87% of Mid-Sized Business Owners and 65% of
Small Business Owners Expect Revenue Increases Over Next 12
Months
CHARLOTTE, N.C., May 1, 2024
/PRNewswire/ -- A majority of small and mid-sized business
owners expect their revenues to increase this year, and their
worries over a recession have declined substantially, according to
the 2024 Bank of America Business Owner Report, conducted in
partnership with Bank of America Institute. While business owners
remain mindful of the impacts of inflation and interest rates on
their bottom lines, both concerns have lessened since Spring 2023.
And despite some lingering uncertainties over the broader economy,
business owners plan to expand their businesses in the year
ahead.
"Small business owners remain cautiously optimistic in 2024,"
said Sharon Miller,
President and Co-Head of Business Banking at Bank of America.
"With anticipated revenue increases, many are focused on engaging
with customers and implementing new technologies that will help
them differentiate their businesses."
The 2024 Bank of America Business Owner Report includes input
from more than 1,400 small and mid-sized business owners (defined
as businesses with $100,000 to
$5 million and $5 million to $50
million in annual revenues, respectively). The report
explores the viewpoints, goals, concerns and outlooks of business
owners nationwide.
"Our report finds that most mid-sized business owners are
planning to expand their businesses and hire in the coming year,"
said Raul Anaya, President
and Co-Head of Business Banking at Bank of America. "Most of
these business owners are confident in their revenue growth as well
as in the local, national and global economies."
Business and Economic Outlook
When looking at
attitudes concerning the national economy, business owners'
outlooks varied by the size of their business: 75% of mid-sized
business owners expect the national economy to improve over the
next 12 months, while just 33% of small business owners expect the
same.
Mid-sized business owners (MSBOs) maintain a positive business
outlook:
- 87% believe their revenue will increase over the next 12
months.
- 80% plan to expand their businesses in the year ahead.
- 69% plan to hire over the next 12 months.
- 84% said their revenues were higher in 2023 than in 2022.
Among small business owners (SBOs):
- 65% expect their revenue to increase in the year ahead (holding
steady since last spring).
- 39% plan to expand their business over the next year.
- 30% plan to hire more employees over the next 12 months.
- 55% reported higher business revenues in 2023 than in
2022.
Top economic concerns for MSBOs include the U.S. political
environment (68%), inflation (67%), supply chain (66%) and consumer
spending (66%). SBOs share concern over the U.S. political
environment (75%) and inflation (73%) but are also concerned about
health care costs (69%) and interest rates (63%). 61% of MSBOs and
56% of SBOs noted concerns about recession, both down from 72% last
spring. And while concerns over inflation have come down slightly
since this time last year, 90% of MSBOs and 84% of SBOs still say
that inflation is currently impacting their business.
Funding plans have increased for MSBOs in the year ahead, with
93% of MSBOs planning to obtain funding (90% in spring 2023).
Financing plans have stayed steady with 54% planning to apply for a
bank loan in the next 12 months. In contrast, funding and loan
application plans have decreased for SBOs – with 71% planning to
obtain funding for their business, down from 82% last spring; and
16% of SBOs plan to apply for a bank loan or line of credit this
year, down from 24% last spring.
According to Bank of America Institute's recent Small Business
Checkpoint, small businesses have become more reliant on credit
cards, with balances up 18% since 2019, based on the bank's
aggregated small business credit card data. While rising balances
could raise some concerns, the Institute notes a few reasons to be
less pessimistic. First, inflation increased over 22% since 2019,
so inflation-adjusted credit card balances are comparable to, or
even lower than, 2019 levels.
Second, across all categories of small business credit card
spending, levels have come down since 2023, suggesting small
businesses are taking steps to manage spending and reallocate or
optimize cash flow. However, according to the Institute, while
balance sheet conditions are relatively healthy for small
businesses overall, an increasing portion of their credit card
balances are revolving – carrying from one month to the next –
after a decline in this behavior during and post
pandemic.
Running a profitable business is important to business owners
and, for many, it comes with personal and professional sacrifices.
70% of SBOs say they have made tradeoffs to maintain their
business' profitability, such as increasing prices (47%), working
more hours (45%) and reducing their own salary (32%).
Using Digital Tools to Optimize Operations
Business
owners are implementing digital tools across their operations. Over
the past 12 months, most business owners (99% of MSBOs and 71% of
SBOs) have digitally optimized their business. For many, that means
doing their business banking online or via an app, accepting more
forms of cashless payments and/or bolstering their social media
presence. Using digital tools has helped business owners save time,
stay organized, reach new customers, increase customer satisfaction
and manage cash flow.
The vast majority of MSBOs (89%) plan to implement artificial
intelligence (AI) tools this year. They plan to use these tools to
streamline their payroll and bookkeeping (57%), assist with hiring
efforts (49%) and stand out from competitors (44%).
Meanwhile, SBOs also are evaluating the benefits of AI tools,
albeit to a lesser extent, with 37% planning to implement AI tools
this year – citing similar ways they may use the technology,
including to differentiate themselves from competitors (47%),
streamline their payroll and bookkeeping (36%) and assist with
hiring efforts (25%).
For an in-depth look at the insights of the nation's small and
mid-sized business owners, please read the full 2024 Bank of
America Business Owner Report.
2024 Bank of America Business Owner Report
Methodology
Previously conducted as two separate reports for
small and mid-sized business owners, this year's report explores
sentiment among businesses of different sizes.
Ipsos conducted the 2024 Bank of America Business Owner Report
survey online between March 4 and March 28,
2024 using a pre-recruited online sample of small business
owners. Ipsos contacted a national sample of 1,038 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, approximately 250 small business
owners were 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 for
the national and designated market area segments were weighted to
national benchmark standards for size, revenue and region.
Ipsos also interviewed a national sample of 377 medium-sized
business owners in the United
States with annual revenue between $5,000,000 and $49,999,999 and employing between two and 499
employees. The final results for this national segment and a
combined sample of the small and medium-sized business owners were
weighted to national benchmark standards for size, revenue and
region.
Bank of America Institute
Bank of America Institute is
dedicated to uncovering powerful insights that move business and
society forward. Established in 2022, the Institute is a think tank
that draws on data and analyses from across the bank and the world
to provide timely and original perspectives on the economy,
sustainability, and global transformation. The Institute leverages
the depth and breadth of the bank's proprietary data, from 69
million consumer and small business clients, 57 million verified
digital users, $4.1T in total
payments in 2023 and $1.27T in
consumer and wealth management deposits. From this robust data set,
the Institute provides a unique perspective on the health of the
economy. It also elevates thought leadership from throughout the
bank that addresses long-term trends and shares these findings with
the general public.
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 69 million consumer and small
business clients with approximately 3,800 retail financial centers,
approximately 15,000 ATMs (automated teller machines) and
award-winning digital banking with approximately 57 million
verified digital 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 4 million
small business households through a suite of innovative,
easy-to-use online products and services. The company serves
clients through operations across the
United States, its territories and more than 35 countries.
Bank of America Corporation stock is listed on the New York Stock
Exchange (NYSE: BAC).
For more Bank of America news, including dividend announcements
and other important information, visit the Bank of America newsroom
and register for news email alerts.
Reporters may contact:
Susan
Atran, Bank of America
Phone: 1.646.743.0791
susan.atran@bofa.com
Anu Ahluwalia, Bank of America
Phone: 1.646.855.3375
anu.ahluwalia@bofa.com
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SOURCE Bank of America Corporation