Local Entrepreneurs Plan to Invest in Technology, While Pulling Back on Hiring Plans
Miami small business owners’ confidence in business performance remains high this spring after a robust year end, according to the spring 2017 Bank of America Small Business Owner Report. As the highest of 10 markets surveyed to say 2016 revenues exceeded expectations (34 percent vs. 18 percent nationwide), more than two-thirds of area entrepreneurs expect their revenue to increase over the next 12 months. This optimism is driving action for business plans and investments, as nearly one-quarter of Miami business owners plan to apply for a loan in 2017, the highest of any market surveyed. And, nearly half plan to use the funding to invest in new technology, 30 percentage points higher than the national average (18 percent).
The report, based on a semi-annual study of small business owners in the greater Miami area and across the country, also found that while area entrepreneurs are planning to boost technology through lending, hiring plans for the year ahead (37 percent) have dropped 10 percentage points from just six months earlier. Despite this, confidence that the national economy (52 percent vs. 43 percent in fall 2016), as well as the global economy (43 percent vs. 34 percent in fall 2016), will improve in the year ahead remains high and is trending upward. Confidence in their local economy (55 percent) has held steady from six months earlier for Miami entrepreneurs, as have growth plans over the next five years (71 percent).
“Miami-area entrepreneurs have had a strong year and are feeling confident for the future of their businesses,” said Odalis Martinez, Miami small business banker manager at Bank of America. “We look forward to supporting them for what’s on the horizon as they gear up for growth and borrowing plans.”
In line with their optimistic business and economic outlooks, the survey found that Miami small business owners’ concerns over many economic factors have declined significantly since fall 2016, including:
Health care costs (67 percent, down 9 percentage points since fall 2016).
Interest rates (48 percent, down 12 percentage points since fall 2016).
Strength of the U.S. dollar (44 percent, down 22 percentage points since fall 2016).
Consumer spending (43 percent, down 20 percentage points since fall 2016).
Commodities pricing (39 percent, down 16 percentage points since fall 2016).
Stock market (35 percent, down 22 percentage points since fall 2016).
While health care costs are a top concern for Miami-area entrepreneurs, they are significantly 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 and other markets surveyed. Of the 38 percent of local entrepreneurs who offer employee insurance benefits:
Fifty-nine percent believe the pace of health care cost increases have improved (21 percent nationwide).
Sixty-four percent believe the quality of health care has improved (25 percent nationwide).
Fifty-seven percent believe the availability of health care has improved (27 percent nationwide and the highest of all markets surveyed).
While three-quarters of Miami area entrepreneurs say work interferes with their home life, Miami small business owners are most likely to say they have achieved a work-life balance (87 percent) compared to any other market surveyed. Despite this, stress is still present for Miami business owners, as two out of five report having had a nightmare about their business failing.
When asked to describe an average work week, Miami entrepreneurs say “enjoyable” (49 percent), “interesting” (42 percent) and “fulfilling” (39 percent). Many, however, also acknowledge the stressful side of being a business owner, with 41 percent reporting their job is “demanding,” 34 percent say “stressful” and 20 percent find it “exhausting.”
While 45 percent of Miami entrepreneurs work more than 40 hours a week, area business owners are the most likely of any market surveyed to say they are satisfied with the number of hours they work (89 percent). Nearly all Miami small business owners value the flexibility of their work location (94 percent) and schedule (94 percent). More than three-quarters are also satisfied with the amount of time their work schedule allows them to spend with family and close friends.
When asked for their top predictions for small businesses 20 years from now, most Miami business owners envision a paperless and automated future, and nearly one in five believe most businesses will employ a robot. Top predictions include:
Businesses will go paperless (47 percent).
Operations will be conducted by automation (44 percent).
Cash will disappear with transactions becoming digital (36 percent).
More offices will be virtual than physical locations (34 percent).
Hours of operation will be obsolete (20 percent).
Innovation is of top importance for Miami entrepreneurs, as 83 percent have taken some sort of innovative action in the past two years, from upgrading business technology (48 percent) to creating a new product or service (32 percent). Eighty-four percent report that encouraging innovation in the workplace is a priority and key contributor to business success. Fifteen percent say they are “industry-leading,” and 28 percent say they are “ahead of the curve,” while 52 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:
Matthew Daily, Bank of America