The Power of Local Small Business Data

Examining the performance of small businesses in local markets

Earlier this year, Fiserv launched the Fiserv Small Business Index^®, a comprehensive measurement of consumer spending at small businesses across the U.S. 

The Index measures the performance of small businesses and offers a strong signal about the performance of the economy as a whole. It covers all 50 states, 16 business sectors and 34 subsectors, and is defined by real transaction data from millions of merchants and billions of transactions covering cards, cash and checks. 

Since its launch, the Fiserv Small Business Index has offered national and state-level data well ahead of any other measure. Beginning in July 2024, we’ve added a sales and transaction index for the top 10 local U.S. markets. These markets are based on total sales volume, giving a good indication of how small businesses in the largest cities are performing.

For example, below are the top four metro markets as of July 2024:

The importance of local data on small businesses

Economists, politicians and business owners will tell you that small businesses are the backbone of state and local economies. With nearly half of U.S. workers employed by small businesses, employees are likely to say the same. It is essential for anyone invested in a community’s economic performance to understand how small businesses are doing.

But, as they say, timing is everything. Data from the federal government about business performance is typically delayed by weeks or even months. Results can be further complicated by a patchwork of state and local data built on different methodologies. 

Since the launch of the Fiserv Small Business Index, Fiserv has responded to requests for customized data analyses to inform the work of economists, trade organizations, government, media and others. Most often, these requests are for localized data.

Case study: understanding the state of a state

A financial industry trade organization in North Carolina reached out to us to help them understand small business performance in their state. Some highlights:

• North Carolina's small business sales closely mirror the national trend, although they lag slightly behind. For example, in Q1 2024, the total U.S. sales index value was 141, compared to North Carolina's 139. Similarly, the transaction index, which measures foot traffic, indicates increased activity for both the U.S. and North Carolina. However, North Carolina's growth is slightly behind the national trend, with Q1 2024 indexes at 111 for the U.S. and 106 for North Carolina.
• Individual market performance within North Carolina varies significantly. Asheville showed the highest sales growth at 9.9%, and a significant transaction growth of 11.9%. Conversely, rural areas faced challenges, with sales declining at -3.1% and transactions declining at -2.2%. These differences highlight diverse economic landscapes within the state, where some areas are thriving while others are not.
• The restaurant sector in North Carolina shows mixed results. Overall, the state saw a slight decline in sales and transaction growth, at -0.7% and -0.8%, respectively. However, smaller markets like Greensboro and Wilmington had positive trends. In Greensboro, 4.1% sales growth and 1.9% transaction growth suggest potential expansion opportunities in a less competitive market. Larger markets such as Charlotte faced declines, indicating more significant challenges, such as competition and cost.

This kind of analysis helps organizations understand the dynamics that affect credit risk, offers insight into how and where to tailor new products and services, and provides data to inform strategic planning and investment decisions.

How weather can affect small businesses

Understanding how an extreme weather event might impact small businesses and their employees is increasingly important for anyone looking to understand the dynamics that affect businesses in today’s climate.

For example, the Fiserv Small Business Index can help us understand the impact of July 2024’s Hurricane Beryl that made landfall in the Houston market and across east Texas. The Category 1 storm was an early entry for hurricane season. We looked at some of the most economically impacted categories within the Houston market. 

At first glance, a small drop in overall sales growth in Accommodations and Food Services (Hotels and Restaurants) might not seem impactful, but the number doesn’t tell the whole story. These subsectors suffered a combined loss of nearly -9% in foot traffic for the month while prices spiked over 8%. Both results contribute to overall sales, creating an offsetting effect that is anything but small.

In the case of small business construction contractors and specialty trades, the storm provided a significant boost – both in terms of sales growth and foot traffic. Meanwhile, ticket sizes were down, likely due to a combination of smaller, storm preparation-related projects and easing inflation. 

Small business Transportation and Warehousing reaped the biggest gains due to the storm. Beryl delivered an increase of almost 35% for this subsector, and customers were willing to pay a 20% premium for the services.

Understand trends, inform planning and drive growth

Whether it’s planning for weather events or calculating the benefits of inviting a big event to town, having an up-to-date view of small business data can inform decision-making and provide a window into the overall health of the economy. Over time, this kind of data can be a tool to predict economic trends, inform emergency planning and identify opportunities for growth.