Small Business Predictions for 2025
In this episode, Matt Wagner breaks down seven key predictions that will impact Main Street businesses and entrepreneurs in 2025.
In 1989, the New York Times ran their now-famous (for us Main Street old-timers) article entitled “When Wal-Mart Comes to Town.” Featuring Wal-Mart’s arrival to Independence, Iowa, this article predicted the doom of small-town downtowns when big business competitors move into commercial districts. Twenty years since the article’s publication, I think we would all agree that—like so many competitors and economic shifts before—Main Streets found their competitive advantage by offering a unique, experiential retail to consumers.
Today, we find ourselves once again looking at a similar cast of competitors, but in a much different way. Main Street retail and restaurant owners find themselves competing with new jobs created in the warehouse and logistics sectors of larger retail agglomerations. Given the robust online sales of large national retailers, these corporations are now offering a growing number of these supply chain occupations ranging from warehouse packers to delivery drivers. Wal-Mart alone has stated that they plan to hire 20,000 new warehouse and fulfillment positions to gear up for the holidays—a move that will only further strain efforts from Main Street retailers and restaurants to retain and hire needed workers in a post-COVID retail environment.
Place professionals and those engaged with small businesses have been hearing and seeing first-hand the challenges of hiring and retaining labor in this early post-vaccine rollout era. The most common reasons typically focus on a lack of childcare and/or concerns of sending students back to schools, a smaller recruiting pool for entry-level positions, the increased quit rates in industries often associated with lower pay, and the rise of the Delta variant and additional health concerns for workers (especially those in the restaurant and retail sectors who experience close proximity to unmasked customers). Additional trends discussed include:
- An increased rate of retirement. Oxford Economics reports that in the 15 months since the pandemic began, about 2.5 million Americans retired. That is about twice the number who retired in 2019, which means there are essentially 1.2 million fewer people in the work force over the age of 55 than would otherwise be expected.
- Raised pay rates across the board. While many small businesses have raised pay rates, it has been difficult for them to compete with national chains and other industry sector positions that have also raised pay rates much higher in order to compete.
- Unexpected impact of unemployment benefits. Some have argued that higher unemployment benefits have been a disincentive to work. However, a recent analysis published by the University of Massachusetts indicates that the first states to withdraw support for the extra unemployment benefits did not see a jump in jobs in the weeks following the withdrawal.
But what is often missed in the discussion is what might be a more systemic shift in the workforce: a dramatic movement of entry-level labor from retail and restaurants to supply chain-related jobs. As just one example, earlier this fall I was in Sterling, Illinois, working with the community on refining their entrepreneurial ecosystem. During our focus group, we learned that the local Wal-Mart distribution center was hiring 130 warehouse workers with a starting wage of $23.00 and a $3,000 signing bonus!
Wal-Mart is not an isolated example. Amazon, while riding the wave of what looks like a permanent 2.5% capture of total retail sales growth over the past 18 months, is hiring at starting wages north of $20.00 and offering signing bonuses ranging from $1,000 to $2,000.
While Main Street businesses may have weathered the COVID storm relative to retail sales shifts to e-commerce, they now are faced with perhaps a much bigger issue: workforce development. For other past challenges—including COVID—we had tools in our toolbox and could quickly develop programs in the form of private-public partnerships to design solutions. However, we are challenged by the fact that workforce is not an issue commonly discussed amongst place professionals. And historically, state and regional job centers, community colleges, and other institutions whose primary mission is workforce development have primarily been focused in the areas of manufacturing and technology-related skills training.
What Can Place Professionals and Small Business Owners Do?
While it’s difficult at this time to fully predict if this is a short-term or systemic shift in the labor force, Main Streets and other resource connectors to small businesses should be more informed and use their creativity as an opportunity to create a new competitive position for what labor is seeking beyond a wage war. A recent Forbes article suggests the top considerations for job seekers and current employees are:
- Work/Life Balance
- Shared Values
- Career Progression Opportunities
- Benefits
While most small businesses may not be able to match the wage components, a good effort toward stronger wage growth could be coupled with other shifts that create new competitive advantages in working at a Main Street business. Let’s review some potential areas for exploration:
1. Create Safe Workplaces. There is a large segment of the workforce that remains nervous about returning to work that may result in exposure to COVID. Maintaining a safe workplace with masks, hand sanitizer, and cleaning protocols as well as limiting interaction with customers may help to alleviate this concern—even if there is push-back to mask wearing from a customer perspective. I’ve been in a number of stores and restaurants lately where the workforce is wearing masks and consumers are not. This is tied to:
2. The Customer is NOT Always Right. The mix of COVID and politics has created a situation in which many consumers have become downright disrespectful to owners and employees, creating toxic work environments in industries ranging from local schools, airlines, and health care to restaurants and retail. This is further exacerbating the situation whereby employees are leaving these industries to others that offer a safer and more pleasant work experience. While we can’t change peoples’ reactions, we can create a zero-harassment policy that backs up our employees. And as place professionals, we can educate our district consumers about the importance of workers’ and small business owners’ safety in order to keep stores and restaurants open and offering that important Main Street community experience.
