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Bank of America Survey Finds Majority of Dallas/Fort Worth Small Business Owners Lean on Family and Friends for Emotional and Financial Support

Local Economy Optimism Among the Highest of 10 Major Cities Surveyed

Tuesday, November 15, 2016 9:07 am EST

Dateline:

Dallas
"This high level of community support may be reflected in our north Texas small business owners’ confidence in the local economy for the year ahead."

Eighty-eight percent of Dallas/Fort Worth small business owners say they receive emotional, operational and/or financial support from their families, according to the fall 2016 Bank of America Small Business Owner Report. Fifty-seven percent of local entrepreneurs also report that family and/or friends have at some point loaned or gifted them money for their business. However, 37 percent of Dallas/Fort Worth small business owners regret asking family and friends to invest in their business – 20 percentage points higher than the rest of the country and the highest among the 10 major cities surveyed.

The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Dallas/Fort Worth and around the country, also found that 59 percent of Dallas/Fort Worth entrepreneurs feel their local community plays an important role in the success of their small business – and 74 percent report that residents in their community actively shop at local small businesses. Three-quarters of Dallas/Fort Worth small business owners say they give back by supporting local charitable and nonprofit organizations.

This strong culture of community support may be why Dallas/Fort Worth small business owners are among the most optimistic nationwide about their local economy. Sixty-two percent expressed optimism that their local economy will improve over the next 12 months – significantly higher than the national average of 37 percent and up 6 percentage points since the spring. Meanwhile, Dallas/Fort Worth small business owners’ confidence in the national economy has remained steady at 40 percent since last spring (38 percent), but is still 9 percentage points higher than the national average (31 percent).

“It’s uplifting to see Dallas/Fort Worth entrepreneurs receiving such strong emotional and financial support from their families and friends, and that the local community has played a critical role in their individual successes,” said Jeffrey Coomer, Dallas/Fort Worth small business banking manager at Bank of America. “This high level of community support may be reflected in our north Texas small business owners’ confidence in the local economy for the year ahead.”

Outlook on revenue, growth, hiring and economic concerns

Revenue expectations, as well as Dallas/Fort Worth small business owners’ plans to grow and hire, held steady from spring to fall, although they are significantly higher than the rest of the country. Sixty-four percent predict revenue growth in 2017 (vs. 52 percent nationally); 61 percent plan to grow their business over the next five years (vs. 55 percent nationally); and 40 percent plan to hire in the year ahead (vs. 25 percent nationally).

When it comes to the top economic concerns of Dallas/Fort Worth entrepreneurs, 73 percent say they are concerned about health care costs impacting their business in the year ahead. Additionally, Dallas/Fort Worth small business owners are more concerned about the following economic factors than the rest of the country: 

  • Commodities prices (57 percent vs. 47 percent nationwide).

  • Consumer spending (57 percent vs. 51 percent nationwide).

  • Credit availability (46 percent vs. 35 percent nationwide).

 

Top funding sources for Dallas/Fort Worth small business owners

When asked about which financial resources were used to start their businesses, 74 percent of Dallas/Fort Worth small business owners say they dipped into their personal savings. Additional top funding sources local entrepreneurs used when first starting out include personal credit cards (38 percent), family/friends (31 percent) and banks (27 percent).

While 37 percent of Dallas/Fort Worth small business owners regret asking family and friends to invest in their business, the top emotions they felt when given a loan from their family and/or friends were grateful and appreciative (62 percent), followed by more motivated to succeed (55 percent). However, 39 percent of Dallas/Fort Worth entrepreneurs feel anxiousness or pressure to pay the loan back – 9 percentage points higher than the national average and the highest among the 10 major cities surveyed.

While they’re not shy about asking family or friends for financial support to start their business, only 15 percent of Dallas/Fort Worth small business owners continue to rely on their personal networks for funding once their business has been established. Banks (44 percent) and personal credit cards (34 percent) are the top two financing sources that Dallas/Fort Worth entrepreneurs use once their businesses are off the ground.

Skeptical about commercial holidays, but still expect to hit year-end goals

As the holiday season approaches, 67 percent of Dallas/Fort Worth entrepreneurs say Black Friday is not important to their business, and 68 percent say the same about Cyber Monday. While they’re are not relying heavily on popular commercial holiday shopping to boost their bottom line, most Dallas/Fort Worth small business owners are confident they’ll hit their year-end revenue goals (77 percent), and one-third (34 percent) expect the holidays to generate more revenue for them this season than in 2015.

Seventy-seven percent of Dallas/Fort Worth small business owners plan to offer their employees holiday perks. The top three perks they plan to offer include:

  • Closing the office during the holidays (38 percent).

  • Giving gifts to employees (31 percent).

  • Offering flexible hours or vacation time (29 percent).

 

Fifty-six percent of Dallas/Fort Worth entrepreneurs say offering holiday perks to their employees will not impact them, but 20 percent say offering perks means that they’ll need to work longer hours, and 14 percent say they’ll need to sacrifice at least a portion of their own wage during the holiday season.  

More likely to implement EMV technology than businesses nationwide

Twenty-one percent of Dallas/Fort Worth small business owners have implemented Europay, MasterCard, Visa (EMV) chip technology, compared to 18 percent nationwide. Among the 32 percent who have not installed the technology, the top reason cited is because they don't see the importance or value of implementing it. However, for those select few in Dallas/Fort Worth who have the technology in place, 65 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 Dallas/Fort Worth 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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