Tax Reform Contributing to Entrepreneurs’ Confidence as Digital Payments and Cutting-Edge Technologies Poised to Reshape the Small Business Landscape
Eighty-one percent of local Atlanta entrepreneurs plan to grow their businesses over the next five years, the strongest small business growth forecast recorded in Atlanta since spring 2014, and the highest among business owners surveyed in 10 major cities, according to the spring 2018 Bank of America Business Advantage Small Business Owner Report.
The report, based on a semiannual survey of 1,000 small business owners across the country and in the greater Atlanta area, finds Atlanta entrepreneurs are highly optimistic about their local economy, with 71 percent expressing confidence it will improve in 2018, 15 percentage points higher than the national average. Similarly, 61 percent of Atlanta entrepreneurs are confident the national economy will improve in 2018, the highest among business owners surveyed in 10 major cities.
Steady economic confidence has translated into an extremely positive outlook on revenue, long-term growth and hiring. Seventy-four percent of local entrepreneurs believe their revenue will increase in 2018, the highest among small business owners surveyed and 14 percentage points higher than the national average. Additionally, 36 percent of Atlanta entrepreneurs plan to hire more employees over the next 12 months, 14 percentage points higher than the national average.
“Atlanta entrepreneurs are extremely optimistic about the economy and the future of their businesses,” said Dean Bird, Atlanta small business banker manager at Bank of America. “Additionally, local small business owners feel positive about tax reform and are excited by the potential of emerging technologies creating more opportunity for business growth.”
According to the report, one of the greatest opportunities for Atlanta small business owners in the near term may be recently enacted changes to the federal tax code. Sixty-nine percent cite the new policy as a game-changer for small businesses overall, and 65 percent say it’s made them more optimistic about their own business’ outlook.
Furthermore, 44 percent of Atlanta entrepreneurs say they have altered their business plans for 2018 as a result of the new tax code. Eighty-one percent expect to receive savings for their business because of the policy, and they plan to use those funds to fuel further growth in different ways, including:
Investing back into their business (46 percent).
Expanding operations (26 percent).
Hiring more employees (20 percent).
Awarding raises and bonuses to employees (19 percent).
Despite optimism from the tax law changes, Atlanta business owners anticipate some economic challenges in the year ahead. Health care costs remain a top concern for Atlanta entrepreneurs (66 percent), and the report found a variety of other mounting economic concerns, including:
Interest rates (55 percent, up 20 percentage points year over year).
U.S. and global stock market (54 percent, up 20 percentage points year over year).
Commodities pricing (51 percent, up 12 percentage points year over year).
The report found that mobile use is nearly universal among local business owners, with 94 percent using smartphones and other mobile devices to manage their business, including:
Digital banking (58 percent).
Social media updates (56 percent).
Digital payments (44 percent).
Two decades into the internet era, the role of the business website is less significant, as only 55 percent of Atlanta entrepreneurs report having one. Sixty-six percent of those who have a website say its primary function is for sharing basic information, while 22 percent say its primary use is to drive sales.
Greater reliance on technology can also create challenges for entrepreneurs, as more than 53 percent of local business owners believe their business would suffer if the internet crashed for a week, including 40 percent who say they would lose revenue and 30 percent who would lose customers. Eight percent of Atlanta entrepreneurs say they have been impacted by a data breach in the last year.
Although the expanding role of new technologies presents some risks and challenges, Atlanta business owners believe the positives far outweigh the negatives. Eighty-three percent believe their future success is dependent on technology, more so than threatened by it. Additionally, 77 percent of Atlanta business owners make investments at least annually in technology, and 43 percent do so at least once per quarter.
Atlanta business owners are investing in emerging technology at a rapid pace, with half of survey respondents reporting they currently use or are exploring advanced technologies for their business, specifically:
The Internet of things (28 percent).
Data analytics (19 percent).
3D printing (10 percent).
Virtual/augmented reality (8 percent).
Atlanta entrepreneurs are still uncertain about blockchain and cryptocurrencies. Fifty-seven percent are unfamiliar with distributed ledger technology, and only 16 percent believe it will be relevant to their business in the near future.
GfK Public Communications & Social Science conducted the Bank of America Small Business Owner Report Survey for spring 2018 online between February 12 and March 26, 2018 using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,031 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 ten 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, previous 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 47 million consumer and small business relationships with approximately 4,400 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 36 million active users, including approximately 25 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.
Reporters May Contact:
Matthew Daily, Bank of America