Local Business Owners’ Hiring Plans for the Year Ahead Are the Highest in the Nation
Houston small business owners’ confidence in the economy has increased significantly from just six months ago, according to the spring 2017 Bank of America Small Business Owner Report. This spring, nearly two-thirds of local entrepreneurs are confident that the national economy will improve over the next 12 months—a staggering 35 percentage-point jump from fall 2016 and the highest of 10 major cities surveyed. This confidence also extended to their local economy, as 74 percent of Houston small business owners expect it to improve, compared to 66 percent just six months ago.
The report, based on a semi-annual study of small business owners in the Houston area and across the country, also found that local business owners are more confident than their peers nationwide when it comes to their revenue outlook, hiring expectations and future growth plans:
Sixty-eight percent expect their revenue to increase over the next 12 months (vs. 48 percent nationwide and 57 percent in fall 2016).
Forty percent plan to hire more employees over the next 12 months (vs. 18 percent nationwide and higher than any other market surveyed).
“This spring, more Houston small business owners are confident in the economy, which appears to be translating into plans for hiring, growth and higher revenues in 2017,” said Elizabeth Romero, small business central division executive at Bank of America. “The overall optimism among Houston entrepreneurs is a great indicator of potential growth for small businesses in the region.”
In line with their increasingly positive outlook on the economy, Houston small business owners’ concerns over most economic factors have decreased significantly since fall 2016, with the most significant declines showing in:
Interest rates (46 percent, down 24 percentage points since fall 2016).
Health care costs (63 percent, down 18 percentage points since fall 2016).
However, concern surrounding the impact of consumer spending rose 8 percentage points in just six months (60 percent in spring 2017 vs. 52 percent in fall 2016). Meanwhile, Houston entrepreneurs’ concerns over several other economic factors remained flat from fall 2016, including the stock market (46 percent) and credit availability (43 percent).
While health care costs continue to be a chief concern for Houston 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 34 percent of Houston entrepreneurs who contribute to employee benefits:
Sixty-two percent believe the pace of annual health care cost increases have improved (vs. 21 percent nationwide).
Sixty-four percent believe the quality of health care has improved (vs. 25 percent nationwide).
While more than three in four Houston entrepreneurs say they have achieved a work-life balance, they are the most likely, compared to the nine other major cities surveyed, to admit that their work life interferes with their home life (87 percent vs. 77 percent nationwide). And, 37 percent report having had a nightmare about their business failing. More than two-thirds also report that when it comes to running their business, their level of stress and anxiety is high—more than any other market surveyed.
When asked to describe an average work week, Houston entrepreneurs say “enjoyable” (49 percent), “interesting” (46 percent) and “fulfilling” (40 percent). However, they also report that running their business is “demanding” (39 percent) and “exhausting” (32 percent).
Though many Houston small business owners tend to work overtime—with nearly three in five reporting that they work more than 40 hours a week—a strong majority (87 percent) still say they are satisfied with the number of hours they work. Nearly all Houston entrepreneurs value the flexibility of their schedule (93 percent), the flexibility of their work location (91 percent) and the amount of time they can spend with family and close friends (74 percent).
When asked for their top predictions about the future of small business 20 years from now, most Houston small business owners envision a paperless and virtual one. Top predictions include:
Businesses will go paperless (52 percent).
More offices will be virtual than physical locations (42 percent).
Cash will disappear with transactions becoming digital (37 percent).
Operations will be conducted by automation (31 percent).
Most businesses will employ a robot (20 percent).
When considering innovation in their workplace and themselves as innovative leaders, 89 percent of Houston small business owners say encouraging innovation in the workplace is a priority (higher than any other market surveyed), and 83 percent say it is a contributor to business success. Houston entrepreneurs are also the most likely to consider themselves innovative business leaders (69 percent vs. 53 percent nationwide). When it comes to innovation at their business, 17 percent of local business owners say they are “industry-leading” (higher than any other market surveyed) compared to other business owners in their sector, while 27 percent say they are “ahead of the curve” and 37 percent say they “keep the same pace.”
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