The biggest small business trends for 2027 are a record wave of new businesses that is mostly solo founders, AI moving into everyday use at even the smallest firms, and a cost squeeze from tariffs, prices and interest rates that are rising again. Here are all nine, with the number behind each:
- The startup surge is mostly solo. Americans filed a record 5.67 million business applications in 2025 and 2026 is running 15.3% ahead, but only 28% of applications look likely to hire.
- AI goes daily, and the smallest firms caught up. 23.9% of firms with 1 to 4 employees now use AI, up from 17.0% in late 2025 (Census).
- The tariff reset. The Supreme Court struck down the IEEPA tariffs, refunds opened in April 2026, and new Section 301 tariffs of 10% to 12.5% now cover 60 economies.
- Prices are rising again. 47.1% of firms paid higher input prices in the last two weeks, up from 40.5% a year earlier.
- Credit gets more expensive. The Fed raised rates to 3.75%-4.00% in September 2026, and 29% of small business borrowers now apply to online lenders.
- New tax rules are in effect. The 20% QBI deduction and 100% bonus depreciation are now permanent, and the 1099-K threshold is back to $20,000.
- Online sales grow, the typical firm doesn't. E-commerce grew 12.2% in a year, but 31% of firms report revenue falling versus 13.7% rising.
- Hiring is slow and good workers are scarce. Small establishments added just 23,000 jobs in September 2026, while minimum wages rise again in 2027.
- Confidence is fragile. The Fed's survey of small employers found revenue expectations at their lowest since 2020.
Every figure comes from the organization that measured it (the US Census Bureau, Federal Reserve, IRS, SBA Office of Advocacy, BLS, USTR and CBP), plus our own search data where it adds something. Vendor and advocacy surveys are labeled as such.
Let's get into it.
1. The Startup Surge Is Mostly Solo
Americans are starting businesses at record rates, but most of them are one-person operations.
The Census Bureau's Business Formation Statistics show 534,947 business applications in September 2026 alone. Our sum of the monthly data puts January to September 2026 at 4.93 million applications, up 15.3% from the same months of 2025 and 80% above 2019. 2025 itself was a record at 5.67 million.
The detail that matters: applications Census flags as likely to become employers grew just 4.7% and are only 28% of the total, down from 38% in 2019. The growth is solo founders, side businesses and freelancers. The SBA Office of Advocacy counts 36.2 million small businesses, of which 29.8 million (82%) have no employees. Survival is still hard: about half of new establishments are gone within five years.
What to expect in 2027
Expect the solo economy to keep growing in 2027, and expect demand for tools built for one-person businesses (bookkeeping, invoicing, AI assistants, simple payroll for a first hire). The Fed's report on nonemployer firms found nearly a third plan to add employees within 12 months, so some of this wave becomes the next generation of employers.
2. AI Goes Daily, and the Smallest Firms Caught Up
AI is no longer just a big-company tool.
The Census Bureau's Business Trends and Outlook Survey found 23.8% of US firms used AI in a business function in the last two weeks (early October 2026), up from 17.3% in November 2025. The biggest jump came at the bottom: firms with 1 to 4 employees went from 17.0% to 23.9%, the same rate as firms with 20 to 49 employees.
Surveys of employers find higher numbers. The Federal Reserve's Small Business Credit Survey found 46% of small employer firms use AI, mostly for writing and marketing (83%), and 71% of users report higher productivity. Most report no change in labor costs. A Goldman Sachs survey of its program alumni (not a representative sample) found 76% use AI but only 14% have it fully integrated, and 73% want more training.
What to expect in 2027
Census found 27.3% of the smallest firms expect to use AI within six months. Expect 2027 to be about moving from experimenting to integrating AI into specific jobs: customer replies, bookkeeping, scheduling and marketing. Our search data shows the interest: "small business ai" searches are up 313% in a year and "small business bookkeeping" up 132%.
3. The Tariff Reset: Refunds, Then New Tariffs
Small businesses that import went through three tariff regimes in one year.
After the Supreme Court struck down the IEEPA tariffs on February 20, 2026, USTR announced a temporary 10% surcharge and new investigations. That led to Section 301 tariffs of 10% or 12.5% covering 60 economies. Meanwhile, US Customs opened an IEEPA refund process in April 2026, with refunds generally issued within 60 to 90 days, but only to the importer of record. The duty-free de minimis exemption for small parcels remains suspended.
