U.S. small business owners are entering the new decade on a high note, with 82 percent anticipating year-over-year revenue growth as they close out 2019, according to the Bank of America Business Advantage Fall 2019 Small Business Owner Snapshot.
Entrepreneurs are confident about their business prospects, with expansion plans, revenue projections and intent to hire remaining strong and steady from last fall. While business owners also maintain a positive outlook for their local economies (52 percent vs. 54 percent in fall 2018), they are expressing a slightly more cautious view of the national economy (49 percent, down from 55 percent in fall 2018). The top five factors influencing business owners’ confidence in the national economy this fall are elections (91 percent), U.S. political climate (90 percent), GDP growth rate (89 percent), inflation (89 percent) and interest rates (89 percent).
“Entrepreneurs are charging into the new decade eager to increase their revenue and expand into new markets,” said Sharon Miller, head of Small Business, Bank of America. “While business owners are also closely monitoring the effects of recent changes to U.S. trade tariffs and policies, as a whole, they’re continuing to invest in their businesses and are optimistic about 2020.”
The new research, based on a semiannual survey of more than 1,600 entrepreneurs across the country, also reveals:
Small business growth indicators remain steady and strong
- Sixty-nine percent plan to expand (up slightly from 67 percent in fall 2018).
- Fifty-eight percent expect their revenue to increase (level with 57 percent from fall 2018).
- Twenty-four percent plan to hire (down slightly from 27 percent in fall 2018).
- Twelve percent intend to apply for a loan (down slightly from 15 percent in fall 2018).
Concern about health care costs and the political environment declined, while concern about other economic issues is on the rise
- The top two economic concerns for entrepreneurs in the year ahead are health care costs (61 percent) and the political environment (61 percent), though they declined from 66 percent and 65 percent, respectively, since spring 2019.
- Conversely, the survey found increasing concerns related to consumer spending (54 percent vs. 47 percent in spring 2019), the strength of the U.S. dollar (50 percent vs. 46 percent in spring 2019), and corporate tax rates (45 percent vs. 40 percent in spring 2019).
U.S. trade policies are impacting more business owners
Over the past year, more business owners say they have been impacted by U.S. trade policies. As of this fall, 44 percent say they are feeling the effects of tariffs, up from 41 percent in the spring and 36 percent in fall 2018. Of those business owners who have been affected this fall, the greatest impacts have been on the costs of their goods and supplies (61 percent have noticed an increase) and raised customer pricing (55 percent).
Holiday season brings challenges and stressors, but resilient business owners have ways to cope
During the holiday season, entrepreneurs are preparing for the unique challenges and opportunities that come with this busy time of year. Sixty-six percent expect to face challenges this holiday season, including balancing work and personal commitments (42 percent), creating customer demand (37 percent), and keeping prices competitive (36 percent).
Fifty-four percent of entrepreneurs feel stressed during the holidays. As stress levels rise, they plan to cope by taking extra steps toward self-care (48 percent), going on a vacation (38 percent), and developing processes to handle the influx of business (25 percent). Nearly three-quarters of entrepreneurs also look forward to spending time with family and friends during the holidays, 29 percent plan to provide employees special perks and bonuses, and 28 percent plan to give back to their local communities.
For a complete, in-depth look at the insights of small business owners, read the Bank of America Business Advantage Fall 2019 Small Business Owner Snapshot.