Small Business Insights: Small business vitality today

Mode of sales

Rapidly changing consumer behaviors around accessibility and convenience have led many small businesses to change how they do business. With the demand for e-commerce and the fallout from the pandemic, more small businesses have shifted to online sales. Whether online only, hybrid, or in-person, small businesses are always looking for the best ways to succeed. 

On average, more than 2 in 5 small businesses are doing direct online sales

On average, 42% of small businesses across the US, Canada, and the UK are doing direct sales to customers online, dropping down from an average of 48% in April 2023 and an average of 46% in July 2023. 

In the US (42%) and Canada (44%), the largest share of small businesses pull their business from online sales. In the UK, direct negotiation ranks highest (45%).

The share of online sales has remained the same for most small businesses over the past 3 months

Among small businesses doing online sales, an average of 73% between the US, UK, and Canada report the share of online sales compared to overall sales has remained the same over the last 3 months.



2 in 3 small businesses expect no change in online sales over the next quarter

Small business sales will remain stable, according to the latest survey. An average of 66% of small businesses expect online sales to remain the same over the next 3 months, an increase from an average of 63% in July 2023.



Cash flow and payments

Getting paid is often the number one problem small businesses face. Find out how much small businesses are owed in unpaid invoices and if cash flow problems are on the rise.

On average, nearly 6 in 10 small businesses have unpaid invoices

On average, nearly 6 in 10 (58%) small businesses have unpaid invoices. In the US, this quarter marks the first time the number of unpaid small businesses has dipped below 60% since September 2022. Still, 57% report that they currently have unpaid invoices.

Small businesses with unpaid invoices are owed around $26,000 on average

On average, small businesses in the US, Canada, and the UK are owed $26,000 in unpaid invoices, continuing a downward trend for both the US and Canada since September 2022. 

Small businesses getting paid on time is a significant driver of healthy cash flow.

On average, 1 in 2 small businesses have overdue invoices

Fewer small businesses have overdue invoices this quarter. Across the US, Canada, and the UK, 1 in 2 (50%) small businesses have invoices overdue by 30 days or more — compared to an average of 56% in July 2023 and 65% in April 2023.

2 in 5 small businesses have cash flow problems

On average, 2 in 5 (42%) small businesses are experiencing cash flow problems, according to the latest survey.



More than 1 in 10 small businesses report worse cash flow problems than last year

More than 1 in 10 (16%) small businesses report worse cash flow problems than last year on average — slightly above the low of 13% in April 2023, but still well below the average of 30% reported in 2022.

More than 1 in 3 small businesses with cash flow problems are dipping into cash reserves on average

Using a credit card (42%) tops the list of cash flow solutions in the US this quarter while 39% of Canadian small businesses are tapping into the business owner’s money for cash flow help and 41% of UK small businesses are using cash reserves.

Funding and financial health

Getting funding can be another major challenge for small businesses. Find out who they’re turning to for financial support and how many are worried about their financial health.

8 in 10 small businesses are making a positive profit

3 in 10 small businesses have poor financial health

After spiking to 37% in April 2023 and 35% in July 2023, the percent of small businesses experiencing poor financial health has decreased to an average of 30% this quarter. 

Across the US (47%), the UK (53%), and Canada (51%), most small businesses report stable financial health this quarter. But at least 1 in 4 small businesses across all three countries report that they are facing closure or in survival mode.



Nearly 1 in 5 small businesses report worse finances than a year ago

On average, nearly 1 in 5 (19%)small businesses report their financial health is worse than it was a year ago – decreasing from an average of 22% in September 2022 and an average of 23% in December 2022.

Small businesses surveyed report quarterly revenue of $509K, on average

Small business revenue averaged $509,000 this quarter among respondents – dropping from an average of $540,000 last quarter.



Small business revenue growth remained unchanged over the past 12 months

On average, small business revenue growth did not increase or decrease year over year this quarter.

On average, small businesses in the US grew their sales revenue by 0% over the past 12 months with 27% experiencing a decrease in growth, 24% reporting no change, and 40% reporting an increase in growth.



