responding to these challenges, Gateway Commercial Finance, an invoice factoring company, analyzed the latest data from the National Federation of Independent Business (NFIB), the U.S. Bureau of Labor Statistics (BLS), and the Fed Small Business Credit Survey. This study highlights key trends in small business optimism, hiring, and financial health. In March 2025, the NFIB Small Business Optimism Index dropped 3.3 points to 97.4. This is the sharpest monthly decline the index has seen since June 2022, bringing it below its historical 51-year average of 98. It fell another 1.6 points in April 2025, marking the fourth consecutive monthly dip. The downturn was driven primarily by weakened expectations for future business conditions and unfilled job openings. Business owners are less certain about what will happen next. In February 2025, the NFIB Uncertainty Index jumped to 104, its second-highest level in more than 50 years. This kind of uncertainty makes planning tough. Many small businesses are slowing down decisions about hiring, spending, and growth. When the future looks shaky, most choose to wait things out. According to the BLS Job Openings and Labor Turnover Survey, staffing trends at small businesses (10 to 49 employees) have shifted in early 2025. Small business owners are treading carefully when it comes to growing their teams, but that doesn't mean hiring has stopped. Some are bringing on new people and finding ways to adapt in a shifting labor market. Here's what the data shows: Job openings are down. Some employers could be holding off on creating new positions while they wait for more economic clarity. Hiring is steady. Despite fewer openings, many businesses are still filling roles as needed. More people are quitting. Workers seem more confident about finding better opportunities elsewhere. Layoffs have slowed. Fewer businesses are cutting staff, which points to a degree of stability. Financial health is still a weak spot for many small businesses. Fewer are reporting revenue or job growth, based on the most recent Fed Small Business Credit Survey. These numbers haven't bounced back to where they were before the COVID-19 pandemic. Access to credit isn't helping much either. While the share of businesses applying for new credit has returned to pre-2020 levels, approval rates have slipped. Before the pandemic, 62% of applicants received full approval for financing; that figure now sits at just 52%. This drop in access to capital may further constrain investment, hiring, and long-term planning for many small businesses. Small businesses continue to be an important part of the U.S. economy, but many are moving carefully as uncertainty persists. With optimism declining, hiring trends shifting, and credit access tightening, owners are prioritizing stability over aggressive growth. The latest data points to a period of adjustment—not acceleration, but not retreat either. How small businesses respond in the months ahead will help shape the bigger economic picture. For this study, we leveraged the April 2025 NFIB Small Business Economic Trends report, the U.S. Bureau of Labor Statistics' JOLTS Estimates, and the annual Fed Small Business Credit Survey to understand small business optimism and uncertainty, job openings, hiring, turnover, and employment and revenue growth. This story was produced by Gateway Commercial Finance and reviewed and distributed by Stacker. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
23-06-2025
- Business
- Miami Herald
How small businesses are navigating rising uncertainty in 2025
How small businesses are navigating rising uncertainty in 2025 Small businesses make up nearly half of all private-sector jobs in the U.S. They help drive local economies, spark innovation, and keep communities running. Because of their impact, their mood often reflects bigger shifts in the economy. Right now, that mood isn't great. The NFIB Small Business Optimism Index has consistently dropped from January to April 2025. Rising labor costs, persistent inflation, and tighter access to credit are creating major planning challenges for many small business owners. To understand how small businesses are responding to these challenges, Gateway Commercial Finance, an invoice factoring company, analyzed the latest data from the National Federation of Independent Business (NFIB), the U.S. Bureau of Labor Statistics (BLS), and the Fed Small Business Credit Survey. This study highlights key trends in small business optimism, hiring, and financial health. The mood on Main Street: Optimism and uncertainty In March 2025, the NFIB Small Business Optimism Index dropped 3.3 points to 97.4. This is the sharpest monthly decline the index has seen since June 2022, bringing it below its historical 51-year average of 98. It fell another 1.6 points in April 2025, marking the fourth consecutive monthly dip. The downturn was driven primarily by weakened expectations for future business conditions and unfilled job openings. Business owners are less certain about what will happen next. In February 2025, the NFIB Uncertainty Index jumped to 104, its second-highest level in more than 50 years. This kind of uncertainty makes planning tough. Many small businesses are slowing down decisions about hiring, spending, and growth. When the future looks shaky, most choose to wait things out. Labor market pressures: Hiring, quits, and layoffs According to the BLS Job Openings and Labor Turnover Survey, staffing trends at small businesses (10 to 49 employees) have shifted in early 2025. Small business owners are treading carefully when it comes to growing their teams, but that doesn't mean hiring has stopped. Some are bringing on new people and finding ways to adapt in a shifting labor market. Here's what the data shows: Job openings are down. Some employers could be holding off on creating new positions while they wait for more economic is steady. Despite fewer openings, many businesses are still filling roles as people are quitting. Workers seem more confident about finding better opportunities have slowed. Fewer businesses are cutting staff, which points to a degree of stability. Small business financial health and credit access Financial health is still a weak spot for many small businesses. Fewer are reporting revenue or job growth, based on the most recent Fed Small Business Credit Survey. These numbers haven't bounced back to where they were before the COVID-19 pandemic. Access to credit isn't helping much either. While the share of businesses applying for new credit has returned to pre-2020 levels, approval rates have slipped. Before the pandemic, 62% of applicants received full approval for financing; that figure now sits at just 52%. This drop in access to capital may further constrain investment, hiring, and long-term planning for many small businesses. Navigating uncertainty with cautious resilience Small businesses continue to be an important part of the U.S. economy, but many are moving carefully as uncertainty persists. With optimism declining, hiring trends shifting, and credit access tightening, owners are prioritizing stability over aggressive growth. The latest data points to a period of adjustment-not acceleration, but not retreat either. How small businesses respond in the months ahead will help shape the bigger economic picture. Methodology For this study, we leveraged the April 2025 NFIB Small Business Economic Trends report, the U.S. Bureau of Labor Statistics' JOLTS Estimates, and the annual Fed Small Business Credit Survey to understand small business optimism and uncertainty, job openings, hiring, turnover, and employment and revenue growth. This story was produced by Gateway Commercial Finance and reviewed and distributed by Stacker. © Stacker Media, LLC.
