Survey: 1 in 5 Small Businesses May Not Survive 2025
By: M. Scott Morris
Published: May 14th, 2025
A new report from Alignable in collaboration with Harvard Business School and MIT researchers reveals a dramatic surge in small business anxiety as the U.S. trade war continues.
"Business owners are incredibly resourceful, but tariffs are creating more intense cost pressures and deeper uncertainty with each passing month," said Eric Groves, Alignable's co-founder and CEO. "With half of small business owners now expecting sales to decline, it's a clear signal that we need to act together. One of the most effective ways to push through this turbulence is by leaning on your community and tapping into your most trusted relationships."
Drawn from 2,392 survey responses collected from April 9 to 24 and 13,000-plus earlier responses this year, the report highlights growing distress even among businesses without direct trade exposure.
According to Alignable's May Tariff Report:
- 20% of small business owners say their companies may not survive through 2025 if tariff conditions persist or worsen.
- 50% expect revenue losses, up from 44% last month and 30% in January.
- 26% say they've already lost income due to rising trade-related costs.
- More than 50% say they can't negotiate lower supplier prices when tariffs rise because domestic alternatives cost at least 25% more than those sourced overseas and often take six to 12 months to secure.
- 42% expect trade policy uncertainty to persist through 2025.
- 75% foresee a high-tariff environment (15%+) continuing for years.
- States with the highest revenue concerns include New York (57%), California and North Carolina (56%), Arizona and Colorado (55%), Illinois and Ohio (54%), Florida (51%), Pennsylvania (50%), and Massachusetts (48%).
- Industries with small business owners who are most worried include restaurants (67%), travel/lodging (67%), retail (64%), manufacturing (63%), transportation (61%), arts and music (58%), construction (53%), and health and wellness (46%).
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