The IT Nerd

Today Intuit QuickBooks launched the 2023 Intuit QuickBooks Small Business Annual Report developed in collaboration with Professor Ufuk Akcigit, Arnold C. Harberger Professor of Economics at the University of Chicago. The annual report reveals how macroeconomic policies like inflation and higher interest rates are affecting small businesses’ ability to create jobs and get the funding they need to grow. The findings are based on anonymized data from more than 3.4 million Intuit QuickBooks customers and surveys of more than 5,000 small businesses in the US, Canada, and the UK. 

Top Canadian findings:

• Inflation and interest rates are creating unique challenges for small businesses
  • Monthly small business credit card expenditure is currently 18% higher, on average, than before the pandemic, equivalent to $2,652 CAD per business while monthly repayments against credit card account balances are up by 22% on average, again equivalent to $2,652 CAD per business.
• Funding is a persistent challenge for small businesses, limiting growth
  • While 51% of small business owners surveyed have used their own savings to fund their business, only 27% report ever getting funding from a commercial lender. New small businesses (0-5 years old) are more than twice as likely to say “getting funding” is their number one challenge compared to older small businesses (21+ years).
• Higher use of digital tools and technology correlates with higher growth
  • Among small businesses using digital tools to manage 8 or more different areas of their business, 63% report revenue growth and 22% report workforce growth, but among those only managing 1 or 2 areas, this drops to 31% and 6%.

Intuit has also drafted robust recommendations based on these insights for policymakers, entrepreneurs, and accountants to help key stakeholders strive towards creating an environment that is conducive to small business success. 

For a more in-depth look at the insights from the inaugural report, check out the Intuit QuickBooks Small Business Index Annual Report here. You can also stay up to date on the latest monthly Index releases, by visiting the Intuit QuickBooks Small Business Index interactive hub.

METHODOLOGY

The report’s findings are based on a new analysis by Ufuk Akcigit, Raman Singh Chhina, Seyit M. Cilasun, Javier Miranda, Eren Ocakverdi, and Nicolas Serrano-Velarde of four data sources, in partnership with Intuit QuickBooks data analysts: 

1. Intuit QuickBooks Small Business Index: recent employment and hiring trends among small businesses in the US, Canada, and the UK. Methodology details available here.
2. Intuit QuickBooks customer data: anonymized, aggregated and reweighted/adjusted to reflect the wider population of small businesses in the US, Canada, and UK, not Intuit’s business, to provide new insight into small business access to credit, credit card expenditure, and payments against credit card balances during the recent inflationary period. Sample: 3.4 million small businesses; 2,795,000 in US; 305,000 in Canada; 313,000 in UK.
3. Intuit QuickBooks Small Business Insights: regular online surveys of small businesses with up to 100 employees, commissioned by Intuit QuickBooks in the US, Canada, and UK every three to four months. Total sample size for April 2023 wave of surveys: 5,175 (comprising 2,805 small businesses in the US; 1,210 small businesses in the UK; and 1,160 small businesses in the UK).
4. Official statistics and other external sources, including publicly available data from: the U.S. Census Bureau; Federal Financial Institutions Examination Council, Bank Holding Company (US); National Federation of Independent Businesses (US); Statistics Canada; Office for National Statistics (UK), Department for Business, Energy & Industrial Strategy (UK); 

While small businesses continue to be faced with challenges as we head into 2022, new data from Intuit QuickBooks Canada shows that small business (SMB) wages and workforces have grown in almost all industries over the past 12 months.

Key findings on SMB wages and employment from QuickBooks Online Payroll data include:

Wages

• Personal care (+5.5%), hospitality (+4.6%) and retail (+4.6%) industries have seen the most wage growth over the past 12 months
• Mining & energy (-3.54%), professional services (+1.1%) have seen the least wage growth

Employment

• Accounting & legal (+8.6%), retail (+5.5%) and education & public administration (+4.2%) have seen the most jobs growth over the past 12 months
• Finance & real estate (-3.8%), personal care (+0.6%) and mining & energy (+0.8%) have seen the least jobs growth

For the full data set and findings from three recent surveys, including insights on SMB confidence, hiring difficulty, and inflation concerns visit here. 

