Aldrich Uncertainty Report

PRIVATE COMPANY | Q4 2025 Aldrich Uncertainty Report Insights from private company owners and leaders from the Western US

California Mountain West

Oregon

INTRODUCTION

REPORT FINDINGS

A Message from our CEO

Five Key Findings from the Aldrich Uncertainty Report The Aldrich Uncertainty Report highlights how private company leaders across the Western US are adapting to an evolving business landscape. Despite continued challenges including rising costs, tariffs, and higher interest rates, leaders are concentrating on what they can control: strengthening operations, planning proactively, and protecting their people and legacy. The following five themes reflect how business owners are approaching uncertainty with confidence and long-term focus.

Across the Western United States, private company leaders continue to face a business environment defined by complexity and change. From shifting interest rates and tariffs to talent shortages and supply chain pressures, uncertainty remains a constant. Yet, what stands out in this year’s Aldrich Uncertainty Report is the determination and adaptability of the leaders shaping our region’s private companies. This report captures insights from more than 60 owners and executives across industries and geographies who are not only responding to today’s challenges but preparing for tomorrow’s opportunities. Their focus on scenario planning, strategic flexibility, and continuity for employees and clients reflects a strong, values-driven approach to leadership. At Aldrich, we believe confidence in uncertain times comes from clarity of purpose, of financial insight, and of long-term planning. Our role is to provide the tools, data, and perspective to help business owners make informed decisions and move forward with intention. Navigating Uncertainty with Confidence and Purpose

1 Uncertainty is Being Met with Resilience While 45% of leaders are optimistic about their company’s outlook for the coming year, only 31% feel confident in their ability to adapt to external disruption (economic conditions, tariffs, etc.). Leaders are taking practical steps to strengthen flexibility including refining financial models, diversifying suppliers, and aligning leadership teams to respond quickly to change. This measured optimism reflects a shift toward preparation rather than prediction, building the capacity to adapt regardless of what comes next. 2 Strategic Flexibility is the New Advantage Seventy-five percent of leaders have updated their strategic plans to reflect current conditions, and 65% see scenario planning as the most valuable tool for the year ahead. Many are slowing capital investments (81%) or adjusting supply chains (79%) to preserve liquidity and options. Leaders who regularly test assumptions and plan for multiple outcomes are better positioned to stay ahead of shifting market dynamics. 3 Technology and Data Offer Potential Only 37% of leaders are confident in their team’s ability to identify and implement the right technology, and just 16% rate their use of financial data for decision-making as excellent. For many, improving data visibility and digital capabilities remains a significant opportunity. Companies that invest in processes and systems supporting real-time insight and smarter operations can respond faster and make better-informed decisions in a competitive market.

4 People and Continuity Lead Transition Planning

Fifty-eight percent of owners said ensuring stability for employees and clients is their top transition priority, followed by finding the right successor (53%). Only 45% ranked maximizing sale value first. With 76% receiving unsolicited offers to sell in the past year, early, people-centered planning allows leaders to protect their culture and legacy while remaining ready to act when opportunity arises. 5 The OBBBA Brings New Opportunities and New Considerations The One Big Beautiful Bill Act (OBBBA) introduces a broad range of updates to the tax code. Nearly all leaders have some level of understanding (95%) about the potential impact their company’s financial planning or operations. Working closely with experienced advisors can help uncover opportunities, manage risks, and ensure planning decisions support both near-term performance and long-term financial success. The 2025 findings underscore the power of insights, not uncertainty, in driving confident leadership. At Aldrich, we help business owners turn data into direction— building personalized strategies that align with your business vision and personal goals for lasting success.

John Lauseng CEO + Partner Aldrich

Insights Not Uncertainty

Aldrich’s 50-year history of partnering with businesses, their owners, and their employees has shown us that success is not achieved in isolation. It requires collaboration, innovation, and a clear alignment of business goals with actionable strategies. From tax planning and accounting to business transitions and wealth management, we’re here to help you navigate every phase of your business and personal life cycle.

About Aldrich

The Aldrich Group of Companies

For more than 50 years, Aldrich has helped businesses, their owners, and their employees achieve their professional and personal financial goals. We pair deep industry experience with a full suite of integrated financial, tax, accounting, wealth, corporate retirement, and business transition services to help bring clarity to every phase of our client’s personal and professional life cycles. Based in Oregon since our founding in 1973, Aldrich now serves clients across the country from our eight offices throughout the Western US.

