Intuit Small Business Insights Survey Shows Hopeful Signs for Economy

The results of the quarterly Intuit QuickBooks Small Business Insights survey released in late August revealed that despite fewer small businesses in the United States reporting that their operating costs are rising, over half still say that inflation is their biggest challenge—among other insights.

Although elevated interest rates and record-high inflation have created significant economic pressures that have compelled firms to seek new solutions for mitigating risks to their businesses, the survey results imply that business leaders are beginning to feel more optimistic about the short-term trajectory of the business landscape.

Despite more small businesses struggling with cash flow, hiring has picked up

Elevated inflation and interest rates have been top of mind for many business owners, as they represent a myriad of challenges to growing an organization. These increased economic pressures have led to many small businesses reporting mild to serious cash flow issues.

That said, the data also revealed hopeful signs for the resilience of small U.S. businesses.

According to the survey, 13% of respondents said in July 2024 that cash flow is a “major problem” for their business currently; this represents a 4% year-over-year increase from July 2023 and a 4% increase from January 2024.

Despite this, responses from the survey suggest a prevailing sense of optimism among U.S. businesses. From April 2023, responses from participants in the study indicated consistent feedback about their “appetite for growth,” with a standard deviation of about 1.6 percentage points across the sample population. The data also showed a 2% decrease in the number of small U.S. businesses using any kind of financing since January.

Almost half of respondents also said that they were planning on increasing the size of their workforce; 32% said in July that they were planning on a “modest” increase in staff in 2024 (compared to 30% in January), and 9% said they were planning on a “significant” increase in staff in 2024 (compared to 6% in January). While both of these statistics represent an increase in hiring from small businesses since the beginning of the year, they predictably represent a year-over-year decrease from last July, when 35% of businesses said they were planning on hiring a “moderate” number of additional staff, and 11% said they planned on a “significant” increase in employees.

Technology use and digital adoption

Of course, technology adoption was another standout theme of the survey—and some of the results are surprising.

Despite reports by Intuit earlier this year that some firms are leveraging technology to mitigate talent shortages and the impact of inflation, fewer participants reported adopting new technology in July 2024 compared to the previous year. 75% of participants representing small businesses reported that they had not adopted new digital tools in the past three months, compared to 62% in July 2023.

Approximately 85% of respondents reported using accounting software or apps to record and manage financial transactions for their businesses; of the digital tools they reported using the most, accounting software was rated the “most useful” by the majority of respondents (36%), followed by business websites (29%), social media (26%), and payment platforms (23%).

When asked how the digital tools they considered to be the “most useful” were helping their small business, nearly two-thirds of respondents said they “improve efficiency” (62%) and “save time” (61%). The next most commonly-reported benefit was “reduce errors,” reported by over a third of respondents (39%).

Artificial intelligence (AI) and small businesses’ productivity

The survey also revealed insights about how AI is affecting the productivity of small businesses.

Participants based in the U.S. and Canada indicated the highest rates of AI adoption in the study compared to the United Kingdom (U.K.) and Australia, with 49% of U.S. firms reporting that they use AI-enabled tools daily (15%), weekly (20%), or monthly (14%). Canadian businesses reported even higher rates of AI use, with 52% of respondents saying they use AI on a regular basis.

Despite the higher frequency of AI-enabled tool use by Canadian firms than U.S.-based businesses, the study’s data revealed that U.S. firms are slightly more bullish on the technology than those based in Canada and that participants in the U.K. and Australia are considerably more skeptical.

On a scale of one to five, 46% of U.S. firms reported that they view AI as “somewhat” or “very” helpful for the productivity of their organization, while 49% of Canadian respondents indicated the same. For the U.K. and Australia, the results showed that 39% and 37% of respondents respectively felt favorable towards the technology.

For more details, you can access the full survey insights here.