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Small Business Data

20 small business financial literacy statistics to know in 2024

Small business owners need some degree of financial literacy to effectively run and grow a business. But many weren’t professionally trained or educated on how to manage their finances. An Intuit QuickBooks commissioned survey reveals that only 16% of new small business owners have a business degree or similar qualifications. The majority are learning as they go.

Knowing this, it’s not uncommon for small business owners to feel a little trepidation when it comes to financial management. Nearly half (42%) of small business owners surveyed admit they had limited or no financial literacy before starting their businesses.

Financial literacy goes beyond a simple understanding of accounting terms and definitions. At its core, it means harnessing the financial skills—like budgeting, investing, and managing cash flow—that are required to grow and maintain a successful enterprise. But these skills don’t come stock with a business permit. Many new business owners (and even not-so-new) can find themselves in over their heads when it comes to the financial management of their business.

If you’re among them, you’re certainly not alone. Read on for 20 essential stats every small business owner needs to know about financial literacy.

QuickBooks research reveals the state of financial literacy for small business owners in 2024

1. Only half (54%) of small business owners say they had a good understanding of financial management before starting a business.1

One in four (28%) say they lacked confidence in their financial knowledge. Another 14% said they had limited or no financial literacy prior to starting a business.

2. 1 in 5 small business owners say they taught themselves financial literacy.1

Business owners who rated their financial literacy as “high” before starting a business attribute their knowledge to self-led learning. Another 1 in 5 say they learned through prior entrepreneurial experience. Only 13% say they learned about financial literacy in school. 

3. Low financial literacy costs small business owners an average of $118,121 in lost profit.1

Small business owners with low financial literacy at the start of their business journey could be losing money because of it. Nearly half (45%) say they’ve lost at least $10,000 in profits as a result of low financial literacy — 13% believe they’ve missed out on $500,000 or more. 

4. 32% of small business owners say better financial literacy would help them improve budgeting and cash flow.1

One in 5 (20%) say they’d have a better understanding of their financing options if they were more financially literate. Another 19% say financial literacy would give them a better understanding of their taxes. 

5. Less than half (48%) of small business owners are confident they’re paying taxes correctly.2

This number jumps to 69% for small business owners who use an accounting professional. 

6. 71% of small business owners say being a business owner has improved their financial security.1

The majority of small business owners say they are better off after starting a business. Only 14% say business ownership has decreased their financial security. 

7. 48% of small business owners plan to build personal wealth by growing their business.3

Another 44% say they’ll build their wealth by starting a new business or side hustle. More than 1 in 3 (36%) will turn to financial investments to build personal wealth, and 19% say they plan to buy a home. For entrepreneurs, starting or growing a small business is a better way to build wealth than buying a home. 

8. Nearly half (49%) of small business owners say their business is stable, but not growing.4

Only 32% say their business is expanding. But for many, stability is enough. Only 10% say they want their business to rapidly expand. 

9. 45% of small business owners say stability, not growth, is the long-term goal for their business.3

For these business owners, a steady income and the flexibility to work when they want is more important than expanding the business. 

10. 43% of small business owners say cash flow is a problem for their business.4

74% say their cash flow challenges have stayed the same or worsened over the last 12 months. Only 26% say their cash flow problems have improved. 

11. 38% of small business owners use their own money to fund their business when the cash flow river runs dry.4

Another 38% turn to credit cards or dip into the business’s cash reserves.

12. The majority of today’s entrepreneurs (85%) use credit cards for their business.3

Nearly 6 in 10 (59%) use credit cards as an emergency or temporary source of funding for their business. 

13. 7 in 10 small business owners have used a personal credit card to pay for business-related costs.3

Using a personal credit card can impact their personal credit score and make it harder to separate business and personal transactions for tax purposes. 

14. 76% of small business owners who use credit cards have used 30% or more of their credit limit.3

More than half (51%) have used 50% or more of their credit limit. Experts typically recommend keeping credit utilization under 30% to maintain a good credit score. 

15. 1 in 5 (24%) small business owners are not confident they’ll be able to pay their credit cards off without paying interest.3

Another 10% don’t know or understand the Annual Percentage Rate (APR) — or the percentage of interest they’ll have to pay — on their credit cards. 

16. 47% of small business owners say they would pull from savings to pay down a maxed-out credit card.4

32% say they would look for ways to decrease non-payroll costs, and 25% would apply for a loan to help with debt payoff. But 13% say they would apply for another credit card. 

17. 50% of small business owners say using credit cards can easily lead to debt accumulation.4

These business owners say debt accumulation is one of the biggest disadvantages of using credit cards for business. But high interest rates and substantial interest charges take the number one spot — 57% of small business owners say this is the top disadvantage. 

18. 71% of today’s small business owners use accounting software or apps to manage their finances.4

But another 71% say they’re also still using pen and paper or spreadsheets to manage some aspects of their finances — leaving them vulnerable to human error. Only 2% say they don’t have any kind of system for recording financial transactions. 

19. 98% of small business owners say their accountant boosts their confidence in their business.2

Another 9 in 10 say their accountant or bookkeeper helps their business grow. 

20. 9 in 10 small business owners say their accounting professional contributes to the business’s success.2

Businesses that don’t use an accounting professional are less likely to report strong financial health or believe they could pass a financial audit.


  1. Black History Month Survey: Innovation thriving, but signs of economic uncertainty
  2. Accounting professionals are key partners in the fight against inflation
  3. Entrepreneurship in 2024: Small business trends and predictions for the year ahead
  4. Small Business Insights: Small business vitality today

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