Everywhere you look, small-business owners are still pushing forward. Growth is back on the table. Confidence is high. And even after a few unpredictable years, the self-made spirit hasn’t gone anywhere.
But optimism can hide a different kind of strain. Our 2025 Cash Flow Compass found that 94% of small businesses expect growth this year, while more than half have less than 31 days of cash on hand. The paradox is hard to miss: revenue is rising, but liquidity is shrinking.
Here are the five trends shaping small-business cash flow in 2025 and what resilient owners are doing to stay steady while they scale.
Trend 1: Growth is outpacing cash flow
Growth looks like progress, until the cash flow doesn't match up. New hires, bigger orders, and expansion costs can all hit your balance sheet before the revenue does, leaving even the most successful businesses running on fumes.
Our report shows that 54% of small businesses have less than a month of operating runway. On top of that, 88% were hit with unexpected cash flow issues in the past year—the kind that derail plans, delay payroll, or force emergency borrowing.
Yet, only 31% of businesses actively optimize their cash flow. The rest are reacting. They’re moving money around week to week, checking the bank balance to make decisions, and treating cash management as something they can wait to handle when there's extra time.
For owners, the shift is simple but powerful: build a rhythm that supports momentum. The businesses scaling confidently are the ones mapping cash 30, 60, and 90 days ahead, separating funds by their intended use, and leaning on structure to turn fast growth into healthy growth.
Read next: Why Scaling Up Leaves Many Businesses Running On Empty
Trend 2: Margins look healthy, but money feels tight
Plenty of small businesses are profitable, but profit without control is fragile. The Cash Flow Compass found that 82% of companies report healthy margins, yet 94% face barriers that eat into those margins. Rising costs impact 42% of businesses, staffing challenges affect 28%, and cash flow timing issues squeeze another 22%. Over half say that late payments keep cash tied up when they need it most.
The profit exists but it's often trapped in limbo, already spoken for by taxes, payroll, or surprise expenses. Bryce Conlan, co-founder of Dance Motion Marketing, described the problem in the Compass report: "We missed bills all the time. The unexpected thing shows up... and that bill comes due and you're like, 'We don't have that. We didn't plan for that.'"
Resilient owners treat profit like a system, not a surprise. They make profit accessible by separating it from operating cash, paying themselves first, and regularly reviewing expenses to spot erosion early. When profit becomes a planned outcome instead of a leftover, it fuels reinvestment and real financial control.
Read next: Why Healthy Margins Can Still Leave Owners Scrambling For Cash
Trend 3: Confidence is high, but control is limited
Small business owners are wired to bet on themselves. That optimism fuels the entrepreneurial journey, but it can also blur reality. The disconnect shows up in the numbers: 95% of owners feel confident in their ability to manage cash flow, but fewer than a third are actively doing so proactively.
The confidence gap comes with real costs. According to our Compass data, 76% of business owners say cash flow challenges hurt their business in the past year, and nearly one in three missed multiple opportunities because of it. Those missed chances show up in the form of postponed hires, stalled investments, and sleepless nights spent crunching numbers.
This is not a capability problem; rather, it’s a frameworks gap. When decisions are made by gut feel, even great instincts have their limits. The businesses finding calm amid the chaos are the ones turning clarity into habit. They’re reviewing numbers weekly, forecasting ahead, and automating routine money movement so that cash stays under their control, not the other way around.
Read next: Why So Many Small Businesses Overestimate Cash Flow Control
Trend 4: Revenue is rising, but costs are climbing faster
For many business owners, 2025 has been the year of the quiet squeeze. Eighty-six percent of companies saw expenses rise, by about 11% on average, and nearly nine in 10 faced at least one unexpected cash-flow hit. Labor, rent, and insurance costs keep inching upward, eroding margins even in good months.
But the real cost isn't just financial—it's psychological. When costs spike unpredictably, the instinct is to freeze. As Mike Michalowicz, author of Profit First, put it in the Compass report: “When things are clear, you can act. You can plan. You can move. But when everything’s shifting, you freeze. You pull back. You stop leading and start reacting.”
That paralysis is what kills momentum. For some, rising costs are a drag; for others, they’re the push to get leaner, to audit spending, renegotiate terms, and increase prices early. The most resilient businesses aren’t immune to inflation and the like—they’re just faster to respond.
Read next: How Rising Expenses Are Quietly Squeezing Margins
Trend 5: AI is reshaping small business cash management
AI is becoming a back-office teammate in many companies. In our report, 64% of business owners said they’d trust AI to manage cash flow, and nearly a third already are. They’re using it to track income and expenses, automate billing, and forecast shortfalls before they happen.
For many, AI isn't about chasing innovation, it's about survival and reinvention. As Mike Michalowicz puts it in the Compass: “The best businesses aren't built during the boom. They're built in the rubble. Entrepreneurs don't just survive hard times. They invent what's next."
That sentiment shows up in the data: owners adopting AI are doing it less for novelty and more for foresight. While some see automation as a risk, others see it as an equalizer, helping them compete with bigger teams without losing control. When paired with human judgment and clear guardrails, AI becomes another structure for stability, not a threat to it.
Read next: The real ways small businesses are using AI today (and what’s next)
Stability isn’t luck, it’s a cash-flow system
Across all five trends, one signal stands out: small businesses aren’t failing due to a lack of sales—they’re getting into trouble due to a lack of structure. Growth, profit, confidence, and even innovation mean little without systems that keep cash moving in the right direction. That’s where the real shift needs to happen next.
At Relay, we stand with the self-made—owners determined to build stability, not just chase success. Because when you’re good with money, you’re free to focus on what really matters: growing your business, your team, and the life you set out to create.
Download the full 2025 Cash Flow Compass to see how small businesses across the country are building resilience, one system at a time.
Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
