Boston Small Business Owners’ Hiring Plans on the Rise, According to Bank of America Survey
Eighty Percent Expect to Hit Year-End Revenue Goal – Highest of 10 Major Cities Surveyed
Boston small business owners’ plans to hire jumped by 50 percent in a six-month period, according to the fall 2016 Bank of America Small Business Owner Report. Thirty-six percent of Boston small business owners plan to hire more employees in the year ahead, compared with only 23 percent who said they planned to hire in the spring of 2016. The fall 2016 figure is also 11 percentage points higher than the national average.
The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Boston and around the country, also found that 80 percent expect to hit their year-end revenue goal ‒ 12 percentage points higher than the rest of the country, and the highest among the 10 major cities surveyed. Looking to 2017, 54 percent expect their revenue to increase in the year ahead.
Boston entrepreneurs’ confidence in the economy is also on the rise, as 40 percent believe the national economy will improve in the next year – an increase from 33 percent who thought so in the spring. Optimism in the local economy has remained steady, with 47 percent expecting it to improve over the next 12 months, in line with the spring.
“The fact that most are expecting to end the year either meeting or beating their revenue goals shows some real momentum for Boston small businesses heading into 2017,” said Seth Felix, Boston small business banking manager at Bank of America. “That, in addition to the 50 percent increase of those saying they’ll hire in the year ahead, is certainly encouraging to see from a growth perspective.”
Economic factors and issues concerning Boston entrepreneurs
While Boston entrepreneurs are more optimistic about key areas of their business, they remain concerned about certain economic factors, with the rising cost of health care topping the list as a worry for 75 percent of respondents. Notably, Boston small business owners are significantly more concerned about the following than the rest of the country:
Commodities prices (62 percent vs. 47 percent nationwide).
Consumer spending (61 percent vs. 51 percent nationwide).
- Interest rates (57 percent vs. 46 percent nationwide).
Other topics that are causing greater concern for Boston small business owners include:
Social crises and violence in the U.S. and abroad (36 percent), an 11 percentage-point jump since spring 2016.
- Financial crises in countries abroad (33 percent), an 8 percentage-point jump in six months.
Getting by with a little help from their friends, families and community
Eighty-nine percent of Boston small business owners say they receive emotional, operational and/or financial support from their family. Fifty-one percent of local entrepreneurs also report that family and/or friends have at some point given them a financial loan or gift for their business, and 52 percent rely on family and friends to a role in their business, whether as advisors, employees, investors or partners. When asked who helps them most with running their business, 34 percent responded “friends and family,” exceeded only by “employees” (49 percent).
Additionally, sixty-one percent of Boston entrepreneurs say their local community is important to the success of their small business – 14 percentage points higher than the nationwide response. Boston small business owners say they’re most supported by the local community through:
Patronage of their business (50 percent).
Promotion and marketing of their business (29 percent).
- Online reviews and referrals (28 percent).
Life cycle of small business financing
When starting their business, 73 percent of Boston entrepreneurs say they used personal savings, followed by personal credit cards (38 percent) and banks (33 percent). Boston small business owners were among the most likely to have received financial support from family and friends, with 34 percent turning to loved ones for financial resources to get their business off the ground (vs. 21 percent nationwide).
Eighty-eight percent of Boston entrepreneurs who have received money from family or friends for their business say they don’t regret asking them for financial support. Instead, they are primarily grateful and appreciative (79 percent) and are among the least likely (21 percent) to feel anxious about paying them back, compared with 30 percent nationwide.
Once established, only 10 percent of Bostonian small business owners continue to rely on their personal networks for financing. Banks (52 percent) and personal credit cards (46 percent) are the top two funding sources that Boston entrepreneurs use once their business is off the ground.
Local entrepreneurs feeling the holiday spirit
The majority (81 percent) plan to spread the cheer by offering employees at least one holiday perk this season. The top three perks they plan to offer include:
Closing the office during the holidays (40 percent).
Giving gifts to employees (39 percent).
- Holding an office holiday party (38 percent).
Fifty-two percent of Boston entrepreneurs say that offering holiday perks to their employees will not impact them personally, while 24 percent say offering perks means that they’ll need to work longer hours, and 21 percent of Boston small business owners say they’ll need to sacrifice at least a portion of their own wage.
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 Boston 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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