Aldrich CPAs + Advisors LLP, one of the top 70 accounting firms in the US (Accounting Today) Aldrich Wealth LP, a Registered Investment Advisory firm with over $6.5B in assets under advisement Aldrich Capital Advisors LP, which provides advisory services for business transactions

www.aldrichadvisors.com/about

Aldrich Uncertainty Report | Q4 2025

REPORT PARTICIPANTS

Exclusive Insights from the West’s Business Leaders The Aldrich Uncertainty Report draws from conversations with over 60 owners and executives of private companies across Oregon, California, and the Mountain West (Colorado, Idaho, Montana, Nevada, Utah, Washington, and Wyoming). These leaders, representing industries from construction to healthcare, lead businesses generating $10 to $150 million in annual revenue.

Company Annual Revenue

39%

27%

24%

Primary Location

Role in Company

10%

Oregon

33%

$10m-$20m

$21m-$50m

$51m-100m

$101-150m

26% Mountain West

41% California

Years in Operation

Executive Owner 74% 26%

18% 27%

41+ years 48%

11-20 years

21-40 years

Industry

2-10 years

19%

Manufacturing and Distribution

Company Ownership Structure

23%

11%

Private equity held

Food and Beverage Manufacturing

19%

Architects and Engineers

35%

Closely held (multiple partners)

10%

Employee owned

Commercial Real Estate

Healthcare

15%

Single owner

24%

34%

Family owned

Construction

Aldrich Uncertainty Report | Q4 2025

CHANGING CONDITIONS

OUTLOOK FOR GROWTH

How has your outlook for your business changed in the last six months?

Business’s outlook for revenue growth over next 12 months

More optimistic

About the same

More pessimistic

Mountain West

California

12%

13%

42%

35%

23%

California

23%

50% 19%

31%

KEY

58%

Mountain West

Optimistic Very Optimistic Very Pessimistic Pessimistic Neutral

50%

31%

19%

20%

50%

30%

Oregon

All West

Oregon

37%

39%

24%

All West

20% 50% 23%

26% 27%

40%

My company’s financial health has been negatively impacted by tariff-related cost increases or supply chain disruptions.

Leader Perspectives “We’ve recently secured long-term contracts with major clients and also have maintained a strong pipeline for construction projects.” — CxO, Construction

Strongly Agree

Agree

Neutral

Disagree

12%

35%

31%

23%

California

“Our sales growth is slowing and volumes are declining, which may negatively impact profitability.” — Owner, Food & Beverage Manufacturing “We have diversified our portfolio and secured long-term contracts which ensure steady growth.” — CxO, Construction “New taxes and regulatory policies have negatively impacted our industry so we forecast neutral growth for the next 12 months.” — CxO, Food & Beverage Manufacturing

Mountain West

19%

31%

25%

20%

40%

35%

Oregon

16%

35%

31%

18%

All West

Compared to six months ago, how has your company’s ability to access outside capital for growth or operations changed?

“We have expanded into new product lines and repeat orders are increasing.” — Owner, Manufacturing

California

Oregon

Mountain West

All West

KEY

Stayed the Same Become Easier

12%

27%

38%

40%

“We have seen a reduced number of commercial construction projects compared to last year.” — CxO, Construction

58%

Become More Difficult

50%

44%

45%

Do not seek or use outside capital

27%

19%

10%

19%

Aldrich Uncertainty Report | Q4 2025

STRATEGIC PLANNING

SCENARIO PLANNING

California

Mountain West

How confident are you in your company’s ability to adapt to external disruptions (e.g., economic conditions, tariffs, etc.) over the next year?

All West

23%

39%

25%

We’re staying the course and not making major changes We don’t currently have a strategic plan in place We’re holding off on long-term decisions until there’s more clarity We’re actively reworking our plans to reflect current conditions We’ve made minor adjustments but kept our long-term strategy intact

Which best describes your company’s current approach to strategic planning in response to uncertainty?

31%

35%

37%

35%

15%

38%

5% 5%

Oregon

All West

35%

KEY

27%

Moderately Confident Very Confident

40%

35%

20%

Not Confident Slightly Confident

31%

All West

18%

How frequently are you revisiting or updating your financial forecasts in light of current economic volatility?

Monthly or more often

53%

Quarterly

Which of the following external risks are you most actively planning for in the next 12 months? Respondents could choose more than one answer

27%

Semi-annually

Inflation and cost volatility

Pressure from competitors

Finding/retaining talent availability

Supply chain disruptions

Tariff or trade changes

2% 0%

Annually

50%

65%

58%

35%

California

We do not regularly update our forecasts

60%

35%

50%

55%

45%

Oregon

Mountain West

63%

56%

44%

31%

“For the rest of 2025 our focus is strengthening our supply chain and enhancing operational efficiency.”

