Chicago Entrepreneurs Have More Economic Concerns Than National Counterparts, but More Likely to Say Health Care Cost, Quality and Availability Have Improved
Chicago small business owners’ hiring plans and revenue expectations for the year ahead declined from just six months ago, according to the spring 2017 Bank of America Small Business Owner Report. This spring, 24 percent of local entrepreneurs plan to hire (vs. 33 percent in fall 2016), and 58 percent expect their revenue to increase over the next 12 months (vs. 63 percent in fall 2016). While trending downward from last fall, revenue forecasts for area small business owners are significantly higher this spring than their nationwide counterparts (48 percent). Meanwhile, their plans to grow their businesses over the next five years are level with the fall (66 percent in fall 2016).
The report, based on a semi-annual study of small business owners in the greater Chicago area and across the country, also found Chicago entrepreneurs’ confidence in the local economy remains even from the fall (42 percent), but lower than the national average this spring (50 percent). Meanwhile, Chicago small business owners’ confidence in the national economy improved (47 percent)—up 9 percentage points from the fall.
“There’s a sense of caution in the air among Chicago entrepreneurs, with revenue expectations falling and long-term growth plans remaining flat,” said Jim Holmes, Chicago small business banker manager for Bank of America. “Though confidence in the local economy is also unchanged and many area small business owners are hitting pause on their hiring plans, we’re seeing a promising rise in confidence toward the national economy.”
Despite a mixed economic outlook, the survey also found that Chicago small business owners are more concerned over a number of economic factors than their counterparts nationwide:
Health care costs (69 percent vs. 64 percent nationwide).
Consumer spending (50 percent vs. 42 percent nationwide).
Interest rates (49 percent vs. 37 percent nationwide).
Corporate tax rates (45 percent vs. 39 percent nationwide).
Strength of the U.S. dollar (45 percent vs. 36 percent nationwide).
While health care costs continue to be the chief concern, Chicago-area small business owners are also much more likely to believe that their business’ health care pricing, quality and availability have improved over the past five years, compared to their national counterparts. Of the 37 percent of local entrepreneurs who offer employee benefits:
Forty-seven percent believe the pace of annual health care cost increases have improved (21 percent nationwide).
Forty-four percent believe the quality of health care has improved (25 percent nationwide).
Forty-two percent believe the availability of health care has improved (27 percent nationwide).
While nearly three-quarters of Chicago entrepreneurs say work interferes with their home life, 84 percent say they have achieved a work-life balance. Still, it appears local business owners are getting less sleep than their peers across the country. Sixty-six percent say work regularly interferes with their ability to get enough sleep, versus just over half of small business owners nationwide. In addition, 30 percent report having had a nightmare about their business failing.
When asked to describe an average work week, area entrepreneurs say “interesting” (52 percent), “enjoyable” (52 percent) and “fulfilling” (48 percent). On the other hand, 48 percent of Chicago business owners admit their job is “demanding,” but just 23 percent call their job “stressful”—the lowest percentage among business owners surveyed in 10 major cities.
Though many Chicago small business owners tend to work overtime—with two-thirds reporting that they work more than 40 hours a week—a strong majority (83 percent) still say they are satisfied with the number of hours they work. Nearly all value the flexibility of their work location (91 percent), the flexibility of their schedule (90 percent) and the amount of time they can spend with family and close friends (80 percent).
When asked for their top predictions about the future of small business 20 years from now, most Chicago small business owners envision a virtual, paperless and automated one. Top predictions include:
More offices will be virtual than physical locations (49 percent).
Businesses will go paperless (44 percent).
Operations will be conducted by automation (43 percent).
Cash will disappear with transactions becoming digital (33 percent).
Hours of operation will be obsolete (19 percent).
Most businesses will employ a robot (12 percent).
Eighty-two percent of Chicago entrepreneurs say encouraging innovation in the workplace is a priority and 80 percent say it is a key contributor to business success. Eighty-seven percent have taken some sort of innovative action in the past two years, from upgrading business technology (57 percent) to creating a process to increase efficiency (36 percent). Ten percent say they are “industry-leading” and 31 percent say they are “ahead of the curve,” while 51 percent say they “keep the same pace” with other business owners in their sector.
GfK Public Communications & Social Science conducted the Bank of America Business Advantage Small Business Owner Report for spring 2017 online between February 21 and March 19, 2017 using a pre-recruited online sample of small business owners. GfK contacted a national 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. Additionally, a total of 300 small business owners were surveyed in 10 target markets: Atlanta, Boston, Chicago, Dallas/Fort Worth, Houston, Los Angeles, New York, Miami, San Francisco and Washington, D.C. An oversample of 150 interviews was also completed among respondents in the technology and medical/health care fields. The final results were weighted to national benchmark standards for size, revenue and region.
Waves of the Small Business Owner Report before 2016 were conducted by telephone, and while best efforts were made to replicate processes, differences in sample, weighting and method suggest caution when making direct statistical comparisons to results from previous years.
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 15,900 ATMs, and award-winning digital banking with approximately 35 million active users and more than 22 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 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.
Reporters May Contact:
Diane Wagner, Bank of America