2024 Growth Indicators for Small Businesses

Your small commercial sweeping business has withstood the test of the early 2020s, a stellar achievement. Your company survived the extreme impacts of COVID, the resulting economic crisis, and here you are, still afloat after these years of stubbornly resistant national recovery. Maybe you’re seeing some promising hints of a better 2024 but are still puzzled trying to figure out projections and finalize your quarterly planning. Here is some helpful data, information, and advice from the best US sources for predictions of business growth potential over the coming year.

What Can I Expect in Business Growth in 2024?

What’s in store for 2024? Intuitively, we can easily enough make some correct assumptions about what kinds of general conditions are conducive to business growth, e.g., low interest rates, low inflation, a strong labor market, viable environmental conditions, reasonable transport/fuel costs etc. Of course, sustained high B2C and B2B and consumer activity is about demand, which is affected by income and cost factors. Let’s look at how things have shaped up leading into 2024.

Key Indicators of Strong Small Business Growth Potential

You may wonder how to even start to understand what to expect in terms of the potential financial trajectory of your small commercial sweeping business through 2024. First, it makes sense to weigh the various key factors that combine to form the right or wrong overall conditions for generating growth.

The leading economists agree that a strong economy is the biggest sign of good potential for business growth during any given period. Good economic conditions are defined as periods during which the economic indicators are positive and the economy is expanding. Conversely, conditions are considered bad when an economy is stalling, i.e., not gaining growth, but rather contracting, shrinking.

Particular key economic Indicators that contribute to a generally strong or weak economy include good or bad rates of unemployment, inflation, and home construction. These and other prediction factors lead to adjustments in the consumer confidence index, which gauges optimism. All of these contribute to the outcome in the country’s Gross Domestic Product (GDP). Barring surprise disruption by, for example, the pandemic, natural disasters, etc., good and bad states of the national economy tend to be cyclical.

So, What is the Outlook on Growth Conditions for 2024?

USA Today finds that, “there’s no question the U.S. economic outlook has improved throughout 2023,” but also emphasizes that this does not mean 2024 will be a risk-free year for the country. The Federal Reserve predicts that GDP growth will slow in 2024 to about 1.5%, slow, yes, but still on an upward track.

The labor market continues to show its resilience going into 2024, with the national unemployment rate rising a mere 3.8% and the Fed projecting a U.S. unemployment rate of just 4.1% through 2024. That’s significantly under the country’s long-time average of about 5.7%.

The U.S. economy is predicted to grow at a rate of 1.5% in 2024, compared to the 2.4% rate in 2023. So, per Forbes, the national economic growth rate is slowing. But it’s still growing.

Inflation Rate Expectations for 2024

Although the risk of new increases in inflation looms over early 2024, the consumer price index is currently far below its record 9.1 high of mid-2022. But, the existing 3.1 rate is still higher than the Federal Reserve’s 2% goal and is one of the biggest concerns expressed by small business owners. Jerome Powell, Federal Reserve Chairman has stressed that the positive news on the inflation rate does not mean that the struggle to rein in price increases is over and that the way forward is not a certainty.

Wells Fargo economists have assessed that the continuing inflation and increased interest rates used in attempts to mitigate it remain a risk and that as long as inflation is not under control it is too soon to assume the country is no longer at risk.

Interest Rates

The Federal Reserve’s campaign of increasing interest rates through last year appears to have helped lower the inflation rate and avoid a definitive recession. In mid-December 2023, the agency signaled that three interest rate cuts could be implemented in 2024. Powell spoke encouragingly in a 2023 year-end press conference. The S&P 500 neared a record high and the Vix Index, carefully monitored by Wall Street as its “fear” trigger, was lower than at any point since the onset of the pandemic in 2020.

Inc. magazine points out that this is a U-turn from early 2023, when top US economists were warning of “the most anticipated recession in U.S. history." At that time, entrepreneurs were reportedly “feeling sullen” about the economy and potential for their businesses over the coming periods. But, ultimately, the widely feared sharp decline didn’t occur.

Notwithstanding a skeptical public, now, at the start of 2024, government economists and business owners express surprise at the continuing strength of consumer spending, labor markets, and economic growth. However, again, even with inflation slowing and job growth strengthening, Powell has emphasized that it’s much too soon to assume all will be sound through 2024 and has warned businesses to be aware of obscure risks.

