Area Small Business Owners Pay the Highest Starting Wages Nationwide
As the year comes to a close, New York City area small business owners expect their 2017 revenue to exceed that of 2016, and they are focused on hiring and securing financing to accommodate growth in the year ahead. According to 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 New York City area, 70 percent of local business owners are confident that their year-end revenue will be higher than in 2016.
This confidence coincides with an increase in economic optimism since last fall. Forty-eight percent of local entrepreneurs believe the national economy will improve over the next 12 months, an increase of 13 percentage points year over year. Similarly, 45 percent of New York small business owners believe their local economy will improve in the year ahead (vs. 37 percent in fall 2016). Additionally, area small business owners plan to hire and expand their businesses at rates above their national peers:
Fifty-five percent plan to grow their business over the next five years (vs. 51 percent nationwide).
Twenty-five percent intend to hire new employees in the next 12 months (vs. 16 percent nationwide).
Thirteen percent plan to apply for a loan in 2018 (vs. 8 percent nationwide).
“New York entrepreneurs anticipate a strong end to 2017, as they are optimistic about the economy and revenue projections,” said Corey Price, New York small business banker manager at Bank of America. “They are also among the most growth-focused in the country, with a stronger percentage looking to hire and secure financing for their business in the year ahead.”
Concern about specific economic factors has held steady or declined year over year. Health care costs continue to be the top economic concern, though at 66 percent, New York entrepreneurs are less concerned than last fall (77 percent). Other top concerns include:
Consumer spending (54 percent, steady since fall 2016).
Strength of the U.S. dollar (49 percent, steady since fall 2016).
Interest rates (48 percent, down 10 percentage points since fall 2016).
Stock market (46 percent, down 13 percentage points since fall 2016).
Corporate tax rates (45 percent, down 13 percentage points since fall 2016).
New York entrepreneurs report the highest average starting salaries for their employees among the 10 major markets surveyed, including an entry-level wage that exceeds the state minimum wage ($10.50 per hour for businesses with 10 or fewer employees, $11 per hour for businesses with 11 or more employees).
Entry-level employee starting salary: $26,278 (vs. national average of $16,130). Assuming an employee worked 40-hour weeks, an employee making minimum wage in New York City would earn $21,840-$22,880.
Mid-level employee starting salary: $41,886 (vs. national average of $22,607).
Senior-level employee starting salary: $59,417 (vs. national average of $31,325).
As the job market has become more competitive in recent years, business owners are increasingly focused on employee retention strategies. In New York, nearly nine in 10 business owners provide wage increases or raises to employees, with 29 percent providing regular annual employee raises (vs. 22 percent nationwide).
To enhance company culture, more than two-thirds of New York area entrepreneurs offer employee incentives, including flexible work locations and hours (39 percent), competitive benefit packages (19 percent) and employee perks such as pets in the workplace (16 percent).
Two in five New York small business owners believe social media has a positive impact on their bottom line — 10 percentage points higher than the national average. Forty-one percent say they were reliant on social media when launching their business (18 percentage points higher than the national average), and 52 percent say they are reliant on social media to sell their goods and services. Another 60 percent say they use social media for day-to-day marketing and to capture employee feedback (45 percent).
While most New York entrepreneurs see social media as having a positive impact on their business, nearly three in 10 admit to making a business blunder on their business’s mobile or digital channels. Top digital blunders include outdated online information that caused customer confusion (14 percent), incorrectly scheduled appointments or meetings (13 percent) and inaccurately processed customer payments (8 percent).
Beyond social media, the vast majority of New York business owners are adopting digital management tools to assist in their day-to-day operations. Three-quarters of New York entrepreneurs use at least one digital tool to run their business, with digital banking (41 percent) and financial tracking and/or accounting apps (36 percent) reported as the most popular solutions.
With a majority of New York entrepreneurs expecting 2017 revenue to exceed that of 2016, 86 percent are paying it forward to employees with plans to reward them with holiday perks, including:
Office closure during the holidays (45 percent).
Salary bonuses (40 percent).
Employee gifts (38 percent).
A holiday party (32 percent).
Flexible hours and vacation time (32 percent).
Additionally, nearly two-thirds of New York entrepreneurs plan to participate in charitable efforts this holiday season, such as making financial contributions to charities or non-profits (43 percent), giving employees time off to volunteer (16 percent) and organizing a charitable fundraising effort (13 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:
Susan Atran, Bank of America