Our search data shows how many owners went looking for their money: searches for "tariff refund" went from 1,900 a month to a peak of 246,000 in April 2026, the month refunds opened.
The cost is real. The Fed's survey found more than 4 in 10 small employers cite tariff-related costs as a financial challenge, and of those that source inputs abroad, 76% passed some costs on to customers. A NY Fed analysis found 67% of small retailers reported tariff challenges.
What to expect in 2027
If you paid IEEPA duties as the importer of record, check whether you have filed for a refund. If you bought from an importer, the refund goes to them, not you. For 2027, plan around the Section 301 rates as the new baseline, and expect the de minimis exemption to stay gone.
4. Prices Are Rising Again
Inflation is back on the list of small business worries.
The same Census survey found 47.1% of firms paid higher prices for inputs in the last two weeks, up from 40.5% a year earlier, with firms of 5 to 19 employees hit hardest (about 50%). 59.8% expect input prices to rise over the next six months, and 38.4% expect to raise their own prices.
The Fed's September 2026 projections put inflation at 3.7% for 2026, easing to 2.3% in 2027.
What to expect in 2027
The Fed expects inflation to cool in 2027, but costs won't fall back. Expect 2027 pricing decisions to matter more than usual: owners who review prices regularly, and explain increases clearly, keep margins; those who absorb costs to avoid upsetting customers lose them.
5. Credit Gets More Expensive, and Fintech Lenders Gain Share
Interest rates are going up again, not down.
The Fed raised its target rate to 3.75%-4.00% on September 16, 2026, saying inflation remains elevated, and its median projection keeps rates at about 4.1% through 2027. In the Census survey, 28.5% of firms said interest rates cut their profitability over the last six months. Banks' lending standards for small firms were basically unchanged in the Fed's July survey.
Where owners borrow is shifting. The Fed's credit survey found the share of applicants going to online fintech lenders rose from 17% to 29%, but 60% of online-lender borrowers found costs higher than expected, against 37% at small banks. Small banks had the highest full-approval rate (57%).
What companies are doing
The SBA raised the combined 7(a) and 504 loan limit to $10 million from $5 million in July 2026.
What to expect in 2027
Plan 2027 borrowing on the assumption that rates stay around current levels. Compare total cost, not speed, when choosing a lender, and consider small banks and SBA programs before online lenders for anything but short-term needs.
6. New Tax Rules Are Now in Effect
The 2025 tax law made several small business provisions permanent, and they apply to 2026 returns.
The IRS confirms the 20% qualified business income (QBI) deduction is now permanent, with a new $400 minimum deduction for owners with at least $1,000 of QBI. 100% bonus depreciation is permanent for property acquired after January 19, 2025, and the Section 179 expensing limit rose to $2.5 million. Domestic research and development costs can be deducted in the year they are paid again.
Reporting got lighter too. The Form 1099-K threshold is back to $20,000 and 200 transactions, and the 1099-NEC and 1099-MISC threshold rose to $2,000 for payments made in 2026, from $600.
What to expect in 2027
Early 2027 is the first filing season under the new $2,000 1099 threshold. Expect equipment purchases to be timed around permanent bonus depreciation, and talk to your accountant about the QBI minimum and R&D expensing before year-end.
7. Online Sales Grow, the Typical Firm Doesn't
The platforms are growing fast. Most small businesses are not.
US e-commerce reached $340.2 billion in Q2 2026, up 12.2% in a year and 17.1% of all retail. Square's seller payment volume grew 13% to $72.8 billion and Shopify's merchant sales grew 32% to $115.6 billion.
But the typical firm tells a different story. In the Census survey, 31.0% of firms reported revenue falling over the last two weeks against 13.7% reporting it rising, and the Fed's credit survey found small employers' revenue expectations at their lowest since 2020. Intuit's QuickBooks Small Business Index (vendor data) found average real revenue at the smallest firms fell 3.5% in 2025.
What to expect in 2027
Growth is concentrating in businesses that sell online and through platforms. Expect 2027 to reward owners who add an online channel or marketplace presence, and to keep pressuring local businesses that rely only on walk-in traffic.
