2025 Small Business Report: Employment, Revenue and Tech Trends

Small businesses continue to serve as the backbone of economies across the United States, Canada and the United Kingdom, even as they face mounting challenges in employment, revenue and financing.

The 2025 Intuit QuickBooks Small Business Index Annual Report highlights key trends shaping this vital sector, offering a comprehensive analysis of the opportunities and hurdles confronting small business owners.

Employment and revenue trends

Between October 2023 and October 2024, small businesses in the U.S. experienced a decline of 51,200 jobs, marking the most significant year-over-year employment decrease since 2015.

Despite this downturn, signs of recovery have emerged since February 2024. Average real revenue per small business also saw a reduction of $11,850, continuing a three-year trend of declining revenues.

The manufacturing sector was notably affected, losing 20,600 jobs and experiencing a 4.72% drop in average real revenue, equating to $30,180 per business. Conversely, the wholesale trade sector demonstrated resilience, with an average revenue increase of $78,490 per business, despite a slower decline in employment.

In Canada, the small business sector faced a reduction of 84,100 jobs since July 2024. This decline underscores the broader challenges within the Canadian small business ecosystem. Meanwhile, the United Kingdom's small businesses reported a decrease of 2,200 jobs from October 2023 to October 2024, marking the second consecutive annual employment decline.

This reduction, however, was less severe than the previous year's figures. Notably, the construction sector added 7,500 jobs, indicating pockets of growth within the industry.

Financing challenges

The report identifies higher borrowing costs and limited access to financing as key factors contributing to declining employment.

Elevated interest rates have particularly impacted small businesses' growth trajectories. U.S. businesses with up to 100 employees that faced restricted access to credit card financing due to higher interest rates exhibited up to 30% lower revenue growth and up to 4% lower employment growth compared to their counterparts with better financing options.

Credit cards have become the primary financing source for U.S. small businesses, with 55% charging more than 25% of all expenses to credit cards. In 2024, average monthly credit card interest payments rose by 14%, reaching $156 per small business.

Technology adoption and productivity

Embracing digital tools has emerged as a critical factor for small business success. The report reveals that 67% of small businesses managing eight or more areas of their operations with digital tools experienced productivity gains.

Additionally, 45% of these businesses reported increased revenue, compared to 30% among those utilizing digital tools in fewer areas. Businesses with higher digital integration are also 1.6 times more likely to anticipate positive future revenue growth.

Policy and industry implications

The findings of the report carry significant implications for policymakers, financial institutions, and technology providers. Policymakers may consider measures to improve access to affordable financing, such as programs aimed at reducing borrowing costs or offering grants to support small business growth.

Financial institutions can play a vital role in providing flexible lending solutions tailored to the unique needs of small enterprises. Meanwhile, technology providers have an opportunity to develop accessible and scalable digital tools that enable small businesses to optimize operations and improve their financial management.

Market adaptation

The 2025 Intuit QuickBooks Small Business Index Annual Report underscores the resilience and adaptability of small businesses amid economic challenges.

While employment and revenue declines present significant hurdles, strategic financial management and the adoption of digital tools offer pathways to recovery and growth.

The insights provided serve as a valuable resource for stakeholders aiming to navigate the evolving economic landscape and support the continued vitality of the small business sector.