There are nearly 32 million small businesses in the United States; together, they form the backbone of the American economy1. They’ve been responsible for nearly two thirds of all jobs created in the US in the last fifteen years. Today, more than half ofAmericans either own or work for a small business. Perhaps as a result, small businesses contribute 43.5% of US gross domestic product2.
Over the last twenty years, the way small businesses serve their customers has evolved considerably. But the way they manage their money is stuck in the 90s.
But running a small business today is more challenging than ever. For example, during the COVID-19 pandemic, 43% of small businesses were temporarily closed, and the vast majority had only enough cash on hand to cover two months of operating expenses. The current economic environment has only compounded these challenges3.
It’s worth noting that, over the last twenty years, the way small businesses serve their customers has evolved considerably. In particular, products and services have moved online, becoming faster, more personalized, and easier to access.
But the way they manage their money is stuck in the 90s. As we’ll see, most still use traditional banks4 to manage their finances. Thousands actually manage their business finances through personal bank accounts. Perhaps unsurprisingly, this outdated and inadequate toolset is not meeting their needs or expectations.
In this report, we’ve partnered with The Harris Poll to talk to business owners about the challenges they face. We’ll identify what’s not working about the way they manage their money and how it could be improved. We’ll explore their willingness to try new solutions. Finally, we’ll identify technological innovations that have the potential to provide small-business owners a better experience and offer insights about the road ahead.