According to the U.S. Bank 2024 Small Business Perspective, nearly 73% of American small business owners report growth over the past year, with even higher growth rates among Black (84%) and Hispanic (80%) owners. The report, based on a survey of over 1,000 small business owners, examines the challenges and opportunities facing businesses in today’s economic climate, including labor shortages and the impact of artificial intelligence (AI) on operations and job security.
The survey reveals that while many small business owners are experiencing growth, they face significant labor challenges. These include being understaffed (52%), dealing with a competitive labor market (77%), and struggling to keep employee salaries in line with inflation (65%). In response, 83% of owners plan to offer flexible hours to improve work-life balance and attract talent.
Digital tools are becoming increasingly important, with 75% of small business owners planning to focus on these tools over the next year to achieve their business goals. About 68% of owners view AI and automation positively, and 60% have already adopted such technologies. However, 47% of owners express concern that automation might replace their company.
“Small business owners continue to show remarkable resilience and optimism despite economic stressors like competition, inflation, and supply chain issues,” said Shruti Patel, Chief Product Officer for Business Banking at U.S. Bank. “The survey highlights the growing importance of digital tools in improving efficiency and productivity. U.S. Bank is committed to providing integrated solutions that streamline cash flow and workflows for our clients.”
The survey also highlights top stressors for small business owners:
- Competition (73%)
- Economic environment (71%)
- Inflation and rising costs (65%)
- Supply chain disruptions (47%)
- Securing adequate funding (42%)
- Political environment (31%) in an election year
Nearly half of the respondents say these stressors are hindering their growth, with competition and supply chain issues causing delays. Economic challenges and inflation are affecting revenue more directly.
In terms of digital tools, 71% of owners and 55% of employees agree on the need for these tools to ease their work. Eighty percent of owners prefer banks that offer integrated digital solutions for banking, payments, and administrative tasks. Owners find digital tools most beneficial for simplifying work, preventing fraud, and improving productivity.
While 68% of owners see AI and automation as beneficial, nearly half of small business employees are uncertain about how these technologies will affect their jobs, with 25% worried about potential job replacement. This concern is higher among Gen Z and Millennials compared to older generations. Despite these worries, 79% of owners who currently don’t use AI are open to implementing it in the next year.
