With 2017 soon coming to a close, Miami small business owners expect higher year-end revenues than in 2016, and more are looking to apply for a loan in 2018. According to the fall 2017 Bank of America Business Advantage Small Business Owner Report, a semiannual survey of 1,000 business owners across the country and the greater Miami area, 87 percent of Miami entrepreneurs are confident their year-end revenues will exceed those of 2016. This confidence coincides with Miami business owners’ intentions to seek capital, with 22 percent of area entrepreneurs planning to apply for a loan in the year ahead — the highest among business owners surveyed in 10 major cities, and 14 percentage points higher than the national average.
In the short term, 39 percent of Miami entrepreneurs plan to hire more employees in the next 12 months — 23 percentage points higher than the national average. Sixty-seven percent of local business owners also have strong expectations for increased revenues in 2018 (vs. 51 percent nationwide). This enthusiasm toward growth is on par with overall economic confidence:
Fifty-three percent are confident their local economy will improve in 2018 (vs. 48 percent nationwide).
Forty-seven percent are confident the national economy will improve in the year ahead (vs. 46 percent nationwide).
Forty-eight percent are confident the global economy will improve in the year ahead (vs. 31 percent nationwide).
This confidence is translating into long-term growth plans, as more than two-thirds say they plan to grow their business over the next five years (vs. 51 percent nationwide).
“Miami entrepreneurs are projecting strong year-end revenues and have a bright outlook for the future of their businesses,” said Odalis Martinez, Miami small business banker manager at Bank of America. “We are looking forward to supporting our community of small business owners as they seek loan funding, grow their workforce and invest in long-term business growth.”
Concern about specific economic factors over the next 12 months has held steady or, in many cases, significantly declined since last fall. While concern over health care costs fell dramatically from last fall (63 percent of area entrepreneurs expressed concern in fall 2017 vs. 76 percent in fall 2016), this issue continues to be the top economic concern among Miami entrepreneurs. Other top concerns include:
Strength of the U.S. dollar (59 percent, down 7 percentage points since fall 2016).
Stock market (57 percent, steady since fall 2016).
Corporate tax rates (50 percent, down 17 percentage points since fall 2016).
Interest rates (47 percent, down 13 percentage points since fall 2016).
Consumer spending (42 percent, down 21 percentage points since fall 2016).
Miami business owners continue to be thoughtful about retaining talent, with 81 percent of area entrepreneurs taking steps within the past two years to do so (26 percentage points higher than the national average and the most of all 10 major cities surveyed), including offering flexible work hours or work locations (39 percent), offering employee perks such as happy hours (28 percent) and creating employee reward programs (25 percent). The majority of Miami entrepreneurs provide wage increases and promotions, with most raises given on an unscheduled basis (52 percent) driven by either employee performance or positive business growth. Meanwhile, 22 percent give regular annual raises.
When asked about the top factors impacting business growth, 82 percent of Miami business owners cited their ability to attract and retain quality employees, which only trails a positive economic environment (86 percent) and customer demand (84 percent). Other growth factors identified include favorable government policies (82 percent) and access to capital (81 percent).
Nearly three in five Miami small business owners believe social media has a positive impact on their bottom line, higher than any market surveyed and 27 percentage points higher than the national average. When compared to their peers in other major cities across the country, Miami business owners are also the most reliant on social media when it comes to marketing their business (77 percent vs. 50 percent nationwide), networking with peers (74 percent vs. 48 percent nationwide) and selling goods and services (66 percent vs. 37 percent nationwide).
Only 2 percent of Miami small business owners say social media has negatively impacted their bottom line, but about half say they have made a business blunder on mobile or digital channels — higher than any market surveyed. Top business blunders among area entrepreneurs include incorrectly scheduled appointments or meetings (23 percent), customer confusion due to outdated information found online (23 percent) and inaccurately processed payments (16 percent).
Beyond social media, the vast majority of Miami business owners are adopting digital tools to assist in their day-to-day operations. Nine out of 10 Miami entrepreneurs use at least one digital tool to run their business, with digital banking (50 percent) and online articles or blogs (45 percent) reported as the most popular solutions.
Perhaps as a result of higher revenue expectations this year, 91 percent of Miami entrepreneurs plan to reward their employees with holiday-related perks, including:
Salary bonuses (45 percent — higher than any market surveyed and 10 percentage points higher than the national average).
Office closure during the holidays (44 percent).
A holiday party (41 percent).
Employee gifts (34 percent).
Flexible hours and vacation time (33 percent).
Additionally, 71 percent of Miami entrepreneurs are participating in charitable efforts this holiday season, such as making financial contributions to charities or nonprofits (36 percent), giving employees time off to volunteer (23 percent) and organizing charitable giving programs for employees (23 percent).
GfK Public Communications & Social Science conducted the Bank of America Business Advantage Small Business Owner Report survey for fall of 2017 online between August 8 and September 28, 2017 using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,013 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/Fort Worth, Houston, Los Angeles, New York, Miami, San Francisco and Washington, D.C. Approximately 150 interviews each were also completed among respondents in the tech and medical/health care field. The final results were weighted to national benchmark standards for size, revenue and region.
Prior to 2016, 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 4,500 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 34 million active users, including approximately 24 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.
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Reporters may contact:
Matthew Daily, Bank of America