December 17, 2025

Forty years in tech teaches you a few things. Business changes, the tools evolve, and the challenges never stand still. But 2026 feels different. The speed of change is faster. The pressure is heavier. And the stakes for small to mid-sized businesses (SMBs) have never been higher.

Every week, I hear from SMB owners who are tired, stretched thin, and overwhelmed by everything they’re expected to manage: rising costs, talent shortages, complex compliance rules, cybersecurity threats, and the fast adoption of AI in everyday operations.

I recently finished reading a new article by Steve Van Remortel, click here to learn more about Steve Van Remortel, on how SMB leaders feel heading into 2026. One thing stood out immediately. Three major challenges are still keeping businesses from hitting their revenue goals:

  • Lack of accountability and productivity
  • Being stuck in the day-to-day
  • People-related challenges

Layer in economic uncertainty, new regulatory pressure, and rapidly changing technology, and running a business is more complicated than ever.

This article breaks down what SMB leaders must understand in 2026 and how to navigate it with confidence.

 

1. Accountability and Productivity: The Top Barrier to SMB Growth in 2026

If you’re an SMB owner, you’ve likely felt the silent drag that happens when accountability slips and productivity drops. Most people don’t avoid accountability because they’re lazy. They fear the discomfort.

But here’s the truth I’ve learned after decades of leading teams:

Accountability doesn’t begin with conflict or even clarity. It begins with trust. When trust is present, clarity becomes easier, conversations become healthier, and accountability becomes a natural part of how the team operates.

And clarity drives productivity.

According to Gallup, $1.9 trillion in productivity was lost in 2024 due to unhappy or disengaged employees. That impact is even bigger in SMBs, where every person contributes directly to outcomes.

The problem? Many SMBs don’t have a defined accountability system. They rely on “good intentions” instead of measurable expectations.

In 2026, the highest-performing SMBs will be the ones that:

  • Build clear systems for accountability
  • Train leaders to coach instead of micromanage
  • Create teams that execute consistently
  • Use data to measure performance, not emotion

If productivity is low, it’s rarely a workload issue. It’s a clarity issue. And getting this right is one of the most powerful growth levers for 2026.

 

2. Stuck in the Day-to-Day: The Leadership Trap Limiting Strategic Growth

Ask any SMB leader how they spend their time, and you’ll hear a familiar story:

Too much time working in the business and not enough time working on it.

According to Remortel, leaders admitted they are trapped in daily operations instead of driving long-term growth. And the time allocation is often completely flipped from what it should be.

His recommended breakdown for healthy, scalable SMBs looks like the following:

CEO: 70 percent on the business, 30 percent in the business
They spend most of their time planning the future, setting direction, and making big decisions. Only a small part of their time is on daily tasks.

VP: 50 percent on, 50 percent in
They split their time evenly between big-picture strategy and day-to-day operations.

Managers: 30 percent on, 70 percent in
Most of their time is spent helping the team with daily work, with some time dedicated to improving processes and planning.

Entry-level team: 10 percent on, 90 percent in
The main focus is hands-on tasks and getting the daily work done, with just a little time spent learning how the bigger picture fits together.

In my experience building One Step, getting pulled into day-to-day tasks can be one of the biggest challenges for any business owner. When you’re stuck managing the operational details, you lose the time and space needed for planning, vision, and real growth.

In 2026, this is one of the biggest competitive differentiators. Leaders who free themselves from day-to-day tasks create more room for:

  • Strategic planning
  • Team development
  • Innovation
  • Business growth opportunities

At One Step, we follow the Entrepreneurial Operating System (EOS) because it gives us a clear framework for predictable growth. It starts with vision. When everyone understands where we’re going and how their role supports that direction, execution becomes sharper and more focused.

EOS also reinforces the importance of having the right people in the right seats, building simple, repeatable processes, and using data rather than guesswork to guide decisions. Just as important, it pushes us to call out issues early and stay aligned through a steady meeting rhythm. By strengthening these fundamentals, we create an environment where growth isn’t random or reactionary. It becomes intentional.