Data Sources and Methodology

1. QuickBooks Online Payroll data

This is not survey data but anonymized, aggregate data from small businesses that use QuickBooks Online Payroll to manage their payroll between January, 2019 and November, 2021. Businesses that have used QuickBooks Online Payroll for less than two months were excluded from the dataset. All hourly wages are expressed as median values. Contractors and salaried employees were excluded from hourly wage calculations. Contractors and salaried employees are included in average employee calculations. Workforce growth rates are calculated by comparing the average number of paid employees per business for the current month against the average number of paid employees per business for the same month in the previous year (i.e. November 2021 vs November 2020). For example, if the average number of employees goes up from 5 to 6 from one period to the next, the increase is 20%. The data is not seasonally adjusted. The pre-pandemic benchmarks used in this report are from February 2020, the month prior to the first lockdowns being announced.

2. Small Business Survey

QuickBooks commissioned a 10-minute online survey among 725 small business owners in Canada from November 1 to 30, 2021. Respondents’ businesses have up to 100 employees and more than $5,000 in annual revenue. 57 of the 725 respondents answered the survey in French. More than one in three (34%) are brick-and-mortar businesses. The remainder are omni-channel, multi-channel or primarily online. Almost one in four (24%) are product-based businesses, close to one in two (45%) are service-based, and the remainder sell both products and services. Roughly one in seven (13%) are located in rural areas while the remainder are in urban or suburban locations. Percentages have been rounded to the nearest decimal place. Respondents received remuneration.

3. Employee Survey

Commissioned by QuickBooks in November 2021, Pollfish surveyed 2,500 employees aged 18+ throughout Canada, with a 50:50 split between male and female respondents. 500 of the 2,500 respondents answered the survey in French. Responses were collected via Pollfish’s audience pools and partner network using double opt-ins and random device engagement sampling methodology to ensure accurate targeting.

Today, Intuit QuickBooks Canada launched The Future of Entrepreneurship in Canada Report, capturing findings from Canadians including current and aspiring entrepreneurs. 

The report reveals that among Canadian entrepreneurs, one in five (21%) started their business within the past year. This represents close to two million Canadians (1.9M) – more than the population of Calgary, one of Canada’s largest metropolitan areas.  

Despite a challenging year, the majority of Canadian entrepreneurs (73%) and aspiring entrepreneurs (76%) say they are optimistic for the future. Confidence from entrepreneurs is a positive sign for the country’s immediate post-pandemic recovery.  

Other notable findings include: 

• Digital is the future: While 41% of Canadian entrepreneurs sell exclusively offline, more sell online, and 22% sell through both channels. Among the businesses started up over the past year, 3 in 4 sell online, and over half sell exclusively online. 
• Financial management gap: Managing finances is one of the largest challenges for entrepreneurs, yet only one-third of Canadian entrepreneurs (33%) are using an accounting service or professional for support. 
• Canadian entrepreneurs need support to succeed: Three-quarters (76%) say that running their own business is stressful and half (49%) agree there are not enough mental health resources for entrepreneurs. 
• Canadians are resilient: 72% of Canadians who launched a new business in the last year say they started theirs as a “side hustle” in the wake of COVID-19. 
• What’s driving entrepreneurship now: While money is the number one driving force for entrepreneurship, freedom and flexibility also push entrepreneurs. Key motivators from entrepreneurs include: 
  • Being your own boss (58%)  
  • Setting your own hours (56%) 
  • Doing something meaningful (50%) 

The full report is available here.

TIFF – The Toronto International Film Festival is in full swing, the biggest film festival in Canada and one of the most important in the world.