3. Sharing Employees. While limited on examples, Foster Coffee in Owosso, Michigan, has led an effort over the past couple of years centered on joint-hiring among several restaurants to provide a highly qualified labor pool, while being able to offer better benefits, flexibility, and pay.
4. Selling Flexibility. As highlighted by COVID and the disproportionate number of women not reentering the workforce, understanding childcare and home-schooling needs while offering flexible work schedules by day can be a value-add to many workers.
5. Examine Health Insurance Benefits for Employees. Over the years, there have been a growing number of group health care plans for small businesses through member and/or trade organizations. A great example comes from the Kentucky Chamber that is working with local chambers to provide competitive cost group health care programs to member businesses.
6. Hire More Teens. Most recently, CVS pharmacies have eliminated the requirement of a high school diploma for entry-level workers. And in Medford, Oregon, the local McDonalds have gone as far as hiring 14- and 15-year-olds. Main Street programs have also been making efforts to get younger folks engaged in their local workforce. Earlier this summer, Livermore Downtown, Inc. in California hosted the Livermore Downtown Job Fair, an event open to folks of all ages but geared towards students. This job fair brought together over 20 local business managers to engage with young folks and gave students a chance to meet possible employers in person, fill out applications on the spot, and learn more about the work permit process. The Main Street program also worked with the local high schools to spread the word.
7. Create Return from Prison Programs. One of the top reasons for recidivism is the lack of job opportunities due to a felony conviction. A recent ABC news report out of California highlights staffing services eyeing inmates released early with good behavior credits, saying it could be a good source of workers to ease the shortage facing restaurants and other service sector businesses. There are 76,000 inmates eligible for early release from state prisons.
8. Which of your Business Activities can you Invest in Further? Reduce is the current go-to for many businesses. Reduce menus, reduce hours, reduce days open, and reduce inventory. This is more of a cost-reduction strategy. I come from the school that long-term business strategy doesn’t work with a pure cost reduction playbook. At some point, investment is necessary to grow. Some of this reduction can be offset by increases to online sales activity as well as enhanced delivery and pick-up services for restaurants.
9. Raise Prices and Offer an Experience. For example, as we saw in the beginning of the summer, consumers had bent-up demand for being out shopping and eating with friends and family. Leverage that demand, combined with limited supply, by raising prices. It is worth noting that demand is not the exclusive driver here. While notable, labor and supply increases are forcing price increases and thus the reality that margin increases may be minimal.
10. Support Launches of Childcare Facilities. As noted earlier, for younger children not in school or too young for the vaccines, childcare and the return to the classroom remain a concern. As place professionals, think of childcare programming as part of your overall recruitment/entrepreneurship support strategy. It may have more return on investment than nearly any other target business on your wish list.
11. What Can You Automate? Using technology or process reductions to decrease employee headcount offers a potential solution. For example, many Wal-Mart stores have now gone to total self-checkout stations, reducing the need for checkout clerks. Some restaurants have moved to more fast-casual service, having consumers order and pick up at the counter while eating in the restaurant.
In Summary
With COVID, like with so many other economic conditions that have accelerated trend patterns, the pain being felt in the labor market for retail, hospitality, and restaurant sectors is likely not a short-term shift in labor preferences. For place professionals, this represents a new challenge in our role in supporting entrepreneurs and small businesses to be better connected to potential solutions and resources to better position their workforce strategy in a competitive fashion. Consistent with other aspects of downtown and district revitalization, this challenge will also necessitate a strong public-private partnership to address systemic policy issues further exacerbating the labor market for Main Street businesses.
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Main Spotlight: Findings from the Winter 2022 Small Business Survey
Main Street America's research team shares the results of the 2022 Small Business Survey.
