Entrepreneurship in 2024: Small business trends and predictions for the year ahead

Nearly a quarter of US consumers (23%) are considering starting a new business in 2024, according to findings from the Entrepreneurship in 2024 Report commissioned by Intuit QuickBooks in December 2023. Seasoned and aspiring entrepreneurs alike predict they will continue to face challenges like credit card debt and rising interest rates in 2024. However, they feel optimistic about hiring, expanding their businesses, and building personal wealth.

Read on for entrepreneurship trends and predictions in 2024.

Key findings

Use these links to jump ahead.

• Starting a small business is considered a better way to build personal wealth in 2024 than buying a home, especially among younger generations
• Inflation continues to be a driving force of new business growth following the pandemic
• Gen Z is the most likely to invest in small business growth in 2024
• Credit cards remain critical for small business financing, 83% of respondents used credit cards in 2023 
• Respondents say they need to earn $230k in 2024 to feel successful
• Increasing revenue is the #1 small business goal for 2024, above launching new products or services, or getting financing
• Baby Boomers report working remotely and taking more time off than younger generations

Starting a small business is considered a better way to build personal wealth in 2024 than buying a home

Amid the high costs of property and borrowing, more than 4,500 survey respondents (who are all employed or self-employed) say business ownership is a better way to build personal wealth in 2024 than buying a home.

This is especially true for side hustlers and younger generations, who may feel home ownership isn’t in reach. Millennials were the most likely to back “starting a business” as the best way to build personal wealth next year, while Baby Boomers were the least likely. 

However, homeownership has some surprising correlations with business ownership. More than two-thirds of small business owners with employees (69%) are also homeowners, according to the survey. Among non-business owners, home ownership drops to 52%.

23% of respondents are thinking about starting a new business in 2024 — tax refunds may help

Nearly a quarter of respondents are considering starting a business in the next 12 months. But the desire to start a new business diminishes with age — 28% of Gen Zers say they’re considering starting a business in 2024 compared to 26% of Millennials, 20% of Gen Xers, and just 10% of Baby Boomers. 

Of course, not all burgeoning business owners will see these dreams become a reality. One important factor that could influence their decision is the size of their tax refund — which could serve as funding for their new business. Almost two-thirds (65%) say a smaller tax refund would make it harder to start a business or side hustle in 2024. 

In fact, 32% of those who have started a business within the last three years (during or after the COVID-19 pandemic) said “getting a tax refund helped me to fund the idea.” Tax refunds helped to fund 49% of small businesses created since 2020 which now have employees.

Inflation continues to be a driving force of new business growth following the pandemic

Survey respondents continue to see inflation and high interest rates as the greatest threats to their ability to build personal wealth, with many expressing concern about debt and the cost of borrowing. However, these concerns are higher among employees (W2 earners) than business owners (those with 1099 income from business ownership or self-employment) — perhaps because employees are more likely to have fixed incomes. 

But, for some aspiring entrepreneurs, inflation comes with a silver lining. When times get tough, entrepreneurs get creative. In a 2022 QuickBooks-commissioned survey, two-thirds of respondents (66%) who wanted to start a new business in 2023 said inflation was a big motivating factor. Two in five (45%) said technology makes it easier for entrepreneurs to diversify and boost their income. 

Today, 57% of small business owners who started their businesses during or after the COVID-19 pandemic say inflation was the primary driver behind their decision to do so. The rising cost of living forced these business owners to seek additional sources of income. 

Starting a business, especially amid a global pandemic, isn’t easy. But 53% of new businesses say digital technology such as e-commerce, social media, and remote work, helped break down the barriers to business ownership.

Gen Z is most likely to invest in business growth in 2024 — expanding online and hiring employees are top priorities

Small business owners surveyed (those with 1099 income from self-employment or business ownership) say hiring skilled workers will be the most beneficial to business growth in 2024, followed by social media and e-commerce. 

On the flip side, respondents see inflation as the #1 hindrance to small business growth, followed by rising interest rates and the lasting effects of the COVID-19 pandemic. 

