Chicago Is Open for Business: Bank of America Survey Finds Growth Among Area Entrepreneurs Is on the Rise
Chicagoland Small Business Owners Feeling Optimistic About the Year Ahead, Planning for a Robust 2016
Small business owners in the Chicago area are feeling increasingly 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 the Chicago area and around the country.
The report found that 67 percent of Chicago small business owners expect revenue to increase over the next 12 months, compared to 61 percent last year. In addition, 60 percent plan to hire in the coming year, a 12 percentage point increase from just one year ago.
“Small businesses continue to drive economic growth in our great city,” said Jim Holmes, Chicago small business banker manager for Bank of America. “It’s encouraging to see confidence among Chicago-area entrepreneurs so high, especially when it comes to hiring and the strength of the economy. We’re looking forward to an exciting year ahead.”
Not surprisingly, this expected growth demands more capital. Twenty-eight percent of Chicago small business owners plan to apply for a loan in 2016, compared to just 18 percent a year ago.
Economic confidence is on the rise, despite lingering concerns
In addition to confidence in their businesses, Chicago entrepreneurs have increased assurance in the economy: Half (50 percent) predict the local and national economies will improve over the next year (compared to 42 and 48 percent a year ago, respectively), and 39 percent are optimistic about global economic improvement (versus 32 percent a year ago).
When asked about their top concerns, Chicago small business owners believe the following factors could potentially impact their businesses over the next 12 months:
- The possibility of future interest rate hikes (38 percent).
- The upcoming U.S. presidential election (37 percent).
- Financial crises in countries abroad [i.e., China and Greece] (33 percent).
- The possibility of a rising minimum wage (31 percent).
Chicago entrepreneurs bolstering business with technology
Chicagoland entrepreneurs are not afraid of change, especially when it comes to new technology. Most (91 percent) Chicago small business owners think technology has helped their business, and 83 percent are willing to adopt new technologies into their businesses.
In recent years, small business owners have adopted new technology to do the following:
- Accept payments (55 percent).
- Connect with employees (52 percent).
- Optimize websites (45 percent).
- Track inventory (39 percent).
- Create apps for customers (24 percent).
When it comes to cybersecurity concerns, 11 percent of Chicago small business owners have been a victim of a cybersecurity breach. In order to better protect themselves and their customers, more than two-thirds (68 percent) are upgrading their technology at least once a year. As a result, 59 percent of local business owners feel prepared for a cybersecurity breach.
Chicago small business owners embrace workplace 2.0
Chicago workplace cultures have become more technology and teamwork focused, with 44 percent saying their workplace has become more tech savvy and 39 percent saying it has become more collaborative. However, Chicago small business owners are some of the least likely to offer telecommuting to employees (41 percent, versus 47 percent nationally).
Telecommuting aside, Chicago small business owners do offer a variety of other perks and benefits to their employees including flexible hours (56 percent) or salary bonuses (50 percent). They also provide many nontraditional perks, including areas to relax or unwind, such as nap pods or game rooms (19 percent), office happy hours (17 percent) or pet-friendly work environments (11 percent).
Chicagoans feeling the holiday spirit
Chicago small business owners take care of their people around the holidays. Out of the nine markets we survey, they are the most likely to close the office during the holiday season (50 percent, versus 44 percent nationally), and are more likely to hold holiday parties than most of their national counterparts (48 percent, versus 45 percent nationally). Additionally, 45 percent of local business owners offer flexible hours or vacation time around the holidays to employees – 12 percent more than their national counterparts.
When it comes to holiday shopping milestones, Black Friday and Cyber Monday are not significant revenue drivers for Chicago small business owners. More than half (57 percent) feel that Black Friday has no impact on their business’ bottom line and 62 percent feel similarly about Cyber Monday, saying that it is overhyped and has no impact on their bottom line. These numbers are nearly identical to the 2014 holiday season.
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 Chicago 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.
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