Greater Washington Small Business Owners’ Revenue, Growth and Hiring Outlook Notably Higher Than Peers Nationwide, According to Bank of America Survey
Family, Friends and Community Are Critical to Local Entrepreneurs’ Successes
Small business owners in the Greater Washington area are more confident in their revenue expectations, growth and hiring plans than their peers nationwide, according to the fall 2016 Bank of America Small Business Owner Report.
Sixty-eight percent of Greater Washington-area entrepreneurs expect their revenue to increase in 2017 (vs. 52 percent nationwide). Long-term growth outlook is also strong, with 68 percent of local small business owners reporting they plan to grow their business over the next five years (vs. 55 percent nationwide). To support this growth, 45 percent say they plan to hire more employees in the year ahead, significantly higher than the national average (25 percent) and up from 35 percent just six months ago.
The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in the Greater Washington area and around the country, also found that 95 percent of area entrepreneurs report they receive financial, emotional and/or operational support from their family, and 53 percent have received a financial loan or gift from family and/or friends for their business. Sixty-five percent of area entrepreneurs rely on family to serve at least one important role in their business, whether as advisors, employees, investors and/or partners – among the highest of the 10 major cities surveyed.
“Business is a family, friend and community affair here in the Greater Washington region,” said Sean Mitchell, Washington, D.C. small business banking manager at Bank of America. “Small business owners share their passions with their loved ones and local networks, and that could be why they are feeling among the most optimistic about their business outlooks and future success compared with other small business owners around the country.”
In addition to family and friends, local small business owners perceive their community to play a sizeable role in the success of their business. Seventy-nine percent report that residents in their community actively support local businesses – with 66 percent saying their local community plays an important role in the success of their own individual enterprise. To show their appreciation, more Greater Washington-area business owners give back to their communities than any of the 10 major cities surveyed, with 81 percent reporting they support charitable or nonprofit organizations, compared to 67 percent nationwide.
Health care tops economic factors worrying Greater Washington-area entrepreneurs
Fifty-five percent of Greater Washington small business owners are confident their local economy will improve in 2017 (vs. 37 percent nationwide). Forty-six percent forecast improvement of the national economy in the year ahead (vs. 31 percent nationwide).
While local entrepreneurs are feeling more confident than their peers nationwide about many key areas of their business, they are concerned that certain economic factors could have an impact. The cost of health care is the most prominent concern among Greater Washington-area small business owners with 72 percent worried it will impact their business in the year ahead. Additionally, a majority of local small business owners are concerned about:
Consumer spending (55 percent).
Corporate tax rates (53 percent).
- Interest rates (52 percent).
How Greater Washington-area entrepreneurs finance their businesses
When starting their businesses, 76 percent of local entrepreneurs say they dipped into personal savings, followed by personal credit cards (39 percent), banks (34 percent) and family and friends (34 percent). Beyond these traditional sources of funding, small business owners in the Greater Washington area were most likely to use new, alternative sources (22 percent), such as online lenders, venture capital and angel investors, or start-up funds.
Once established, banks became the primary source of financing for local small business owners (44 percent), followed by credit cards (39 percent) and family and/or friends (20 percent). Family borrowing includes in-laws, which 13 percent of Greater Washington-area small business owners said they’ve done, compared with only 5 percent nationwide.
Upbeat on year-end revenues and feeling the holiday spirit
Seventy-two percent of Greater Washington-area small business owners expect to hit their year-end revenue goals. As such, 82 percent plan to spread holiday cheer by offering employees at least one holiday perk this season.
Giving the gift of time was top on the list of perks local entrepreneurs plan to provide, more so than their peers nationwide:
Closing the office (46 percent vs. 37 percent nationwide).
- Offer flexible hours or vacation time (34 percent vs. 20 percent nationwide).
Rewarding employees does come at some personal cost to Greater Washington-area entrepreneurs: 28 percent say they will forgo vacation to allow their employees to have extra time, compared to only 11 percent nationwide.
For a complete, in-depth look at the insights of the nation’s small business owners, read the fall 2016 Bank of America Small Business Owner Report, and for additional insights, download the Small Business Owner Report national infographic here. A local Greater Washington-area snapshot can also be viewed here.
About the Bank of America Small Business Owner Report
GfK Public Affairs and Corporate Communications conducted the Bank of America Small Business Owner Report survey for fall of 2016 online between August 7 and October 4, 2016 using pre-recruited online sample of small business owners. GfK contacted a national sample of 1,000 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, small business owners were surveyed in 10 target markets: Atlanta, Boston, Chicago, Dallas/Fort Worth, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C. A total of 300 small business owners were surveyed in Atlanta, Boston, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, San Francisco and Washington, D.C., and 100 small business owners were surveyed in Houston. The final results were weighted to national benchmark standards for size, revenue and region.
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 4,600 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with approximately 34 million active accounts and more than 21 million mobile active 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.
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Reporters May Contact:
Tara Burke, Bank of America, 203.292.6590