Small business predictions for 2026

Artificial intelligence (AI) emerged as the defining trend of 2025, with companies experimenting to understand its potential. As 2026 continues, the experimentation phase gives way to execution with businesses leaning toward more strategic AI integration.

Small businesses will identify where it adds value and where it doesn’t, implementing it selectively. AI is no longer a novelty but a tool to increase efficiency and level the playing field between small and large companies.

“To achieve real value, small business leaders must ask not whether to use AI but how to implement it strategically,” says a 2025 report from small business resources firm Paychex. “The goal is measurable return on investment in time saved, improved accuracy and employee experience, achieved through strong governance and clear ethical standards.”

When integrated appropriately, AI can be a powerful weapon for small businesses as they carve out their market niche. Expect AI use cases, and successes, to continue evolving for emerging companies.

While AI unlocks new growth strategies, it also supercharges cybersecurity threats at an unprecedented rate and scale. Companies of all sizes must now brace for increasingly sophisticated attacks that once targeted big businesses alone.

To protect against cyberattacks, Paychex recommends zero-trust security, multi-factor authentication, restricting data access to authorized users, encrypting sensitive files and training yourself and employees to recognize common entry points such as phishing emails, ransomware and credential theft.

As Forbes writes, “This is expected to retain the knowledge of these employees within the company while increasing employee trust and supporting the transformation of the workforce to use AI.”

Blumberg also told TechCrunch that successful startups may require smaller rounds to reach profitability. She attributes this shift to AI’s ability to automate processes affordably, “enabling many early-stage companies to accomplish profitability without excessive burn.”

Buffered by economic upheaval and shifting tariffs, many small businesses played defense in 2025. Uncertainty is likely to persist in 2026, but founders are increasingly learning how to operate and grow in today’s economic environment.

This “normal economy” may look different than in the past, but optimism remains. A November 2025 report by Comerica Bank found that 80% of small business leaders are confident or very confident about their outlook, and 79% expect revenue growth in 2026.

Tariffs impacted 42% of small businesses in 2025, with founders reporting responses such as new loans or credit lines, hiring freezes or layoffs and tapping into personal savings. Many expect tariffs to remain or deepen in 2026, prompting delayed capital investments and creative approaches to staying afloat.

“Small businesses have navigated a year filled with challenges … yet their optimism remains unwavering,” says Larry Franco, executive vice president at Comerica Bank. “While trade challenges have driven rising costs and supply chain disruptions, many owners are responding with creativity and leveraging lower borrowing costs to invest and innovate.”