Bank of America Survey Finds Los Angeles Small Business Owners More Upbeat About Business Growth, Revenue and Hiring Than Peers Nationwide
OREANDA-NEWS. Los Angeles small business owners are much more confident in their ability to grow their business and increase revenue when compared with entrepreneurs in the rest of the country, according to the spring 2016 Bank of America Small Business Owner Report.
The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Los Angeles and around the country, found that:
Sixty-four percent plan to grow their business over the next five years, versus the national average of 55 percent.
Sixty-one percent expect to increase their revenue over the next 12 months, versus the national average of 51 percent.
- Thirty-three percent plan to hire new staff this year, compared to 22 percent nationally.
Despite the general optimism about their business, the report found declining confidence in both the national and their local economies. Only 29 percent feel confident that the national economy will improve over the next 12 months, compared with 57 percent in spring 2015. Additionally, 40 percent of Los Angeles small business owners are confident their local economy will improve over the next 12 months, compared with 61 percent one year ago.
“There is an interesting divide among Los Angeles entrepreneurs with respect to the low level of optimism about the national economy and more upbeat outlook they have for their own businesses,” said Troy Bosch, Los Angeles small business banker manager at Bank of America. “The election year conversation, as we’ve seen in previous years, can contribute to greater uncertainty on national issues, such as the economy, even if optimism is high about business growth closer to home.”
Keeping a close eye on the election
Sixty-three percent of Los Angeles small business owners believe the upcoming presidential election will have an impact on their business “a lot” or “somewhat.” Overall, they have mixed feelings about how the presidential race will shake out: 18 percent are optimistic, 25 percent are pessimistic, and 56 percent are neutral about how it will affect their businesses.
The election year issues they are most concerned about from a business perspective this year include taxes (70 percent), the economy and job growth (67 percent) and health care policy (56 percent).
How LA entrepreneurs would adjust to a minimum wage increase
As Los Angeles prepares for a $15 per hour minimum wage by 2020, 64 percent of Los Angeles small business owners say they will need to take financial measures to compensate for an increase. The most common measures cited include: raising the price of products or services (26 percent), reducing operational spending (19 percent), and cutting staff hours (18 percent).
Using loan funding to hire more staff and invest in new technology
Fewer entrepreneurs in Los Angeles intend to apply for a loan this year, with 17 percent reporting they plan to seek funding in 2016, down from 24 percent a year ago. However, this compares favorably with only 9 percent of small business owners nationwide planning to apply for a loan this year. Those who will seek funding intend to hire more employees (49 percent), invest in new technology (44 percent), expand operations (35 percent) and buy new equipment (34 percent).
Skill and work experience top hiring factors, education less so
Nearly half (48 percent) report that skill level is the single most important factor when hiring, followed by fit with company culture (27 percent) and previous work experience (22 percent). Only 3 percent of LA entrepreneurs say education level is the most important factor when hiring a candidate.
When Los Angeles entrepreneurs ranked qualities that are most important for their employees to exhibit, 75 percent said they most value candidates who are trustworthy and dependable. Seventy-three percent value candidates who are hardworking, and 63 percent value experience.
For a complete, in-depth look at the insights of the nation’s small business owners, read the entire spring 2016 Bank of America Small Business Owner Report, and for additional insights, download the Small Business Owner Report national infographic.
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.
Visit the Bank of America newsroom for more Bank of America news.