Local small business owners see big opportunity in the year ahead, despite small declines in revenue expectations and economic sentiment since last fall, according to the spring 2019 Bank of America Business Advantage Small Business Owner Report. The softening in mood over the economy comes as Los Angeles-area entrepreneurs report mixed views on the impact of last year’s landmark tax reform and trade tariffs.
The report, based on a semiannual survey of over 1,500 small business owners across the country and the greater Los Angeles area, reveals that:
“Los Angeles entrepreneurs are continuing to invest in their businesses, despite growing reservations about the economy and a small decline in revenue expectations,” said Franco Terango, small business southwest division executive at Bank of America. “Compared to the national average and historical data, the overall outlook is certainly positive, and the opportunity for Los Angeles business owners remains strong.”
Fifty-seven percent of Los Angeles entrepreneurs expressed concern about the current political environment, though they are divided over how major policy issues are directly impacting them. More than half of Los Angeles business owners say the new tax code has had an impact on their business — with 24 percent reporting that impact as positive. This is down from the 32 percent who anticipated a positive impact one year ago.
Regarding U.S. trade policy, 45 percent say they have been impacted by tariffs, with 18 percent reporting the impact as mixed, 16 percent reporting it as negative and 11 percent reporting it as positive. Additionally, 39 percent of Los Angeles entrepreneurs say they’re concerned about climate change affecting their business.
Unexpected or major economic events can transform a business in the blink of an eye. While most Los Angeles entrepreneurs are taking steps to protect their business from potential threats such as natural disasters, an economic downturn or a cyber breach, a majority do not have a plan to address reputational crises or challenges.
Customer feedback holds tremendous sway in the digital era, with online reviews serving as a powerful channel for sharing both compliments and criticisms. While 63 percent of Los Angeles business owners have received a negative online review of their business, 59 percent believe positive reviews matter the most, compared to 41 percent who say negative reviews have a greater impact.
Furthermore, 76 percent say reviews are important to the success of their business, with 79 percent reporting that positive reviews have helped generate business opportunities. Recognizing that negative reviews do have an impact, 76 percent of Los Angeles business owners who have received one say they respond as soon as possible to limit the reputational damage.
For a complete, in-depth look at the insights of the nation’s small business owners, read the spring 2019 Bank of America Business Advantage Small Business Owner Report.
Ipsos Public Affairs conducted the Bank of America Small Business Owner Report Survey for spring 2019 online between February 8 and February 24, 2019 using a pre-recruited online sample of small business owners. Ipsos contacted a national sample of 1,504 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 10 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.
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Colleen Haggerty, Bank of America