Tightening Credit Conditions

In 2023, business owners had to work within an increasingly difficult credit market. A Fed survey found that in early Q3, around a third of US banks implemented more stringent standards for lending to businesses with under $50 million of annual sales revenues.

The survey also revealed that 87.5% of US banks reported that at that time they held “a less favorable or uncertain outlook.” Consequently, only 13% of loans were approved for small businesses by large banks (assets over $10 million). Unfortunately, that situation will probably not improve in 2024, per the Fed.

Economic Effect of Worker Shortages in 2024

The US Chamber of Commerce reported that the economy had grown more than 5% by Q3 2023 and was on track to grow an additional 1% by the end of Q4. But, consistent with the consensus across the field of the nation’s top economists from government and academic institutions, the Chamber projected slowing growth in 2024, topping out between only 0.2% and 0.4% in Q2 and Q3 of this year. That’s well below those periods in 2023.

However, Chamber experts assert that the worker shortage will effectively limit the extent to which the economy will slow down because job openings will remain much higher than the nationwide total number of unemployed workers. Further, wages have continued to increase sharply and are expected to continue rising while the unmet demand for workers remains so high.

Stock Market Indicators

Wall Street investors widely express the optimistic outlook that the national economy will benefit from a “soft landing” with the business sector side-stepping what had appeared to be a threat of impending recession. That optimism is said to have boosted all corners of the stock market.

In addition to growth of just the mega tech corporations, pharmaceuticals, and home construction stocks, among others, escalated in value during 2023. “The U.S. economy is looking increasingly rosy,” per Bank of America and Goldman Sachs experts’ predictions for 2024.

The Telling Economic Lead-in from 2023

Growth across the national economy stayed strong through year-end 2023, even with inflation and the Fed’s interest rate hikes. In Q3, the GDP rose 4.9% from the previous year — faster than in any period since Q4 2021. However, some experts predict that the growth rate will slow or even stop in early 2024 due to escalating interest rates. For example, Wells Fargo economists argue that real GDP growth will be "subpar at best."

Others even predict a downturn, citing the dissipation of effects from the pandemic stimulus. They further argue that, additionally, the government’s current measures like the Inflation Reduction Act and the Chips Act cannot be expected to impact the overall economy to the same extent.

Global Economic Indicators

For those who prefer to include the broadest possible view of the US projections for 2024, here is the best-informed global perspective. The International Monetary Fund offers a baseline prediction of global growth. The agency projects that it will slow from 3% in 2023 to 2.9% this year (2024). That’s below the last 20-year average of 3.8%.

The IMF predicts that advanced economies will slow from 2.6% in 2022 to 1.4% in 2024, to some extent due to tightening policies. Developing economies are expected to decline slightly in growth rates from 4.1% in 2022 to 4% through 2024 (as the agency also had predicted for 2023).

Global inflation, per the IMF, can be expected to fall from 8.7% in 2022, and 6.9% in 2023, to 5.8% in 2024. The agency asserts that this is to be the result of stricter monetary policies coupled with decreasing commodity prices across the international marketplace. The IMF finds that inflation can be expected to decline gradually and reach targeted levels in 2025 at the earliest.

National Economic Cycles

University of Minnesota research has concluded that a normal cycle of economic expansion and contraction takes around 3-5 years but can be longer. The stages of the cycle are prosperity, recession or (infrequently) depression, and recovery. Prosperity is another word for expansion. It happens during lower unemployment, which brings higher per capita incomes, which triggers more consumer spending.

That, of course, triggers increased business production (a.k.a. growth). Then, things eventually wind down again. GDP slacks, unemployment starts to rise again, which means consumers start spending less, and business income is lower. The shrinking demand for goods over multiple quarters triggers decreased production (a.k.a. recession).

Major Business Environment Changes to Expect in 2024

As you form your strategic growth plans for 2024, keep in mind these expected changes to the general business environment around you:

Your local and national competition is likely to increase.
In the digital environment, opportunities transcend geographic boundaries, state lines, and even national borders.
Business owners who focus on a unique niche and provide the best customer service and personalized products and services are most likely to stay relevant and prosper.
Customers will continue to take more control of their proverbial journeys with suppliers. Operators who provide customers with more information to help them control their involvement in the business relationship will excel.

The US Chamber of Commerce recommends taking inspiration from the published leading experts but getting professional advice on your particular situation before making major financial moves.

