Study Cites Strength of the U.S. Dollar, the Rising Cost of Healthcare and the Effectiveness of U.S. Government Leaders as Top Concerns Among Dallas Small Business Owners
Bank of America today released its inaugural Small Business Owner Report1, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners across the country. The survey, which includes an oversampling of small business owners across the Dallas market, found that nearly half (45 percent) of small business owners are confident that their local economy will improve in the next 12 months, while over one-third (34 percent) are confident that the national economy will improve during the same period. Additionally, nearly two-thirds (63 percent) cite the local Dallas economy as being important to their small business' success.
"The Texas market is widely recognized for fostering the growth and success of our business owners, who are without question the backbone of our economy," said Richard Holt, Dallas president, Bank of America. "At Bank of America, we couldn't be more committed to helping local small businesses succeed. By providing them the advice they need to grow and expand, we're enabling our clients to not only further our local economy, but the U.S. economy at large."
The survey found that Dallas small business owners have a number of specific concerns about the economy's impact on the success of their business, the greatest being the strength of the U.S. dollar (67 percent), healthcare costs (66 percent) and the effectiveness of U.S. government leaders (65 percent). Interestingly, the availability of credit was lower on the list of concerns (39 percent) compared to other issues that impact their business.
Despite these concerns, many small business owners in Dallas have expressed optimism about the future of their own business. In fact, 54 percent of respondents anticipate seeing an increase in revenue over the next 12 months. When asked to identify the most important action they plan on taking to help generate this revenue, Dallas small business owners cited marketing their business more to acquire new customers (40 percent), selling more to existing customer base (14 percent), and maximizing day-to-day cash flow so there is more money to invest in their business (13 percent) as top initiatives. Further, when asked how to describe their staffing projections over the upcoming 12 months, one in four (25 percent) Dallas small business owners said they plan to hire more employees in the year ahead, and 61 percent indicated that they plan to keep their staffing projections consistent. Of those who anticipate growing their staff, Dallas small business owners expect their employee base to grow by an average of 22 percent over the next 12 months.
Dallas small business owners make personal sacrifices to achieve success
The positive outlook that many Dallas small business owners are taking comes at the expense of personal sacrifices they're making in other areas of their lives, such as regularly forgoing free time (49 percent) and exercise (34 percent). Such sacrifices may be contributing to the high level of stress that small business owners are experiencing, both in Dallas and across the country. According to the report, four in 10 (41 percent) Dallas small business owners cited that running their business is the most stressful aspect of their lives – more than five times as stressful as maintaining a healthy relationship with a spouse or partner (8 percent), more than three times as stressful as raising children (11 percent) and nearly three times as stressful as managing their own personal finances (14 percent).
Dallas small business owners' concerns related to finding and maintaining talent
More than any other market surveyed in the report, Dallas small business owners encounter the most challenges finding skilled employees (32 percent, compared to 22 percent nationally). Other obstacles include identifying employees with a good work ethic (22 percent) and struggling to provide competitive salaries (14 percent). While less than one fifth (17 percent) of respondents indicated employee turnover increasing over the past 12 months, many struggle to offer the core benefits and perks that employees typically expect from an employer. The report found that half (50 percent) of Dallas small business owners admit to not offering a financial benefits package to their employees and less than one-fifth (17 percent) offer a 401(k) plan, far less than the national sample (31 percent) and less than any other market surveyed in the report.
Dallas small business owners need more financial expertise
Slightly more than three in 10 (32 percent) small business owners in Dallas claim to be very financially savvy when it comes to running their business. The remaining respondents admit to needing occasional or ongoing expert help. Dallas small business owners rely on a wide range of resources for financial guidance, as shown in the graph below.
When asked if they could change one aspect of what their bank provides their business, Dallas small business owners most frequently cited more customized services (17 percent) and an enhanced level of expertise (14 percent), while lowering costs associated with the financial services they receive (1 percent) and making it easier to get a loan (1 percent) ranked extremely low on their priority list.
"It's easy for small business owners to lose sight of keeping their finances in order while in the trenches of running their business," said Tanya Sanders, Small Business Banking manager, Bank of America. "That's why Bank of America recently completed the hiring of nearly 100 small business bankers in communities throughout Texas, with 33 based in the Dallas-Fort Worth area. Through a relationship with a small business banker, clients will gain access to the expertise they need to more effectively manage cash flow, so they can focus acutely on their growth and success."
Bank of America has continued to actively lend to small businesses across the U.S. and Texas. In the first quarter of 2012, Bank of America extended $183.8 million in credit across Texas to businesses with less than $20 million in revenue. This number includes $118.1 million in new originations, which has helped enable Bank of America to exceed its national small business lending pledge to the White House and the SBA.
According to the Bank of America Small Business Owner Report, nearly three-fourths (73 percent) of Dallas small business owners believe they currently have enough capital to effectively run their business. When asked what their biggest challenge is with managing cash flow, Dallas respondents cited not getting paid on time by clients and customers (47 percent) at the top of their list, followed by low profits/lack of business (21 percent) and not getting invoices out in a timely fashion (10 percent).
Of the 300 Dallas small business respondents, 33 percent have applied for a loan within the past two years, and of those 71 percent were approved.
1 See "About the Bank of America Small Business Owner Report" section for information about survey methodology.
About the Bank of America Small Business Owner Report
Braun
Research conducted the Bank of America Small Business Owner Report
survey by phone between March 17 and April 9, 2012 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 nine target
markets including Los Angeles, Dallas, Washington, D.C., Metro New York,
Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error
for the national sample is +/- 3.1 percent, and +/- 5.7 percent for the
oversampled markets, with both reported at a 95 percent confidence level.
Bank of America
Bank 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 57 million
consumer and small business relationships with approximately 5,700
retail banking offices and approximately 17,250 ATMs and award-winning
online banking with 30 million active 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 4 million small business owners through a suite
of innovative, easy-to-use online products and services. The company
serves clients through operations in more than 40 countries. Bank of
America Corporation stock (NYSE: BAC) is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
For more Bank of America news, visit the Bank of America newsroom.
www.bankofamerica.com
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.
© 2012 Bank of America Corporation. All rights reserved.
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Contacts:
Reporters May Contact:
Britney Sheehan, Bank of America,
206.358.7563
britney.w.sheehan@bankofamerica.com
