Small Business Checkpoint: Curbing costs and raising revenues
Though small business revenues are rising, potential tariffs and access to credit could elevate certain cost pressures.
Key takeaways
Small businesses appear to be on the upswing. A Bank of America measure of small business activity showed deposits growth outpaced that of payments for the first time in three years – a sign that revenue is rising faster than costs.
Payroll comprises the largest single share of small business operational costs, according to Bank of America account data. With wage inflation coming down from peak levels and credit standards easing, there is evidence of relief from certain cost pressures for small businesses.
Yet, policy changes such as tariffs, could introduce an inflationary headwind to profitability. So far, however, plans for small firms to increase inventories fell in January from the end of 2024 per data from the National Federation of Independent Business, suggesting any impact is yet to be realized.