How Leaders are Managing Uncertainty

“Closely monitoring material costs and subcontractor rates to maintain profitability.”

56%

53%

55%

44%

37%

“We are investing in predictive analytics to anticipate market shifts.”

All West

How Leaders are Managing Uncertainty

“Providing cross training programs to our staff for handling labor shortages.”

“Upgrading our workforce to adapt to emerging technologies.”

“Preserve cash flow, avoid unnecessary spending, and reassessing capital investments.”

“Diversifying offerings and refining client profiles to offset tariff shocks and economic volatility.”

“We are adjusting capital plans and procurement strategies to manage any kind of uncertainty.”

“Strengthening operational efficiency and investing in technology.”

“Looking for more suppliers who are closer to us geographically, particularly for high demand items.”

“We are proactively working to improve our brand communication to build trust and transparency.”

Aldrich Uncertainty Report | Q4 2025

MANAGING UNCERTAINTY

BUSINESS INSIGHTS + TECHNOLOGY

How would you rate your company’s current use of financial data for decision-making?

Which best describes your company’s current approach to strategic planning in response to uncertainty? Respondents could choose more than one answer

Excellent

Good

Fair

Poor

Considering doing this

Have already done this

Not currently planning

19%

38%

35%

California

Talent Strategies Slow or reduce hiring/hours, reduce workforce

35%

31%

35%

California Mountain West

19%

56%

25%

38%

19%

38%

Mountain West

25%

45%

30%

Oregon

27%

42%

31%

All West

10%

55%

25%

10%

Oregon

31%

58%

12%

California Mountain West

Slow Investment Reduce or delay capital investments

16%

44%

32%

All West

44% 45%

30%

25% 25%

31%

Oregon

39%

42%

19%

All West

“Adapting data driven strategies and investing in analytics to get deeper insights about the performance of the company.”

How Leaders are Managing Uncertainty

Supply Chain Changes Reduce tariff exposure (different suppliers, stockpile inventory, change products)

38%

31%

California Mountain West

35%

45%

20%

“Utilizing advance tools to monitor market trends and adjust business strategies in real time.”

25%

69%

“Investing in predictive analytics to anticipate market shifts.”

Oregon

34%

45%

21%

All West

“Using AI for predictive insights and investing in scalable and customizable infrastructure.”

“Strengthening operational efficiency and investing in technology.”

27%

58%

15%

All West Oregon California Mountain West

Pricing Pass increased

20%

38% 45%

35%

31%

“We are utilizing advanced technology to enhance market prediction and decision making.”

“Strengthening our logistics and investing in automation.”

costs onto customers

26%

48%

26%

Aldrich Uncertainty Report | Q4 2025

BUSINESS INSIGHTS + TECHNOLOGY

TAX STRATEGY

How confident are you in your team’s ability to identify and implement the right technological advancements to stay competitive in your industry?

How would you rate your understanding of the impact of the One Big Beautiful Bill will have on your company’s financial planning or operations? No Understanding Deep Understanding All West

Confident

Somewhat Confident

Not Confident

46%

38%

15%

California

Mountain West

31%

56%

13%

32%

48%

15%

30%

55%

15%

Oregon

37%

48%

15%

All West

Stability, Strategy, and Savings: What Private Company Leaders Need to Know About the New Tax Law

Which of the following best describes your current approach to adopting new technologies such as digital tools, automation, AI, etc.?

Pass-Through Deduction Made Permanent—with Expanded Access: Section 199A, which allows a 20% deduction on qualified business income (QBI) for pass-through entities, is now permanent. The new law also expands phase-in ranges for specified service trades or businesses (SSTBs), making the deduction more broadly available to high-income owners in industries like consulting, healthcare, and financial services. Incentives for Small Manufacturers and Domestic Production: The OBBBA introduces targeted benefits for domestic production including increased expensing thresholds for machinery and tools, streamlined deductions for small manufacturers and additional depreciation options for property used in domestic production. Insights Not Uncertainty OBBBA brings a wide range of updates to the tax code that could bring significant impacts and opportunities to businesses and their owners. To help leaders navigate these developments, visit our series of practical checklists designed to highlight key considerations and support informed strategic planning by scanning the QR code below.

