Forty-one percent of American small and midsized businesses believe a recession is either already underway or very likely. Seventy-one percent of firms with fewer than 20 employees still expect higher revenue this year than last. Both figures come from the same survey.

The research is the latest Bredin State of SMB report, released on July 21 and based on a national survey of 500 US small and midsized business principals combined with the firm's own trend data.

The contradiction is not confusion. It is a description of how experienced owners actually behave.

Start with the pressure. Forty-three percent of respondents say inflation is having a significant or severe impact on their business, and inflation remains the single largest reported challenge. Among those expecting a recession, 51% are cutting discretionary spending, 48% are reducing debt and 45% are building cash reserves.

Those three actions describe a defensive posture that costs almost nothing to adopt and buys real optionality. Cash reserves and lower debt do not improve a profit and loss statement this quarter. They determine whether you are still trading in eighteen months if demand softens further.

Now the growth expectations. Seventy-one percent of very small firms, 88% of those with 20 to 100 employees and 95% of those with 100 to 1,000 employees expect higher revenue in 2026 than in 2025. The larger the business, the more confident the forecast, which is what you would expect from firms with more diversified customer bases and more room to cut costs.

Sixty percent say acquiring new customers is a top priority for the next twelve months. Bredin's trend data adds a caution here: owners are less optimistic about their ability to win those customers than they were a year ago. Acquisition is the plan, and confidence in the plan is falling.

Three operational findings are worth acting on.

First, 39% have raised prices to manage rising costs, and the very smallest firms are the most likely to have done so. Midsized firms are more likely to have invested in technology to improve operational efficiency instead. That split matters. A price rise is fast and can be absorbed by customers only so many times. An efficiency investment is slow and compounds. Small firms default to the fast option because capital is scarce, which is understandable, and which is also why the gap between small and midsized margins widens over time.

Second, 22% report that customers are taking longer to pay. That is a working capital problem disguised as a sales success. Every extra week of receivables is money you have lent to a customer at no interest and without asking. Tightening payment terms, invoicing on delivery rather than monthly, and asking for deposits on larger jobs are unglamorous decisions that do more for cash position than most marketing.

Third, the top fraud concern across firms of every size is now scams built with artificial intelligence: fake invoices, deepfake calls, impersonation of executives and suppliers. The defense is procedural rather than technical. A rule that no payment instruction or bank detail change is ever actioned on the strength of a call or an email, without a callback to a number you already hold, stops nearly all of it.

The Bredin data appears in a press release distributed on July 21 by Business Wire. Stu Richards, the firm's chief executive, notes that owners are not waiting for conditions to improve before making decisions.

That is the transferable point. Pessimism about the economy and ambition for your own business are not in conflict, provided the pessimism is spent on the balance sheet and the ambition is spent on customers. Owners who invert those two, borrowing to grow while hoping conditions improve, are the ones who get caught.