Technology’s Role in 2024 Business Growth

Artificial Intelligence (AI) use throughout the small business subsector is expected to grow rapidly in 2024. Major applications in marketing, sales, customer service, logistics, HR, and automating processes in general operations will enable small and midsize companies to reduce human error, save time, preserve resources, and more. These added efficiencies will bolster productivity, increasing profits and growth potential.

Further, small businesses can be expected to add Augmented Reality (AR) and Virtual Reality (VR) technologies in 2024 to benefit customers with more immersive experiences. Uses in commercial pavement sweeping businesses may be more applicable than expected.

Small Business Owners’ Perspectives on 2024

Verizon offers some insights for small business owners who have been worried about the condition of the national economy. First, the tech giant’s research indicates, “You’re not alone.” A staggering 90% of respondents who own small to midsize businesses express that concern. On the upside, 54% report that they also expect their businesses to do “much or somewhat better” this year (2024).

Why are they simultaneously worried about the external economy and optimistic about their business’s internal financial potential? Because small business owners are positioning themselves by taking steps to offset the impacts of inflation and reduce financial strains on their companies. These are a few ways small business operators are prepping for increasing inflation in 2024.

59% are raising their prices on at least some products and services.
35% are investing in programs for employee retention to minimize new hiring expenses.
57% are slashing non-essential spending and focusing on controlling their budgets.
39% are leveraging free resources to help manage day-to-day operating costs.
37% are stocking inventory in periods of lower prices than expected in future months.

Advice for Small Business Growth in 2024

Basic recommendations for small business owners in 2024 include:

Expect the digital transformation to impact the small business environment in 2024 and develop your team’s digital marketing and web analytics skills.
Have an effective online presence. Optimize your website for search (SEO), develop active social media accounts, and/or launch a mobile app, whatever helps your customers find and engage with your business.
Remember the purpose of the digital advancement of the business sector is not to have more technology, it’s to update your capabilities for connecting with your customers.
Small businesses will continue remote operations. A global transition to more flexible remote work environments was brought on by the COVID pandemic. It has led companies to continue using remote and/or hybrid work models for at least some employees because it:
- Cuts overhead costs.
- Removes geographic limits.
- Allows the use of digital platforms and tools to perform work.
- Enables offering 24/7 service and other work.
- Allows greater agility in providing solutions.
- Makes businesses more adaptable to market changes.
Develop your company ethos to prioritize values over profits. Yes, you read that right. More B2C and B2B customers are prioritizing social and environmental impact in their decision-making. 2024 is predicted to be a year of increasing brand emphasis on ethics and sustainability as consumers prove more assertively that they want to work with conscientious suppliers.

Small Business Administration Help

The SBA in your area offers an excellent resource for guidance and information to help you. The US SBA outlook for 2024 includes points:

91% of small businesses using AI for marketing and operations say it’s made them more successful.
Soft skills requiring emotional intelligence are essential for a positive customer experience with your business. Cultivating strong interpersonal skills is as important as technology, per the SBA. There’s a “customer experience economy” in which you must succeed to grow and stabilize your business in your market over time.
Sustainability is now “critical to today’s customer.” 78% say they prefer to do business with companies that share these values.
Cybersecurity is essential. B2B consumers want to know that their information is secure and responsibly managed.

Bottom Line on the 2024 SMB Growth Outlook?

In the Treasury Department’s Economic Policy team’s statement of October 30, 2023, the government spokesperson said that the United States continues to deliver strong economic growth. Labor markets have rebounded to a post-COVID record high participation level. Core inflation is declining and very encouraging GDP growth in the second half of 2023. The growth has been accelerated by robust household spending and building private business inventories, and inflation has continued trending lower.

The fast growth in Q3 2023 will likely slow over the upcoming quarters, even while the economy continues growing. GDP growth is expected to slow to 1-1.5% through 2024. According to the Treasury Department, if the slowdown is realized, it will indicate that the country’s supply and demand are becoming more favorably aligned and that inflation pressure is lessening, And that would indicate that price growth can be accomplished without businesses attempting to grow contributing to increasing the risk of an economic recession.

The point for small business operators looking to take advantage of growth opportunities in 2024 appears to be to move cautiously. Control spending and worker attrition, put the appropriate technologies in place, focus on your company culture and the quality of your customer engagement, and take the other necessary steps outlined in several of the sections above to ensure you can compete successfully as you scale your operations in 2024.