When we look at which businesses are most likely to invest in growth strategies in 2024, a clear generational trend emerges. In general, younger generations of small business owners are more likely to want to invest in growth than older generations, according to the survey. The majority of Gen Z small business owners (88%) say they want to expand their e-commerce or physical presence to boost revenue in 2024 compared to less than half (47%) of Baby Boomer-aged business owners. 

Likewise, 76% of Gen Z small business owners and 80% of Millennial small business owners say they want to hire employees in 2024, compared to just 34% of Baby Boomers. But 71% of small businesses overall say they’d like to hire additional workers to expand their capacity in the next 12 months — with a slight preference for hiring 1099 contractors over W2 employees, especially among solopreneurs (non-employers). Overall, these businesses say they need to hire to meet increased customer demand in 2024. 

Credit cards are a critical lifeline for small businesses — 76% say they’ve used 30% or more of their credit limit

Credit cards continue to be an important source of small business financing, with 95% of small business employers and 81% of solopreneurs (non-employers) currently using them to make purchases for their businesses. Among all small business owners surveyed who are currently using credit cards, 59% say they’re using them as an emergency or temporary source of funding. 

More than 1 in 10 small business owners (13%) who use credit cards say they relied on their credit cards as an emergency or temporary source of funding in every month of 2023 — 40% of small business owners say they relied on credit cards for six months or more.

Credit cards are a fast and convenient form of funding for small businesses, but they come with pitfalls. Overall, almost 1 in 4 small business credit card users (24%) don’t believe they will be able to clear their credit balances in 2024 without paying interest. Respondents estimate they’re paying an average 16% APR on their credit cards. Over 40% estimate the APR on their business credit cards is 20% or higher. 

Additionally, 76% of respondents who use credit cards say they have used 30% or more of their available credit limit. More than half (51%) have used 50% or more. Credit experts typically recommend keeping credit utilization below 30% to maintain a good credit score. 

For many of these business owners, their personal credit score is at stake — 70% of respondents admit to using personal credit cards for business expenses. Personal credit cards are more popular among freelancers and solopreneurs, while small businesses with employees are more likely to use business credit cards.

The price of success — respondents say they need to earn $230,000 in 2024 to feel successful

On average, US consumers surveyed say they will need to earn $230,000 in 2024 to feel successful, which is roughly three times the median household income, according to the latest  US Census Bureau data from 2022. However, 11% of respondents say they’d be happy to earn just $25,000. The majority of self-employed respondents (57%) report that they are currently making less than $100,000 per year, and 1 in 10 say they’re earning less than $5,000 of 1099 income.

The 1,000 side-hustlers surveyed say they would need to earn an average of $170,000 in 2024 to consider quitting their day jobs. The highest percentage of side hustlers (20%) say they’d need to earn at least $75,000 to make the move. But one in three (33%) say they’re currently making less than $25,000 from their business. The #1 reason most side hustlers keep their day job is to have the stability of a regular income. For them, this is almost twice as important as having access to healthcare benefits from W2 employment. 

By generation, Millennials have the highest bar for success in 2024. On average, they need to earn $288,000 to feel successful. Nearly 1 in 10 (9%) say they would need to earn $1 million per year — though almost two in five (39%) would be happy in the $50,000 to $100,000 range. 

At the other end of the spectrum, Baby Boomers say they would be satisfied with less than half that amount. More than two in five Baby Boomer respondents (42%) say they would feel successful earning $25,000 to $50,000 in 2024.

Small business owners say increasing revenue is their #1 goal in 2024

Small business owners share this desire to increase their income — 42% say it’s their #1 goal to increase revenue in 2024, above launching new products or services or getting financing for growth. 

Nearly 9 in 10 employers are looking to hire in 2024

To achieve this, many small business owners plan to invest in e-commerce in 2024 — above opening or expanding physical locations. However, employers are more likely than non-employers (or “solopreneurs”) to continue to invest in expanding physical locations. 

