Chicago small business owners are optimistic heading into 2019, anticipating 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. That said, a historically tight job market is complicating expansion plans as Chicago entrepreneurs find themselves in a competition to retain and hire talent.
The report, based on a semiannual survey of 1,000 small business owners across the country and the greater Chicago area, revealed that 81 percent of Chicago business owners are confident their 2018 year-end revenue will exceed that of 2017. In addition, over the next 12 months:
“Chicago entrepreneurs are confident in their businesses and are anticipating revenue growth over the next several months,” said Drew Piazza, Chicago small business banker manager for Bank of America. “This optimism is also driving expansion plans, with about a quarter of Chicago business owners seeking to bring on new employees. That said, record-low unemployment is presenting a challenge for recruiting and retaining top talent.”
As 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 has affected 25 percent of all Chicago entrepreneurs. Among those who sought to hire new employees, 52 percent had difficulty finding qualified candidates, and 51 percent report that their inability to find qualified candidates has limited business growth.
To adjust to these challenges, business owners who sought to hire in the last year have modified their hiring strategies to find and recruit top talent by:
In correlation with steady business forecasts, the survey found a general trend of declining concern over most economic factors that are tracked. Health care costs remain the top concern for Chicago entrepreneurs at 60 percent, though that fell 13 percentage points year over year. Concern over corporate taxes also decreased significantly, with only 40 percent identifying this as a burdensome issue nearly a year after the enactment of U.S. tax reform, down from 54 percent in fall 2017.
Perhaps a result of recent changes to and uncertainty about trade policies, 41 percent of Chicago business owners identify U.S. trade policy as an economic concern, making it the fourth-highest concern for entrepreneurs today. Thirty-seven percent say the latest tariffs/U.S. trade policies have impacted their business, with 18 percent reporting both positive and negative effects, 12 percent reporting a negative impact and 7 percent reporting a positive impact.
Chicago business owners are feeling the holiday spirit as 89 percent plan to offer at least one holiday perk to their employees. The top holiday perks planned this year are office closures (49 percent), salary bonuses (44 percent) and a holiday party (44 percent, the highest percentage among all 10 cities).
Finally, despite unique challenges in managing a small business, Chicago entrepreneurs love what they do. Eighty-three 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.
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, 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:
Diane Wagner, Bank of America