By Rieva Lesonsky
Bank of America just released its spring 2017 Small Business Owner Report, a semi-annual survey of 1,000 small business owners across the country. And while 52% of entrepreneurs are confident the national economy is on the upswing (up what B of A calls a “staggering” 21%), that “newfound confidence” has yet to translate into revenue outlook, hiring and long-term growth plans.
In fact, the 48% who expect their revenues to increase in the next year, is actually lower than the number (52%) who expected that in last fall’s outlook. And the number of business owners who expect to grow their businesses in the next five years is flat (56% now compared to 55% last fall).
The hiring outlook is fairly dismal. Only 18% plan to hire in the next year, down 7 percentage points from fall 2016 and the lowest point in five years. However, the entrepreneurs surveyed are focused on retaining their existing employees.
When it comes to money issues, only 9% of those surveyed plan to apply for a loan in the year ahead. Of those who need a loan, they plan to use the money for marketing (42%), investing in new equipment (34%) and expanding operations (28%).
Cost of Health Care
The business owners are very concerned about the cost of health care—in fact it remains the top economic concern (64%). But while that seems high, the concern is down 11 percentage points from last fall. However, 42% are worried about the health care costs their employees must bear.
More than one-quarter of small businesses surveyed with fewer than 50 employees provide an employee health benefit. Half of those who provide health insurance for their employees, say cost increases have worsened in the last five years, while 21% believe it has improved and 29% report no change.
Attitude Shift
Sharon Miller, head of small business, for Bank of America says, “What our survey shows is a significant shift in the mindset of small business owners from just six months ago. Although some uncertainty remains with respect to hiring and revenue, the increase in general optimism is certainly a promising indicator of potential growth for small businesses in 2017.”
This shift in attitude is underscored by their decrease in concern from the fall survey about the strength of the U.S. dollar (36%, down 16 percentage points) and the stock market (34%, down 16 percentage points).
Is Business Ownership a Nightmare?
These business owners are working hard—61% regularly work more than 40 hours a week, however 82% say they’ve achieved a “work life balance.” Yet, 47% describe their work week as “demanding,” 30% call it “stressful” and 25% have had a nightmare about their businesses failing. Millennials are even more stressed—42% of them have had a nightmare about their businesses failing, compared to 28% of Gen-Xers and 23% of baby boomers.
What gets in the way of achieving balance? I’m sure this is a familiar list to you—it is to me:
- Too many administrative tasks (46%)
- Customers & clients requiring individual attention (44%)
- Not having the financial resources to hire additional staff (38%
- Not having enough employees to run the business without their support (34%)
However, most of the business owners (52%) say running their businesses is “fulfilling” and “enjoyable” (51%).
Innovation Matters
Encouraging innovation in the workplace is a priority for 75% of the business owners surveyed—77% say it is a key contributor to business success. Many are confident—37% say they’re “industry-leading” or “ahead of the curve,” while 52% believe they “keep the same pace” with other businesses in their sector. Tech entrepreneurs are more confident—59% of them say they’re “industry-leading” or “ahead of the curve,” and one-third are keeping pace.
What’s the Future Look Like?
Looking 20 years into the future, most entrepreneurs envision a virtual and automated world. They predict:
- More offices will be virtual rather than physical locations (49%)
- Operations automated (42%)
- Businesses will go paperless (42%)
- Cash will disappear (36%)
You can read the full 2017 Small Business Owner Report here.
