70% of Growing SMBs Increase Consumer Outreach

Small to medium-sized business (SMB) owners face a challenging landscape where larger, wealthier competitors dominate the economy.

According to a PYMNTS Intelligence report, “A Good Year: Why SMBs Grew More Confident In 2024,” SMBs are confident in their ability to survive and thrive. By focusing on new opportunities, SMBs can level the playing field with larger competitors and strengthen their market position.

SMBs Gained Confidence Throughout 2024

Throughout 2024, SMBs showed greater optimism, with fewer reporting declining revenue.

In October 2023, 17% of SMBs experienced a revenue drop, but by November 2024, that figure decreased to 15%. This trend of improving financial health was further reflected in the drop of businesses concerned about their survival — from 7.3% in January 2024 to just 5% for most of the year, with a slight uptick to 6.8% in November during the U.S. election season.

Survival prospects varied significantly by business size. Only 1.8% of SMBs with more than $1 million in annual revenue were concerned about survival, compared to nearly 10% of those with less than $150,000 in revenue. Smaller companies with fewer employees were even more likely to fear failure, with 11.3% of businesses employing fewer than five people expressing doubts about their future. This highlights the resilience of larger SMBs, while smaller firms continue to face key challenges.

Larger SMBs More Likely to Report Increased Revenue

SMBs reported strong revenue performance across industries, with more than 50% reporting growth. Among those, larger businesses were particularly successful. Two-thirds of SMBs with revenues exceeding $1 million reported growing revenue, compared to only 43% of businesses making less than $150,000 annually. This data suggests the larger the SMB, the greater the likelihood of experiencing positive revenue growth.

Hospitality businesses led the way in revenue growth, with 57% reporting success. Conversely, personal and consumer services businesses were among the least likely to report positive growth. The findings suggest while SMBs face challenges, businesses in certain sectors and of larger sizes are more resilient and well-positioned to thrive in a competitive economy.

SMBs Focus Their Success on Value-Added Opportunities

SMBs that reported revenue growth are using their success to spark further expansion. Many of these businesses, especially those growing by more than 25%, invested in marketing and outreach to attract new customers. Consider more than 70% of SMBs with substantial growth increased their marketing efforts, which is 37% higher than those with more modest growth of less than 10%.

Beyond marketing, growing SMBs are investing in product and service expansion, refining business processes and reducing production costs. This approach to growth highlights a key trend among SMBs: they are focused not just on survival, but on creating long-term value through strategic investments. As more SMBs channel their earnings into these value-added opportunities, they are better able to compete with larger players.