Commercial Business

From Strain to Resilience: Small Business Strategies for 2024

From Strain to Resilience: Small Business Strategies for 2024

May 03, 2024 | Olivia Voltaggio

In 2023, the landscape was tumultuous. American small businesses, lenders, and service providers faced many challenges. These included soaring interest rates, inflation, labor shortages, and supply chain disruptions. Now that things seem to be settling down, the prospect of a softer landing in 2024 has infused many with cautious optimism for the journey ahead.

An Uncertain Economy 

As the economy continues to shift, attention inevitably turns to labor concerns. With inflation showing signs of cooling and consumer spending on the rise, small businesses find themselves at the forefront of this resurgence. 

From December 2023 to January 2024, 650,000 new jobs were created1. This underscores the rebound's momentum. Still, 40% of small businesses are actively seeking to expand their workforce, while the unemployment rate stands at a mere 3.9% for the same time period 1,2. The stark contrast is between job openings and available labor which presents a big obstacle for businesses. Businesses are striving to meet growing demand. 

As the spotlight returns to labor dynamics, small businesses are trying to navigate the delicate balance between supply and demand in the employment market.

High Default Rates

Although core personal consumption expenditures (PCE) inflation has stabilized at a 2% annualized rate in line with the Federal Reserve's objectives over the past six months, small businesses still face ongoing pressure from interest rates1. This financial strain is shown in the concerning trend of small business default rates. They have risen continuously for the past 18 months as of February 20241. 

A rate cut by the Federal Reserve may serve to alleviate some of the burdens currently on small business balance sheets offering much needed relief from the financial strain of the past few years. There is speculation this will happen by the end of the year. Should this monetary adjustment play out, then it may serve to alleviate some of the burdens currently on small business balance sheets and offer much needed relief from the financial strain of the past few years.

Small Business Resiliency

Financial stress is getting worse for consumers and businesses. However, businesses and consumers must adapt in order to thrive. Now is the time to understand your customers' finances well. You must assess their capacity and find the best growth opportunities. 

Equifax offers the assurance necessary to navigate these challenges, because we can help you understand your customers' financial circumstances. By using accurate affordability assessments before giving credit, you can be more confident that your customer can afford to borrow. Also, using our insights into financial capacity can help you find customers who match your offerings. You can then use additional Equifax insights to do targeted marketing across many channels. 

With a firm grasp of your customers' financial reality, we empower you to grow confidently, and move forward even during these uncertain and ever changing times. We can help your business thrive with resilience and adaptability.

Deeper Insights

Read the full Q2 report in our eBook as well as the first blog in this series which discusses the significant uptick in small business creation. 

You can also find more economic and credit insights by registering for our monthly Market Pulse webinar where you’ll hear the latest data and trends from industry experts. 



Olivia Voltaggio

Olivia Voltaggio

Senior Content Manager, US Information Solutions

Olivia joined Equifax in 2019. She graduated from the University of Illinois at Urbana-Champaign with a Bachelor of Science degree in advertising and a Bachelor of Arts degree in English. Olivia holds an Editing Certificate from the University of Chicago Graham School.