Small businesses expect revenue to increase by an average of 3% over the next 3 months

Small businesses expect revenue to increase by an average of 3% over the next 3 months. This estimate comes in lower than the 4% average increase anticipated in July 2023 and the 6% average increase anticipated in April 2023.



Nearly 2 in 5 small businesses have applied for financing in the last 12 months

On average, nearly 2 in 5 (39%) of small businesses have applied for financing in the last 12 months. More US small businesses (44%) have applied for financing in the last 12 months than UK (36%) and Canadian (35%) small businesses.



More than 1 in 3 small businesses say the availability of financing has worsened over the past 12 months

On average, 36% of small businesses in the US, Canada, and the UK report that the availability of financing has worsened over the past 12 months. More small businesses in the US (38%) and Canada (40%) have experienced worsening availability of financing than those in the UK (30%).



Small businesses are cutting staff and dipping into cash reserves to combat worsening availability of financing

In response to the worsening availability of financing, small businesses in the US (22%) and Canada (18%) are cutting personnel. In the UK, 21% of small businesses are relying on greater use of internal cash buffers or plans to slash future investments.



More than 2 in 5 small businesses do not expect to get the financing they need over the next 12 months

An average of 2 in 5 (46%) small businesses do not expect to get the financing they need over the next 12 months — higher than 38% in April 2023 and 39% in July 2023. UK small businesses top the list with 52% saying they won’t be able to meet financing needs over the next year.



Business growth and challenges

While growth can be a top priority for some small businesses, others focus on stability. Many face the pressures of competition, inflation, and availability of financing. Learn more about the specific growth goals and business challenges small businesses are rising to.

The pursuit of steady and fast growth is on the rise

Small businesses have big aspirations. The percent of small businesses pursuing steady or fast growth is trending upwards while the percent of those pursuing stability is trending downwards. 

In the US, 62% of small businesses report targeting steady growth — up from 54% in September 2022 and 57% in December 2022. Similarly, 10% of US small businesses say their primary goal is fast growth — up from 4% in September 2022 and 5% in December 2022.



Inflation is the top external challenge small businesses currently face

Inflation is top of mind for small businesses for the third quarter in a row. One in 2 (52%) small businesses say rising costs is their greatest challenge.



2 in 3 businesses have recently increased prices — and 1 in 3 plan to soon

The percent of small businesses that recently increased their prices continued an upward trend this quarter, peaking at an average of 67%. One in 3 (33%) small businesses indicate a plan to increase prices soon.



12% is the average price increase reported by small businesses

Small businesses who recently increased prices bumped them up by 12% on average — dropping from an average of 17% in April 2023 and an average of 13% in July 2023.



Small businesses are planning to increase prices by 7%

Small businesses planning an upcoming price bump will increase prices by 7% on average — dropping from an average of 14% in April 2023 and an average of 12% in July 2023.



Small businesses expect operating costs to increase by an average of 3% over the next 3 months

Workforce management

A daunting step for any small business is hiring workers for the first time. Running payroll, providing benefits, and holding onto skilled workers become essential to everyday operations. Learn how small businesses are navigating this.

1 in 3 small businesses plan to expand their workforces, down from last quarter

April 2023 and July 2023 saw a rise in small businesses planning to expand their workforces. This quarter, the push for workforce growth has slowed with an average of 33% of small businesses planning to increase their workforce in the next 3 months.



Hiring is a challenge for 2 in 5 small businesses

An increasing number of small businesses are experiencing hiring challenges. On average, 2 in 5 (40%) say hiring has been difficult and is becoming harder. While this is an increase from 35% in April 2023 and 38% in July 2023, it still falls below the high of 53% in September 2022. 

In the US, 44% of small businesses report hiring is hard or getting harder this quarter.



More than 1 in 3 small businesses are preparing to increase pay for workers - a decline from previous quarters

On average, more than 1 in 3 (38%) small businesses are planning to give pay increases to workers over the next 3 months. This marks the smallest average share of businesses earmarking pay increases since September 2022. 

