Monthly Convergence - July Recap

Welcome to Monthly Convergence! Your at-a-glance breakdown of the forces shaping small business, internal strategy, and operational readiness. July brought some quiet power moves beneath the chaos. Let’s unpack it.

July in Focus: Small Business Shifts, Training Trends & What Comes Next

Published August 1, 2025
By Tara Foulkrod | Vorticity Advisory

Small Biz Watch: Weathering Uncertainty with Strategy

While the heat index soared, so did anxiety around consumer confidence, interest rates, and labor costs. But among the chaos, savvy business owners made quiet but meaningful pivots:

• Tax Certainty: Small Business Deduction Becomes Permanent

  The NFIB celebrated a win with the 20% Small Business Deduction (Section 199A) now permanently codified in the tax code as of July 4 2025, which is a big relief for 33 million small business owners.

  A temporary tax code, Section 199A was set to expire December 31, 2025.

  • Changes include extension of the QBI deduction, permanently.

  • The wage and property limitations threshold has increased.

  • There is a new minimum deduction for active businesses.

  • This was part of Trump’s much talked about and contentious ‘Big Beautiful Bill’.

Image Capture from Barnes Denning CPAs and Advisors detailing changes to the Small Business Deduction.

• Trade Uncertainty & Tariff Impact

  A Goldman Sachs survey shows 36% of U.S. small businesses already feel impacted by tariffs; 38% expect future pain. Uncertainty about changing trade policy is fueling hesitation on planning.

  • In the same survey, 75% of small business respondents also reported feeling optimistic about their future, with 72% planning on growing throughout the rest of the year.

  • Meanwhile, an SBE Council survey details 39% of small business owners expect better economic conditions in the coming six months, while 33% expect worse, and a quarter expect no changes.

• Employment and Compensation Trends

  While hiring has stayed relatively flat, many SMBs are feeling the strain of being unable to fill job openings due to a lack of qualified applicants.

It’s not that SMBs aren’t optimistic, it’s that they’re cautious with all the socioeconomic changes happening at present. Right now the power move is strategic slowness.

Training & Process Pulse: Quietly Revolutionizing the Back Office

You’re seeing it everywhere. The main hot topic in training is AI, as with most other facets of business. However, AI is not the only thing happening in the training and process areas of a business, there are other shifts as well:

• Growing demand for upskilling amid labor shortages

  • SHRM highlights labor quality as an ongoing challenge in small businesses; employers are investing in L&D to build needed skills internally amid talent constraints.

• Rise of the “Mini SOP” and Importance of Training:
  Businesses started ditching the bulky binders in favor of agile, single-topic guides. One-page walkthroughs, annotated screenshots, and short explainer videos became more common, especially in ClickUp, Notion, or Google Docs.

  • Businesses are seeing fewer errors and better execution when training SOPs through guided, interactive training methods.

• AI in Training (But Not Where You’d Think):
  With all the news of AI all over LinkedIn and every major media outlet, it’s no wonder that many businesses are jumping onto the bandwagon so as not to fall behind. The problem with that is that employees aren’t really being trained to use it.

  • The most interesting part is although many companies are now using tools like Copilot, Gemini, or ChatGPT, many users actually prefer experiential and social learning rather than organized formal training.

  • This leads to the conclusion that the most effective employees will be those with the drive and initiative to learn new tools on their own by actually using them, rather than a mass push of AI into a business by those on high.

Wider Lens: The Real-World Ripple of Policy and Panic

The macro view hit differently this month. Here’s what could shape small business strategy through Q3 and beyond:

• GDP rebound but structural caution

  The U.S. economy jumped back into growth with a 3% annualized GDP gain in Q2, an autonomous rebound driven by weaker imports and a snapback from Q1 contraction. Yet core domestic demand softened, and business spending is slowing, suggesting momentum may be fragile.

“Don’t be fooled. Underlying growth was weak in the second quarter and took a material step down in the first half of this year compared to 2024. We think a GDP print close to that pace is likely in the third quarter, given the mounting headwinds for the economy, and we see growth remaining weak in the fourth quarter too.” - Oliver Allen, US Economist, Pantheon Microeconomics

• Public trust in small business remains high

  Gallup and Pew report that Americans ranked small businesses as the most trusted institution (68% confidence), far ahead of big corporations and organized labor, reinforcing the Main Street narrative.

Small business topped the confidence meter, followed by the military, the police, higher education, and the medical system.

• The lowest confidence was put in Congress, TV News, and Big Business.

What to Watch in August

August is a transitional month as summer spending winds down, fiscal year planning ramps up, and the push toward Q4 clarity begins. Some things to keep an eye on:

• August is Back‑to‑School Month and Black Business Month, with mini‑observances like Startup Day across America on August 1 and Women’s Equality Day on August 26. These offer content, marketing, and community engagement themes relevant to small businesses.

• At the July 30 FOMC meeting, the Federal Reserve opted not to cut interest rates (its fifth hold in 2025). Some officials disagreed, while political pressure for rate cuts is mounting. A key Fed statement is expected to shape small‑business borrowing decisions and future planning.

• The Trump administration confirmed that new reciprocal tariffs including a 25% tariff on Indian imports will take effect August 1, 2025, without extension. Rising trade costs could affect small-business pricing, sourcing, and planning.

My Takeaways: Intentional Beats Reactive

Small doesn’t mean static, but mid-Q3 doesn’t look to be the moment for bold moves. With so many shifting variables in play, this may be a time for small and mid-sized businesses to observe, assess, and proceed with intention. If your decision-making framework isn’t solidly in place, it might be wiser to pause and see how some of these changes unfold before committing to a major pivot.

That’s not to say everything should be put on hold. Progress is always valuable, but it does mean you should caution yourself against any major shifts in your business. While wins like the permanent extension of Section 199A bring welcomed stability, factors like escalating tariffs and the relentless pace of AI adoption can quickly overwhelm smaller teams.

Instead, take this month as a chance to shore up your foundation. Be proactive! Do things like tighten up internal workflows., revisit your onboarding and SOPs, or conduct a light audit of your training needs and technology use. Use August to build readiness. Not for panic-driven change, but for smart and responsive actions.

And, there is good news! Confidence is ticking upward across many sectors, and consumer activity remains steady heading into back-to-school season. National observances like Black Business Month and Women’s Equality Day offer awesome opportunities for outreach, storytelling, and community building. Also, apprenticeship and workforce development efforts are expanding. So, even if you’re not scaling right now, you can still be positioning yourself for smarter growth later during less tumultuous times.

Caution doesn’t have to mean stagnation. Sometimes the most strategic move is to prepare while others overextend.

Want help untangling your processes or revamping your training materials? Let’s chat.
📩 Contact Vorticity Advisory