Bank of America Survey Finds Chicago Small Business Owners’ Confidence in the Economy Down
OREANDA-NEWS. Chicago small business owners’ confidence in both the national and their local economies is down significantly from last year, according to the spring 2016 Bank of America Small Business Owner Report. Only 33 percent of small business owners in Chicago say they are confident that the national economy will improve over the next year, a 25 percentage-point decrease from last year, while 41 percent are confident that their local economy will improve, down from 56 percent last year.
The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Chicago and around the country, also found that 71 percent of Chicago small business owners believe their business will be affected “a lot” or “somewhat” by the outcome of the presidential election.
“Election years tend to create a greater sense of uncertainty in the small business community, and this year is no different,” said Jim Holmes, Chicago small business banker manager for Bank of America. “Despite the general unknowns an election year brings, it’s promising to see Chicago business owners maintain expectations for revenue.”
Steady on revenue, but falling optimism on growth and hiring
While 62 percent of Chicago small business owners predict their revenue will increase over the next 12 months (in line with previous years), the report found that fewer are looking to grow their business. Last spring, 70 percent of Chicago entrepreneurs said they planned to grow over the next five years; that number that has dropped to 59 percent. Additionally, less than one-third (29 percent) plan to hire new employees in the next year, down from 51 percent last spring.
Health care concerns high for Chicago small business owners
In Chicago, 44 percent of small business owners currently offer health insurance to their employees; of those, 32 percent report their health care costs increased this year by more than 20 percent. As a result, while the cost of health care is a concern for small business owners across the country, Chicago small business owners (81 percent) are particularly concerned about this issue, compared with the national average of 74 percent.
Highly skilled workers, trustworthiness and team players valued above education
More than half (51 percent) say skill level is the most important factor when hiring a potential candidate, followed by fit with the company culture (25 percent) and previous work experience (19 percent). Only 4 percent of Chicago entrepreneurs say education level is the most important factor when hiring.
When Chicago small business owners ranked qualities they find most important for their employees to exhibit, 76 percent said they valued candidates who are trustworthy, hardworking (72 percent) and experienced (58 percent). Sales ability (30 percent) and knowledge of STEM (science, technology, engineering and mathematics) (13 percent) are less important attributes.
Adjusting to a minimum wage increase
As Chicago prepares for a minimum wage increase to $10.50 (effective July 1), 64 percent of small business owners in the area say they will need to take financial measures to adjust. The most common measures cited include: increasing the price of products and services (24 percent), reducing operational spending (20 percent) and cutting staff hours (13 percent).
About the Bank of America Small Business Owner Report
GfK Public Affairs and Corporate Communications conducted the spring 2016 Bank of America Small Business Owner Report survey online between March 17 and April 19, 2016 using a pre-recruited online sample of small business owners. GfK contacted a national 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, a total of 300 small business owners were also surveyed in nine target markets: Atlanta, Boston, Chicago, Dallas, 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. Previous waves of the Small Business Owner Report survey were conducted by telephone. Best efforts were made to replicate processes in sample, weighting, and method.
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 47 million consumer and small business relationships with approximately 4,700 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with approximately 33 million active users and approximately 20 million mobile 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 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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