Despite Challenges, Small Business Owners Still
Optimistic About the Future, Embrace Self-Sacrifice, Prioritize
Employees and Customer Relationships
Seven years after the “Great Recession,” two-thirds (64 percent)
of small business owners report their businesses are still in the
process of recovering, according to Bank of America’s spring 2015
Small Business Owner Report. The report, based on a semi-annual
survey of 1,000 small business owners across the country, says that
only one in five (21 percent) small businesses state they have
completely recovered from the recession.
However, despite these lingering impacts from the Great
Recession, small business owners are still confident about the
future growth of their businesses: 63 percent believe revenue will
increase in the next 12 months (versus 62 percent last fall), and
66 percent plan to grow their business in the next five years.
“Small business owners are optimistic about the future and are
working extremely hard to achieve success,” said Robb Hilson, Bank
of America Small Business executive. “As they have focused on
recovery, many business owners have embraced a mindset of
self-sacrifice. They are prioritizing their employees and customers
above all else and it is often at the expense of their own personal
or financial well-being.”
The report found that small business owners have been working
long hours, forgoing raises and delaying their own compensation as
they focus on investing in employees and attracting and rewarding
repeat customers.
The report also reveals that 67 percent of small business owners
would rather delay or reduce their own compensation than take any
other course of action to make ends meet. In fact, more than half
(54 percent) of small business owners surveyed said they have
either never given themselves a raise, or haven’t done so in more
than two years. More women than men report having never given
themselves a raise (23 percent of women, versus 15 percent of
men).
In order to support their businesses, 85 percent of small
business owners work more than 40 hours per week on average.
Furthermore, 30 percent of respondents work more than 60 hours per
week on average.
Small business owners continue to invest in their
employeesWhen it comes to their employees, small business
owners overwhelmingly find the need to reward them and show their
appreciation in a variety of ways. Almost all (94 percent) small
business owners surveyed say their companies have employee
appreciation programs, including:
- Dinners and outings (46 percent).
- Spot bonuses (44 percent).
- Office recognition programs (35
percent).
- Extra time off (34 percent).
- Off-cycle raises or promotions (25
percent).
These are in addition to benefits programs, such as:
- Flexible hours (56 percent).
- Office closure on major holidays (48
percent).
- Paid vacation time (46 percent).
- Health care (37 percent).
Small business owners looking to hire but struggling to find
skilled workersThe report found that 46 percent of small
business owners plan to hire additional employees over the next 12
months, down from 52 percent a year ago. One potential reason for
this decline is that more than two out of five small business
owners (41 percent) are struggling to find qualified job
candidates, according to the 2015 survey. They cite a number of
challenges, including candidates who:
- Lack the skill sets they are seeking
(59 percent).
- Have salary expectations that are too
high (45 percent).
- Prefer to work for a large or midsize
brand (29 percent).
- Want benefits they do not provide (26
percent).
As a result, rather than hiring new employees, small business
owners are increasingly opting to train and develop existing
personnel. Among individuals who plan to apply for a loan in 2015,
38 percent plan to use the funding for employee training and
development, compared with 32 percent who plan to use the monies to
hire new staff.
Small business owners strengthening relationships to attract
and retain customersEstablishing relationships with customers
is a primary driver of repeat business, and small business owners
are showing their appreciation to their customers in a variety of
ways. More than half (57 percent) of the survey respondents feel
they receive repeat business because of the relationships they have
developed with their customer base. This sentiment is even stronger
among baby boomer owners (71 percent) compared with 47 percent of
millennials and 53 percent of Gen-Xers.
The survey shows that some of the most popular ways owners are
showing their appreciation to their customers are:
- Monetary rewards (29 percent).
- Events or celebrations (29
percent).
- Free product/service for a first visit
(28 percent).
- Social media promotions (27
percent).
- Personalized gifts (27 percent).
- Referral programs (25 percent).
- Appreciation days (25 percent).
- Loyalty programs (24 percent).
