Optimism in the Economy Is on the Rise for Boston Small Business Owners, According to Bank of America Survey
Boston small business owners’ confidence in the national economy has increased from just six months ago, according to the spring 2017 Bank of America Small Business Owner Report. This spring, 47 percent of Boston-area entrepreneurs are optimistic the national economy will improve in the year ahead, up 7 percentage points from fall 2016. Confidence in the local economy (46 percent) is also in line with national economic optimism, but has remained relatively flat over a six-month period (47 percent in fall 2016).
The report, based on a semi-annual study of small business owners in the Boston area and across the country, also found that despite increased confidence in the national economy long-term growth plans and revenue expectations remain relatively flat from six months ago. Fifty-nine percent of area entrepreneurs plan to grow their business (55 percent in fall 2016) and 57 percent expect their revenue to increase in the year ahead (54 percent in fall 2016). Plans to hire have decreased, with 28 percent reporting they plan to hire in the year ahead – down 8 percentage points from fall 2016.
“It’s encouraging to see a strong uptick in economic optimism among the Boston business community in such a short period,” said Jonathan Dowst, northeast division executive at Bank of America. “The mood is good, with nearly 60 percent of businesses planning to grow and increase revenues, and more than 70 percent relying on innovation to drive their success. These numbers continue to position small businesses as a main driver of the U.S. economy.”
Along with an increase in economic optimism, Boston entrepreneurs’ concerns over most economic concerns have declined significantly since fall 2016, including:
Health care costs (57 percent, down 18 percentage points since fall 2016).
Consumer spending (52 percent, down 9 percentage points since fall 2016).
Commodities prices (41 percent, down 21 percentage points since fall 2016).
Strength of the U.S. dollar (39 percent, down 19 percentage points since fall 2016).
Interest rates (39 percent, down 18 percentage points since fall 2016).
Corporate taxes (39 percent, down 5 percentage points since fall 2016).
While health care costs remain a chief concern for Boston small business owners, they are mixed in their views of how health care overall has changed in the last five years, but are still more likely to say health care pricing, quality and availability have improved compared to their national counterparts. Of the 30 percent of Boston entrepreneurs who offer employee insurance benefits:
Thirty-five percent believe the pace of health care cost increases have improved (21 percent nationwide).
Forty-one percent believe the quality of health care has improved (25 percent nationwide).
Forty-three percent believe health care availability has improved (27 percent nationwide).
Overall, a strong majority (79 percent) of Boston small business owners report they have achieved a work-life balance. Despite this, local business owners describe an average work week as equally “demanding” (54 percent) as it is “fulfilling” (53 percent).
For those who don’t feel they have achieved a work-life balance, 28 percent of Boston entrepreneurs don’t care about balance because their small business is their passion. This was significantly higher than any other market surveyed and 21 percentage points higher than the national average. Despite this, Boston small business owners report feeling stressed and anxious (64 percent), but their levels of enjoyment (87 percent) and personal fulfillment (87 percent) outweigh the day-to-day stressors of running their business.
When asked for their top predictions about the future of small business 20 years from now, most Boston small business owners envision a virtual, paperless and cashless future. Top predictions include:
More offices will be virtual than physical locations (46 percent).
Businesses will go paperless (44 percent).
Cash will disappear with transactions becoming digital (42 percent).
Operations will be conducted by automation (34 percent).
Hours of operation will be obsolete (23 percent).
Seventy-six percent of Boston entrepreneurs say encouraging innovation in the workplace is a priority, and nearly three-quarters say innovation is a key contributor to success. Additionally, 73 percent have taken some sort of innovative action in the past two years, from upgrading business technology (46 percent) to creating a new product or service (29 percent).
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.