With the signing of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, the federal tax landscape has shifted meaningfully for privately held businesses. For founders, owners, and executives of private companies, this landmark legislation offers permanence where there was once uncertainty—and strategic opportunities across the board. This is not just about tax rates—it’s about planning power and decision making. With permanent full expensing, restored R&D deductions, enhanced pass-through flexibility, and targeted domestic manufacturing incentives, the OBBBA creates new momentum for reinvestment, ownership transitions, Permanently Enhanced: The new law makes 100% bonus depreciation permanent, eliminating concerns about phasing timelines Domestic R&D Expensing Fully Restored: Under Section 174A, domestic research and development costs are now fully deductible in the year incurred. Businesses may also accelerate deductions for some previously capitalized amounts. Plan Around SALT Deduction Limits: The State and Local Tax (SALT) deduction temporarily increases to $40,000 through 2029, then reverts to $10,000 in 2030. A phase-down applies for taxpayers with modified adjusted gross income (MAGI) over $500,000. and strategic growth. Key Provisions Full Expensing and Interest Deductions:

California

Mountain West

Oregon

All West

35%

25%

24%

KEY

10%

Early Adopter: Adopt early once tech shows clear competitive advantage. Fast Follower: Implement proven tech after peer success is demonstrated. Late Adopter/Skeptic: Stick with current systems unless change is absolutely required. Pragmatic Adopter: Adopt when industry norms or customer needs demand it.

69%

50%

44%

23%

38%

35%

29%

Note: One Big Beautiful Bill Act (OBBBA) content is subject to change as future regulations and official guidance become available. This article does not constitute tax advice and should not be relied upon when making tax decisions or taking tax positions. Readers are encouraged to consult with a qualified tax professional for advice specific to their situation.

Aldrich Uncertainty Report | Q4 2025

TAX STRATEGY

TRANSITION + SUCCESSION

Timeline for exiting the business

All

3-5 years

6-10 years

> 10 years

Don’t have one

What actions are you taking today in response as a result of OBBBA? Respondents could choose more than one answer

71%

Reviewing tax strategy with advisors

12%

38%

California

45%

Reassessing entity or ownership structure

Mountain West

13%

25%

38%

66%

Adjusting investment plans

15%

25%

15%

45%

Oregon

Expanded R&D Deductions: See What Your Business Could Claim

13%

19%

27%

40%

All West

To help you get started, here’s five questions to determine if you might qualify: 1. Are you developing or improving products, processes, or software? 2. Did the work involve technical uncertainty or risk? 3. Did your team use a process of experimentation (testing, modeling, iteration)? 4. Was the work grounded in engineering, computer science, or similar disciplines? 5. Do you have wages, contractor payments, or supply costs tied to these activities? A Checklist to Guide Your R&D Credit Strategy To make it easier to evaluate your eligibility, we’ve developed the Aldrich OBBBA R&D Checklist—a concise, one-page tool designed to help private company leaders identify potential opportunities under the new law.

The Research and Development (R&D) tax credit was designed to encourage innovation across a broad range of industries, not just scientists in a lab. Eligible activities often span sectors like architecture, engineering, construction, manufacturing, software development, and product design—anywhere businesses are developing new or improved processes, products, or technologies. The One Big Beautiful Bill Act (OBBBA) presents significant R&D opportunities for businesses, including the ability to fully deduct domestic R&D expenses in the year they’re incurred, starting in 2025. The law also allows certain companies to retroactively deduct previously capitalized R&D costs from recent tax years. How to Know if Your Company May Qualify From product development to process improvements, many companies may already qualify without realizing it. The R&D credit remains a generous federal and state incentive, and the standards to qualify are more accessible than many assume. If your business is taking technical risks or improving how it operates, now is the time to revisit your R&D strategy.

In the last 12 months, how many times have you received unsolicited questions or offers about potentially selling your business?

1-2 times

3-5 times

54%

15%

California

Mountain West

63%

25%

70%

Oregon

61%

15%

All West

With 76% of companies receiving unsolicited interest from potential buyers, even owners not planning to exit soon should begin preparing. A successful transition takes time — often years — to strengthen management teams, improve financial reporting, and address tax implications. Finding the right buyer can take even longer, particularly for owners who prioritize continuity for employees

and customers. Starting early, even a decade in advance, gives owners the flexibility to enhance business value and choose the right path forward. Aldrich advisors help business owners plan strategically so they’re ready when the right opportunity arises.

Scan the QR code to access the checklist and see how your business might benefit from the R&D credit.

Aldrich Uncertainty Report | Q4 2025

TRANSITION + SUCCESSION

What ownership transition strategies has your company considered?

When it comes time to consider a transition, what do you anticipate will be your (or your owner’s) top three priorities?

