Facts & Resources

Bank of America Small Business Owner Report

Fall 2017 Small Business Owner Report

The Bank of America Small Business Owner Report is a biannual study exploring the concerns, aspirations and perspectives of small business owners throughout the U.S. and in 10 major cities. This iteration of the report explores the evolving small business landscape, including economic outlook, business growth expectations, views on health care quality and availability, stressors of owning a business, work-life balance and the importance of innovation.

Key insights from the fall 2017 Bank of America Small Business Owner Report include:

Rural business owners more confident about economy, urban counterparts more optimistic on revenue, growth and hiring

The report revealed that entrepreneurs in urban areas have the most dynamic business outlooks and plans for growth, while their rural counterparts are more upbeat about the economy. Specifically:

  • Fifty-seven percent of urban entrepreneurs plan to grow their business over the next five years (vs. 50 percent of their rural peers).
  • Fifty-two percent of urban business owners are confident that their revenue will increase in the coming year (vs. 47 percent of rural entrepreneurs).

  • Twenty percent of urban entrepreneurs plan to hire in 2018 (vs. 15 percent of rural business owners).

A snapshot of small business owners across generations and genders

The report also revealed varying levels of business owners’ optimism and future expectations when cutting across generations and genders. Specifically, millennial entrepreneurs have a significantly more optimistic outlook in a number of areas, including:

  • Eighty-one percent expect their revenue to increase in 2018 (30 percentage points higher than the national average).

  • Forty-three percent plan to hire in the year ahead (27 percentage points higher than the national average).

  • Seventy-six percent plan to grow over the next five years (25 percentage points higher than the national average).

  • Sixty-three percent expect their local economy to improve within the next 12 months (15 percentage points higher than the national average).

Meanwhile, male business owners are more confident than their female counterparts that the national economy will improve in 2018 (51 percent of men vs. 40 percent of women), but women entrepreneurs are more likely to expect their revenue to increase in the year ahead (55 percent of women vs. 48 percent of men). When it comes to hiring, men and women entrepreneurs are on the same page, with 16 percent of both genders planning to hire in 2018.

Face-to-face vs. virtual space

Surprisingly, fewer than half of entrepreneurs say social media and virtual communities are critical to many aspects of their business. Just 30 percent say social media has had a positive impact on their business’ bottom line in the past year. Instead, nearly three-quarters of business owners say they rely more on in-person interactions and networks for support running their business.

Not all small business owners downplay the role of social media. Millennial entrepreneurs buck the national trend, reporting they are much more reliant on social media for:

  • Sharing updates with their customers (74 percent).
  • Selling goods and services (66 percent).
  • Hiring employees (56 percent).

Half of millennials primarily turn to virtual communities to connect with others about business matters. This generation is also the most likely to use digital tools—nine out of 10 use at least one for daily operations, and 49 percent of millennials use digital banking.

As hiring focus shifts, raises and rewards key to retention, while employee talent remains a key factor for growth

While plans to hire in the year ahead have cooled, entrepreneurs are focused on maintaining current staffing levels, and very few plan to downsize. Of those who are planning to hire in 2018, 70 percent plan to bring on full-time employees, and just over half plan to hire part-time staff. Fewer than one in five plans to hire freelancers, independent contractors, interns or seasonal employees.

Small business owners continue to be thoughtful about retaining talent, with more than half taking steps within the past two years to do so, such as:

  • Giving wage increases and promotions (89 percent).
  • Offering flexible hours or work locations (34 percent).
  • Providing perks such as office happy hours (17 percent).
  • Giving spot bonuses or rewards (15 percent).

Report Methodology
GfK Public Communications & Social Science conducted the Bank of America Small Business Owner Report survey for fall of 2017 online between August 8 and September 28, 2017 using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,013 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees. In addition, a total of approximately 300 small business owners were also surveyed in each of 10 target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, New York, Miami, San Francisco and Washington, D.C. Approximately 150 interviews were also completed among respondents in the tech and medical/health care fields. The final results were weighted to national benchmark standards for size, revenue and region.

Prior to 2016, previous waves of the Small Business Owner Report survey were conducted by telephone and while best efforts were made to replicate processes, differences in sample, weighting, and method suggests caution when making direct statistical comparisons of the results from pre-2016 and post-2016.

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For More Information

For more information about the Small Business Owner Report, please contact Don Vecchiarello, Bank of America, 1.980.387.4899.

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