In today’s fast-paced world, starting a small business requires grit and wisdom. Hearing from nearly 18,000 small businesses that shared insights with us into the strategies driving their success, there’s a common theme: to thrive, you need to be adaptable, continuously looking for opportunities to innovate, and willing to learn from any missteps along the way.
With the business environment evolving, small business owners are seeking practical ways to navigate forward. Their top priorities include attracting and retaining talent, staying compliant with changing regulations, and leveraging modern technologies to drive operational efficiencies.
Invest in Skills
Retaining top talent goes beyond compensation. Small businesses should focus on creating work environments that support employee growth and long-term engagement. This includes offering clear career paths, development and upskilling opportunities, and on-the-job learning experiences. By supporting talent development, small businesses can ensure their people are equipped to navigate new demands and technologies.
According to a new ADP Market Pulse Study, three out of four (77%) small businesses agree that skills development and training are critical to employee retention, and four out of five (80%) agree that skills development is important to ensure they remain competitive. Additionally, two-thirds of small businesses (69%) say that their employees expect the company to invest in skills development and training.
Small businesses can take advantage of their flexible structures by creating pathways for talent to grow through cross-functional experiences, training programs, and stretch assignments. Here are some ideas to build your talent development strategy:
Establish a Culture of Continuous Learning. Embed learning into daily workflows through informal learning, mentorship, and access to microlearning resources such as short videos, podcasts, and digital courses.
Leverage Peer-to-Peer Learning. Small businesses often have tight-knit teams. Use this to advantage by facilitating knowledge sharing across roles and departments, such as lunch-and-learn sessions, internal wikis, or employee-led workshops.
Look for the Right Skills and Experience. When recruiting, consider focusing on critical skills rather than diplomas and formal qualifications. Then, offer opportunities for real-time learning to build employees’ skills in your business environment.
By adopting a more holistic and employee-centered approach to upskilling, small businesses can not only remain agile in a shifting labor landscape but also strengthen engagement, innovation, and long-term retention.
Stay Ahead of Compliance Changes
Regulatory compliance remains a critical priority for businesses. From changes to minimum wage and overtime rules to new requirements around paid leave, small businesses must stay alert to federal, state, and local updates. With the recent passing of H.R.1, the “One Big Beautiful Bill Act,” there are several significant changes that are relevant to small businesses for payroll, employment tax, and employee benefits purposes, with some key provisions effective retroactively as of January 1, 2025.
Additionally, the bill expanded domestic research and development (R&D) tax opportunities. Instead of amortizing R&D costs over multiple years, the Act allows businesses to immediately deduct domestic R&D expenses starting in 2025. Small businesses (with up to $31 million in gross receipts) will be able to deduct past R&D expenses back to 2021. The Act also includes rules to coordinate the immediate deductibility of domestic R&D expenditures with the research and development credit (or R&D credit).
Navigating a complex regulatory landscape requires both proactive monitoring and reliable support. Small businesses can benefit from working with trusted partners like accountants and service providers who can help interpret new regulations, provide guidance on appropriate actions, and help identify relevant tax credit opportunities. Having technology in place that tracks regulatory updates and integrates changes directly into payroll and HR workflows can help minimize risk and allow continuity as well.
Embrace Modern Technologies
For small businesses unsure about where to begin leveraging new AI-driven technologies, integrated, scalable solutions are available to streamline operations and reduce administrative burdens.
Rather than managing fragmented systems, many business owners are consolidating their tech stacks and investing in cohesive platforms tailored to their unique needs. Embedded tools and mobile solutions can offer employees a seamless experience while driving internal efficiency.
AI-driven technologies, for instance, can enhance HR processes by automating payroll validation, reducing manual entry errors, and improving time and attendance tracking. Advanced analytics also allow small businesses to make data-informed decisions related to hiring, compensation, and workforce planning.
Importantly, while technology can enhance operations, it does not replace the value of human insight and connection. Strategic use of digital tools can enable business owners to focus more on long-term growth, especially when supported by expert partners and trusted advisors.
To begin integrating technology to help streamline operations, consider the following:
- AI-powered automation: Streamlines tasks like payroll, scheduling, and customer service (e.g., chatbots for customer service, AI-based bookkeeping, and automated HR workflows).
- Cloud-based platforms: Enable remote access, centralize operations, and support growth (e.g., data storage, customer relationship management (CRM), and accounting systems).
- Mobile/contactless payment systems: Enhance the customer checkout experience (e.g., mobile point-of-sale (POS) systems and digital wallets).
- Cash flow management solutions: Integrates and automates accounts payable, accounts receivable, payroll, and POS processes, offering greater visibility into cash inflow and outflow to help optimize business operations.
- Analytics tools: Supports data-driven decision-making (e.g., understand customer behavior, track performance, and optimize inventory or marketing strategies).
- Marketing automation: Boosts outreach with less manual effort (e.g., automation tools that can schedule social media posts, personalize email campaigns, and track engagement metrics).
In today’s dynamic business environment, small businesses must be agile, informed, and intentional in their strategies. Success hinges on the ability to develop talent, remain compliant with evolving regulations, and embrace technology that enhances human potential. By focusing on these core areas, small business owners can position themselves and their people for growth.
Matt Farwell is the senior vice president of small business services at ADP.
Photo courtesy Getty Images for Unsplash+
