Bank of America Survey Finds 65 Percent of Boston Small Business Owners Are Still Recovering From the Great Recession

Local Entrepreneurs Embrace Self-Sacrifice, Work Longer Hours Than Any Other Market Surveyed

Seven years after the Great Recession, nearly two-thirds of Boston small business owners (65 percent) report their businesses are still recovering, according to the spring 2015 Bank of America Small Business Owner Report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Boston and around the country.

Though many feel that they have not completely recovered, the survey found that Boston entrepreneurs have been working long hours, forgoing raises and delaying their own compensation as they focus on their employees and customers. In fact, Boston small business owners are working longer hours than any other market surveyed, including New York and Washington, D.C. Eighty-six percent of small business owners in Boston work more than 40 hours a week, with 38 percent working over 60 hours a week. The majority (57 percent) have never rewarded themselves with a raise, or haven’t done so in more than two years.

“Boston entrepreneurs are still feeling the effects of the Great Recession, but they’re resilient individuals who remain positive and passionate about their businesses,” said Colleen Matteson, Boston small business banker manager at Bank of America. “They’re working hard to stay focused on growth and they value their employees and customers above all else, often at their own expense.”

Boston small business owners demonstrate self-sacrifice; prioritize employees and customersBoston small business owners are prioritizing the needs of employees and customers before their own. The survey reveals that 41 percent have delayed or forgone compensation for up to two weeks for the betterment of their small business, which is 9 percent higher than the national average (32 percent). Additionally, more than two-thirds (68 percent) would rather delay or reduce their own compensation than take other courses of action to make ends meet; this includes scaling back on services they offer customers (9 percent) or delaying/ reducing compensation for their staff (7 percent).

Almost all (94 percent) Boston small business owners say they have employee appreciation programs, including:

Dinners and outings (51 percent).
Spot bonuses (45 percent).
Office recognition (36 percent).

They also provide work-life balance benefits for employees, including:

Flexible hours (60 percent).
Closure on major holidays (53 percent).
Paid vacation time (41 percent).

The majority of Boston small business owners (63 percent) cite that establishing relationships with customers and clients is the primary driver of repeat business, and they find many ways to show their appreciation, including:

Monetary rewards, such as discounts or free upgrades (30 percent).
Referral programs (27 percent).
Social media promotions (26 percent).
Personalized gifts (26 percent).

Additionally, 69 percent says a primary way in which they have adapted to customer demands is by becoming more technologically savvy, which is 7 percent higher than the national average.

Boston entrepreneurs are more optimistic about business growth, hiring plans and the economy from one year agoAlthough many Boston entrepreneurs feel that they have not completely recovered from the recession, 64 percent plan to grow their business over the next five years, which is a 10 percent increase from findings in the spring 2014 Small Business Owner Report.

When looking at staffing, 49 percent of Boston entrepreneurs say they expect to hire more employees this year, which is an 8 percent increase from one year ago. Despite these hiring projections, more than half of Boston small business owners (51 percent) say that it’s difficult to find qualified candidates (41 percent nationally). They say the top challenges in finding qualified staff are attributed to a skills gap (56 percent) and high salary demands (46 percent).

In addition to their optimism for the future of their businesses, Boston entrepreneurs are feeling confident about the economy. The majority (51 percent) believe that the national economy will improve over the next year, which is up 12 percent from last year. They’re also feeling positive about their local economy, with 48 percent saying it will improve over the next 12 months, a 7 percent increase in confidence from one year ago.

Boston small business owners have concerns about effectiveness of U.S. government leaders and health care costsOnly 29 percent of Boston entrepreneurs feel appreciated by policymakers. When asked about the impact of specific government policies, local small business owners say the greatest potential for a positive impact on their business could come from expanded tax breaks for automatically enrolling employees into retirement savings accounts (33 percent) and incentives to keep jobs on U.S. soil (26 percent). Conversely, they say the policies that would have the greatest negative impact on their business would be required health care plans for employees (38 percent) and mandated sick leave for employees (28 percent). Although they cite required health care plans as a top policy that could have a negative impact on their business, 41 percent offer health care benefits, which is higher than any other market surveyed.

Though overall business and economic optimism is on the rise, Boston entrepreneurs still have concerns over specific issues. The effectiveness of U.S. government leaders (66 percent) is their number one concern, followed by health care costs (64 percent), though concern over health care costs is down from 80 percent six months ago.

For an in-depth look at the attributes of the nation’s small business owners, read the full spring 2015 Bank of America Small Business Owner Report, and for additional Boston-based insights, download the Small Business Owner Report Boston infographic here.

About the Bank of America Small Business Owner ReportBraun Research conducted the Bank of America Small Business Owner Report survey by phone, from March 4, 2015, 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.

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Reporters May Contact:T.J. Crawford, Bank of America, 1.646.855.3301tj.crawford@bankofamerica.com

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