Long-Term Growth Outlook Tops Peers Nationwide, Despite 2017 Hiring Plans Dropping
Dallas/Fort Worth small business owners are expressing increased confidence in both the local and national economies compared to fall 2016, and are among the highest of all 10 major markets surveyed, according to the spring 2017 Bank of America Small Business Owner Report. More than half of area entrepreneurs are confident the national economy will improve over the next year, up 16 percentage points from just six months earlier. Confidence in the local economy is also trending upward (69 percent vs. 62 percent in fall 2016). Dallas/Fort Worth small business owners are upbeat about plans for long-term growth, with more than three-quarters planning to grow their business over the next five years, greater than any of 10 markets surveyed.
The report, based on a semi-annual study of small business owners in the Dallas/Fort Worth area and across the country, also found that while area entrepreneurs are optimistic about the economy and long-term growth, immediate revenue growth and plans to hire are lagging. Sixty-five percent report expectations for revenue growth this year, flat from fall 2016. Plans to hire have dropped with less than one-third reporting they will take on new employees in 2017, down 9 percentage points from just six months earlier.
“This survey tells a much different story about the mindset of Dallas/Fort Worth small businesses than what was reported just six months ago,” said Jeffrey Coomer, Dallas/Fort Worth small business banker manager at Bank of America. “Although some uncertainty remains with respect to hiring and revenue, the fact that they’re feeling more confident about the economy and long-term growth indicates a more positive outlook among businesses in the area. We look forward to helping entrepreneurs continue to grow their business and supporting them however we can.”
In line with the optimistic outlook, the survey found that Dallas/Fort Worth small business owners’ concerns over economic factors have declined since fall 2016, including:
Health care costs (68 percent, down 5 percentage points since fall 2016).
Consumer spending (51 percent, down 6 percentage points since fall 2016).
Strength of the U.S. dollar (45 percent, down 11 percentage points since fall 2016).
Interest rates (41 percent, down 6 percentage points since fall 2016).
Stock market (40 percent, down 10 percentage points since fall 2016).
While health care costs continue to be a top concern for area small business owners, they are 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 31 percent of area entrepreneurs who contribute to employee insurance benefits:
Forty-seven percent believe the pace of annual health care cost increases have improved (21 percent nationwide).
Fifty-seven percent believe the quality of health care has improved (25 percent nationwide).
Forty-six percent believe the availability of health care has improved (27 percent nationwide).
While many Dallas/Fort Worth entrepreneurs describe their average work week as “fulfilling” (54 percent), “enjoyable” (45 percent) and “interesting” (41 percent), of the 10 local markets surveyed, area business owners were the most likely to say their average work week is “demanding” (56 percent). Dallas/Fort Worth small business owners also acknowledge that at times, their job is “stressful” (34 percent) and “exhausting” (18 percent).
The overwhelming majority (80 percent) of area small business owners say work interferes with their home life, and 29 percent say they don’t have a work-life balance (higher than any market surveyed). The top barrier to finding a balance for Dallas/Fort Worth entrepreneurs is a lack of financial resources to hire additional staff. As a result, stress derives from area owners completing tasks on their own (61 percent, 23 percentage points higher than national average).
With many Dallas/Fort Worth small business owners completing tasks themselves, they tend to work long hours. More than two-thirds report they work more than 40 hours a week, but despite this, a strong majority (77 percent) still say they are satisfied with the number of hours they work. Nearly all Dallas/Fort Worth entrepreneurs value the flexibility of their work schedule (94 percent) and location (93 percent), as well as the amount of time their job allows them to spend with family and friends (73 percent).
When asked for their top predictions for small businesses 20 years from now, most Dallas/Fort Worth entrepreneurs envision a future that is paperless, while others said virtual, cashless or automated. Top predictions include:
Businesses will go paperless (51 percent).
More offices will be virtual than physical locations (41 percent).
Cash will disappear with transactions becoming digital (39 percent).
Operations will be conducted by automation (38 percent).
Most businesses will employ a robot (16 percent).
Innovation is top of mind for Dallas/Fort Worth entrepreneurs, as 81 percent say it is a contributing factor to business success and more than four in five say encouraging innovation in the workplace is a priority. Seventy-seven percent have taken some sort of innovative action in the past two years, from upgrading business technology (50 percent) to creating a process to increase efficiency (33 percent)..
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:
Britney Sheehan, Bank of America