8. Hiring Is Slow, and Good Workers Are Scarce
Small businesses are cautious about hiring, but finding the right people is still hard.
ADP's September 2026 employment report found small establishments (1 to 49 employees) added just 23,000 jobs. The Census survey found 9.4% of firms cut staff in the last two weeks versus 4.9% that added. Yet hiring and keeping qualified staff is still small employers' second-biggest operational challenge, after reaching customers, in the Fed's survey. Small businesses employ 45.9% of private-sector workers, per the SBA.
Labor costs keep rising. California's minimum wage goes to $17.40 an hour on January 1, 2027, and Washington's to $17.73.
What to expect in 2027
Expect small firms to hire carefully in 2027, using AI and automation to cover routine work and keeping headcount flat. Budget for minimum wage increases where you operate.
9. Confidence Is Fragile
Small business owners are not panicking, but they are not optimistic either.
In the Census survey, 35.2% of firms rate their current performance as above average, against 19.2% below. The Fed's survey found both revenue and employment expectations at multi-year lows. A new cost is creeping in: 6.8% of firms reported money lost to extreme weather in the last six months, up from 4.8% a year earlier.
What to expect in 2027
With rates, prices and tariffs all uncertain, expect owners to keep more cash on hand and delay big commitments in 2027. Our search data hints at the caution: "small business insurance" searches are down 45% in a year, a possible sign owners are cutting costs rather than adding coverage.
What We're Seeing in Search
Our database tracks US search demand across tens of thousands of trends. For small business, as of August 2026: "small business ai" is up 313% and "small business bookkeeping" up 132% in a year, while "small business insurance" is down 45%. "Tariffs" searches fell 70% from last year's peak, but "tariff refund" grew from 1,900 to 49,500 a month. Owners have moved from asking what tariffs are to asking how to get money back.
For related reads, see our B2B ecommerce trends and digital marketing trends.
The Common Thread
Put the nine shifts side by side and one pattern runs through them: more people are starting businesses, and running one is getting more expensive.
The startup wave is real, but it is mostly solo founders. AI is giving those small operations real leverage. At the same time, tariffs, input prices and interest rates are all pushing costs up, while the typical firm's revenue is flat or falling. The tax changes help at the margin, especially for owners who invest in equipment.
If you plan for three things in 2027, plan for these: claim what you are owed (IEEPA tariff refunds, the QBI deduction, bonus depreciation); put AI to work on one or two specific, time-consuming jobs rather than experimenting broadly; and review your prices and financing now, on the assumption that rates and costs stay where they are through 2027.
Frequently Asked Questions
What are the biggest small business trends for 2027?
The biggest shifts are a record wave of mostly solo business formation, AI adoption reaching the smallest firms, the reset of US tariffs after the Supreme Court ruling, rising input prices, higher interest rates and a growing role for online lenders, permanent tax changes from the 2025 tax law, strong online sales alongside weak revenue at the typical firm, slow hiring, and fragile confidence.
How many small businesses use AI?
The Census Bureau found 23.8% of US firms used AI in a business function in the last two weeks as of October 2026, including 23.9% of firms with 1 to 4 employees. The Federal Reserve's survey of small employers found 46% say they or their employees use AI.
Can small businesses get tariff refunds?
Yes, if they were the importer of record for duties paid under the IEEPA tariffs, which the Supreme Court struck down in February 2026. US Customs opened a refund process in April 2026, with refunds generally issued within 60 to 90 days of an accepted claim. Businesses that bought from an importer don't receive the refund directly.
What tax changes affect small businesses in 2026?
The 20% QBI deduction and 100% bonus depreciation were made permanent, the Section 179 limit rose to $2.5 million, domestic R&D costs can be expensed again, the Form 1099-K threshold returned to $20,000 and 200 transactions, and the 1099-NEC/MISC threshold rose to $2,000 for 2026 payments.
How many new businesses are being started?
Americans filed a record 5.67 million business applications in 2025, and January to September 2026 was running 15.3% higher than the same period of 2025, according to Census Business Formation Statistics.
Want to spot the next small business opportunity before it gets crowded? Read our guide on how to identify market trends or browse what's gaining traction in our trending topics list.
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