The Sage Small Business Tracker Q4 2024

In collaboration with Smart Data Foundry and The Centre for Economics and Business Research (Cebr), the latest iteration of the Sage Small Business Tracker has been launched.

The Tracker continues to analyse anonymised Sage Accounting and Payroll data of over 130,000 UK Small and Mid-sized Businesses (SMBs) and looks at how they are performing in real terms in the current economic climate. The anonymised data set includes SMBs from all regions across the UK, including Northern Ireland, Scotland, and Wales with annual revenue of between £0 – £200,000 +.

The latest Sage Small Business Tracker reveals that small businesses across the UK are facing an increasingly difficult operating environment as profits and productivity decline.

Despite these challenges, entrepreneurs are taking proactive steps to safeguard their financial stability, revealing a strong ability to adapt and innovate.

Q4 2024 – top findings

• Small business profits continue to grow year over year, but at a slower pace. In Q4, profit growth eased to 7.3% year over year, marking the second consecutive quarter of slowdown from 8.2% in Q3 and 8.6% in Q2. Meanwhile, productivity has declined by 0.9% year over year.
• In response to economic uncertainty and high borrowing costs, small businesses are strengthening their financial positions. Over the past year, cash reserves have increased by 3.2%, while debt levels have fallen by 9.7%, reflecting a cautious yet strategic approach to long-term stability.
• Encouragingly, small businesses are still finding ways to grow. Real revenues have risen by 2.5%, marking the third consecutive quarter of growth, while operating costs have decreased by 0.4%—demonstrating their ability to enhance efficiency despite financial pressures.

These figures reinforce the adaptability of small businesses and their role as a driving force behind the UK economy. However, continued support—through both smart policy and business-friendly initiatives—will be crucial to sustaining this momentum.

Steve Hare, CEO of Sage, commented: "Small and mid-sized businesses - the backbone of the UK economy – are proving their resilience. While they face a cost-heavy few months ahead, their ability to manage finances and drive revenue growth is inspiring.

Given the current economic landscape, advocating for policies that support their growth is more important than ever."

Download the report for the full analysis.