U.S. Bank: 73% of Small Businesses Have Grown Despite Labor Challenges
AUG 27, 2024 - 6:14 am
Almost three quarters (73%) of American small business owners say their business has grown in the last year, with even higher percentages for Black (84%) and Hispanic (80%) owners, according to the U.S. Bank 2024 Small Business Perspective.
According to the 2024 survey findings, many U.S. small business owners have been growing while also facing labor challenges, which include being understaffed (52%), navigating a more competitive labor market (77%) and struggling to increase their employees’ salaries to keep pace with inflation (65%). Survey data shows owners are taking several proactive steps to help their company attract and retain employees — such as the 83% who say they plan to offer flexible hours to support a healthier work/life balance.
At the same time, owners are embracing digital tools, with three quarters (75%) planning to focus on digital tools in the next 12 months to help reach their business goals. Small business owners are open to AI and automated solutions, with nearly seven in 10 (68%) seeing their benefit, and six in 10 (60%) having already implemented a solution with AI or automation. However, they have some concerns (see visual) with 47% of owners being worried that their company could be replaced with automation.
“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,” Shruti Patel, chief product officer for business banking at U.S. Bank, said. “The survey also reinforces the importance they place on digital tools in increasing efficiency and productivity. As small businesses owners rely more and more on software to manage their operations, U.S. Bank is focused on bringing our clients a seamless integrated experience across banking and payments to help streamline their cashflow and workflow.”
This survey includes input from 1,000 small business owners and 1,000 small business employees, as well as an additional sample of 300 Hispanic and 300 Black owners.
Small Business Owner Top Stressors and Their Impacts
Small business owners reported their top five macroeconomic stressors this year as:
§ Competition (73%)
§ Economic environment (71%)
§ Inflation and the increased costs of materials/supplies (65%)
§ Supply chain disruptions (47%)
§ Obtaining enough funding to support their business (42%)
In an election year, almost a third (31%) of small business owners also ranked the political environment as a top stressor.
When considering the implications of their top stressors, nearly half (49%) said these factors were delaying their ability to grow their business at the rate they had wanted. More specifically, 48% of those who cited competition and 39% of those who cited supply chain disruptions as their top stressor said these were delaying their ability to grow. However, those who cited economic environment (53%) or inflation and increased costs (58%) as their top stressor said these factors were decreasing their revenue.
