Bank of America Survey Finds Washington, D.C.-Area Small Business Owners the Most Bullish in the Nation on Hiring, Growth
Despite Lingering Economic Concerns, Area Entrepreneurs Have Highest Business Expectations for 2016 out of Nine Markets Surveyed
Small business owners in the Greater Washington area are overwhelmingly optimistic, 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 Washington, D.C. and around the country.
More small business owners in the Greater Washington area are hiring than any other market surveyed: 73 percent plan to add headcount in the coming year, an increase of more than 30 percentage points from two years ago and the highest since the inception of the report in 2012. Additionally, 81 percent plan to grow their business over the next five years, a 20 percentage point spike from last year ‒ also higher than any other market surveyed.
Not surprisingly, this expected growth demands capital. Nearly one-third (32 percent) of Greater Washington small business owners plan to apply for a loan in 2016, an increase of 14 percentage points from last year. Of those who plan to apply for a loan, 46 percent plan to hire more employees and invest that capital in new equipment.
“The increase in optimism among small business owners in Greater Washington is incredibly encouraging,” said Ryan Coughlin, Washington, D.C. small business banker manager at Bank of America. “As more entrepreneurs plan to hire additional employees and grow their businesses, we look forward to seeing the impact these advancements will have on our community.”
Economic confidence is on the rise, despite lingering concerns
In addition to optimism surrounding their businesses, Greater Washington small business owners are more confident in their local and national economies. Nearly two-thirds (65 percent) believe the local economy will improve in the next year, an increase of 23 percentage points from a year ago, and more than half (55 percent) believe the national economy will improve (versus 41 percent a year ago). Though small business owners are less confident in the global economy, this confidence has increased considerably since last year. Forty percent believe it will improve in the next year, versus 25 percent who said the same a year ago.
When asked about their top concerns, Greater Washington small business owners believe the following factors could potentially impact their businesses over the next 12 months:
- The possibility of future interest rate hikes (33 percent).
- The upcoming U.S. presidential election (32 percent).
- The possibility of a rising minimum wage (30 percent).
- Financial crises in countries abroad [i.e., China and Greece] (25 percent).
Greater Washington small business owners embrace workplace 2.0
The workplace culture in Greater Washington has shifted in recent years resulting in collaborative, tech-friendly and flexible environments. While 30 percent of small business owners believe technology has reduced their staffing needs, nearly all (91 percent) say that changing technology has helped their business. In addition, 86 percent of Greater Washington small business owners say they are very willing to adopt new technologies; for example, more Greater Washington entrepreneurs have created a mobile app for customers than any other market surveyed (31 percent).
Small business owners are also embracing a different work environment, as 47 percent say their workplace has become more focused on teamwork and collaboration over the past five years. This collaboration is taking place despite an increase in the amount of flexibility that employers are now offering, as nearly half (48 percent) currently offer their employees the option to telecommute, compared to just 32 percent five years ago.
Small business owners are beginning to offer nontraditional perks as well, including areas to relax and unwind, such as nap pods or game rooms (26 percent), the ability to bring your pets to work (13 percent), or onsite gym or workout classes (11 percent).
Technological advancements require additional precautions
In Greater Washington, 11 percent of small business owners have already fallen victim to a cybersecurity breach. In order to better protect themselves, more than three-fourths (76 percent) are upgrading their technology once a year or more, the highest of the nine markets we survey. As a result, more than three in five (62 percent) local small business owners feel prepared for a cybersecurity breach.
Greater Washington entrepreneurs looking forward to a successful
Greater Washington small business owners expect to end the year on a high note: 86 percent say it’s likely they will hit their year-end revenue goal, 9 percentage points more than last year. Many Greater Washington small business owners intend to offer year-end perks to their employees, such as salary bonuses (56 percent), a holiday party (54 percent) or office closures (49 percent).
When it comes to holiday milestones, the majority of Greater Washington business owners continue to state that Black Friday and Cyber Monday have no impact on their business’ bottom line, but they are becoming stronger revenue drivers for some. Fifty percent of Greater Washington small business owners say Black Friday has an impact on their business’ bottom line – a 17 percentage point jump from one year ago. Similarly, 42 percent of small business owners reported that Cyber Monday has an impact on their business’ bottom line, compared to 31 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 Greater Washington 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.
Visit the Bank of America newsroom for more Bank of America news.
Reporters May Contact:
Nicole Nastacie, Bank of America, 980.388.7252