Metro New York Small Business Owners Cite Recovery of Consumer Spending, Strength of the U.S. Dollar and Effectiveness of U.S. Government Leaders as Top Concerns
Bank of America today released its inaugural Small Business Owner Report1, a semi-annual national 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 Metro New York market, found that half (50 percent) of Metro New York small business owners are confident their local economy will improve in the next 12 months, while only four in 10 (41 percent) are confident in the improvement of the national economy during the same period. Additionally, 66 percent cite the local Metro New York economy as important to the success of their business.
The survey also found that managing the ongoing success of their business creates more stress for Metro New York small business owners than any other aspect of their lives. When asked to identify one of the most stressful areas of their lives, managing the ongoing success of a small business (44 percent) was cited as three times as stressful as raising children (14 percent) and four times as stressful as maintaining a healthy relationship with a spouse or partner (11 percent).
Metro New York small business owners also tend to put themselves last on their list of priorities. When asked about the sacrifices they've made over the past year for the sake of their small business, time for themselves (53 percent) and keeping physically fit (34 percent) were their top two responses, followed by maintaining a healthy relationship with a spouse or partner (19 percent) and managing their own personal finances (19 percent).
"Small business owners are making huge personal sacrifices to spur job creation and contribute to the growth of our city's economy," said Jeff Barker, New York City market president for Bank of America. "Despite economic hurdles, Metro New York small business owners have plans to continue hiring and expanding, which is why it's critical that the private and public sector continue to find ways to support local small businesses."
The report found that Metro New York small business owners have a number of specific concerns about the economy's impact on the success of their business. The greatest concern cited was the recovery of consumer spending (72 percent), followed by the strength of the U.S. dollar (68 percent), the effectiveness of U.S. government leaders (68 percent) and commodities prices such as oil and gas (68 percent), as shown in the graph below.
Despite these concerns, many small business owners in Metro New York have expressed optimism about the future of their own business, with 57 percent of respondents anticipating an increase in revenue over the next year. Additionally, 28 percent of Metro New York small business owners said they plan to hire more employees in the year ahead, and 53 percent said they plan to keep their staffing projections consistent.
With anticipated hiring, small business owners are also looking to take more action to grow their business. When asked to name the most important action they plan on taking to help generate increased revenue, Metro New York small business owners cited marketing their business more to acquire new customers (39 percent), followed by maximizing day-to-day cash flow so there is more money to invest in their business (21 percent) and obtaining additional capital to expand/grow their business (12 percent).
Metro New York small business owners struggle to attract and retain top talent
While a quarter of respondents (23 percent) saw an increase in employee turnover in the past year, Metro New York small business owners expressed specific concerns related to talent retention and many struggle to offer the core benefits and perks that employees typically expect from an employer. When asked for their number one challenge in retaining top talent, 21 percent cited providing competitive health care and retirement benefits, more so than any other market surveyed. This was followed by finding employees with the skills required for their business (20 percent), finding employees with a good work ethic (18 percent) and offering competitive salaries (16 percent). Despite acknowledging the importance of offering competitive benefits, 35 percent of those surveyed do not offer any type of financial benefits package, and only 31 percent offer a 401(k) plan to their employees.
Metro New York small business owners value professional financial advice
The vast majority of small business owners need some level of financial advice or guidance to help them run their business, with less than one-quarter (24 percent) of Metro New York small business owners describing themselves as being very financially savvy. The remaining respondents said they need help from time to time or require more regular and ongoing expert help to manage their business' finances. When asked if they could change any one aspect of what their bank provides their business, the survey found that Metro New York small business owners are looking for:
- Ways to market their business to promote growth (22 percent).
- More investing options designed specifically for small businesses (15 percent).
- Better online/remote banking services (15 percent).
- More expertise at local bank branches (12 percent).
- More personal time with a local banker to better understand business goals (10 percent).
Broadly, Metro New York small business owners are looking for an enhanced level of expertise and more customized services. Only 1 percent of respondents cite lower/less fees and ease in obtaining a loan or line of credit as the one aspect of their bank they would change.
"These survey findings align with what we've heard on the ground from our small business clients – that they value not only financial expertise, but also an understanding of their own unique opportunities and challenges," said Raj Kochhar, Bank of America Small Business Banker region executive for the Northeast. "Through the hiring of 1,000 small business bankers across the nation, with 90 right here in the Tri-State area, we're able to deliver the personal counsel our clients need to uncover problems, identify solutions and help them realize their own vision of success."
Bank of America has continued to actively lend to small businesses across the U.S. and New York State. In the first quarter of 2012, Bank of America extended $318.5 million in credit across New York State to businesses with less than $20 million in revenue. This number includes $124 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, 67 percent of Metro New York 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, respondents cited not getting paid on time by clients and customers (38 percent) at the top of their list, followed closely by low profits and lack of business (34 percent) and not getting invoices out in a timely fashion (12 percent).
Of the 300 Metro New York small business respondents, 48 percent have applied for a loan within the past two years and of those 77 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.
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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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