This year will be a make-or-break moment for small businesses across America. It's dizzying how quickly trade policy and AI progress are moving the ground underneath us.

On one side, the see-saw threat of tariffs and declining consumer confidence threaten to double costs and force hundreds of thousands of small businesses to shut down. On the other, AI is opening access to sales and revenue growth levels previously only attainable to large corporations with deep pockets.

The question for anyone running a business in 2025 is simple: Will you succumb to the headwinds of chaos blowing in, or will you find the AI-enabled current underneath and ride it to potentially historic growth?

The Perfect Storm

Small businesses have never had it easy. Politicians from both US political parties love to call them "the backbone of the economy" and wax poetic about the American Dream. But historically, small businesses have been shortchanged by government, lenders, and technology providers: small businesses spend 2.5 billion hours complying with IRS rules every year, and 41% of small businesses say that a lack of access to capital hurts their growth.

During the COVID pandemic, it looked like things might change. New business formation increased by 200% in 2020 and stayed high for years. Lots of people who lost trust in big employers or were laid off decided to bet on themselves instead.

Fast forward to 2025. No matter your politics, it's clear the current administration's tariffs are imposing enormous new costs on American businesses, hitting smaller ones with the tightest margins hardest.

Just yesterday, I heard about a small American toy seller whose tariff bill just 10Xd from $26K/year to $346K/year. That's who's suffering.

While you might assume small businesses or local shops on Main Street would be less exposed to global commerce than big companies like Apple, it's actually the opposite. Today, the average small business generates more than half their sales online, and many rely heavily on the global supply chain for both goods and services.

While it's obvious that ecommerce and direct-to-consumer businesses would be affected by tariffs, their impact extends much further. On the supply side, small businesses depend on global networks for cost-efficient inventory. On the demand side, they rely on globally integrated internet platforms like Amazon, eBay, Shopify, and Stripe to find and serve customers.

This means small business supply chains and distribution funnels are disproportionately exposed to global economic shifts, even when the business appears locally rooted.

Small Business Survival Isn't Political

If you've read this far, you might think this is a screed against the Trump administration's policies. The reality is that at Blaze, we serve everyone, no matter your politics.

We have customers in red states and blue states, on the coasts and in the middle of America, in high-income countries and developing regions around the world.

The only thing we're against is elitism and anything that makes it harder for people to build great things.

This isn't about who you voted for in November. The fact is, the events of the last week are hitting the best of America - people who have taken on the risk and commitment of starting something.

The trillion-dollar companies at the top of the NASDAQ will weather this storm. Many smaller businesses won't.

What's the path through?

If tariffs and uncertainty represent the shadow looming over small businesses, AI is like a sunrise of opportunity breaking through the clouds. AI allows small business owners to:

1. Do significantly more than they could do before

2. Deliver at a higher quality level than they have basic resources for

3. Accomplish it all at a dramatically lower cost

While AI is often framed as a cost-saving measure for large corporations—a way to reduce overhead and cut jobs—for small businesses, it's the inverse: a positive opportunity for small operations to punch far above their weight class.

This is especially relevant as traditional growth channels face external threats and disruptions. If platforms like Amazon, eBay, or the App Store become less effective channels due to tariff impacts, AI can help small business owners grow in new ways through:

1. Better organic and paid social media marketing

2. Improved SEO performance

3. More effective outbound sales communication

4. Advanced customer service capabilities

5. Personalized customer engagement

AI tools can combine data from your CRM with multi-channel communication strategies to help you engage customers, retain them, upsell them, and deliver more personalized offers—sophisticated approaches that were previously out of reach.

With a future full of higher costs and bigger challenges, the only strategy for small businesses is to ramp up more efficient growth: doing more with less. AI is the path through.

History Tells Us This is an Opportunity

This tension between challenge and opportunity isn't new. Often, periods of chaos breed the most creative innovations. Look at the 1920s and 1930s—times of tremendous political upheaval that also saw incredible development in technology, art, and culture.

Some people view tariffs or AI in absolutist terms—universally bad or universally beneficial. But the reality is more nuanced. New challenges and technologies aren't panaceas, nor are they harbingers of doom. They simply change the playing field.

If we look at past technological waves as prologue, we see they typically increase access to opportunity while also growing the gap between winners and losers. Dystopian forecasts of "equality of outcomes" have never come true.

Consider the industrialization of food in the 1940s and 1950s. Before then, seasonal foods like tomatoes weren't available year-round, and food-borne illnesses killed millions. New technologies around food processing lifted the floor for quality—making safer, more affordable food widely available.

But they also raised the ceiling. Today, we have an explosion of recipe books and apps, farm-to-table cuisine, and Michelin-starred restaurants. The range of outcomes widened: food deserts still exist, but a tremendous amount of creativity, value, and meaning was unleashed.

The same pattern will emerge with AI. The floor will rise, but the ceiling will climb even higher. The disparity between those who are merely along for the ride and those who leverage it to amplify their unique strengths will grow.

The Choice Before You

Every small business owner faces a choice this year: Will you leave AI on the table and risk failure? Or will you use it to complement and amplify what makes you and your business truly unique?

AI automates busy work so you can focus on the things only you can do—the creative and strategic work that only a human brain can accomplish. While AI models look at past data to predict the present, they don't use present data to predict the future. That remains something only you can dream up.

If Steve Jobs once described personal computers as "a bicycle for the mind," AI is a rocket ship for your mind—a tool that can accelerate and enlarge human creativity. But how you use that rocket ship is entirely up to you.

If you're reading this newsletter, you're already ahead of 98% of small business owners. But don't just read about AI—start using it. The power of compounding means that if you begin experimenting with these tools now and rediscover what only you can do and what you can delegate to AI, imagine where you'll be in six months, a year, or four years.

This opportunity is as fleeting as the challenges are intense. 2025 is critical because the volatility will force you to choose what the next five or ten years of your life will look like—and what kind of future you'll create for your children and grandchildren.

How to Move Forward

If you're feeling overwhelmed by the prospect of identifying your unique strengths while leveraging AI for everything else, remember: a small business shouldn't mean a lonely business.

While Blaze is building the world's first virtual marketer, we know that technology is only part of the solution. The first step is connecting with other humans—talking to people facing similar challenges, processing emotions together, and sharing tips and playbooks.

That's why we're dedicating resources to events, community building, and content that helps small businesses navigate both the challenges and opportunities of this moment. While the long-term answer is using tools like Blaze to increase your capacity, the short-term solution is banding together with other small businesses to help each other through.

Because that's what America is about. Despite our different backgrounds and perspectives, we're all in this together. That approach has always worked for me, and I believe it's what we need now more than ever.

The AI revolution is as significant as the emergence of consumer computing or the internet itself. Those who embrace it now won't just survive this make-or-break moment—they'll emerge from it stronger, more creative, and more capable than ever before.

Just because you're a small business doesn't mean you're a bad business. In fact, if you're staying alive through the chaos, it means you're exceptional. You're just not big—yet.