Uncertainty Lingers for New York Entrepreneurs With Hiring Plans and Revenue Forecasting
New York City small business owners’ optimism about the economy is on the rise, according to the spring 2017 Bank of America Small Business Owner Report, which found that 50 percent are confident the national economy will improve in the next 12 months—a 15 percentage-point increase from fall 2016. Similarly, confidence in the local economy jumped to 46 percent—up 9 percentage points from the fall. Five-year growth outlooks are also on the rise, with 64 percent reporting plans to grow their business in the next five years—a 12 percentage-point increase from six months ago.
The report, based on a semi-annual study of small business owners in the greater New York City area and across the country, found that while sentiment about the economy and long-term growth is trending upwards, entrepreneurs are cautious in their estimates for revenue growth and their plans to hire new employees in the coming year. Only one-quarter of New York entrepreneurs plan to hire this spring, down from 34 percent in fall 2016. Revenue expectations remain steady, with 56 percent expecting revenue to increase in the next 12 months (vs. 55 percent in fall 2016). Likewise, the survey found plans to apply for a loan in 2017 also are level at 14 percent this spring (vs. 16 percent in fall 2016).
“This survey tells a much different story about the mindset of New York small businesses than what was reported just six months ago,” said Michael Angelone, New York small business banker manager at Bank of America. “Although some uncertainty remains with respect to hiring and revenue, the fact that they’re feeling more confident about the economy and long-term growth certainly indicates a more positive outlook among businesses in the Tri-State Area.”
New York small business owners’ confidence in the economy correlates with sharp declines in several economic concerns since fall 2016, including:
Health care costs (68 percent, down 9 percentage points since fall 2016).
Interest rates (45 percent, down 13 percentage points since fall 2016).
Corporate tax rates (43 percent, down 15 percentage points since fall 2016).
Credit availability (38 percent, down 8 percentage points since fall 2016).
Stock market (36 percent, down 23 percentage points since fall 2016).
While health care costs remain a chief concern, New York small business owners 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. Among the one-third of New York entrepreneurs who contribute to employee health care:
Thirty-nine percent believe the pace of annual health care cost increases have improved (21 percent nationwide).
Thirty-five percent believe the quality of health care has improved (25 percent nationwide).
While 84 percent of New York entrepreneurs say work interferes with their home life, 78 percent believe they have achieved a work-life balance. Despite this, nearly two out of five report having had a nightmare about their business failing.
When asked to describe an average work week, New York entrepreneurs say “interesting” (51 percent), “fulfilling” (42 percent) and “enjoyable” (40 percent). However, it does not mean they are not stressed—45 percent say their job is “demanding,” 36 percent report it is “stressful” and 27 percent find it is “exhausting.”
While 64 percent of New York small business owners work more than 40 hours a week, a strong majority (75 percent) say they are satisfied with the number of hours they work. Nearly all New York entrepreneurs value the flexibility of their work location (89 percent) and schedule (86 percent), as well as the amount of time their job allows them to spend with family and close friends (72 percent).
When asked for their top predictions for small businesses 20 years from now, most New York entrepreneurs envision a virtual and paperless future. Top predictions include:
More offices will be virtual than physical locations (49 percent).
Businesses will go paperless (42 percent).
Operations will be conducted by automation (38 percent).
Cash will disappear with transactions becoming digital (37 percent).
Hours of operation will be obsolete (19 percent).
Most businesses will employ a robot (14 percent).
More than three-quarters of New York entrepreneurs say encouraging innovation in the workplace is a priority, and nearly four out of five area small business owners say it is a key contributor to business success. Seventy-nine percent have taken some sort of innovative action in the past two years, from upgrading their business technology (47 percent) to creating a new product or service (33 percent). Additionally, 5 percent of New York small business owners say they are “industry-leading” and 29 percent say they are “ahead of the curve,” while 57 percent say they “keep the same pace” with other businesses in their sector.
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:
Susan Atran, Bank of America