A new report from American Express revealed that small businesses are entering 2025 with optimism and a strategic focus on innovation. After navigating a challenging economic environment in 2024, many are anticipating a year of stability while doubling down on technology investments to strengthen their competitive edge. 

According to American Express’ new Amex Trendex: Small Business Edition report, based on a survey of 1,106 financial decision-makers, 70% of small business owners reported emerging stronger despite market uncertainties in 2024. This resilience has set the tone for 2025, with 74% expecting a more stable business landscape. Confidence is soaring, with 91% of owners feeling prepared to grow and 90% optimistic about future financial success.

A Generational Divide in Priorities

The data reveals a clear generational divide in how business owners are approaching the future. Millennial and Gen-Z entrepreneurs are setting themselves apart with a tech-first approach, being significantly more likely to invest in financial platforms for cash flow management and embrace digitization to attract new customers.

Social media continues to play a central role, with these generations leveraging platforms to build brand visibility and engage customers. In fact, 71% of Millennial and Gen-Z small business owners see virality as a dream outcome for their brand, underscoring their understanding of social media’s influence. This demographic is also more inclined to introduce new products, grow their workforce, and expand their physical presence compared to their Gen-X and Baby Boomer counterparts.

AI: A Game-Changer for Competitive Growth

Artificial intelligence (AI) is emerging as a key differentiator, particularly among younger entrepreneurs. The survey revealed that over two-thirds of Millennial and Gen-Z business owners are already using AI, with nearly half planning to increase their investments in 2025. The advantages are clear: businesses leveraging AI are more likely to upgrade technology, expand market share, and develop innovative products.

AI-powered businesses also anticipate stronger workforce growth. Half of these companies expect to increase their headcount in 2025, compared to just 36% of businesses not using AI. For many, AI isn’t just a tool—it’s a cornerstone of their growth strategy.

What Lies Ahead

As 2025 approaches, small businesses are focusing on key investments to stay ahead of customer preferences and market trends. The report highlights areas such as upgrading IT infrastructure, refreshing online presence, and expanding physical locations as top priorities.

For Millennial and Gen-Z leaders, technology and social media will be pivotal, while AI adoption will continue to redefine what’s possible for small businesses across generations. With confidence high and strategies in place, the year ahead holds promise for those willing to embrace change.