Small Business Outlook Remains Strong

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    Entrepreneurs Split on Impact of Tax Reform, Trade Policies Economic
    Outlook Conforms With Slower Economic Growth

    CHARLOTTE, N.C.–(BUSINESS WIRE)–U.S. entrepreneurs continued to project a strong business outlook this
    spring even as confidence in the national and local economy weakened,
    according to the spring
    2019 Bank of America Business Advantage Small Business Owner Report
    Health care costs and the political environment topped the list of small
    business owners’ concerns for the year ahead, while entrepreneurs
    reported a mixed view on the impact of last year’s landmark tax reform
    and shifts in trade policy.

    The report, based on a semiannual survey of more than 1,500 small
    business owners across the country, reveals that:

    Small business owners’ business outlook over the next 12 months
    remains strong and steady:

    • Sixty-seven percent of entrepreneurs plan to expand their business
      (steady from fall 2018).
    • Fifty-nine percent believe their revenue will increase (vs. 57 percent
      in fall 2018).
    • Twenty-four percent plan to hire (vs. 27 percent in fall 2018).
    • Twelve percent plan to apply for a loan (vs. 15 percent in fall 2018).

    While their economic outlook weakens slightly:

    • Forty-eight percent are confident the national economy will improve
      (vs. 55 percent in fall 2018).
    • Fifty-one percent express similar confidence in their local economies
      (vs. 54 percent in fall 2018).
    • Top economic concerns have all risen since fall 2018, including health
      care costs (66 percent), interest rates (48 percent), stock market and
      consumer spending (both 47 percent).
    • The political environment, a new concern measured this spring, ranks
      as business owners’ second-greatest concern (65 percent).

    “Small business owners remain optimistic about the outlook for their own
    businesses and project revenue increases in the year ahead,” said Sharon
    Miller, head of Small Business, Bank of America. “However, these
    entrepreneurs are also feeling slightly less confident in the economy
    and are expressing more concern about a variety of economic factors.”

    Entrepreneurs split on effects of recent policy changes, contemplate
    impact of climate change

    Nearly two-thirds of entrepreneurs expressed concern about the current
    political environment, though they are divided over how major policy
    issues are directly impacting them. Half of small business owners say
    the new tax code has impacted their business — with 28 percent reporting
    that impact as positive. This is down from the 45 percent who
    anticipated a positive impact one year ago.

    Regarding U.S. trade policy, 41 percent say they have been impacted by
    tariffs, with 18 percent reporting a negative impact, 9 percent
    reporting a positive impact and 14 percent reporting a mixed impact.
    Additionally, 33 percent of entrepreneurs say they’re concerned about
    climate change affecting their business.

    Most business owners preparing for the worst — but are they doing

    Unexpected or major economic events can transform a business in the
    blink of an eye. While most entrepreneurs are taking steps to protect
    their business from potential threats, such as natural disasters, an
    economic downturn or a cyber-breach, a sizeable number are not.
    Additionally, most entrepreneurs do not have a plan to address
    reputational crises or challenges.

    • Sixty-one percent have a business continuity plan in case of a flood,
      fire or other disaster, though 39 percent do not have such a plan.
    • Sixty-nine percent have taken steps to prepare for an economic
      downturn, while 31 percent have not.
    • Eighty percent of business owners have taken at least one step to
      protect customer data from a cyber-breach, while 20 percent have not
      taken any steps.
    • Seventy-six percent do not have a plan to manage reputational issues
      and threats.

    Perhaps a result of growing up in a time of greater economic turmoil,
    millennial business owners are more likely to have taken steps to
    prepare their business for an economic downturn (79 percent vs. national
    average of 69 percent) and are more likely to have a plan in place to
    address reputational issues (36 percent vs. national average of 24

    The power of posts — are online reviews more of a trust broker or

    Customer feedback holds tremendous sway in the digital era, with online
    reviews serving as a powerful channel for sharing both compliments and
    criticisms. While a majority of business owners have received a negative
    online review of their business (54 percent), more believe positive
    reviews have greater impact than negative ones (62 percent vs. 38

    Furthermore, 63 percent say reviews are important to the success of
    their business, with 80 percent reporting that positive reviews have
    helped generate business opportunities. However, recognizing that
    negative reviews also have an impact, 66 percent of business owners who
    have received one say they respond as soon as possible to limit the
    reputational damage.

    For a complete, in-depth look at the insights of the nation’s small
    business owners, read the spring
    2019 Bank of America Business Advantage Small Business Owner Report
    For additional insights, download the Small
    Business Owner Report infographic

    Bank of America Business Advantage Small Business Owner Report Survey
    Public Affairs conducted the Bank of America Small Business Owner Report
    Survey for spring 2019 online between February 8 and February 24, 2019,
    using a pre-recruited online sample of small business owners. Ipsos
    contacted a national sample of 1,504 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 10 target markets:
    Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York,
    San Francisco and Washington, D.C. 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.

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    Reporters May Contact:
    Don Vecchiarello, Bank of America,
    [email protected]