 

3. People-Related Challenges: The Real Reason SMBs Struggle to Scale

After 40 years of leadership, I can tell you this confidently: Almost every business problem is a people problem. And in 2026, people's challenges are becoming even more complex.

In his article, Remortel outlined several important factors business owners need to consider in the year ahead, calling them “the biggest issues SMBs are facing today.”

  • 80% of turnover is caused by a bad hire
  • Lack of trust; when missing, honest and transparent conversations become rare.
  • Low role clarity
  • Inconsistent performance reviews
  • No plan for future leaders
  • No defined talent strategy

SMBs often underestimate how much impact a single wrong hire can have. One misaligned team member can stall execution. Two can derail the entire business.

The SMBs that win their industries in 2026 will be the ones that:

  • Invest in leadership development
  • Improve communication and feedback systems
  • Build talent pipelines
  • Create environments people want to stay in
  • Become known as a great place to work

Culture is no longer a “soft” topic. In 2026, it’s a strategic advantage.

 

4. Economic Pressure, Rising Costs, and Workforce Expectations in 2026

According to isolved’s latest Business Owners’ Imperative report:

41% cite increased costs as the top challenge

40% cite economic instability

34% cite increased labor costs

82% are concerned about employee well-being

76% say their employees live paycheck to paycheck

With margins shrinking, SMBs need solutions that reduce costs, improve retention, and enhance productivity.

From my experience leading a tech team with strong retention, many of these concerns can be reduced by giving employees benefits such as:

Flexible Pay
Employees can access part of their paycheck early if they need it.

On-demand Pay
Get paid for hours already worked without waiting for payday.

Faster Onboarding
New hires get up to speed more quickly.

Clear Job Roles
Everyone knows exactly what their responsibilities are.

Wellness Programs
Support for employees’ mental and physical health.

Automation
Technology that handles repetitive tasks so people can focus on more important work.

A stronger, more engaged workforce leads to better customer experience and in 2026, customer experience is becoming a key differentiator.

 

5. Compliance, HR Complexity, and New Regulatory Pressure

Here’s a statistic that shocks most people:

95% of business owners are deeply involved in HR, payroll,
compliance, and employee experience.

Not because they want to be, but because they feel they have to be.

In 2026, compliance is growing more complex across multiple areas:

  • HR regulations
  • Data privacy
  • Payroll requirements
  • Cybersecurity
  • Vendor risk
  • AI governance

To stay protected, SMBs are increasingly partnering with professional services and third-party providers who can absorb the compliance burden and reduce risk.

This frees owners and HR leaders to stay strategic instead of drowning in paperwork.

 

6. Technology, AI Adoption, and Cybersecurity

I can say this with confidence; SMB leaders are being hit from two sides:

  • Rapid AI adoption
  • Rising cybersecurity threats

The data shows:

  • 81% of business owners view AI as a major opportunity
  • 68% fear a data breach this year
  • Many lack enterprise-level security protections
  • HR teams often handle sensitive data without proper training

Businesses are turning to secure, integrated systems that help them:

  • Automate workflows
  • Use AI for predictive analytics
  • Strengthen cybersecurity defenses
  • Protect sensitive employee and customer data
  • Train staff on security hygiene
  • Reduce human error

SMBs that build digital trust in 2026 will outperform those that ignore cybersecurity and data governance.

 

The 2026 SMB Leadership Formula for Real Growth

When you combine all findings, from productivity to people to technology, the formula for success in 2026 becomes clear:

  1. Build real accountability for every position.
  2. Protect leadership time for strategic work.
  3. Invest deeply in people's development and culture.
  4. Strengthen financial resilience with smarter workforce tools.
  5. Modernize HR, compliance, and cybersecurity systems.
  6. Use AI responsibly to enhance decision-making and productivity.

After four decades leading teams and building companies, here’s the insight I keep returning to:

  1. Businesses grow when their people grow.
  2. Businesses stagnate when their leaders are stuck.

2026 isn’t a year to play small.

It’s a year to reassess, realign, and rebuild stronger foundations.

Here’s to the SMBs who choose clarity over chaos, accountability over avoidance, and strategic growth over the daily grind.

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