Local Entrepreneurs’ Revenue Outlook and Hiring Plans Decline From Six Months Ago as They Adopt Wait-and-See Approach
Atlanta entrepreneurs are increasingly confident in the future of the national economy, according to the spring 2017 Bank of America Small Business Owner Report. This spring, 55 percent of area business owners believe the national economy will improve over the next 12 months (vs. 46 percent in fall 2016). And, 62 percent are confident that their local economy also will improve—12 percentage points higher than the national average. This confidence is translating into action as an impressive 74 percent of Atlanta entrepreneurs plan to grow their business over the next five years and 20 percent plan to apply for a loan in 2017.
The report, based on a semi-annual study of small business owners in Atlanta and across the country, also found that while more confident than their peers nationwide, Atlanta small business owners are taking a wait-and-see approach as their revenue expectations and hiring plans for the year ahead have declined. This spring, 22 percent of Atlanta entrepreneurs plan to hire—a significant drop of 24 percentage points from fall 2016—compared to 18 percent nationwide. Additionally, two-thirds expect their revenue to increase over the next 12 months (vs. 71 percent in fall 2016 and 48 percent nationwide). Atlanta entrepreneurs’ declining revenue expectations could be attributed to their 2016 revenue results as 49 percent report their revenue last year stayed the same or declined from 2015.
“This increased optimism in the economy is a great indicator of potential growth for the Atlanta area in 2017,” said Dean Bird, Atlanta small business banker manager at Bank of America. “The boost in confidence is already translating into action as local entrepreneurs are making plans for borrowing and long-term growth. We are excited to see what 2017 holds for Atlanta small business owners.”
In addition to a promising outlook toward the economy and long-term growth, Atlanta small business owners’ concerns over most economic factors have decreased significantly from six months earlier, with the most significant declines showing in:
Health care costs (65 percent, down 9 percentage points since fall 2016).
Strength of the U.S. dollar (44 percent, down 22 percentage points since fall 2016).
Consumer spending (44 percent, down 17 percentage points since fall 2016).
Interest rates (35 percent, down 25 percentage points since fall 2016).
While health care costs continue to be a chief concern for Atlanta small business owners, they are mixed on their views of how health care has changed over the past five years, but are still more likely to say health care pricing, quality and availability have improved compared to their national counterparts. Of the 33 percent of local entrepreneurs who offer employee benefits:
Thirty-six percent believe the pace of annual health care cost increases have improved (21 percent nationwide).
Thirty-eight percent believe the quality of health care has improved (25 percent nationwide).
While an impressive 79 percent of Atlanta entrepreneurs report they have achieved a work-life balance, nearly one-third admit their stress level has worsened since starting their business, and 76 percent report that their work life interferes with their home life. Atlanta business owners admit work interferes with:
Finding time for themselves to relax (69 percent).
Getting enough sleep (66 percent).
Taking vacation (65 percent).
Visiting with friends (63 percent).
Spending time with family (63 percent).
When asked to describe an average work week, local entrepreneurs say “fulfilling” (51 percent), “enjoyable” (44 percent) and “interesting” (43 percent). However, it doesn’t mean that they’re not stressed—52 percent say their job is “demanding,” 30 percent say it’s “stressful” and 29 percent say it’s “exhausting.”
Though many Atlanta small business owners tend to work overtime—with nearly three in five reporting that they work more than 40 hours a week—a strong majority (77 percent) still say they are satisfied with the number of hours they work. Nearly all local entrepreneurs value the flexibility of their work location (94 percent), the flexibility of their schedule (90 percent) and the amount of time they can spend with family and close friends (78 percent).
When asked for their top predictions about the future of small business 20 years from now, most Atlanta small business owners envision a paperless, cashless and virtual one. Top predictions include:
Businesses will go paperless (51 percent).
Cash will disappear with transactions becoming digital (45 percent).
More offices will be virtual than physical locations (45 percent).
Operations will be conducted by automation (31 percent).
Hours of operation will be obsolete (19 percent).
Most businesses will employ a robot (9 percent).
Eighty-six percent of local entrepreneurs say encouraging innovation in the workplace is a priority, and 84 percent believe it is a key contributor to business success. Eighty-two percent have taken some sort of innovative action in the past two years, from upgrading business technology (43 percent) to creating a process to increase efficiency (31 percent). Ten percent say they are “industry-leading,” and 35 percent say they’re “ahead of the curve,” while 50 percent say they “keep the same pace” with other business owners in their sector.
GfK Public Communications & Social Science conducted the Bank of America Business Advantage Small Business Owner Report for spring 2017 online between February 21 and March 19, 2017 using a pre-recruited online sample of small business owners. GfK contacted a national 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. Additionally, a total of 300 small business owners were surveyed in 10 target markets: Atlanta, Boston, Chicago, Dallas/Fort Worth, Houston, Los Angeles, New York, Miami, San Francisco and Washington, D.C. An oversample of 150 interviews was also completed among respondents in the technology and medical/health care fields. The final results were weighted to national benchmark standards for size, revenue and region.
Waves of the Small Business Owner Report before 2016 were conducted by telephone, and while best efforts were made to replicate processes, differences in sample, weighting and method suggest caution when making direct statistical comparisons to results from previous years.
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 15,900 ATMs, and award-winning digital banking with approximately 35 million active users and more than 22 million mobile 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.
Reporters May Contact:
Matthew Daily, Bank of America