While we tend to focus on the fun parties and celebrity sightings, QuickBooks wants to remind people that nearly 50% of the film industry in Canada is made up of entrepreneurs and SMBs.

Below are some Canadian self-employed entrepreneurs who work in film.

• Michelle Carter, Canadian Producer and President of Mission Productions from Aurora, Ontario. Mission Productions is a marketing and fundraising agency that focuses on storytelling for the greater good of society
• Mike Monson, Self-Employed, Canadian Music Composer from Hamilton, Ontario has worked with Warner Music Canada, President’s Choice, City of Hamilton, CBC Arts
• Alex Coleman ,Canadian Film Editor from Toronto, Ontario produces and creates a broad mix of local, national and internationally released film, music video and corporate/commercial projects

The magic of film wouldn’t exist without music composers, film editors and producers like Mike, Alex and Michelle.

All three of these Canadians use QuickBooks to help them with their businesses, so they can spend more time on their craft and less time worrying about finances.

Running a small business is a full-time job. And for many, it isn’t their only job. In honor of this past Father’s Day, QuickBooks is highlighting the significant role fathers have in driving Canada’s economy by commissioning a study that uncovers just how instrumental a role fathers are playing within the small business ecosystem – all while juggling the other responsibilities life throws at them.

Whether it be sacrificing personal time or family time, key findings showed:

• Dads needs to be alone sometimes, too. 57 per cent are missing out on personal time due to work commitments and 45 per cent say family commitments take away from personal time.
• Work hard, play less? 46 per cent of men reported that long hours are a common challenge they face and 26% admitted they spend more than 40 hours a week on work responsibilities.
• Balance is a struggle. 1/2 men say that a lack of work/life balance is a common challenge they face.

Dads have a lot going on. The survey found that over 50 per cent of respondents have financial management problems. On a positive note, financial management software was reported to be the number 1 tool used to assist with balancing work and family commitments.

There’s a blog post that’s now online with more info and it is totally worth a read.

Our family networks can play such a vital role in helping drive our success. With Mother’s Day around the corner, wanted to reach out with a story opp focused on the role mothers play in driving forward the Canadian economy.

This year and just in time for Mother’s Day, QuickBooks commissioned a study that unpacks just how instrumental a role mothers are playing within the small business ecosystem – both as advisors and as owners.

Whether it be sacrificing family time, or postponing celebrations, key findings showed:

• Moms are missing out. 32 per cent are missing or neglecting family time due to work commitments.
• Held back from scaling up. 29 per cent say that family commitments have led to missing or neglecting business opportunities
• Putting family on hold. 1/4 women say that work commitments have delayed their starting a family.
• No time for oneself. 36 per cent of women list not being able to take enough time for themselves between balancing business and family commitments.

Interestingly, the study also found that Mother’s Day isn’t always the celebration it was set out to be, with 20 per cent of survey respondents feel more stressed on Mother’s Day than a usual Sunday, and 18 per cent postponing celebrations to focus on work.

QuickBooks has a very good blog post that you can read on this topic: https://quickbooks.intuit.com/ca/resources/uncategorized/how-to-prevent-burnout-new-research-and-tips-for-mother-entrepreneurs/ 

The QuickBooks Online (QBO) ecosystem has a new member: Toronto-based startup Dream Payments.

With the new QuickBooks and Dream Payments integration, small business owners can now accept cash, credit and Interac Debit from anywhere, anytime, helping them get paid faster and improve their access to capital and better manage their cash flow.

With 1.3 million debit terminals in Canada and growing, there’s been a gap in the market for an affordable and comprehensive mobile point of sale to replace dated and expensive payment terminals, and as 68 per cent of entrepreneurs use apps to run their businesses according to Intuit’s “2017 Small Business App Study,” there’s also clearly an appetite for greater integration within the ecosystem.

