Small businesses remain the backbone of the U.S. economy, but owners are navigating uncertainty around hiring, investment, and growth. Economic strategist Dan Varroney says access to affordable capital and innovative, community-driven solutions are essential for long-term success on this episode of Business Trends Today.
Varroney, best-selling author of Rethinking Economic Growth and founder of Potomac Core, notes that small businesses make up 99.9% of U.S. companies, employ half the workforce, and generate two-thirds of new jobs. His research and interviews with business leaders reveal both the challenges and opportunities facing entrepreneurs today.
Small businesses are ready to hire, but access to affordable capital remains a barrier, Varroney expressed. He notes that federal interest rates, currently between 3.5% and 3.75%, are too high for many small business owners, and a reduction of at least one percentage point could unlock job creation and economic growth. However, Varroney does allude to the new Federal Reserve leadership that has emphasized a return to Main Street, which Varroney says could directly benefit small businesses nationwide.
Beyond capital, Varroney highlights the impact of regulatory relief. “In a prior administration, $1.4 trillion worth of regulations were imposed,” he declared. He adds that the ongoing rollbacks and faster permitting processes are helping small businesses reduce compliance costs and accelerate projects, creating new expansion opportunities.
Further, small business resilience is evident in local communities. Varroney cited a program in Cleveland where a coalition of small businesses partnered with county officials to train and hire nonviolent felons, reducing recidivism while addressing workforce shortages. “Small businesses are problem solvers,” Varroney confirms.
“[Small businesses] innovate together to overcome challenges.”
Currently, Varroney confirms that this is a robust time to start a small business, due in part to 100% expensing for plant and equipment and emerging technologies such as artificial intelligence. Moreover, he notes that retirees entering the market with equity or experience can leverage these tools to mentor or partner with existing businesses, adding new talent and knowledge to the entrepreneurial ecosystem.
As Varroney emphasizes, access to affordable capital and thoughtful growth strategies are essential for owners to navigate uncertainty and scale successfully. By leveraging creativity, collaboration, and resilience, small businesses can overcome challenges, seize new opportunities, and sustain long-term economic growth in 2026 and beyond.
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