Pressure Points
On the surface, things may look stable. But behind the headlines, many small businesses are tightening spending, delaying decisions, and preparing for a more uncertain road ahead.
If small businesses are struggling to turn tools into growth, they’re also rethinking how they manage one of their biggest expenses: people. Despite talk of a “hiring reset,” many of the same challenges remain—from elevated wages to difficulty finding skilled workers.
I spoke with Chris Ward, Head of Small Business Banking at TD Bank U.S., about how small businesses are adapting their hiring strategies, building financial flexibility, and preparing for what comes next.
Rieva Lesonsky: If we are entering a “hiring reset,” what does that actually mean for small business owners? Should they be rethinking how—and when—they hire?
Chris Ward: What we’re hearing from many small business owners is that the reality around hiring hasn’t changed all that much. Roles are still hard to fill, wages and costs remain elevated, and competition for skilled workers continues. So even with talk of a hiring reset, many owners are navigating the same constraints they’ve been managing for some time.
What is changing is how intentional owners are becoming. They’re investing in upskilling their current employees, prioritizing essential roles, reassessing how work gets done, and looking for flexibility through part-time help, automation, or outside support. It’s less about pulling back and more about being disciplined.
Lesonsky: With staffing needs and revenue expectations both in flux, how can small business owners build more flexibility into their financial planning without overextending themselves?
Ward: It starts with visibility. Any financial plan should be treated as a tool, not a static exercise, and it works best when owners understand how different scenarios affect cash flow.
Our advice to owners is to build financial resilience. It’s not just about business survival, but about positioning businesses to grow with confidence, no matter what the future holds. TD’s latest Financial Preparedness Survey shows why that matters. While 94% of owners feel financially prepared for the next 12 to 18 months, only 24% report having more than six months of emergency savings to cover operating expenses. That’s why modeling scenarios like slower hiring or softer revenue is so important. It helps owners identify pressure points early and make adjustments.
Small businesses are also tapping AI to increase flexibility and create capacity. Our survey found that 69% of small business owners use AI to help decrease expenses, up from 39% in 2025. Many point to improvements in customer service and sales lead generation, both of which can support revenue growth.
Lesonsky: You mentioned that more businesses are stress testing their cash flow. What does that look like in practice—and what should owners be paying closest attention to right now?
Ward: In practice, it means testing the business against real‑world disruptions, such as higher wages, uneven revenue, or delayed hiring.
With nearly all owners in our survey saying economic indicators influence how they plan and act, stress testing is a way to translate that awareness into action. Owners should put their financial scenarios under pressure before the market does it for them. That includes understanding how higher wage costs might impact loan repayments or the ability to meet payroll during uneven revenue cycles. When owners map out these sensitivities, they’re better positioned to make adjustments and keep the business adaptable as conditions change.
Lesonsky: How are small businesses recalibrating wage expectations and retention strategies in this environment, where hiring may be easing, but cost pressures remain high?
Ward: What we’re seeing is a shift toward smarter productivity. Our survey found that 60% of small business owners believe adopting AI will allow them to increase their workforce over time.
Rather than replacing people, AI is helping teams focus on higher‑value work. That supports growth by amplifying productivity and allowing businesses to scale more sustainably without stretching resources too thin.
Lesonsky: Where do you see the biggest risks for small businesses in the months ahead—and where are the opportunities for those that plan effectively?
Ward: Labor and input costs remain key challenges, but fraud and cybersecurity are also becoming major operational risks. According to our survey, 54% of small business owners experienced fraud or attempted fraud in the past year, and 12% say it resulted in financial loss. For businesses operating with tight margins, even a single incident can have a meaningful impact on cash flow and stability.
The opportunity lies in preparation. Owners who proactively invest in safeguards, modern tools, and training to strengthen fraud prevention and cybersecurity are better positioned to protect their business and maintain customer trust, even in uncertain conditions.
Lesonsky: As the labor market continues to shift, what’s one thing you think small business owners may be underestimating right now?
Ward: We have consistently seen in the last few NFIB Small Business Optimism Indexes that small business owners are struggling to hire quality people right now. What they may be underestimating is the impact of focusing on the employees they already have.
In a tight labor market, retention and development become increasingly important. Cross-training, upskilling, and thoughtfully using tools like AI to improve productivity can help employees be more effective and see a longer-term future with the business. That focus can lead to stronger teams, better performance, and lower turnover.
Lesonsky: What should small business owners be doing today to ensure they’re positioned to grow—no matter how the labor market evolves over the rest of the year?
Ward: Regardless of how the labor market evolves, growth starts with fundamentals. That means building a strong financial and operational foundation and making sure access to capital is in place before it’s needed.
Our survey shows small business owners are already thinking this way: 96% say financing would be necessary or potentially necessary to level up their business, and 93% expect to consider applying for a loan or line of credit in the next 12 to 18 months. When owners talk about leveling up, they’re focused on growth and market expansion (54%), stronger operations, systems, and processes (47%), and improved financial performance (45%).
Used intentionally, financing can support those priorities by strengthening working capital and funding investments in technology, cybersecurity, and operational upgrades. Planning ahead gives owners more flexibility to adjust as conditions change, rather than reacting after the fact. Businesses that align capital decisions with long‑term goals are better positioned to grow with confidence, even as the landscape continues to shift.
My Takeaway: What stands out here is that small businesses aren’t pulling back—they’re getting more intentional. In an environment where hiring remains challenging and costs are high, discipline, flexibility, and forward planning are becoming essential.
The businesses that succeed won’t necessarily be the fastest-growing, but the ones that are best prepared.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
