8 small business trends to watch in 2026

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8 small business trends to watch for in 2026

Small and medium-sized businesses (SMBs) in the U.S. are experiencing accelerated change in 2026, driven by technology, shifting consumer expectations, and demand for sustainable practices.

From increased adoption of AI tools and the continued expansion of e-commerce to heightened cybersecurity risks and rising standards for personalized customer experiences, small businesses are tasked with quickly shifting their strategies to stand out from competitors.

If you’re looking to launch or scale an SMB in 2026, understanding key trends — and how to align your strategy with these shifts — can help you make more confident decisions, prioritize investments, and structure a business built for long-term resilience. Upwork, an online marketplace for hiring skilled freelancers, explores the top trends influencing the SMB landscape in 2026, along with tips for small businesses like yours to succeed.

8 small business trends reshaping SMBs

Small businesses often have lean teams and tight resources. While adaptability to market trends is vital, the most successful SMBs start by prioritizing strategies and tactics likely to have the greatest impact. These trends highlight how entrepreneurs and leaders can act now to stay competitive and fuel growth.

1. AI adoption and automation

AI has moved beyond the initial testing phase to an essential everyday resource for most businesses. From automating repetitive tasks to helping business owners make smarter decisions, AI helps entrepreneurs save time, cut costs, and compete at scale.

Key signals of AI’s impact on small businesses include:

Increased AI adoption. Research from the U.S. Chamber of Commerce found that as of 2025, nearly 60% of U.S. small businesses used AI tools in their operations — more than double the rate in 2023. Chatbots handle customer questions while predictive analytics forecast demand.
Automated workflows. Routine tasks like invoicing, scheduling, and data entry are increasingly automated, freeing up teams to focus on growth and strategy rather than admin work. According to a 2025 survey of small business leaders distributed by Goldman Sachs, 80% of respondents using AI reported increased efficiency and productivity.
AI-powered marketing and content creation. Verizon Business research shows that as of 2025, more than 28% of SMBs already used AI for marketing and social media, and another 24% used AI for written communication. Tools like ChatGPT and Jasper help generate branded messaging and content marketing assets at scale while reducing creative costs.

2. E-commerce and omnichannel growth

Small businesses are identifying new ways to boost visibility, sales, loyalty, and business growth through their e-commerce channels.

Here’s how SMBs are evolving their e-commerce and omnichannel strategies:

Increased shift from brick-and-mortar stores to e-commerce. Online sales accounted for 16.4% of total U.S. retail sales as of Q3 2025, with many small businesses adopting or expanding digital storefronts and multichannel selling.
Focus on omnichannel experiences. From buy online, pick up in store (BOPIS) to livestream shopping and social commerce on platforms like TikTok and Instagram, SMBs blend physical and digital touchpoints to meet their target audience wherever they shop.
Improved personalization strategies. AI-powered recommendations, dynamic pricing, and tailored product suggestions help small businesses deliver more relevant shopping experiences that drive loyalty and repeat purchases. A survey distributed by Attentive featuring insights from 3,300 consumers found that 77% would be more likely to purchase from a brand when they get relevant product recommendations.
Increased shift to subscription models and voice commerce. Subscription models offer predictable revenue and stronger retention, while voice and mobile shopping make purchasing faster and more seamless for consumers on the go. Offering mobile shopping options is particularly important; in fact, research from Adobe found that 58% of e-commerce sales on Cyber Monday 2025 came through a mobile device. Businesses that combine these e-commerce tactics with strong customer service can stand out from competitors in a crowded market.

3. Hyperpersonalization and customer experience

Delivering a one-size-fits-all experience no longer works. In 2026, small businesses are winning customer loyalty by tailoring every interaction, from marketing messages to product recommendations.

Factors shaping hyperpersonalization and customer experience include:

AI-powered recommendations. SMBs using AI to deliver personalized product suggestions and dynamic content are seeing higher engagement and repeat purchases from customers who feel understood and supported.
Real-time chatbots. Automated chatbots can handle simple support queries instantly, providing helpful recommendations and freeing up human teams to focus on complex or high-value interactions.
Advanced segmentation. Businesses can use detailed customer data, including behavior, preferences, and purchase history, to create more precise marketing campaigns that convert better and strengthen long-term relationships.

4. Cybersecurity and data protection

Cybersecurity has become a critical priority for small businesses as digital operations expand and online threats grow more sophisticated. With many SMBs and startups handling sensitive customer and financial data, even a single breach can cause lasting damage. To stay secure in 2026, small businesses are focusing on practical, proactive measures that reduce risk and strengthen defenses.

The cybersecurity landscape for small businesses is defined by:

Increased cyberattacks. A survey from Hiscox featuring insights from nearly 6,000 small businesses found that 59% reported experiencing a cyberattack in the previous 12 months. Costs can include revenue loss, reputational damage, fines, and legal fees.
More outsourcing of cybersecurity skills. Many small businesses are turning to specialized professionals for security audits and real-time monitoring, ensuring protection even without in-house expertise.
Adoption of AI-powered cybersecurity tools. According to Forbes, AI-driven cybersecurity solutions help detect and prevent threats faster, keeping businesses ahead of potential breaches.

