Local entrepreneurs are finishing 2018 on a high note, with most Boston-area small business owners reporting anticipated year-over-year revenue growth and indicating plans to hire and expand in the year ahead, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report. While the majority of business owners are pleased with the direction of the economy, Boston entrepreneurs are struggling to land qualified employees in a highly competitive local job market.
The report, based on a semiannual survey of 1,000 small business owners across the country and the greater Boston area, revealed that 91 percent of Boston entrepreneurs are confident their year-end revenue will exceed that of 2017. In addition, over the next 12 months:
“Boston business owners are experiencing a sustained pattern of revenue growth and are looking to take advantage of a strong economy,” said Kevin Kelly, Northeast small business division executive at Bank of America. “We’re seeing multi-year highs in hiring and loan application plans, but rapid business growth in Boston is being tempered by a highly competitive talent market.”
As Boston business owners make plans to hire in the year ahead, they acknowledge that identifying and retaining employees has become a significant challenge. In the last year, turnover affected 26 percent of Boston entrepreneurs. Among business owners who sought to hire new employees, 48 percent say they had difficulty finding qualified candidates, in large part due to the tightening job market.
To adjust to these challenges, entrepreneurs have modified their hiring strategies to find and recruit top talent by:
When it comes to the top characteristics Boston business owners are looking for in their potential job candidates, entrepreneurs primarily value previous work experience (52 percent), passion for the work and mission of the business (48 percent), and the ability to learn new skills (47 percent).
In correlation with positive business forecasts, the survey found a general trend of declining or unchanged concern over most economic factors that are tracked. Health care costs remain at the top of the list of economic concerns in Boston and the highest nationwide — at 69 percent. Concern over corporate taxes decreased significantly, with only 41 percent still identifying this as a burdensome issue nearly a year after the enactment of U.S. tax reform, down from 53 percent in fall 2017.
Perhaps a result of recent changes to and uncertainty about trade policies, 48 percent of Boston business owners identify a more aggressive U.S. trade policy as an economic concern. Forty-three percent say the latest tariffs/U.S. trade policies have impacted their businesses, with 17 percent reporting a negative impact, 14 percent reporting a positive impact and 12 percent reporting both positive and negative effects.
On a positive note, Boston business owners are feeling the holiday spirit, as 90 percent plan to offer at least one holiday perk to their employees. The top holiday perks being offered are office closures (53 percent), salary bonuses (45 percent), holiday parties (41 percent) and flexible hours or vacation time (41 percent). Finally, despite unique challenges in managing a small business, Boston entrepreneurs love what they do. Ninety percent say the added stress of entrepreneurship has been worth it, and 84 percent would recommend that others follow in their footsteps.
For a complete, in-depth look at the insights of the nation’s small business owners, read the fall 2018 Bank of America Business Advantage Small Business Owner Report.
For holiday shoppers looking to support local small businesses this season, Bank of America encourages a trip to the Downtown Boston Holiday Market at 467 Washington Street (across from Macy’s), where 20 local artisans are offering an array of unique, handmade crafts. The market is open throughout December.
GfK Social and Strategic Research conducted the Bank of America Small Business Owner Report Survey for fall 2018 online between August 30 and September 13, 2018, using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,067 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees. In addition, a total of approximately 300 small business owners were also surveyed in each of 10 target markets: Atlanta, Boston, Chicago, Dallas, Houston, 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.
Prior to 2016, previous waves of the Small Business Owner Report Survey were conducted by telephone and while best efforts were made to replicate processes, differences in sample, weighting and method suggests caution when making direct statistical comparisons of the results from pre-2016 and post-2016.
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 67 million consumer and small business clients with approximately 4,400 retail financial centers, approximately 16,100 ATMs, and award-winning digital banking with more than 36 million active users, including nearly 26 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 across the United States, its territories 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:
Trevor Koenig, Bank of America