© JENNIFER E. WOLF
Community Spotlight: Encouraging Entrepreneurship in Wheeling, West Virginia, and Emporia, Kansas
Learn about Show of Hands, an entrepreneurial program in multiple Main Street communities.
Wheeling, WV © Wheeling Heritage
Main Spotlight: 10 Predictions for 2022
Chief Program Officer Matt Wagner, Ph.D., shares his predictions for the trends affecting small businesses in 2022.
Tips and Tricks to Help Make Your Small Business Saturday a Success in 2021
Is your Main Street ready for the biggest small business shopping day of the year?
Community Spotlight: ‘WonderFall’ Business Decorating Contest Shines Autumnal Spotlight on Local Businesses
Main Street Charles City organizes their annual 'WonderFall' event, a business decorating contest designed to have some fun with the autumnal season as well as provide a reminder of the importance of curb appeal in attracting the public’s attention.
Charles City, IA © Mark Wicks
Main Spotlight: Better Community Planning & Economic Development Series with Ed McMahon
Leverage NC, a partnership between North Carolina Main Street and the North Carolina League of Municipalities, hosted a four-part webinar series titled Better Community Planning & Economic Development led by Ed McMahon, Chair Emeritus of Main Street America and a leading national authority on land use policy and economic development.
Community Spotlight: Main Street Arkansas Coffee Trail Celebrates the Importance of Coffee Shops Downtown
Main Street Arkansas has brewed a new engaging way for tourists and residents alike to explore local Arkansas commercial districts: the Main Street Arkansas Coffee Trail.
Little Rock, AR © Main Street Arkansas
National Black Business Month Spotlight: The Four Way and L. May Creations
We spoke with two Black entrepreneurs in UrbanMain commercial districts: L. May Creations in the Austin neighborhood of Chicago and The Four Way in south Memphis, Tennessee.
Memphis, TN © Four Way
Main Spotlight: Supporting Black-Owned Businesses in Biddeford, Maine
Heart of Biddeford shares the strategies they developed to support Black-owned businesses in their community.
Biddeford, ME © Heart of Biddeford
Community Spotlight: Main Streets Love Farmers Markets
We heard from organizations across the nation about the incredible impact their markets have had on community engagement, entrepreneur and small business support, and keeping their district vibrant.
Main Street: A Place for a More Connected Economy in a World of Dispersion
The global pandemic gave us all a glimpse of a further dispersed future – a time when you don’t sit in a classroom at school, watch movies in a theater, or even go to the grocery store. Where do Main Streets fit in that model?
Main Spotlight: Get Used to It — The Pivot Is Not Going Away
The COVID-19 pandemic has long-lasting effects on the economy. Here are 11 changes that small business owners should continue to remain competitive.
Reflecting on the History, Legacy, and Future of Black Wall Street in Tulsa
This May marked the 100th anniversary of the Tulsa Race Massacre in the Greenwood neighborhood of Tulsa, Oklahoma. We explored the impact and legacy of this tragic event.
Tulsa, OK © Dr. Tiffany Crutcher
Main Spotlight: Creating a Community for Inclusive Entrepreneurship in Fremont, CA
Learn about the various programs and initiatives that Fremont is using to promote inclusive economic development.
Fremont, CA © Fremont Economic Development
For an Inclusive Recovery, We Need Support for Small Business and the Groups that Help Them
BDOs are place-based organizations that help small businesses and entrepreneurs to flourish. They have been on the frontline of support for the country’s hardest-hit entrepreneurs throughout the pandemic and have been working to enable thriving commercial corridors throughout the crisis.
Main Spotlight: Five Takeaways on Supporting Entrepreneurship from Matthew Wagner, Ph.D.
Matthew Wagner, Ph.D., Chief Program Officer at Main Street America, was featured on Breaking Down Barriers: a podcast from Startup Space highlighting stories of community leaders who break down barriers to entry for underserved and unrepresented entrepreneurs.
Main Spotlight: Windows of Opportunity — The Transformation of Empty Storefronts on Main Street
A vacant storefront is the perfect stage to creatively promote the available space or to showcase other businesses and events in the area.
Ripon, WI © RetailWorks, Inc
Small Businesses E‑Commerce Usage Continues to Increase as Holiday Revenues Were Mixed: Results from Our January 2021 Survey of Small Business Owners
We heard from 289 business owners in 35 states plus the District of Columbia in our new text message-based survey of small business owners across the network.
