Small businesses are 'in pretty good shape': Intuit CFO

Since the beginning of the Biden-Harris administration, 18.1 million new business applications have been submitted. Intuit (INTU) CFO Sandeep Aujla joins Wealth! to discuss the state of small businesses and how the company is helping set up business owners for financial success.

"Small businesses are actually in a pretty good shape. Their revenues over the last three months are up about 3%. When you look at year over year, their profits are up about 2% year over year. And a key leading indicator is how many hours their employees are working. And we are seeing that up about 4% year over year," Aujla explains. However, he notes that while cash reserves are down 8% year over year, small businesses are still in a good position as they are up 16% from the pre-COVID timeframe.

Aujla adds, "The number one need of the small business, the area they're focused on the most, is helping me get and grow customers. And that's where we are really excited about what we're bringing to market through our innovations such as revenue intelligence." He explains that by combining data from QuickBooks and MailChimp, Intuit is uniquely positioned to aid owners in growing their businesses, improving their cash flows, and ensuring they get the tax benefits they're entitled to.

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This post was written by Melanie Riehl

Video transcript

There's been a resurgence in the entrepreneurial spirit with more individuals and small groups venturing into small businesses since the start of the Biden Harris administration, there have been 18.1 million new business applications with an average 443,000 filed each month.

A rate 90% faster than pre pandemic averages.

But for small business owners navigating through sticky inflation and higher rates is no easy task.

That's why companies like Intuit, of course, are continuing to keep some of these entrepreneurs top of mind.

Joining me now we've got Sandeep Ajala who is the into it, Chief Financial Officer here with us, Sandeep.

Great to have you here on the program with us today.

First and foremost.

I mean, we we gotta talk about the state of small businesses.

What are you seeing from the Intuit seat at the table within this broader ecosystem of small businesses?

Well, Brad, thank you for having me Happy Friday.

You know, at into it, we serve 100 million customers and 10 million of those customers are small and mid size businesses.

And for us, what we are seeing across the small business platform is that small businesses are actually in a pretty good shape.

Their revenues over the last three months are up about 3%.

When you look at year to year, their profits are up about 2% a year, year.

And a key indicator, a key leading indicator is how many hours their employees are working.

And we're seeing that up about 4% year over year.

Now, all those are great indicators, but the small businesses are also looking at the cash reserves, the cash reserves are down about 8% when you look at the same period last year, but six up 16% uh over the uh pre COVID uh time frame.

So I would say small businesses are in a pretty good shape.

And the other thing, I would point out that those on our platform and those who have been on our platform for four years or more tend to have 60% higher cash flow uh cash reserves and those who are on a platform for less than a year.

Further, indicating our focus on small businesses and really helping drive their prosperity are common tax code breaks or advantages small businesses are increasingly looking for in order to make sure that they can securitize some of those profits that they're seeing from their business or, or just make sure that financially they're making sound decisions that can help benefit their position or at least put some of that capital back to work.

You know, Brad the number.

Um So on the tax side, we do small business taxes and we always make sure that they are uh getting access to each and every benefit that's available to them through the tax code.

But what I would highlight is that the number one need of a small business, the area they're focused on the most is helping me get and grow customers.

And that's where we are really excited about what we bring to market through innovation such as uh revenue intelligence by combining the billions of data points on TurboTax, sorry, on quick books, as well as on mail champ.

So that's where our focus is on helping them grow their businesses, helping them improve their cash flows, helping them save time while we also make sure that they're complying with the tax code and getting access to each and every benefit that they're entitled to.

Certainly here, you know, it's interesting as you were mentioning, the employee hours that are being worked for some of these small businesses.

I wonder how you're seeing small businesses navigate this labor market right now.

The labor market.

You know, we can reflect on where it was a couple of years ago and companies of our scale were having challenges, recruiting and retaining employees.

So you can imagine the challenges that the small businesses were having the market has uh very much normalized and we are seeing small businesses continue to have a better uh time.

Uh adding employees, they are having more success retaining their employees and the pressure they felt on their cost structure by having to give those pay increases has returned to much more reasonable and normalized levels.

So it's a auto magnitude better environment that they are not getting now than where they were say uh circuit two years ago.