Across the Western US, private company leaders are putting people before price when thinking about the future of their businesses. Ensuring continuity for employees and clients ranked as the top priority for 58% of respondents, followed closely by finding the right successor at 53%, while 45% said getting full value in a sale was their main objective, underscoring that for many, maintaining culture and stability outweighs purely financial outcomes. At the same time, 76% of companies reported receiving at least one unsolicited offer to sell in the past year. For owners, this combination of buyer demand and people- first priorities makes early, intentional planning essential. Developing a transition strategy now that protects employees, supports clients, and positions the business for continued success—while also securing financial outcomes for owners— means that when the right opportunity arises, leaders can move forward with confidence and on their own terms. Leading with Values in a Business Transition

Respondents could choose more than one answer

California

Mountain West

Oregon

All West

Respondents could choose more than one answer

70%

69%

65%

55%

All West

58%

Ensuring continuity for employees and clients

Sell to a third party

53%

Finding the right buyer or successor

55%

40%

45%

35%

Getting the full value of the business

19%

Passing the business to a family member

39%

Minimizing taxes on the sale or transfer

70%

Timing the exit with market or economic conditions

34%

59%

55%

56%

26%

Navigating family dynamics or ownership structure

Strategic partnerships or joint ventures

26%

Understanding the steps and timeline to exit

31%

27%

24%

19%

Planning for my personal financial future

10%

ESOP

13%

11%

10%

Management buyout

Aldrich Uncertainty Report | Q4 2025

ABOUT ALDRICH

SECTION HEADING

For more than 50 years, Aldrich has helped businesses, their owners, and their employees achieve their professional and personal financial goals.

Aldrich Group of Companies Aldrich CPAs + Advisors LLP Aldrich Wealth LP Aldrich Capital Advisors LP

aldrichadvisors.com wealthadvisors.com

We pair deep industry experience with a full suite of integrated financial, tax, accounting, wealth, corporate retirement, and business transition services to help bring clarity to every phase of our clients personal and professional life cycles.

The Aldrich Group of Companies Aldrich CPAs + Advisors LLP, one of the top 70 accounting firms in the US (Accounting Today)

Private Company Services • Audit and assurance • Business owner planning • Business tax • International tax • M&A advisors • Outsourced accounting corporate retirement plans

• R&D • Tax planning • Valuation services • Legislative and regulatory updates

Aldrich Wealth LP, a registered investment advisory firm with more than $6.5B in assets under advisement that offers services for individuals and corporate retirement plans • Audit and assurance • Business tax and consulting services • International tax and transfer pricing • R&D tax credits • Outsourced accounting • Valuation services

Individual Services • Estate planning • Financial planning • Insurance consulting

• Registered investment advisory • Wealth tax services

Industries We Serve

• Agriculture and Farming • Architecture and Engineering • Communications • Construction • Dental • Food and Beverage • Growth Services • Healthcare • Manufacturing and Distribution

• Nonprofit and Government • Professional Services • Real Estate • Utilities • Veterinary

• Wealth management • Tax planning

• Personal finance planning • Aldrich Wealth Family Office • Insurance consulting • Corporate retirement plans

Aldrich Capital Advisors LP, which provides advisory services for business transactions

Nationwide Service from the Western US

Carlsbad, CA Denver, CO Orange County, CA Portland, OR

Salem, OR Salt Lake City, UT San Diego, CA Spokane, WA

• Mergers & acquisitions • Succession planning • Strategic advisory services

ABOUT THIS REPORT The Aldrich Uncertainty Report presents findings based on original survey data collected using telephonic double-blind interviews with 62 respondents and was conducted by a third party. All respondents are owners or executives of private companies with annual revenues between $5-150 million based in California, Oregon, and the Mountain West (CO, ID, MT, NV, UT, WY). The survey was conducted during August 2025 to provide insights into the outlook, priorities, challenges, and opportunities for private companies and their leaders. The survey data reflects the perspectives of decision makers with substantial influence within their organizations, ensuring the insights are directly relevant to stakeholders in similar business environments. The research was conducted in adherence with strict research standards throughout the data collection and analysis process to ensure that findings are accurate, reliable, and meaningful. All responses were collected and analyzed in a manner that safeguards respondent privacy. The report is based on aggregated, anonymized data to uphold confidentiality while delivering actionable insights. Due to rounding, not all percentage totals found in the report equal 100%. Comparison calculations are made from total numbers (not rounded numbers). Some respondent quotes were lightly edited for clarity. Tax insights and advice included in this document may not describe all relevant facts or analysis of all relevant tax issues or authorities. This document is solely for the intended recipient’s benefit and may not be relied upon by any other person or entity.

Tax insights and advice included in this document may not describe all relevant facts or analysis of all relevant tax issues or authorities. This document is solely for the intended recipient’s benefit and may not be relied upon by any other person or entity.

Aldrich Uncertainty Report | Q4 2025

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