Community Spotlight: Paving the Path from Pop-up to Permanent at the Batavia Boardwalk Shops
The Batavia Boardwalk Shops are freestanding, purpose-built structures acting as seasonal pop-up locations for entrepreneurs, offered in tandem with a business incubator program.
Batavia, IL © April Duda Photography
Business Spotlight: Black Entrepreneurs Leading By Example in Chicago
For Black History Month, we want to recognize and celebrate the Black business owners and entrepreneurs who have overcome challenges and obstacles in launching and running their own businesses, thanks to resilience, creativity, and hard work.
Main Spotlight: Pop-Up Retail: Not Just For Start-Ups, And Other Learnings From Its Evolution
As a vital place factor within an entrepreneurship ecosystem, pop-up programs allow for emerging businesses to test their product, gain consumer feedback, and promote their brand at an extremely low cost. In essence, allowing for a ‘fail-fast’ product development cycle.
Asheville, NC © Ablohkin
Coping with the COVID Crisis in the Midst of the Holiday Rush: Nine Takeaways from Our December Surveys of Small Business Owners and Main Street Programs
In early December, as the COVID-19 crisis intersected with a peak moment in the holiday shopping season, we surveyed small business owners and Main Street programs to learn more about how they were managing.
© Cindy Shebley
Jump off the Business Recruitment Train: The Real Returns are in Cultivating Local Entrepreneurship
New research by Main Street America suggests greater returns on our missions and resources can be had by transitioning to more deliberate economic vitality work centered on cultivating new business development from within our own communities and neighborhoods.
Community Spotlight: Storefront Activation Through Storytelling in Fredericksburg, VA
Fredericksburg Virginia Main Street (FVMS) is taking storefront activation to a new level with their new initiative, the Scan & Love Project, which tells the stories of business owners through personal and engaging videos.
HartBeat of Main Street Grant Program: Spotlighting Tina’s Timeless Threads
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Center of the Yarniverse
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting The Bankery
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting BuzzBomb Brewing
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting The Owl Wine Bar & Home Goods
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting Griff Goods
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting Mockingbird Bar and Tacos
Meet a recipient of the HartBeat of Main Street Grant Program
Economic Gardening Takes Root: Redesigning the Bricks & Clicks Business Retention Program During the Pandemic
Harrisonburg Downtown Renaissance explores how they redesigned their Bricks & Clicks Business Retention Program during the pandemic.
Business Spotlight: Women-Owned Businesses on Main Street (Part 3)
Meet some amazing women business owners!
New Survey Results: How Small Businesses are Managing the Pandemic and Social Unrest
Read the results of our survey aimed at understanding how business owners are managing the recovery from COVID-19 and responding to recent protests and social unrest related to police violence against Black Americans.
Research Spotlight: Black-Owned Businesses on Main Street and Beyond
Our research team dug into some of the data about the state of Black-owned businesses on Main Street, the structural challenges they face, and how Main Streets can support them.
Main Spotlight: Holiday Shopping During COVID: What Should Main Streets Expect?
Matt Wagner explores how the pandemic may affect the shop small holiday weekend.
Main Spotlight: How Rural Economies Can Leverage the Rise in Remote Work
COVID-19 has led to a rise in remote working. How can small and rural towns leverage this shift to create vibrant local economies?
The Impact of COVID-19 on Small Businesses: Follow-up Survey Report
Detailed findings from our follow-up survey on the impacts of COVID-19 on small businesses to better understand the continued challenges businesses face as the crisis evolves.
Main Spotlight: Recovery and Revitalization Depend on Understanding Human Psyche
How does psychology impact the recovery of our downtowns after the COVID-19 pandemic?
Local Impact: Small Business Saturday
Small Business Saturday® is more than a day to shop. It’s a nationwide movement that shines a spotlight on the importance of supporting small businesses in communities across America.
Community Spotlight: Benson, North Carolina
The Town of Benson started a special project to highlight their downtown businesses.
Community Spotlight: Berkley, Michigan
The Berkley Downtown Development Authority (DDA) proudly debuted its Downtown Berkley Shopping Bag for a Cause through a partnership between Better Life Bags.
Main Spotlight: Learnings from the ESHIP Summit
Supporting new and existing small businesses, and the entrepreneurs who run them, represents a vital aspect of the revitalization of downtowns and neighborhood business districts.
