New Reports Show Small Business Owners Are (Mostly) Positive About 2024

By Rieva Lesonsky

Happy days are here again for small business owners – well, sort of. There is a lot of good news (mixed with some challenges) in various reports and surveys of the country’s small business owners.

Economic Outlook for Small Businesses

The newly released 2024 Bank of America Business Owners Report reveals that 65% of small business owners expect their revenue to grow this year and 55% report they made more money in 2023 than in 2022 – a positive trajectory .

In the next 12 months, small business owners also plan to expand their businesses (39%) and hire more employees (30%). While these are positive numbers, they are slightly below last spring’s Small Business Owners Report (SBOR).

While the small business owners surveyed were optimistic about their own companies, they were a little more cautious about the national economy, with just 33% expecting it to improve over the next 12 months. (Interestingly, this is much less than the 75% of medium business owners who think the national economy will improve next year.) And only 42% of small business owners believe their local economies will improve next year .

Economic concerns

Small business owners are still concerned about inflation and higher interest rates, but they are less concerned than they were a year ago. Their biggest concerns this year are the presidential elections (78% are worried) and the political environment (75%). And 61% of small business owners expect the presidential election to impact their business, resulting in increased sales (31%), higher business costs (29%), and the need to raise prices (28%).

Other main concerns:

• Inflation – 73%
• Healthcare costs – 69%
• Interest rates – 63%
• Commodity prices – 61%
• Recession – 56%
• US Dollar Strength – 53%
• Corporate tax rates – 52%
• US/Global Stock Market – 50%

Issues such as labor shortages/hiring challenges, supply chain issues, and credit availability are less of a concern than they were previously.

Inflation

As noted, inflation is still a concern for small businesses and 84% say it currently affects their business. Due to inflation, small businesses have:

• Increased prices – 68%
• Cash flow and expenses reevaluated – 40%
• Increase in employee salaries – 30%
• Lost sales – 29%
• Reduced business costs – 27%

Obtaining financing

Fewer small businesses plan to obtain financing this year, 71%, down from 82% in last spring’s report. Just 16% plan to apply for a bank loan or line of credit this year, down from 24% last spring.

Credit cards

A separate report, the Bank of America Institute’s Small Business Checkpoint, shows that small businesses have become more reliant on credit cards, with balances rising 18% since 2019. While rising balances would normally be concerning, the Institute notes that adjusted by inflation, “credit card balances are comparable to or even lower than 2019 levels.”

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Running and expanding a small business

Driving Customer Engagement

How are small business owners attracting customers? Prioritizing offering a unique customer experience and humanizing your business through personalized interactions, soliciting feedback and building brand awareness. And 65% use social media to interact with customers and promote their businesses.

The majority of small businesses (82%) have implemented customer engagement tactics (77% say they have been successful), including:

• Personalized customer interactions – 80%
• Implementing customer feedback – 48%
• Direct marketing (direct mail and email newsletters) – 38%
• Frequent sales and discounts – 27%
• Hosting community events – 24%
• Rewards/loyalty programs – 23%

Collecting customer feedback is critical for 79% of small business owners. How do they get feedback?

• Monitor online review platforms – 48%
• Compiling feedback in an email inbox – 41%
• Request feedback in person in store – 40%
• Sending customer service surveys via post-purchase email – 30%

Digitization

Over the past 12 months, 71% of small business owners have digitally optimized their business. Actions taken include:

• Do banking online/on mobile apps – 51%
• Accepted more forms of cashless payments – 45%
• Created/increased your presence on social media – 37%
• Implementing more digital marketing strategies – 27%
• Added cybersecurity measures – 21%
• Used a cloud-based platform – 19%

AI implementation

Of the 37% of small business owners who plan to implement AI, they will use it to differentiate themselves from their competitors (47%), streamline payroll and accounting (36%), and help with hiring efforts (25% ) .

Sustainability

According to the report, “more small business owners are implementing sustainable business practices compared to last spring, but they face several obstacles as they integrate sustainability into their operations.” This year, 81% have implemented sustainable business practices and 71% say they are committed to sustainability.

The most common sustainable practices:

• Minimizing paper use – 68%
• Establish more ecological habits (recycling) – 57%
• Offer a hybrid work environment (reduces transportation costs) – 30%
• Working with sustainable sellers/suppliers — 25%

However, implementing sustainable business practices brings challenges for 69% of companies, including:

• Cost increase – 44%
• Customer frustration with higher prices – 20%
• Customer indifference to sustainability efforts – 18%

Making personal sacrifices to maintain profitability

Most business owners interviewed say their companies are profitable, but they have made personal and professional sacrifices to get there. In fact, 70% say they “made trade-offs” to maintain profitability.

Compensations include price increases (47%), working more hours (45%), reduced salary (32%) and reduced marketing costs (24%).

Big companies are more optimistic

This year, Bank of America combined its annual Small Business Owners Report with insights from midsize businesses “to create a comprehensive report that explores the prospects, aspirations and future prospects of business owners across the country.” Business owners are even more optimistic than small business owners: 87% believe their revenue will increase, 80% plan to expand this year, and 69% plan to hire. And 93% of midsize companies surveyed plan to raise financing this year. .

But in general, both small and medium business owners anticipate a good year. I asked Sharon Miller, president and co-head of business banking at Bank of America, if she found anything problematic in the report for small business owners. Miller says, “Although the inflation rate has slowed in recent months, small business owners still see inflation as a top concern for their businesses.”

That concern appears to be assuaged by what Miller found surprising in the report. She says: “What surprised me most was how many important concerns are present in every small business owner this year. More specifically, concerns around a potential recession (down from 72% to 56% in spring 2023) and the impact of supply chain issues (down from 57% to 41% in spring 2023) saw notable declines ​percentage points year after year. . Our data shows that business owners are confident in their business and revenue expectations and continue to plan and invest in their future.”

For an in-depth look at insights from the nation’s small and medium business owners, read the full 2024 Bank of America Business Owners Report.

About the author

Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents. with and has been covering small business and entrepreneurship for over 30 years. Get more information on business trends by subscribing to it free Chains News Bulletin.