Area Entrepreneurs Plan to Use Loan Funding to Invest in New Technology
WASHINGTON, D.C. November 14, 2017 – As the year comes to a close, entrepreneurs in the greater Washington area are expecting strong year-end revenues, and they are projecting that growth to continue in the year ahead. According to the fall 2017 Bank of America Business Advantage Small Business Owner Report, a semiannual survey of 1,000 business owners across the country and in the greater Washington area, 82 percent of local entrepreneurs are confident that their 2017 year-end revenue will exceed that of 2016, and 65 percent are confident that their revenue will improve over the next 12 months.
Additionally, 55 percent of local small business owners believe the local economy will improve in 2018 (level since fall 2016). This sustained confidence in the economy aligns with greater Washington entrepreneurs’ plans to grow, hire and invest in new technology at much higher rates than the national average, specifically:
- Sixty-seven percent plan to grow their business over the next five years (vs. 51 percent nationwide).
- Thirty-three percent intend to hire new employees in the next 12 months (vs. 16 percent nationwide).
- Of those greater Washington entrepreneurs planning to apply for a loan in 2018, 44 percent plan to use that funding to invest in new technology — the highest among business owners surveyed in 10 major cities and 34 percentage points higher than the national average.
“Entrepreneurs in our nation’s capital are optimistic about the year ahead and hungry for innovation,” said Michael Bonura, Washington, D.C. small business banker manager at Bank of America. “Their sustained optimism in the economy, combined with strong hiring and long-term growth plans, points toward a bright future for 2018 and beyond.”
Concern over health care and the stock market falls year over year
Concern about specific economic factors has held steady or declined significantly since last fall. While concern over health care costs declined dramatically from last fall (63 percent of area entrepreneurs expressed concern in fall 2017 vs. 72 percent in fall 2016), this issue continues to be the top economic concern among local entrepreneurs. Other top economic concerns for the year ahead include:
- Consumer spending (54 percent, steady year over year).
- Strength of the U.S. dollar (50 percent, steady year over year).
- Interest rates (43 percent, down 9 percentage points since fall 2016).
- Stock market (42 percent, down 9 percentage points since fall 2016).
- Corporate tax rates (42 percent, down 11 percentage points since fall 2016).
Area small business owners are focused on keeping employees happy
Small business owners in the greater Washington market continue to be thoughtful about retaining talent and have taken steps within the past two years to do so, such as offering flexible hours or work locations (38 percent), providing perks such as office happy hours (25 percent) and offering competitive benefits packages (24 percent). Nine out of 10 local entrepreneurs provide employees with wage increases and promotions, with most raises given on an unscheduled basis (42 percent), driven by either employee performance or positive business growth. Meanwhile, 31 percent give regular annual raises.
When asked about the top factors impacting business growth, 80 percent of greater Washington business owners cited their ability to attract and retain quality employees. Other top factors include a positive economic environment (91 percent), customer demand (86 percent) and favorable government policies (83 percent).
Greater Washington entrepreneurs embrace social media to strengthen relationships, use digital tools to enhance operations
Forty-seven percent of greater Washington business owners say social media has had a positive impact on their business’s bottom line in the past year, and entrepreneurs are actively relying on social media to fulfill their various business needs. Seventy percent of local entrepreneurs use social media to connect with peers and network (vs. 48 percent nationwide), 70 percent use it to market their business (vs. 50 percent nationwide), 64 percent use it to research their industry and competition (vs. 48 percent nationwide), and 62 percent use it to share updates with their customers (vs. 41 percent nationwide).
Only 5 percent of greater Washington small business owners say social media has negatively affected their bottom line, but nearly two out of five say they have made a business blunder on mobile or digital channels. Top business blunders among area entrepreneurs include customer confusion due to outdated information found online (19 percent) and incorrectly scheduled appointments or meetings (17 percent).
Additionally, local area entrepreneurs are using digital tools to help manage daily business operations. Eighty-five percent use at least one digital tool to run their business, with digital banking (59 percent) and financial tracking and accounting apps (39 percent) reported as the most popular solutions.
Local small business owners look to pay it forward during the holidays
Eighty-six percent of greater Washington entrepreneurs plan to reward their employees with holiday-related perks, including:
- Office closure during the holidays (51 percent).
- Employee gifts (40 percent).
- Flexible hours and vacation time (36 percent).
- Salary bonuses (33 percent).
- A holiday party (26 percent).
Additionally, 70 percent of local entrepreneurs are participating in charitable efforts for this holiday season, such as making financial contributions to charities or nonprofits (36 percent), organizing a fundraiser (22 percent), giving employees time off to volunteer (21 percent) and organizing team volunteer opportunities (16 percent).
For a complete, in-depth look at the insights of the nation’s small business owners, read the fall 2017 Bank of America Business Advantage Small Business Owner Report, and for additional insights, download the Small Business Owner Report infographic here. A local snapshot can also be viewed here.
Bank of America Business Advantage Small Business Owner Report
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, previous 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
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.
SOURCE: Bank of America