2025 is shaping up to be a volatile year for small businesses, with a saturated market, fierce competition, and shifting regulations impacting how businesses operate. Many entrepreneurs are questioning how their small businesses can grow amid these challenges.
During CO—’s 2025 Small Business Day event, Tatiana Perry, Senior Manager of Marketing, sat down with three of last year’s CO—100 Honorees — Rachel Garcia of Dry Goods Refillery, Pallavi Pande of Dtocs, and Matt Carr of Beck Flavors — for a candid conversation about what drives small business growth today. From disrupting industries to navigating global supply chain challenges, each panelist shared honest insights on what it takes to succeed in a shifting economic climate.
Disruption through innovation and values-driven leadership
A business’s sustainability efforts and workplace practices drive purchase-making decisions for many of today’s conscientious consumers. As preferences shift, companies have had to innovate to remain competitive.
Garcia, for example, combined education, local partnerships, and social media to spark sustainable change, creating a returnable jar program and sourcing compostable freezer packaging from small suppliers that challenge conventional packaging norms.
“Part of what we're trying to do is teach customers [about] reusing what they already have,” Garcia explained. “That alone … we have [had] to innovate with because we're teaching them how to rethink … which is the hardest part.”
[Read more: Meet Dry Goods Refillery, a 2024 CO—100 Disruptor]
You’re not aiming for the bullseye, you're just aiming for the dartboard. If you're not nimble … you don't end up on the dartboard at all.Rachel Garcia, Founder of Dry Goods Refillery
Another business that puts sustainability at the forefront of its model is Dtocs, which marries sustainability with social impact by employing Indian women and funding education and winter drives for their families.
“Sustainability … [is] not just about a product, it's actually a mindset shift,” Pande said. “It’s about how … you want to live your life. What is the footprint that you're living with today, and how can you make that better?”
While Dry Goods Refillery and Dtocs focus on external sustainability efforts, Beck Flavors demonstrates that innovation can also come from within. Carr emphasizes that the company’s longevity and adaptability stem from a values-driven approach to leadership — one that prioritizes employee satisfaction and community investment, including ongoing partnerships with children's hospitals.
[Read more: A 'Rich and Rewarding' Company Culture Is at the Heart of 110-Year-Old Beck Flavors]
Facing the reality of tariffs and preparing for global uncertainty
While newer small businesses are feeling the impact of heavy, widespread tariffs for the first time, longstanding businesses like Beck Flavors are well-prepared to navigate this challenge. Based on their prior experience, Carr’s team implemented a data-driven tariff strategy, including a tool that simulates cost impacts across 250 imported materials and allows for transparent customer communication.
“We have a single line item on our invoice, which is just a tariff fee,” Carr said. “It's simply a pass-through from us to our customers, but we're being very transparent about it. We hope that it's something that's short-term, but we put tools in place in case it takes longer than we are expecting.”
Meanwhile, businesses like Dry Goods Refillery are facing uncertainty about the tariffs, as they operate with thinner profit margins and shorter supply timelines. Despite this, Garcia hopes the strong community trust and goodwill she has garnered with customers throughout the years will help her weather changes.
Similarly, Pande admitted she’s “terrified” by tariff implications, but has stocked up on inventory and scouted alternative manufacturers in Vietnam to stay agile. For small businesses considering their next steps, she says they have two options: either act on the offensive or the defensive side.
“Where are you going to source from?” Pande asked. “Where are you going to locate your warehouses? Where are you going to penetrate, into what new market? As long as you're assessing these things … you can be in these two zones and work on your business assessment.”
Customer-first strategies that fuel long-term growth
Entrepreneurs who want to achieve long-term growth amid these global challenges need to focus on delivering what their customers want. According to Pande, the key is not assuming what your customer wants, but rather actively listening to them and acting on their feedback.
[Read more: Eco-Friendly, Compostable Tableware Company, Dtocs, Puts Customers — and the Environment — First]
Garcia encourages founders to treat business like a dartboard: aim broadly, stay nimble, and adapt your model based on customer behavior.
“You’re not aiming for the bullseye, you're just aiming for the dartboard,” Garcia said. “If you're not nimble … you don't end up on the dartboard at all.”
Carr echoed this mindset, emphasizing the importance of involving customers in strategic planning to identify unmet needs.
“Without our customers, we're nothing,” Carr said. “Including them in our strategic plan [took] a lot of forethought … but it was also purposeful for us … to talk to them on a regular basis [and] understand the challenges they're having.”
Learn more about our search for America’s top 100 small businesses here.
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