Reflections on the SMB Market 2025

I feel a little like Pati Jinich (Pati’s Mexican Table on PBS), touring the SMB market in the Pacific Northwest (PNW) to understand what individual leaders are cooking these days and what it’s like in the kitchen with market uncertainty, AI, and a changing employee base. 

At the macro level, Vistage’s SMB Confidence Index (Small Business Confidence Hits 8-Month High | Vistage) tells the story in numbers - as SMB confidence in the economy dropped earlier this year and has now stabilized. Recovery is not on the horizon just yet, but SMB leaders have found a more predictable rhythm in the face of changing economic changes and the prospects and sometimes hype of AI. 

In this moment of stability, the question I keep coming back to is: how will the challenges of 2025 impact this year’s decision-making? 

After hundreds of conversations over the past 8 months, here are the Top 10 Questions I heard from CEOs, owners, presidents, and directors in the PNW:

What SMB Leaders Asked Most in 2025

1. How do I actually create enterprise value with AI?

2. How do I play offense in these current market conditions?

3. How do I improve sales performance—consistency and nimbleness?

4. How do I diversify revenue when customer retention is already hard?

5. How do I evolve my culture to be more growth-oriented?

6. How do I scale while maintaining or reducing headcount?

7. How do I integrate outside leaders into the company?

8. How do I build a leadership pipeline with minimal investment?

9. How do I get stakeholders, leadership, and employees on the same page?

10. How do I leverage my leadership team better?

What the Most Successful CEOs Did Differently

And here’s what I’ve noticed. The leaders who are winning right now share four things in common: customer focus, intentionality, empowerment, and collaboration. 

The companies that narrowed their customer focus are consistently outperforming those trying to cast a wider net. Those who have been more intentional about what they are not doing and what they need to achieve quarterly are more aligned from top to bottom on what truly matters. I also see leaders empowering mid-management and frontline employees to adapt quickly to customer needs, which makes them far more flexible in shifting market conditions. And the CEOs who seek outside perspectives and collaborate across industry lines are making faster decisions and embedding new insights into their teams.

Together, these behaviors set the stage well for the year ahead. They’re the reason I’m optimistic about what comes next.

Looking Ahead: Why I’m Optimistic About 2026

Like Pati Jinich, I see innovation and growth coming from less familiar places. There are some incredible innovations championed by businesses under $200M, leveraging technology and data to drive change across technology, professional services, healthcare, energy, and retail. In addition to new products, several of these companies are bending the relationship between growth and headcount, which creates new ways leaders think of scaling businesses. 

As business leaders, our opportunity is to look inside and find ways to unlock something big in the people we work with every day. Scaling a company still comes down to the fundamentals: the right people, aligned around the right direction, taking bold steps forward, consistently and intentionally…and stopping to learn and adjust along the way.

I’ll also be setting aside time in January for a pulse check with executives as they navigate Q1. 

A Culinary Footnote

Pati Jinich is one of my favorite Mexican chefs. Her PBS show, Pati’s Mexican Table, has run for 14 seasons. In 2021 and 2024, I drained several of her cookbooks. What I love about her recipes is that everything is from scratch, and she can adapt recipes that are generations old for a modern kitchen. A family favorite is Tacos Árabes - Pati Jinich.

Originally published on Linkedin on January 6, 2016.

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