For the 32 per cent of small business owners who say cash flow is the main concern keeping them up at night, the Dream Payments QuickBooks integration provides users with all the information they need at their fingertips to manage their business from anywhere:

• Focus on business growth: With the Dream Mobile Point of Sale, SMBs can accept Interac Debit and credit cards and even contactless payments (including Apple Pay and Samsung Pay) and never have to turn a sale away again.
• Get paid faster: Each transaction is automatically updated in QBO. Even inventory and taxes are updated instantly.
• No more guessing or reconciliation problems: Users can access QBO invoices right from within the Dream mobile app and accept in-person payments towards them; they’ll automatically be recorded as paid and reconciled within QBO.

If you’re a small business owner, you should check out Dream Payments for QuickBooks Online.

Intuit Canada’s latest study in partnership with Emergent Research projects that full and part-time freelancers, independent contractors and on-demand workers are expected to make up 45 percent of the workforce by 2020.

Intuit has launched QuickBooks Self-Employed in Canada, a new mobile app that makes it easy for the growing number of self-employed workers to stay in control of their finances and help them prepare for tax time while on the go with effortless expense, mileage and invoice tracking all in one place. Canada is the fourth market globally to launch the app, following the U.S., U.K. and Australia.

What’s causing this shift?

• Nearly half (47 per cent) of self-employed Canadians pursued that work because of a desire for greater work life flexibility.
• Forty-one per cent of self-employed workers are doing so to supplement income.
• Nearly one in five (19 per cent) self-employed Canadians pursued this work because they still needed or wanted to work during retirement.

What do self-employed workers struggle with most?

• The biggest challenge of self-employment is not enough predictable income (59 per cent).
• Twenty-nine per cent of self-employed Canadians manually keep track of their finances on paper.
• Two in three on-demand workers said a better understanding of their financial fundamentals would be helpful.
• Nearly two in three (62 per cent) of those that work for themselves are compelled to maintain a job on the side to supplement their earnings and for 17 per cent of on-demand workers specifically, difficulty managing finances has the biggest potential to put them out of business.

On demand increasingly equals on the go

• Nearly two in three (62 per cent) self-employed Canadians drive a car as part of their self-employment.
• Canadians who drive a car for their self-employment spend on average five more hours working each day than those who don’t.
• More than one-quarter (28 per cent) of self-employed Canadians indicate that mileage is the most difficult expense to keep track of.

For more more research findings, please check out Intuit’s report: “The Rise of the Self-Employed Economy.” The QuickBooks Self-Employed mobile app is available for download  from the App Store or Google Play.

QuickBooks has announced that the QuickBooks Online (QBO) ecosystem has a new member: breakout Canadian startup Shopify

The Shopify platform now seamlessly integrates with QBO, allowing Shopify merchants to automatically update and transfer business financials. All ecommerce transactions now flow into QBO automatically, improving sales transaction accuracy and eliminating the need for manual reconciliation. As 56 per cent of Canadian entrepreneurs use mobile apps to run their business, there’s certainly an appetite within the ecosystem for greater integration.

The QBO ecosystem now connects the more than 200K Shopify merchants to a global base of small business owners and the more than 1,000 small business apps available in QBO, which now enables merchants to manage all aspects of their business in one place – and provides on-demand access to key financial insights wherever they happen to be.

Existing Shopify customers who are interested in learning more about QuickBooks online are encouraged to visit Intuit’s Canadian website, while QuickBooks customers interested in adding ecommerce operations to their portfolio are encouraged to visit Shopify.

For those of you with a small business that you have to do accounting for, there’s updated version of the Square QuickBooks Online integration from Intuit, Sync with Square.

The update will come as great news for entrepreneurs who spend more time manually entering data and filling out spreadsheets than focusing on their customers, or who need some extra help tracking their finances.

With Sync with Square, small businesses can automatically import all daily payments processed with Square into QuickBooks Online. QuickBooks Online also provides a detailed breakdown of all Square transactions, ensuring their financial data is accurate and up to date.

More information about Sync with Square is available here. Intuit Canada has also posted a blog about the announcement, which you can find here.