Small Business Outlook: Tech Innovation Fuels Small Business Growth

This Week's Outlook: High costs and the shortage of qualified applicants for open positions are chilling small business owners’ sales expectations. Small business optimism for growth is fueled by technology, especially as more small business owners use artificial intelligence (AI).   

New Small Business Data

Impact of Technology on U.S. Small Business (September 16, 2024)

Summary: Small business reliance on technology for growth is up fueled by AI.

• 99% of small businesses use at least one technology platform compared to 93% in 2022 and 95% in 2023. Social media platforms top the list (66%) followed by digital payments (57%) and accounting (56%).
• 85% of small businesses are confident that technology will help their businesses grow (up 3 points from 2023).
• 40% of small businesses are using generative AI (up 17 points from 2023) and marketing/promotions show most frequent use of generative AI (56%).
• 60% of small business owners believe AI will help their businesses (up 5 points from 2023).
• 54% of small business owners are worried that government regulation of technology would harm their business, with 78% worried that limiting access to AI will slow their ability to grow their business.

Goldman Sachs 10,000 Small Businesses Report on Rural Small Businesses (September 13, 2024)

Summary: Inflation and workforce challenges are hitting rural small businesses hard.

• Over 73% of rural small business owners believe their business has a meaningful impact on the local economy and on the social well-being of their community.
• 98% of rural small business owners report that the cost of doing business has increased over the past 5-years and 64% have experienced flat or decreased profitability.
• 62% of rural small businesses report that attracting workers to their community is a challenge and 35% are worried that young talent will leave. Lack of affordable housing tops the list of challenges rural small business owners face in recruiting and keeping good workers.
• 67% of rural small business owners have a positive view of the economy (fair to excellent) compared to 73% of non-rural small business owners.

Honoring America's Top Small Businesses

The Results Are In. These Are America's Top 100 Small Businesses

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National Federation of Independent Business (NFIB) Small Business Optimism Index (September 10, 2024)

Summary: Small businesses’ sales outlook plummeted in August and inflation remains top concern. 

• 16% of small business owners reported higher sales in the past 3-months (unchanged from July) and the percentage expecting higher sales dropped 9 points since July to reach -18%.
• 24% of small business owners ranked inflation as their top concern (1 point lower than July and still the top cited problem) and 21% said that labor quality is their top concern (2 points higher than July).
• 20% of small businesses raised their prices in August (2 points lower than July) and 25% are planning on raising prices in the next 3-months (1 point higher than July).
• 56% of small business owners reported capital outlays in the last 6-months (up 2 points from July) and 24% are planning capital purchases in the next 3-months (up 1 point from July).
• 8% of small business owners expect better credit conditions in the next 3-months (down 1 point from July).
• 60% of small business owners are not interested in a loan (2 points lower than July) and 27% report borrowing on a regular basis (unchanged from July).
• 4% of small business owners reported that financing was their top problem in August (up 1 point from July).

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Fiserv Small Business Index (September 6, 2024)

Summary: Consumer spending continues to slowly trend downward and sales are still up compared to a year ago.

• Month-over-month sales at small businesses in August declined 0.3% compared to July and year-over-year sales at small businesses grew 1.6% compared to August 2023.
• Spending increases in August came from food manufacturing, performing arts, truck transportation, and businesses in the spectator sports sector.
• Spending decreases in August came from educational services, insurance, ambulatory healthcare, and specialty trade contracting.

Small Business Fast Facts

Small Business Data Center

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WSJ / Vistage Small Business CEO Confidence Index (August 29, 2024)

Summary: Future revenue expectations remain elevated, but inflation’s impact on profit margins continues to mute small business confidence.

• 12% of small business owners say the economy has improved compared to 12 months ago (6 points lower than July) and 48% say that the economy has gotten worse (10 points worse).
• 24% of small business owners believe the economy will improve in the next 12 months (3 points up from July) and 35% believe the economy will worsen (10 points worse).
• 44% of small businesses plan on increasing employees in the next 12 months (1 point up from June’s 4-year low). 
• 28% of small businesses expect to increase fixed investments in the next year (no change from July, which was a 17-month low).
• 61% of small businesses expect increased revenues in the next 12 months (up 4 points from July). 
• 44% believe profitability will improve in the next 12-months (down 2 points from July).
• 29% of small business owners believe that election uncertainty has negatively impacted sales (2 points lower than July).

MetLife & U.S. Chamber of Commerce Small Business Index for Q2 (June 26, 2024)

Summary: Small business owners continue to feel good about their own operations and about their local economy. The opposite is true with regard to their feelings about the national economy.

• 36% of small business owners are positive about the nation’s economic health (increased 3 points since last quarter) and 47% are negative about the U.S. economy (1 point less negative).
• 43% of small business owners are positive about the health of their local economy (an increase of 5 points since last quarter), and 27% are negative about their local economy (3 points less negative than last quarter).
• 55% of small business owners rank inflation as their top concern (3 points higher than last quarter and the 10th consecutive quarter where inflation tops the list of concerns).
• 46% of small businesses plan on increasing investment over the next 12 months (10 points higher than last quarter), and 41% of small businesses plan on adding staff (7 points higher than last quarter).
• The percentage of small business owners expecting increased revenues reached a record-high 73% (an increase of 6 points since last quarter).
• 66% of small businesses are confident in the health of their own business (1 point increase from the last quarter), and 73% are comfortable with their current cash flow (a 6-point increase from the last quarter).
• 22% of small businesses increased staff over the past year (6 points higher than last quarter and tied with the highest level reached 2 years ago).

About the authors

Thomas M. Sullivan

Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.

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