Small Business
Survey 2024

Over the last year, small business owners’ understanding of artificial intelligence (AI) has grown, sparking an uptick in the adoption of AI solutions. In last year’s report, 40% of survey respondents did not employ AI solutions; a general lack of AI awareness bred uncertainty and hesitation about emerging technology. In this year’s report, the number of survey respondents using AI doubled, owing at least in part to growing familiarity with AI and its business applications. 

A rise in AI awareness among small to midsize businesses has a dual impact: decision-makers are more likely to perceive benefits, but they’re also more likely to harbor security concerns. A drop in respondents expressing “no opinion” suggests that more educated respondents are forming concrete opinions about AI one way or the other, which for the most part is driving adoption.

While business owners acknowledge the cybersecurity risks, they seem to believe that the opportunities outweigh the risks.

• AI usage has more than doubled compared to 2023, with almost 2 in 5 reporting that their business currently uses AI
• Two out of three respondents say AI helps them save time carrying out specific tasks, which allows them to focus on their core business—a 22-point increase over 2023.

As more small to midsize businesses conduct a bigger piece of their business online (this year, 38% added online/digital operations), technology investments among SMBs have grown to support that digitalization. Internet upgrades are a big part of that investment. In 2020, 27% of businesses upgraded their internet connection bandwidth, that increased to nearly half over the next three years: 52% in 2021, 51% in 2022, and 53% in 2023. This year, that number has reached 66%.

• 67% upgraded to a high-speed internet plan
• 60% invested in secure cloud backup services
• 55% purchased new employee devices
• 45% implemented new security systems

SMBs are more optimistic about their near-term financial security than they’ve been in recent years. About half of them expect their personal (50%) and their business (51%) financial security to improve in the coming months. Additionally, the majority of SMBs (59%) believe their business will be in a better economic position the following year. 

Despite short-term positivity, 83% of SMBs are worried about rising inflation and its impact on their business, and about four out of five are worried about the U.S. economy in general. Additionally, concerns about their business’ financial security (62%) and their personal job security (54%) have grown over 10% in the past year. Anticipating a potential economic downturn, almost two-thirds (63%) of small business owners already have—or are planning to—raise prices and reduce spending on non-essential items.

• 83% are worried about the effects rising inflation will have on my business
• 67% fear a possible recession
• More than half (53%) are worried that employees will look for work elsewhere if remote work isn’t an option—17 percentage points higher than last year
• Almost half (47%) expect the U.S. economy to improve in the next few months—21 percentage points higher than last year

While a majority of SMBs are optimistic about the next few months, some have concerns about the holiday season.  More than a third of respondents (37%) were concerned about pricing goods and services to keep up with inflation. A third are concerned about ensuring their digital presence will be enough to cut through the clutter to attract customers during the busiest time of year. 

Despite these concerns, most SMBs have a positive association with the holidays, seeing increased demand during Small Business Saturday (59%) and throughout the holiday season overall (73%). Additionally, more than half of retailers (52%)  are preparing for an in-store-first holiday season, representing a 13-point jump from last year.

• 53% are gearing up for increased holiday sales—an 11-point year-over-year change
• Less than a third (32%) are worried about supply chain issues heading into the holiday season, which is down from 44% two years ago
• 71% are investing more in advertising during the holiday season—a 19-point YOY increase 

SMBs are increasing their online presence, particularly on social media. While Facebook is the leader, with 84% of decision-makers using the site to promote products and connect with customers, other types of platforms are very much in use. Instagram is the 2nd most used at 67%, followed by LinkedIn, YouTube, TikTok and X/Formerly Twitter at 54%.

As for as e-commerce, more SMBs (39%) are using social media to sell products or services directly through social media platforms, up 8% from last year. And business owners are increasing the use of social tools to improve their business; more than a third (37%) say free social media marketing courses are the most helpful and 30% report using AI solutions for their marketing/social media page.