Small business owners cite concerns over health care costs
but remain optimistic about business growthWhen asked about top
concerns over various economic issues, small business owners once
again cited health care costs as a top concern (70 percent) with
the effectiveness of U.S. government leaders coming in as the
second-highest concern (69 percent). Small business owners surveyed
predict the greatest potential for a positive impact from
government policies could come from:
- Expanded tax breaks for automatically
enrolling employees in retirement savings accounts (36
percent).
- Incentives to keep jobs on U.S. soil
(31 percent).
When asked which government policies would have the greatest
negative impact on their businesses, small business owners
cited:
- Required health care plans for
employees (39 percent).
- Mandated sick leave for employees (29
percent).
- Increased minimum wage (26
percent).
Interestingly, while two in five small business owners believe
required health care plans for employees would have the greatest
negative impact on their businesses, another 23 percent believe
they would have a positive impact.
When asked to rate how well they believe policy makers
appreciate small business owners, there is a clear generational
divide. More Gen-Xers (40 percent) and millennials (39 percent) are
positive about policy makers appreciating small business, whereas
only 14 percent of baby boomer business owners feel this way.
Local appreciation for small businesses seen across the
countryNational small business owners rate their local
community high in shopping small, as 60 percent handed out an “A”
or “B” grade when assessing how well their local communities
frequent local small businesses. When looking at themselves, 63
percent of national small business owners gave themselves an “A” or
“B” grade for shopping at other local small businesses.
The report also analyzed specific needs of small business owners
in nine local markets across the country. Key insights gathered
include:
- Like their national counterparts, most
small business owners in certain markets are still recovering from
the recession. Small business owners in Los Angeles (28 percent)
and Miami (25 percent) are most likely to say their business has
completely recovered, compared with New York (19 percent) and
Boston (18 percent).
- Optimism about certain local economies
follows a similar pattern, with Los Angeles (61 percent), Dallas
(59 percent), Miami (59 percent) and San Francisco (61 percent)
small business owners feeling that their local economy will improve
over the next 12 months. A year ago, Los Angeles (53 percent) and
New York (52 percent) small business owners had the highest rates
of optimism about their local economies.
- Small business owners in some
metropolitan areas, including Dallas (57 percent) and Miami (53
percent) said they are more likely to hire additional employees
over the next 12 months, compared to New York (44 percent) and San
Francisco (40 percent).
For a complete, in-depth look at the insights of the nation’s
small business owners, read the entire spring 2015 Bank of America
Small Business Owner Report and for additional insights, download
the Small Business Owner Report national infographic here.
Bank of America Small Business Owner ReportBraun Research
conducted the Bank of America Small Business Owner Report survey by
phone, from March 4 through March 27, 2015, on behalf of Bank of
America. Braun contacted a nationally-representative sample of
1,000 small business owners in the United States with annual
revenue between $100,000 and $4,999,999 and employing between 2 and
99 employees. In addition, 300 small business owners were also
surveyed in each of nine target markets: Los Angeles, Dallas,
Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta
and Miami. The margin of error for the national sample is +/- 3.1
percent; the margin of error for the oversampled markets is +/ 5.7
percent, reported at a 95 percent confidence level.
The Braun Research survey results conducted on behalf of Bank of
America and interpretations in this release are not intended, nor
implied, to be a substitute for the professional advice received
from a qualified accountant, attorney or financial advisor. Always
seek the advice of an accountant, attorney or financial advisor
with any questions you may have regarding the decisions you
undertake as a result of reviewing the information contained
herein. Nothing in this report should be construed as either advice
or legal opinion.
Bank of AmericaBank of America is one of the world's largest
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
48 million consumer and small business relationships with
approximately 4,800 retail financial centers and approximately
15,900 ATMs and award-winning online banking with 31 million active
users and approximately 17 million mobile users. Bank of America is
among the world's leading wealth management companies and is a
global leader in 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.
Visit the Bank of America newsroom for more Bank of America
news.
www.bankofamerica.com
Reporters May Contact:Don Vecchiarello, Bank of America,
1.980.387.4899don.vecchiarello@bankofamerica.com
Bank of America (NYSE:BAC)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bank of America (NYSE:BAC)
Historical Stock Chart
From Sep 2023 to Sep 2024