As consumers and businesses pulled the purse strings tighter during the trying economic conditions of 2009, conventional wisdom says small businesses everywhere felt the effects on their bottom line. In fact, our own data tells us that small businesses did take a revenue hit.
Looking broadly across all QuickBooks Online industries, 2009 small business revenue was down by more than 10%.
However, there’s a twist. It seems the tough times have caused businesses to become wiser about managing their expenses. Looking at the same broad data set across all industries, 2009 expenses declined by 12%, leading to a 2% increase in profit margin over the same period in 2008.
Effectively, small businesses were more profitable overall due to their ability to contain spending in the face of declining revenue.
How did your small business fair during the trying economic conditions of 2009? Does this analysis hold true? What actions did you take to remain profitable? Please post your comments below.
For QuickBooks Online users: To explore how your business compares to your specific industry, visit Trends from the Company Snapshot page under Reports.
Trends uses aggregated and anonymized QuickBooks Online data to compile stats across over 100 industries to gain insights into the health of small businesses. (Image from the Trends Application in the Intuit Workplace App Center http://workplace.intuit.com/AppCenter/)