What America’s small businesses have to say about 2024 (and what they expect in 2025) 

Small businesses employ about half of the workers in this country and generate nearly half of the nation’s gross domestic product. These owners — and their employees — are a massive voting bloc. So with the election only a couple of weeks away, what’s their state of mind?  

A number of surveys have been released in the past few weeks that cover tens of thousands of business owners, of every color and gender from across the country, representing the smallest to mid-sized organizations (that is, a few hundred persons). Here is a sample of what they had to say.

First, real monthly income decreased in September in eight of the 12 industry sectors tracked by the Intuit QuickBooks Small Business Index. Likewise, small-business revenue last month dipped in five of the eight regions monitored as part of the index, with zero or near zero growth in the remaining three.

However, a Small Business Index from payments and financial technology firm Fiserv, which tracked retail and restaurant point-of-sale transactions, revealed three straight months of “steady consumer spending” and — although retail trade declined in September — small-business sales increasing about 1.8 percent over the last year. So not a lot. But positive.  

A Bank of America survey found that 78 percent of the American small-businesses responding to their recent survey “grew” (though the growth was unspecified) in the past year, with even higher percentages for businesses with Black and Hispanic owners. U.S. Bank’s Small Business Perspective survey found that 73 percent of small businesses have also “grown” in the last year — again, with no amount specified. 

But the National Federation of Independent Businesses, which has surveyed its membership monthly for the last 50 years, said that a “net negative” (seasonally adjusted) number of business owners reported higher nominal sales in the past three months, down 1 point from August and the “lowest reading of this year.” The survey also said that the net frequency of reports of positive profit trends was minus-34 percent (seasonally adjusted), with owners blaming weaker sales, inflation and labor costs as the culprits.  

According to the Intuit index employment for U.S. small businesses with one to nine employees decreased by 4,800 jobs in September compared to August (a decline of 0.04 percent month-over-month), with decreases noted in ten of the 12 sectors it tracked.  

Human resources and payroll services provider Paychex’s Small Business Employment Watch for September, which reflects U.S. small businesses with fewer than 50 employees, said that their national jobs index “moderated slightly” in September but has shown “modest employment growth,” with annualized hourly earnings growth remaining below 3 percent for the past five months. This is barely keeping up with inflation. 

 “We’ve seen employment growth fluctuate less than a half a percentage point in the last three months amidst uncertain external forces such as the upcoming election and the potential for additional rate cuts,” said John Gibson, Paychex’s president and CEO. 

The U.S Bank survey also found that many U.S. small-business owners continue to face labor challenges, which include being understaffed (52 percent), navigating a more competitive labor market (77 percent), and struggling to increase their employees’ salaries to keep pace with inflation (65 percent).  

According to the National Federation of Independent Businesses survey, 51 percent of owners reported capital outlays in the last six months, down 5 points from August. Only one in five business owners (seasonally adjusted) are planning capital outlays in the next six months, and that’s down 5 points from August. 

However, CNBC and SurveyMonkey’s Small Business Survey for the third quarter found that lower interest rates will likely lead business owners surveyed to increase investments, expand their business or increase inventory. 

Despite security concerns, a survey of small-business owners from Verizon Business found that they are investing in tech more than they have in the past three years with the number of respondents using AI doubling to 39 percent. Upgrades to internet connections have formed a big portion of those investments, with 66 percent doing so in the past year.  

75 percent of the business owners surveyed by U.S. Bank are also planning to focus on digital tools in the next 12 months to help reach their business goals, with nearly seven in 10 seeing the benefit of AI and 60 percent having already implemented a solution with AI or automation. 

Across the board, the surveys I analyzed found that small businesses are facing similar challenges this year: inflation, the uncertainty around the economy and elections, higher interest rates and finding qualified people. U.S. Bank said that 42 percent of their respondents said they were concerned about obtaining funding, and Verizon says that concerns about their business’ financial and job security have grown over 10 percent in the last year. 

The Bank of America survey found that nearly four out of five owners of small- and mid-sized businesses anticipate revenue growth in the next 12 months and as many as 60 percent believe the national economy “will improve.” 

Verizon says that “despite economic anxiety, small businesses remain optimistic,” and about half of respondents expect their personal and their business financial security to improve in the coming months, with almost 60 percent of the respondents believing their business “will be in a better economic position next year.” 

Overall confidence also increased in the quarterly CNBC-SurveyMonkey poll to 51 out of 100, which is up 4 points from last quarter and 9 points from the same quarter last year — and the first time during the Biden presidency that it has risen above 50, a “net confident” reading. 

“Small business owners continue to show resilience and optimism despite feeling impact from ongoing stressors such as the economy, changing labor market dynamics, higher prices and wages, and other macroeconomic factors,” said Shruti Patel, chief product officer for business banking at U.S. Bank.

But the National Federation of Independent Businesses survey says that optimism has been running below the 50-year average for 33 months and uncertainty has risen to the highest reading ever recorded. Bank of America also admits that smaller employers are less optimistic, with 50 percent planning to expand and 39 percent planning to hire versus 78 percent and 61 percent of the owners of mid-sized businesses. 

So what’s the takeaway? It seems that for most small businesses, 2024 wasn’t bad, but it wasn’t great either. Hiring and investments have slowed. AI is hot. Money isn’t raining from the sky. But there’s no significant recessionary red flags either.  

Entrepreneurs and owners are generally optimistic for 2025. Count me as one. 

Gene Marks is founder of The Marks Group, a small-business consulting firm.