Small Business Outlook: Main Street Is Bullish On Revenue Growth

This Week's Outlook: Small businesses continue to be bullish on revenue, but the headwinds of inflation are still muting profitability and limiting growth plans. 

The latest data shows small business confidence is mixed due to inflation and economic concerns. While many expect revenue growth, profitability outlooks are less optimistic. Hiring and investment plans are modest. Inflation remains a major concern, and many businesses feel understaffed. Overall, there’s cautious optimism, with more confidence in local economies than the national economy.

New Small Business Data

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).

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Intuit QuickBooks Quarterly Small Business Survey (August 30, 2024)

Summary: Revenue up and satisfaction with small business ownership remains steady. 

• 41% of small businesses plan on adding employees in the next 3 months (1 point increase since April) and 44% of small businesses plan on paying employees more in the next 3 months (1 point less than April).
• 69% of small business owners rank healthcare as the most valued employee benefit followed by retirement contributions (65%) and flexible work arrangements (54%).
• 39% of small businesses report increased revenues over the past 3-months (up 2 points from April) and 85% of small businesses report profitability (up 1 point from April).
• 50% of small businesses report invoices overdue by 30 days or more (1 point worse than April) and small businesses report $27,000 owed in unpaid invoices ($5,000 more than April).
• 47% of small business owners believe their finances are better than they were a year ago (no change from April) and 18% of small business owners believe they are in worse financial shape than a year ago (2 points worse than April).
• 31% of small business owners report “being my own boss” was greatest motivation for becoming a business owner followed by the possibility of more income (19%) and balancing work and family (12%) and the best way to pursue their ideas (12%).

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US Bank 2024 Small Business Perspective (August 26, 2024)

Summary: Small business owners and their employees are positive about Main Street.

• 73% of small business owners report their business has grown over the past 12-months with 84% of Black-owned businesses reporting growth and 80% of Hispanic-owned businesses reporting growth.
• 90% of small business owners consider their business successful (4 point increase since 2023).
• Small businesses rank competition as their top stressor (73%) followed by economic environment (71%), increased cost for materials and supplies (65%).
• 52% of small businesses consider themselves understaffed and 49% of small business owners are frustrated by having to delay their plans for growth.
• 78% of employees in small businesses feel optimistic about their future and 64% say they are unlikely to change jobs.  Employees’ top motivators are salary (69%), benefits (56%), and work flexibility (51%).

Small Business Fast Facts

Small Business Data Center

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American Express Amex Trendex: Small Business Edition(August 14, 2024)

Summary:  Small business owners are bullish on meeting their goals this year.

• 90% of small business owners believe their company will achieve its goals this year.
• 38% of small business owners between the age of 18-43 (Gen Z and Millennials) are focused on growing their employee base vs. 29% of small business owners between the age of 44-69 (Gen X and Boomers).
• 31% of small business owners between the age of 18-43 (Gen Z and Millennials) are focused on scaling their businesses to new locations vs. 16% of small business owners between the age of 44-69 (Gen X and Boomers).
• 70% of small business owners between the age of 18-43 (Gen Z and Millennials) consider themselves early adopters of technology comparted to 36% of small business owners between the age of 44-69 (Gen X and Boomers).
• 59% of small business owners between the age of 18-43 (Gen Z and Millennials) said their businesses are using Artificial Intelligence (AI) compared to 34% of small business owners between the age of 44-69 (Gen X and Boomers).

National Federation of Independent Business (NFIB) Small Business Optimism Index (August 13, 2024)

Summary: Headwinds of inflation remain front and center on small businesses’ radar and optimism for post-election bump is growing. 

• 16% of small business owners reported higher sales in the past 3-months (4 points worse than June) and the percentage expecting higher sales rose by 4 points since June to reach -9% (highest this year).
• 25% of small business owners ranked inflation as their top concern (4 points higher than in June and still the top cited problem), and 19% said that labor quality is their top concern (unchanged since June).
• 22% of small businesses raised their prices in July (5 points lower than June), and 24% are planning on raising prices in the next 3 months (2 points lower than June).
• 54% of small business owners reported capital outlays in the last six months (up 2 points from June), and 23% are planning capital purchases in the next three months (no change in the past two months).
• 7% of small business owners expect better credit conditions in the next 3 months (there has been no change in the past 2 months).
• 62% of small business owners are not interested in a loan (1 point higher than June), and 27% report borrowing on a regular basis (1 point lower than June).
• 3% of small business owners reported that financing was their top problem in May (down 1 point from June).

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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