As businesses enter an uncertain year, many are curbing their growth plans

Over the last few months, it’s been difficult for businesses to predict where the economy is headed. That lack of clarity is turning out to be a drag on this economy: the Richmond Federal Reserve surveyed chief financial officers last quarter, and they said uncertainty about consumer demand is the main reason why their companies have been hiring less.

Economic question marks have also been affecting businesses’ growth plans for the year ahead. As business owners have prepped for 2026, many have decided to curb their expectations for growth in the new year.

Even though the most recent GDP report showed that consumer spending is still strong, some business owners are still seeing an uncertain economy.

“It’s making consumers extremely hesitant to make a purchase,” said Brittany Coleman, founder and CEO of ToughCutie, a company that sells merino wool socks. “It’s making retailers extremely hesitant to pull the trigger.”

Coleman said demand has been weakening ever since the second half of last year. She and the retailers that sell her socks are concerned that demand will stay weak.

“And so in this climate, it’s making it really hard to know what to buy for the future, because we just have no idea if that consumer appetite is going to come back the way that it was,” Coleman said.

As a result, Coleman said she’s focusing on selling her socks directly to consumers, because selling through lots of retailers can be costly.

“For a small brand, most of us don’t have big marketing budgets, so that people can see, ‘Oh wow, look at this brand called ToughCutie, I’m now going to go look for them in store because they did this huge activation in Times Square, or they had this big media budget,’” Coleman said. “Most of us don’t have that.”

Put another way, Coleman said she’s simply not focusing on growing the business right now.

“Not all growth is good growth,” Coleman said. “For us, analyzing which revenue streams actually make sense, eliminating the unprofitable ones, the low-margin ones that ultimately drain resources — that’s really where our focus is.”

In a lot of cases, businesses are choosing to limit their growth — and not necessarily because the broader economy is forcing them to.

Nathan Rogge is the CEO of First Pacific Bank, which focuses on lending to businesses throughout Southern California. He said even though there are literally millions of potential clients in the region, his growth plans for the bank this year are pretty modest.

“Really, for us, if we ended up bringing in 20 or 30 new clients in a quarter, that would be a great quarter,” Rogge said.

Adding new clients requires time and resources; businesses often need specialized services, and Rogge said the bank has to make sure it’s only bringing on new clients that it can actually help.

“Let’s say you’re a coin laundry, and you’ve got 20 coin laundries throughout Southern California,” Rogge said. “I may not have the locations that are a good fit to have you bring a few thousand quarters on a regular basis into a branch.”

Rogge said slow growth can also insulate the business from swings in the broader economy.

“No matter what the economic dynamics might be at any time, you should always be able to find 20 or 30 clients each quarter that are a good fit,” Rogge said.

For some business owners, growth plans can boil down to what kinds of lives they want to lead.

“If you want to lead a life that you’re working 60 hours a week just for the sake of grow, grow, grow, and these arbitrary revenue targets to feed your ego, more power to you, but I’m not interested in that,” said Jeff Cayley, CEO of KETL Mtn. Apparel, an outdoor menswear brand.

For the past few years, Cayley’s company has doubled its sales annually. But this year, he’s only aiming to grow by 50%.

“It’ll no doubt take some work, but it’s not in the realm of hyperscaling growth that would cause us to wreck our lifestyles as business operators in order to achieve it,” Cayley said. 

Cayley said that means he and his employees can work reasonable hours. “And do the things that actually matter to us, which is spend time with our friends and family and get outside and have fun.”

As long as the business is turning a profit, all of that is still possible, Cayley said — however fast the business is growing.