Additionally, most employers (89%) want to hire more employees or contractors next year — which suggests employment growth rates may be higher in 2024 than we saw in 2023. Almost two-thirds (62%) of non-employers (solopreneurs), say they want to hire in 2024, with 39% hoping to hire W2 employees, not just contractors. Similarly, many side hustlers don’t plan to keep hustling alone in 2024. Almost three-quarters (74%) want to hire employees or contractors in 2024.

Mental health break: A look at stress and satisfaction among business owners and employees

Overall, almost a third (32%) of respondents report high levels of stress while a similar proportion (36%) report high levels of satisfaction. But the two don’t go hand in hand. Unsurprisingly, the survey found that high stress tends to correlate with low satisfaction among US workers, and vice versa. 

Employees can’t get no satisfaction… but their employers can

Small business owners with employees are the least likely to report a high level of stress (only 26% would rate their overall stress level as “high”), despite working the longest hours each week on average (45 per week). 

On the other hand, freelancers and gig workers are the most likely to report a high level of stress (41% are in this category), despite working the least hours per week (an average of 36 hours) and taking the most time off (more on this below). 

Small business owners with employees are the most likely to report a high level of satisfaction — more than two in five (44%) say they would rate their satisfaction as “high.” It would seem that having a team of W2 employees both lowers stress and increases satisfaction — but employees may not feel the same benefits. Workers who get all of their income from W2 employment, without any form of business ownership or self-employment, report the lowest levels of satisfaction. Only 27% of employees in this category say they are highly satisfied. 

Younger generations take less time off than older generations

Across all respondents, the average amount of PTO taken in 2023 was 14 days. Respondents say they expect to take the same amount of time off in 2024. However, PTO varies by generation and employment type. Freelancers report taking the most time off, on average, at 16 days per year. Conversely, employees take the least time off, at just 12 days.

Overall, 1 in 10 report taking no time off at all in 2023, other than weekends and holidays. A similar proportion expect to take no time off again in 2024. 

By generation, younger workers and business owners are less likely to take time off than older generations. Gen Z respondents took 12 days off on average in 2023 and expect to take the same amount of time in 2024. But Baby Boomer respondents say they took 16 days off in 2023, and plan to take extra time (17 days) in 2024. 

Older generations more likely to work from home

Overall, 63% of respondents say they do some form of remote work, either at home, on the go, or blending home and office work. But business owners are far more likely to work remotely than employees. While 73% of solopreneur business owners report working remotely at least some of the time, this number drops to 28% for W2 workers. 

By generation, Baby Boomer respondents are most likely to work from home — 32% report that this is where they typically work, compared to just 20% of Gen Z respondents.

Sample and methodology

From November 30 to December 5, Intuit QuickBooks commissioned an online survey of 4,583 US consumers age 18+ who have income from employment or self-employment. The survey focused on recent entrepreneurship trends and predictions for 2024 among five cohorts of respondents who identified themselves as small business owners with 1-100 employees (n=996); small business owners with no employees (n=717); full-time freelancers, contract, or gig workers (n=870); side hustlers who combine W2 and 1099 income by running a small business on the side of their day job (n=1000); and W2 employees who work for an employer, with no 1099 income (n=1000). Overall, 50% of the respondents were male while 50% were female; 10% were Gen Z, 50% were Millennial, 29% were Gen X, and 11% were Baby Boomers. Percentages have been rounded to the nearest decimal place so values shown in charts and graphics may not add up to 100%. Responses were collected using Pollfish audience pools and partner networks with double opt-ins, random device engagement sampling, and post-stratification based on census data to ensure accurate targeting and results. Respondents received remuneration.

Disclaimer

This content, report and materials are for informational purposes only and should not be considered legal, accounting, financial, investment, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc., or its affiliates do not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc., or its affiliates do not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.

We provide third-party links as a convenience and for informational purposes only. Intuit Inc. or its affiliates do not endorse or approve these products and services, or the opinions of these corporations or organizations or individuals. Neither Intuit Inc. nor its affiliates assume responsibility for the accuracy, legality, or content on these sites.