Creating Equitable, Inclusive and Transparent Cities: A Year in Review
The Equitable Economic Development Fellowship is a two-year, one million-dollar effort funded by the Surdna Foundation and the Open Society Foundations to help equity, transparency, sustainability and community engagement become driving forces in local economic development efforts.
Community Spotlight: Mini-Grants Offered to Small Businesses in Jefferson, Iowa
The Jefferson Rotary Club partnered with Jefferson Matters: Main Street to offer mini-grants for building facades and storefront signage to two dozen businesses for up to $500 each.
A Memorable Makeover on Main Street
The Wisconsin Economic Development Corporation (WEDC) partnered with Retailworks, Inc., a commercial interior design, display and branding firm headquartered in Milwaukee, to launch Wisconsin’s Main Street Makeover Contest.
Creative Discovery on the Maker Trail in Enid, Oklahoma
Kelly Tompkins of Main Street Enid shares more about the Maker Trail project and how it inspired creativity and helped people discover downtown.
City Sidewalks, Dressed in Holiday Style
Too often, as we’re strolling our favorite Main Street, we pass empty or dark shop windows that make us want to hurry home a little bit faster. Imagine instead, a charming streetscape adorned with vibrant, lively window displays, showcasing retailers’ favorite products and seasonal gift ideas.
Community Spotlight: #ShopSmall in Goldsboro, North Carolina
Small Business Saturday promo pic from Downtown Goldsboro, North Carolina, showing all the folks who took the pledge support a small business in their community.
Using Local Search Trends to Attract More Customers to Your Main Street
We’ve put together a practical list of some of the things that local store owners can do right now to help them capitalize on this increasing trend in local searches.
Network Spotlight: Main Street Iowa Restaurant Week
From authentic comfort food to farm-to-fork fresh and everything in between, these restaurants, bars, and cafes are key to the thriving social, business, and residential life in the historic commercial districts in Main Street Iowa communities.
Fab Lab Sparks Rural Opportunities
Located in southeast Kansas, Independence (pop.8,799) is home to Fab Lab ICC, which is on track to be the world’s leading innovator in combining entrepreneurial mindset education with a fab lab maker space.
Community Spotlight: Morganton, North Carolina
The craft beer industry is playing a key role in the rebirth of Main Streets and neighborhood commercial districts across the county.
Rethink Storefront Accessibility to Rethink Community Viability
Appealing to mobility-challenged shoppers yields benefits beyond the store.
Sparking a Movement in Small Business and Small Towns
Being the only person in the know can be fun, exhilarating even. Except when you are the one person out of 600+ in a room and you know bad news is coming.
The Lowdown in Downtown LaBelle
Fritz the dog has made his way into the hearts of the residents of LaBelle, Florida, and helped our Main Street Community find a way to make what we do more noticeable.
Pop-Up Altavista 2.0
Altavista On Track, the local Main Street organization, is working to cultivate and sustain local entrepreneurs with an educational business launch competition, Pop-Up Altavista 2.0.
The Bright Center: A Space for Winchester’s Bright Minds to Create, Innovate and Thrive
In Winchester, Virginia, one woman’s vision and commitment to downtown’s revitalization created an innovative community space for the Creative Class.
Why Business Retention and Expansion Plans are Important for Downtowns
A business retention and expansion plan, properly implemented, not only helps keep businesses open but possibly even helps them expand.
Business Investment Guides: “Think B.I.G.”
The first rule of conducting business is “make it simple.” The easier it is to pay for merchandise, get entertainment or obtain a service, the more likely it is that people will take advantage of those options.
Small Box – A Creative Retail Project
Main Street communities across the country are no stranger to seeking creative strategies to solve their most nagging issues – vacant buildings, marketing downtown, bolstering retail to name a few.
Supporting Immigrant Entrepreneurs in the Heart of Boston’s Main Streets
To understand the role that immigrant business owners play in Boston’s small business ecosystem, you need only to walk through any Boston Main Streets district.
Measuring the Economic Impact of Storefront Improvements
Façade appearance is a critical aspect of the overall aesthetic appeal and unique character of downtown.
Sign Design Guidelines
A lot of signs are necessary to make a downtown work well, but not every community knows what a good sign system looks like, or how instrumental it can be to the creation of a successful downtown.
Improving Performance in Main Street Iowa Communities
Main Street Iowa, a program of the Iowa Economic Development Authority’s Iowa Downtown Resource Center, created a one-of-a-kind three-year program to provide help for performance venues located in Main Street districts.
