The latest Small Business Earnings Report from Biz2Credit provides a deep dive into the financial state of small and mid-sized U.S. businesses in 2024. Analyzing over 100,000 financing applications, the report reveals a striking trend—while average revenues have increased significantly, earnings have declined due to rising operating costs. This data highlights the growing financial challenges for business owners and the critical role that outsourced and fractional CFOs can play in helping companies navigate these complexities.
Key Findings from the 2024 Small Business Earnings Report
1. Higher Revenues, Lower Profits
Average Monthly Earnings: Small businesses reported average monthly profits of $83,083 in 2024, a significant decline from $150,917 in 2023.
Average Revenue Growth: Businesses saw a 45 percent increase in revenue, climbing from $515,208 in 2023 to $747,608 in 2024.
Operating Expenses Surge: A major factor behind lower earnings is the rise in operating costs, which grew by $300,233 year-over-year, reaching $664,525 in 2024, compared to $364,292 in 2023.
Revenue Peaks & Seasonal Dips: July 2024 recorded the highest average monthly revenue at $824,700, while December saw a dramatic drop, with earnings falling to $42,100 from $105,100 in December 2023.
2. Inflation and Its Impact
The U.S. inflation rate stood at 2.9 percent in 2024, down from 4.1 percent in 2023 and a peak of 8 percent in 2022. While inflation is cooling, businesses are still feeling the pressure of higher wages, supply chain costs, and increased operational expenses.
How Fractional CFOs Can Help CEOs & Business Owners Adapt
For many small and mid-sized businesses (SMBs), financial challenges aren’t just about revenue growth—they’re about consistent profitability and sustainability. Rising expenses, unpredictable cash flow, and economic fluctuations demand strategic financial leadership, but not every company can afford a full-time CFO. This is where fractional CFOs become game-changers.
1. Managing Rising Operational Costs
With operating expenses increasing by over $300,000 in 2024, business owners need strong financial oversight to control spending while maintaining growth. A fractional or outsourced CFO helps by:
Identifying areas where costs can be optimized without sacrificing productivity.
Implementing budgeting strategies to improve cash flow and reduce financial waste.
Negotiating better terms with suppliers and vendors to lower overhead expenses.
2. Improving Profitability & Cash Flow Management
Despite higher revenues, businesses saw profits shrink by nearly 45 percent in 2024. A fractional CFO can:
Develop data-driven pricing strategies to improve profit margins.
Implement cash flow forecasting tools to help businesses anticipate financial needs.
Offer insights on when to invest and when to cut back to maintain profitability.
3. Strategic Planning for Growth & Scalability
With many businesses expecting double-digit revenue growth, leaders must ensure their operations can scale efficiently. An outsourced sCFO provides:
Long-term financial planning to align growth strategies with market conditions.
Guidance on securing funding, investments, or business loans without overleveraging debt.
Implementation of financial automation tools to streamline operations.
4. Navigating Economic Uncertainty & Market Trends
Seasonal fluctuations, inflationary pressures, and market unpredictability mean businesses need agility in financial decision-making. A fractional CFO helps by:
Monitoring economic trends and risk factors to adjust business strategies accordingly.
Ensuring companies are prepared for downturns and can seize opportunities during upswings.
Advising on mergers, acquisitions, or restructuring when necessary.
The Bottom Line: Small Businesses Need Financial Expertise More Than Ever
The 2024 Biz2Credit Small Business Earnings Report reveals a critical challenge:
revenue alone doesn’t equal profitability. With rising costs eroding earnings, small business owners need strategic financial leadership to maintain sustainable growth. However, hiring a full-time CFO is not always feasible—which is why more companies are turning to fractional CFOs for cost-effective, high-impact financial expertise.
For business owners looking to stay profitable in 2025 and beyond, partnering with a fractional CFO could be the key to navigating these economic shifts successfully.
Want to explore the full 2024 Small Business Earnings Report? Read it here.
If you are a business owner or CEO within the San Francisco Bay Area and Silicon Valley, in need of an experienced fractional or outsourced CFO to help your company control costs, increase profit margins, improve cash flow as well as identify strategic growth opportunities, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.
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