Bank of America Survey Finds Atlanta Small Business Owners More Upbeat About the Economy Than Their National Counterparts
Local Entrepreneurs Take Wait-and-See Approach to Hiring and Growth
Atlanta small business owners show greater confidence in the economy than their national counterparts, according to the spring 2016 Bank of America Small Business Owner Report. Thirty-seven percent of local entrepreneurs believe the national economy will improve over the next 12 months, compared with 29 percent nationally, and 48 percent expect their local economy to improve – 10 percentage points higher than the national average.
The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Atlanta and around the country, also found that the upcoming presidential election is causing uncertainty. Seventy-two of Atlanta entrepreneurs say they expect the upcoming presidential election to impact their business “a lot” or “somewhat,” compared with 67 percent nationally.
“Although more confident in the economy than their national counterparts, Atlanta small business owners are taking a wait-and-see approach to their business growth and hiring plans pending the outcome of the fall elections,” said Dean Bird, Atlanta small business banker manager at Bank of America. “This sentiment is similar to what we’ve seen in previous election years and is in line with their counterparts across the country. Despite this election year uncertainty, Atlanta-area entrepreneurs remain positive about the future of their businesses.”
While the majority of Atlanta small business owners plan to grow their business over the next five years (65 percent) and expect their revenue to increase over the next 12 months (58 percent), these projections are down from 72 percent and 65 percent in spring 2015, respectively. Hiring projections have also cooled, with only 32 percent of local entrepreneurs planning to hire new employees in 2016, compared with 51 percent last year. However, this number is still 10 percentage points higher than the national average.
Top economic concerns for Atlanta small business owners
Atlanta small business owners expressed increasing concern for a number of economic factors. Seventy-eight percent of local entrepreneurs are concerned about the “effectiveness of U.S. government leaders,” and 51 percent are concerned about the volatility of the U.S. and/or global stock market, both increases since last spring
Health care costs also continue to loom prominently as an issue of importance for Atlanta-area business owners, with 78 percent expressing concern about rising costs. Currently, only 34 percent of Atlanta entrepreneurs offer health care coverage to their employees – 6 percentage points lower than the national average and the lowest of the nine cities surveyed.
Despite these worries, a number of economic concerns have calmed over the past 12 months, showing that optimism has improved for Atlanta small business owners in some areas. Concern over interest rates (54 percent) and consumer spending (55 percent) have declined year over year. Furthermore, concern surrounding credit availability has fallen by 11 percentage points since last spring.
Minimum wage increase worries Atlanta entrepreneurs, many hiring full-time workers
Thirty-one percent of Atlanta small business owners pay their employees either the Georgia minimum wage of $5.15 or federal minimum of $7.25. The majority (56 percent) of Atlanta small business owners ‒ more than any other city surveyed – don’t believe a minimum wage increase would positively impact the economy. If the minimum wage is raised, 63 percent of Atlanta small business owners say they would need to take financial measures to compensate, including increasing the price of products and services (25 percent), reducing operational spending (18 percent), and cutting staff hours (15 percent).
While many small business owners nationwide seem to be shifting to a part-time model, Atlanta entrepreneurs are the least likely to hire part-time employees compared with other cities surveyed. Instead, 59 percent plan to hire full-time workers over the next 12 months – 8 percentage points higher than the national average. In addition, 41 percent plan to hire part-time employees and 32 percent plan to hire freelancers.
Skill and work experience top hiring factors; education less so
Half of Atlanta small business owners say that skill level is the single most important factor when hiring a potential candidate, followed by fit with company culture (27 percent) and previous work experience (22 percent). Only 2 percent say that education level is the most important factor when hiring.
When Atlanta entrepreneurs were asked to name the top qualities they value in prospective employees, 73 percent said they most value trustworthiness, followed by candidates who are hardworking (70 percent) and experienced (61 percent).
For a complete, in-depth look at the insights of the nation’s small business owners, read the entire spring 2016 Bank of America Small Business Owner Report, and for additional insights, download the Small Business Owner Report national infographic.
About the Bank of America Small Business Owner Report
GfK Public Affairs and Corporate Communications conducted the spring 2016 Bank of America Small Business Owner Report survey online between March 17 and April 19, 2016 using a 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, a total of 300 small business owners were also surveyed in nine target markets: Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami, New York, San Francisco and Washington, D.C. The final results were weighted to national benchmark standards for size, revenue, and region. Previous waves of the Small Business Owner Report survey were conducted by telephone. Best efforts were made to replicate processes in sample, weighting, and method.
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 16,000 ATMs, and award-winning online banking with approximately 33 million active users and approximately 20 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.
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Reporters May Contact:
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