Small and medium-sized businesses (SMBs) faced significant challenges in recent years, but 2024 brought a shift in confidence and financial stability. A recent study by PYMNTS found that SMBs across industries reported stronger revenue performance, reduced survival concerns, and increased investments in customer engagement.
As a fractional CFO firm, we’ve seen firsthand how strategic financial management plays a crucial role in fostering this growth. Let’s break down the key findings from the study and what they mean for your business.
Stronger Revenues, Greater Stability
According to the report, the number of SMBs experiencing revenue declines dropped from 17 percent in late 2023 to 15 percent by November 2024. While this may seem like a small shift, it reflects an important trend: more businesses are achieving financial stability, allowing them to focus on long-term growth rather than short-term survival.
Larger SMBs—those with revenues over $1 million—were particularly confident, with only 1.8 percent expressing concerns about their future viability. In contrast, nearly 10 percent of smaller SMBs (under $150,000 in annual revenue) remained uncertain about their survival. This gap highlights the importance of financial planning, cash flow management, and strategic investment decisions—areas where a fractional CFO can provide crucial guidance.
Industry-Specific Challenges
Not all SMBs faced the same economic landscape. Retail businesses were six times more likely than hospitality companies to predict potential financial struggles over the next two years. Understanding these industry-specific trends is essential for developing a financial strategy that mitigates risks and capitalizes on opportunities.
The Power of Marketing and Consumer Outreach
One of the most promising findings from the study was the link between revenue growth and proactive customer engagement. Nearly 70 percent of SMBs that reported increased revenues also expanded their marketing and loyalty programs. This reinforces a key principle of business growth: consistent and strategic outreach to customers pays off.
For SMBs looking to maximize their financial success, investing in marketing should be balanced with a solid financial foundation. Understanding customer acquisition costs, return on investment (ROI), and cash flow implications is critical—and that’s where working with a fractional CFO can make all the difference.
How Your Business Can Leverage These Trends
If 2024 has shown us anything, it’s that SMBs who take a proactive approach to financial strategy, customer engagement, and long-term planning are the ones that thrive. Here are three steps to ensure your business stays ahead:
Strengthen Financial Reserves: A strong cash flow strategy can help businesses weather uncertainty and invest in growth opportunities.
Optimize Customer Acquisition Costs: Invest in marketing, but ensure that your campaigns are delivering a strong ROI.
Plan for Sustainable Growth: Whether it’s expansion, hiring, or new product offerings, make sure your growth strategy is backed by solid financial forecasting.
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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