Learn from the Small business, big opportunity report

As a Small to Medium Business (SMB) owner, you’re always learning. Keeping up with market trends, adapting to economic changes, and picking up new best practices are all part of operating a healthy business and putting yourself in the best possible position to grow and thrive.

Every year, Sage surveys thousands of small business leaders about the challenges they’re facing, the opportunities they’re seeing, and what they’re doing to drive their businesses forward right now.

This article will explore those invaluable learnings and first-hand experiences collected from the report.

Key findings for 2024

Revenue is on the up

45% of SMBs report growing revenue in 2024; a significant jump up from 32% in 2023. This promising data shows that small businesses are finding ways to boost their profits, despite significant economic challenges.

And that positive financial trajectory appears to be set to continue into the new year. Looking ahead to the next six months, 70% of SMBs expect further revenue gains, with 25% forecasting considerable increases in their earnings.

Small businesses are creating more jobs

Last year, just 21% of SMBs were expanding their teams. This year, hiring has grown substantially, with more than a third (34%) of small businesses adding to their workforce in 2024.

Looking ahead to the coming year, 67% are planning further additions to their headcount; a reflection of the confidence SMBs are feeling about their potential growth.

Efficiency is improving

86% of survey respondents said they were confident about their company’s future, up from 80% in 2023.

One of the primary reasons behind this uptick in confidence is that businesses are operating more efficiently. Over half of SMBs reported improved operational efficiency as the reason for their optimism, up from 37% in last year’s report.

Making business processes and operations more efficient can have a massive effect on productivity and revenue, so it’s no surprise that business owners who’ve managed to streamline things are feeling positive about the future. Plus, with the digital transformation movement really hitting its stride a few years ago, it’s clear that those who invested in technology are beginning to reap the rewards, with benefits like better workflows and reduced waste making a tangible impact on their operations.

Navigating business challenges in 2025

Despite the largely positive findings, SMBs are still facing challenges, with one particular obstacle standing out among the results:

More than half (51%) of SMBs experienced cost increases in the past year, with 42% currently feeling financial pressure as a result.

So what can small businesses do to deal with these cost hikes and stay profitable?

Embrace AI

A massive 85% of the SMBs Sage spoke to said technology is important to their business, and 65% are planning to invest more in tech in the near future. And it appears a big part of that investment will be going into AI, with 69% stating that they’ve already adopted, or are at least experimenting with, artificial intelligence.

AI can help your small business get more done more quickly, automating manual tasks and freeing you up to spend more time on more valuable work. In fact, 74% of small businesses that have already adopted AI now say it’s essential for their daily operations.

Implementing business software products that use AI, or experimenting with the many generative AI tools that are currently available, is a great way to save time, boost productivity, and help offset rising expenses.

Invest in skills

Adopting AI can have a major impact on your business, but to get the most out of this potentially transformative tool, you need to know how to fully utilise it. One in five SMBs say that a lack of in-house skills is preventing them from getting a proper return on their digital investments.

With so many SMBs citing technology and AI as big contributors to their efficiency, you don’t want to put your business in the same position. The best way to avoid it is to invest in digital skills. Making sure you and your team are familiar with use cases, best practices, and crucial security tips when using AI will help you get maximum return from the technology while keeping your business safe at the same time.

Helping your employees learn new skills is a win-win. Not only will your employees understand how to apply AI for the benefit of the business, but investing in your people leads to better employee experience, reduced turnover, and lower hiring costs.

There are a lot of informative (and often free) resources out there to help your teams get to grips with AI. If you’re using a particular product for example, vendor training and documentation is a great place to start.

Look into available support

A large number of SMBs say Government support is essential to their operation, with many in favour of more Government backing around things like e-invoicing (73%) and digital skills training (33%).

If your small business could do with some support, whether that’s financial investment or help to upskill your people, there could be some Government help available.

The recent change in Government leadership in the UK may also lead to a new wave of business support options becoming available, so stay tuned for updates on any policy changes.

Final thoughts

Over the past year, SMBs have faced many hurdles. Economic difficulties, market shifts, and sweeping political changes have forced businesses to adapt in all manner of ways. But in the face of these obstacles, they have remained resilient, with many even achieving significant growth.

The year’s report shows that small businesses are heading into the new year with confidence—thanks in no small part to the new set of tools they have at their disposal to tackle ongoing challenges.

Their collective learning is this: upskilling your small business teams through technology and training now, will maximise your growth opportunities in the years to come.