55% of small business owners expect profits to increase in 2024

Ground Picture // Shutterstock High interest rates, inflation, student loan debt forgiveness, political turmoil and a solar eclipse — 2024 has already been an eventful year, but how are small business owners managing? In July, NEXT asked 1,500 U.S. entrepreneurs aged 18-64 how profitability and business investment has been in the first part of the year, and what they anticipate as we enter the holiday retail season. Here’s what they said. Small businesses anticipate a stronger second half of 2024 NEXT In the first half of 2024, business owners experienced economic fluctuations that could eat into profits. While inflation has cooled slightly, interest rates remained high, causing slower growth. Consequently, consumers, concerned about rising prices, pared back their spending on nonessential items and services. When asked about their profits in the front half of the year, 61% of small business owners reported that profits either met or exceeded their expectations. 38% said that profits were worse than expected. And they expect to finish the year strong. 55% of small business owners expect to increase their profit in the second half of 2024. 27% do not anticipate any changes to their margins, and only 18% expect their numbers to go down. Holiday sales peaks anticipated NEXT Many factors could be attributed to this surge of optimism. Some small businesses, such as retailers, caterers, beauty professionals and cleaners, experience peak sales and bookings due to the holidays or other seasonality. Other macroeconomic factors can affect business owners’ confidence. The Fed is expected to cut interest rates twice before the end of the year, making small business borrowing more affordable. Entrepreneurs could be in a better place to pursue growth opportunities they may have held off on last year when interest rates were not optimal. Business owners prioritize new products, services, customer acquisition — if they have the funds