The US falls above the average this quarter with 46% of small businesses planning to increase pay over the next 3 months.



Where small businesses are planning pay increases, they expect to give raises of 7% on average

Small businesses planning raises are expecting to bump up pay by 7% on average across the US, Canada, and the UK. This is unchanged from July 2023, but still lower than average pay increases planned earlier in 2023 and in 2022. 

In the US, pay raises continue to fluctuate between 7% and 8%.



3 in 10 small businesses are struggling to persuade skilled workers to stay

On average, 3 in 10 (32%) small businesses report retention is hard or getting harder, slightly above last quarter (31%) but still considerably lower than the average reported in September 2022 (47%) and December 2022 (48%).



An increasing number of small businesses see remote work as an effective employee retention tool

An average of nearly 6 in 10 (59%) small businesses say flexible work arrangements, including remote work, is a workplace benefit employees value the most — higher than all previous quarters.



2 in 10 small businesses plan to expand employees benefits

On average, 2 in 10 (21%) small businesses plan to expand employee benefits — the lowest average since September 2022.



Paid time off and dental coverage are the employee benefits small businesses are most likely to increase

On average, nearly 3 in 10 (29%) of small businesses are planning to expand or add paid time off and dental benefits.



Digital tools

Small businesses are capitalizing on the power of digitization with new investments and high return. Data shows that US small businesses using 8 or more digital tools to manage different areas of their business are twice as likely to report revenue growth compared to their peers using just up to 2 digital tools. 

More than 8 in 10 small businesses are using digital technology to run their businesses

More than 1 in 10 small businesses plan to start using social media in the next 3 months

On average, 1 in 10 (12%) of small businesses will introduce social media as a new digital tool in the next 3 months.



More than 1 in 10 small businesses are early adopters of digital tools

On average, more than 1 in 10 (16%) small businesses across the US, Canada, and the UK consider themselves early adopters of new digital tools. This is a slight decrease from 21% in April 2023 and 17% in July 2023.



On average, suppliers and customers are the most popular sources to learn about new digital tools

On average, 38% of small businesses learn about new digital tools from their suppliers or customers – also the top source in the US (40%) and the UK (39%). In Canada, small businesses are turning to not just suppliers and customers (36%), but also friends (36%0 and social media (36%) to learn about new digital tools.



Cost continues to keep small businesses from adopting new digital tools

In both the US (40%) and the UK (38%), small businesses report that cost is a major factor when they choose not to adopt new digital tools. In Canada, cost (40%) and usefulness (41%) are the top reasons small businesses do not adopt new digital tools.



Small businesses agree the top benefit of digital tools is time saved

Demographics & firmographics

The total sample size for each survey, fielded every three months in the US, UK, and Canada, is a minimum of 2,850 small business owners and decision makers, comprising a minimum of 1,500 respondents in the US, 750 respondents in the UK, and 600 respondents in Canada.

Demographics

Firmographics

Sample & methodology

Online surveys commissioned by Intuit QuickBooks in September 2022, December 2022, April 2023, July 2023, and October 2023 with a minimum total of 2,850 respondents for each wave. To present the most insightful analysis of small business performance, the April 2023 survey was administered with an updated set of questions, resulting in some charts only having data for that quarter. All respondents are over the age of 18. More than 95% of respondents are over the age of 25. Overall, 59% of respondents are small business owners on average. The remainder are senior decision-makers within small businesses who have good knowledge of the business’s finances, operations, and strategic priorities. For the purpose of this survey, small businesses are defined as having 100 employees or fewer. Approximately 1 in 10 (16%) small businesses surveyed have no employees while an average of 47% have 1 to 10 employees. The remaining have 11 to 100 employees. On average, nearly 1 in 2 (49%) small businesses surveyed are service-based and 2 in 10 (21%) are product-based. Three in 10 small businesses surveyed sell a mix of products and services. Sales revenue from the last quarter was, on average, $522,000 in the US, £375,000 in the UK, and $629,000 in Canada.