The latest report from the National Federation of Independent Business (NFIB) shows small business confidence improving this summer—but not without concern for the months ahead. According to the NFIB’s July Small Business Economic Trends Report, the Small Business Optimism Index rose to 100.3, its highest level of the year. Yet the accompanying Uncertainty Index also surged to 97, a reminder that optimism and anxiety often go hand in hand.
For Gayle Smith Gay, a long-time small business owner and advocate, these mixed results reflect what many entrepreneurs are feeling right now. On one hand, more owners say “now is a good time to expand.” On the other, inflation, tariffs, and labor shortages continue to cast shadows on their outlook.
The Good News
More small business owners are reporting improved business conditions compared to earlier this year. Hiring remains strong in several sectors, and the share of owners expecting higher sales ticked up modestly. Gayle Smith Gay notes that this boost in confidence could indicate cautious momentum returning to the small business community after months of uncertainty.
The Challenges Ahead
Despite rising optimism, many owners remain on edge. The report found that 21% of small businesses cite “labor quality” as their biggest problem. Others list inflation, rising input costs, and weaker sales as major pain points. The NFIB data also highlights growing unease around global trade and tariff changes, which make it harder for business owners to plan ahead or manage inventory costs.
Why It Matters
For small businesses, confidence is essential—but so is stability. Entrepreneurs must balance cautious optimism with realistic planning, especially as inflation and policy changes continue to shape the market. The NFIB’s findings remind owners to stay agile, keep an eye on costs, and prepare for potential shifts in demand.
In the words of Gayle Smith Gay, “Optimism drives growth, but preparation sustains it.” As small business owners look ahead to the final quarter of 2025, adaptability may be the key to turning confidence into long-term success.
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