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Bank of America Survey Finds Los Angeles Small Business Owners Are Ramping up Hiring Despite Concerns Over Minimum Wage Hikes

Local Entrepreneurs Plan for a Robust 2016

Tuesday, November 17, 2015 12:00 pm EST

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LOS ANGELES

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"Despite their reticence over minimum wage increases, Los Angeles small business owners continue to prioritize hiring, which will fuel success within their business and across the entire community."

While Los Angeles small business owners are concerned about minimum wage hikes, they are very optimistic about revenue growth and many have plans to hire in 2016, according to the fall 2015 Bank of America Small Business Owner Report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Los Angeles and around the country.

Following a minimum wage vote that passed in Los Angeles this summer, area small business owners are expressing greater concern over its impact: 40 percent expressed concern over minimum wage increases, compared to 35 percent of small business owners nationwide. Los Angeles small business owners are also concerned about potential interest rate hikes (40 percent) and the outcome of the upcoming U.S. presidential election (37 percent).

Despite these concerns, Los Angeles owners are planning to hire more than ever before and are confident about revenue growth in 2016, with 68 percent expecting revenues to increase over the next 12 months. Additionally, 62 percent of Los Angeles-area small businesses plan to hire in the upcoming year, more than double what it was two years ago and the highest since the inception of the report in 2012.

“Los Angeles small business owners realize that talent is the backbone of any successful business,” said Troy Bosch, Los Angeles small business banker manager at Bank of America. “Despite their reticence over minimum wage increases, Los Angeles small business owners continue to prioritize hiring, which will fuel success within their business and across the entire community.”

While confidence in business grows, local economic optimism dips
In contrast to increased confidence in their businesses, Los Angeles small business owners report decreased confidence in their local economy: Just over half (53 percent) believe it will improve in the next year, a decrease of 9 percentage points from a year ago. Los Angeles was the only market surveyed that saw a decline in local economic confidence. Confidence in the national economy is flat from a year ago (48 percent in fall 2015, versus 47 percent in fall 2014). However, optimism around the global economy has increased from a year ago, with 33 percent saying it will improve, compared to 29 percent last year.

Tempering confidence in the economy are a few concerns beyond minimum wage hikes. These include:

  • The effectiveness of U.S. government leaders (73 percent).
  • Health care costs (69 percent).
  • Interest rate increases (59 percent).
  • Strength of the U.S. dollar (56 percent).

Los Angeles small business owners embrace workplace 2.0
Los Angeles area small business owners are paving the way for more collaborative, tech-friendly and flexible work environments. For example, most (89 percent) report technology helps boost their business. Nearly as many (84 percent) report that technology practices have helped to better serve customers and expressed willingness to adopt new technologies in the future.

Collaboration is becoming increasingly important to area business owners, with 39 percent saying their workplace has become more focused on teamwork in the past five years. Collaboration is increasing even as employers are offering more flexible work arrangements, including telecommuting options (45 percent), which nearly half of small business owners (48 percent) say improve employee attitudes at work.

Area small business owners are beginning to offer nontraditional perks as well, including areas to relax and unwind such as nap pods or game rooms (20 percent), transportation stipends (19 percent) or the ability to bring pets to work (17 percent).

Cybersecurity raises concerns; Los Angeles small businesses preparing
Although 14 percent of Los Angeles small business owners have been the victim of a cybersecurity breach, nearly two-thirds (63 percent) have expressed concerns about the security of their customers’ proprietary data. In order to better protect themselves, 71 percent are upgrading their technology once a year or more. As a result, more than half (58 percent) of local business owners feel prepared for a cybersecurity breach.

Los Angeles owners looking forward to a successful year-end
Los Angeles small business owners expect to end the year on a high note: 79 percent say it’s likely they will hit their year-end revenue goal. Many small business owners intend to offer year-end perks to their employees, including salary bonuses (49 percent), a holiday party (47 percent) or holiday office closures (47 percent).

When it comes to holiday shopping milestones, Black Friday and Cyber Monday are not top revenue drivers for Los Angeles small business owners. Fifty-five percent say Black Friday has no impact on their business’ bottom line (compared to 58 percent a year ago), and 59 percent think Cyber Monday is overhyped and has no significance to their business’ bottom line (compared to 63 percent in fall 2014).

For an in-depth look at the attributes of the nation’s small business owners, read the full fall 2015 Bank of America Small Business Owner Report, and for additional insights from small business owners in Los Angeles and across the country, download the Small Business Owner Report local insights infographic here.

About the Bank of America Small Business Owner Report
Braun Research, Inc. conducted the Bank of America Small Business Owner Report survey by phone from August 21 through September 22, 2015, on behalf of Bank of America. Braun contacted a nationally representative sample of 1,001 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, 300 small business owners were surveyed in each of nine target markets: Los Angeles, Dallas, Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error for the national sample is +/- 3.1 percent; the margin of error for the oversampled markets is +/- 5.7 percent, reported at a 95 percent confidence level.

The Braun Research survey results conducted on behalf and for the exclusive use of Bank of America and interpretations in this release are not intended, nor implied, to be a substitute for the professional advice received from a qualified accountant, attorney or financial advisor. Always seek the advice of an accountant, attorney or financial advisor with any questions you may have regarding the decisions you undertake as a result of reviewing the information contained herein. Nothing in this report should be construed as either advice or legal opinion.

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 4,700 retail financial centers, approximately 16,100 ATMs, and award-winning online banking with 32 million active users and more than 18 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in 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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