How small businesses can find their footing despite economic uncertainty

Small businesses have proven time and again that they’re resilient. They keep hiring, keep innovating, and keep serving their communities even when the broader economy feels shaky. But underneath that resilience, many owners are carrying real weight. Rising costs and ongoing uncertainty are pushing some to ask a different question. Instead of “can we grow?” they’re asking “should we wait?” 

Joining us on today’s episode of Business Trends Today is Dan Varroney, Founder and CEO of Potomac Core Consulting. He’s also the author of Rethinking Economic Growth: How Small Businesses Can Help Consistently Grow the Economy. Despite uncertainty in the marketplace, Varroney says he still sees small businesses pulling ahead.

Small businesses are outpacing the headlines

Varroney notes that uncertainty is currently the biggest challenge for small business owners. However, he emphasizes that their resilience plays a crucial role behind the scenes. Business owners have maintained close relationships with customers, made wise investment decisions, and leveraged recent tax benefits.

“It's a great time to start a business because all of the technology that's available, it's the right time to make the capital investment."

Since February, businesses with fewer than 50 employees have added more than 300,000 jobs through June. Varroney points to one stat in particular. Seven out of every 10 new jobs added have come from small business, well above the historical rate of two out of three.

He credits some of that momentum to the qualified business income deduction and 100% expensing for plants and equipment, both of which have freed up cash for owners to invest in technology and productivity.

Uncertainty carries a hidden cost

Varroney describes uncertainty as friction that slows everything down, even when the underlying business is healthy. Owners are weighing a long list of questions before making a decision:

• How long will the war in Iran last?
• Will supply chains stay disrupted?
• Will it still be hard to find workers?
• Where will interest rates land?
• What will the new Federal Reserve chair, Kevin Warsh, do next? 

Each unknown introduces additional complexity to decisions that should be simple, such as hiring. Varroney explains that filling a role is more than just staffing; it’s also an indicator of how an owner perceives the economy’s trajectory.

Small and midsize businesses generate roughly two-thirds of new private sector jobs, making that confidence signal matter well beyond any one company. When Main Street hesitates to hire or invest, hiring slows across the board.

Timing growth against the urge to wait

Owners weighing whether to grow now or wait for more certainty shouldn’t wait too long, Varroney says. Capital is available, and while borrowing still costs more than owners would like, rates remain workable.

“There’s a lot of capital in the marketplace. You’ve got the ability to get loans, while still a bit expensive, at reasonable rates. Now is the time to get in. Do not wait too long. You will miss what could have been a good bet,” Varroney said.

To gauge where things are headed, Varroney watches private sector jobs data from the Bureau of Labor Statistics and ADP each month. The signals he’s tracked since February point toward a strong economy over the next six to 12 months, with small businesses leading the way.

Small business owners have spent the past year and a half proving they can adapt, invest, and keep growing even under pressure. Varroney’s advice for owners weighing their next move: watch the data, use the capital that’s available, and don’t let uncertainty turn into inaction.