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Bank of America Survey Finds Family, Friends and Community Key to the Majority of Chicago Small Business Success

Chicago Business Loan Applicants Most Likely to Have Hiring Plans – Significantly Higher Than National Average

Tuesday, November 15, 2016 9:07 am EST

Dateline:

Chicago
"It’s also encouraging that Chicago entrepreneurs are more optimistic than they were earlier in the year – in regard to growth, revenue, hiring projections and economic outlook – and more confident across the board than their peers nationwide in these key areas."

More than 80 percent of Chicago small business owners report they receive emotional, operational and/or financial assistance from their families, according to the fall 2016 Bank of America Small Business Owner Report. Forty-four percent say that at some point, they have received financial gifts or loans from family and friends to fund their local business.

The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Chicago and around the country, also found that 70 percent of Chicago entrepreneurs say residents in their local communities are active shoppers at local businesses, and 55 percent report the local community plays an important role in the success of their enterprise. Seventy-one percent of Chicago small business owners repay that strong community support, saying they contribute to local charitable and non-profit organizations.

“It’s uplifting to see that Chicago entrepreneurs receive strong emotional and financial support from their families and friends, and that the local community plays a key role in their success,” said Jim Holmes, Chicago small business banking manager for Bank of America. “It’s also encouraging that Chicago entrepreneurs are more optimistic than they were earlier in the year – in regard to growth, revenue, hiring projections and economic outlook – and more confident across the board than their peers nationwide in these key areas.”

Growth, revenue, hiring and economic outlook

Sixty-six percent of Chicago small business owners plan to grow their businesses over the next five years – a 7 percentage-point uptick from the spring and 11 percentage points higher than the national average. Sixty-three percent of Chicago small business owners expect their revenue to increase in the year ahead, holding relatively steady from 62 percent in spring and 11 percentage points higher than the national average.

Also, while 33 percent of Chicago entrepreneurs plan to hire more employees over the next 12 months, this is still a 4 percentage-point increase from spring and 8 percentage points higher than the national average. However, the subset of Chicago small business owners intending to apply for a business loan in 2017 (13 percent) is significantly more likely to have hiring plans; 51 percent of those Chicagoans say they would use the funding to hire more employees – the highest percentage of 10 major cities surveyed, and 38 percentage points higher than the national average.

Chicago entrepreneurs’ confidence in the local and national economies is also on the upswing – if only slightly. Thinking ahead to 2017, 44 percent expect their local economy to improve, which is up 3 percentage points from the spring. Chicago small business owners are also showing more confidence in the national economy, with 38 percent expecting it to improve over the next year, up from 33 percent in the spring.

Economic factors impacting Chicago entrepreneurs

While Chicago entrepreneurs are feeling more optimistic about key areas of their business, they are concerned that certain economic factors could have an impact. The cost of health care is the most prominent concern among Chicago entrepreneurs, with 73 percent worried it will impact their business in the year ahead. Additionally, a majority of Chicago small business owners are concerned about:

  • Consumer spending (56 percent).

  • Strength of the U.S. dollar (55 percent).

  • Corporate tax rates (51 percent).


Chicago entrepreneurs are feeling the holiday spirit

When it comes to offering holiday perks to their employees, Chicago entrepreneurs are among the most generous compared to business owners in all 10 major cities surveyed. Eighty-five percent say they plan to offer at least one holiday-related perk (13 percentage points higher than the national average). The top two perks planned for the holidays in Chicago align closely to the national average:

  • Closing the office during the holidays (38 percent vs. 37 percent nationwide).

  • Giving salary bonuses (33 percent vs. 31 percent nationwide).

     

But compared to their national counterparts, Chicago entrepreneurs are more likely to:

  • Offer flexible hours or vacation time (30 percent vs. 20 percent nationwide).

  • Hold a holiday party for their employees (32 percent vs. 26 percent nationwide).

  • Give gifts out to their employees (35 percent vs. 27 percent nationwide). 


Chicago small business owners reluctant to embrace EMV technology

Only 16 percent of Chicago small business owners have implemented Europay, MasterCard, Visa (EMV) technology into their business. Among the 36 percent of Chicago entrepreneurs who have not installed EMV, the top reason cited is because they don't see the importance or value of implementing it. However, for those who have adopted EMV, 60 percent say they feel more secure compared to only 37 percent nationwide who say the same.

For a complete, in-depth look at the insights of the nation’s small business owners, read the fall 2016 Bank of America Small Business Owner Report, and for additional insights, download the Small Business Owner Report national infographic here. A local Chicago snapshot can also be viewed here.

About the Bank of America Small Business Owner Report
GfK Public Affairs and Corporate Communications conducted the Bank of America Small Business Owner Report survey for fall of 2016 online between August 7 and October 4, 2016 using pre-recruited online sample of small business owners. GfK contacted a national sample of 1,000 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between 2 and 99 employees. In addition, small business owners were surveyed in 10 target markets: Atlanta, Boston, Chicago, Dallas/Fort Worth, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C. A total of 300 small business owners were surveyed in Atlanta, Boston, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, San Francisco and Washington, D.C., and 100 small business owners were surveyed in Houston. The final results were weighted to national benchmark standards for size, revenue and region.


Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 47 million consumer and small business relationships with approximately 4,600 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with approximately 34 million active accounts and more than 21 million mobile active users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

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Reporters May Contact:
Diane Wagner, Bank of America, 312.992.2370
diane.wagner@bankofamerica.com