5. Social media marketing transformation

Social media continues to be a key driver of sales, engagement, and customer loyalty for small businesses.

Shifts shaping social media marketing transformation include:

Short-form video. Social media platforms like TikTok, Instagram Reels, and YouTube Shorts dominate attention spans, helping SMBs showcase products and personality in short video clips.
Microinfluencers. Smaller creators with loyal followings are proving more effective and affordable than celebrity endorsements, helping brands build trust and community-driven visibility.
AI optimization. SMBs use generative AI tools to brainstorm content and digital marketing ideas, automate post scheduling, and optimize captions for SEO and large language model (LLM) search, improving consistency and reach with less manual effort.

6. Sustainability and green business practices

As eco-conscious consumers reshape markets, SMBs are responding with sustainable initiatives to retain and attract new clients. According to a DHL survey of more than 5,000 SMB decision-makers, 75% of respondents said sustainability is very or extremely important to their business.

Small businesses are integrating sustainability into their business strategies by:

Eco-friendly product adoption. A November 2025 survey distributed by Northwind Climate and Ceres featuring insights from 2,500 U.S. adults found that nearly two-thirds of respondents are willing to pay more for sustainability. Because of this, SMBs that prioritize eco-friendly practices can better align with customer values.
Circular and sustainable business models. From reusable packaging to recycled materials and waste-reduction initiatives, small businesses are adopting circular systems that minimize environmental impact while cutting costs.
Eco-friendly supply chains. Companies in wellness, food, and fashion are leading the charge with transparent sourcing and lower-carbon operations that strengthen both brand reputation and customer trust.
Sustainability as a market differentiator. Beyond environmental benefits, green practices now set businesses apart, attracting loyal customers and creating long-term competitive advantage.

7. Remote work and hybrid models

Remote and hybrid work is still among the major small business trends in 2026. While some businesses have tightened return-to-office policies, small businesses that continue to support flexible work models are better equipped to maintain agility and attract talent with in-demand skills.

Here’s how remote and hybrid work can benefit small businesses:

Remote work productivity. Research published in Forbes shows that 61% of employees report being more productive working from home, which can lead to higher profitability, lower turnover, and reduced operational costs.
Balancing hybrid work. Blending in-person and digital collaboration helps teams stay connected while maintaining flexibility, improving both performance and job satisfaction.
Driving customer engagement. SMBs are extending hybrid principles to their customers, using a mix of virtual and in-person touchpoints — from workshops and webinars to physical meetings — to strengthen relationships and brand visibility.
Addressing skills gaps by engaging freelancers. Data from The Upwork Research Institute found that as of Q3 2025, 59% of SMBs surveyed planned to expand their use of freelancers. Remote work models enable small businesses to expand their talent pools and access professionals from across the country and around the globe — including freelancers. Additionally, engaging freelancers helps small businesses with lean teams close skills gaps without the overhead of full-time, in-house employees.

8. Subscription-based services and recurring revenue models

Subscription-based models help small businesses expand the ways in which they generate revenue and retain customers in 2026.

Areas of focus include:

Adoption of subscription models. Subscriptions for products and services, from coffee deliveries to wellness products, help businesses maintain steady cash flow and reduce vulnerability to market fluctuations.
Increased automation. Tools for recurring billing, payment processing, and subscription management help streamline workflows, freeing teams to focus on growth rather than administrative tasks.
Smarter financial planning. With clearer forecasting and reduced seasonality, small businesses can allocate resources more effectively and streamline their financial operations.

How small businesses can succeed in 2026 and beyond

Small business success in 2026 depends on addressing key challenges and proactively embracing change. By adopting the right technologies and engaging customers across digital and physical channels, entrepreneurs can strengthen their competitive position. Consistent, secure, and transparent experiences build trust, creating businesses that are more resilient, competitive, and positioned for long-term growth.

The most competitive SMBs are taking steps such as:

Automating repetitive workflows. Streamlining tasks like invoicing, data entry, and customer support with AI and automation tools frees teams to focus on growth initiatives, strategic decision-making, and customer engagement, increasing efficiency and reducing operational strain.
Launching subscription and recurring revenue models. Introducing predictable income streams through subscriptions or membership services stabilizes cash flow, reduces revenue volatility, and allows businesses to plan and scale with confidence.
Embedding sustainability into operations. Adopting eco-friendly practices, circular business models, and transparent supply chains reduces environmental impact, strengthens brand reputation, attracts loyal customers, and differentiates businesses in competitive markets.
Leveraging specialized freelance expertise. Engaging freelancers enables rapid adoption of new technologies and business strategies without long-term overhead.

Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this article. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyze and determine the tools or services that would best fit their specific needs and situation.

This story was produced by Upwork and reviewed and distributed by Stacker.