KeyBank survey shows 1 in 4 small business owners in survival mode

CLEVELAND — Nearly one in four small business owners report being in survival mode as they contend with rising costs and shifting policies, according to KeyBank‘s 2025 Small Business Survey.

The national survey found that 23% of owners are struggling to focus on long-term planning, while 46% said their business performance fell short of expectations this year. Inflation and tariffs have driven much of the strain, forcing owners to raise prices and cut costs.

Despite the challenges, 40% of small business owners said they are cautiously planning ahead. Nearly half, 46%, said they could cover one month of operating expenses in an emergency, a slight drop from 49% in KeyBank’s fall 2024 survey.

Inflation and rising costs were cited as the top concern by half of respondents, well ahead of competition at 33%, cash flow at 25% and labor shortages at 22%. A quarter of owners said they have increased prices to offset tariffs and higher expenses.

Cybersecurity also ranked high, with 41% listing payment fraud as their biggest concern, followed by phishing and email scams at 27% and identity theft at 26%.

The survey found that 72% of small business owners are worried about the impact of expected federal policy changes later this year.

Still, 80% said they feel confident making key decisions, though many admitted to second-guessing themselves in the current climate.
“Navigating the current economic environment has proven to be no small feat for small business owners,” said Mike Walters, president of business banking at KeyBank. “Their ability to adapt, whether through tightening expenses, finding new ways to serve customers, or preparing for regulatory changes, shows the grit and creativity at the heart of the small business community.”

Looking to 2026, owners said they are prioritizing financial planning, professional guidance and personal resilience. About 21% said they would feel more secure with regular conversations with their bankers, while many cited a need for advice on cash flow, financial planning and tax strategy. Thirty percent said better rest and self-care contributed to their sense of resilience.

The survey included responses from 2,144 small- to mid-sized business owners nationwide with annual gross revenue under $10 million. It was conducted in July 2025 using SurveyMonkey.