Do you feel more optimistic about your business and local economy today than you did a year ago? If so, you’re not alone. According to a survey of 1,000 small business owners across the country, half said they believe their local economy will improve over the next 12 months, up from 45 percent a year ago. In addition, 45 percent believe that the national economy will improve, up from 41 percent a year ago. This is despite concerns about rising healthcare costs and political impasse in Washington.
According to a semi-annual survey conducted by Bank of America, business owners are confident across the board, regionally and among all generations. Millennials tend to be the most optimistic, as you might expect given their youth and limited exposure to economic downturns, but small business owners of all ages are more hopeful this year than in 2014.
Sunny Outlook in L.A. and Miami
The report polled small business owners in major U.S. markets and found subtle differences by region. The most optimistic cities in the country in regard to their local economy and staffing prospects are Los Angeles and Miami. Specifically, 62 percent of L.A. respondents say they are confident that their local economy will improve over the next 12 months, followed by Miami at 59 percent. In addition, more than half of small business owners in Los Angeles (58 percent) and Miami (55 percent) plan to hire more employees this year.
Here are some highlights of responses from other U.S. cities:
- Atlanta: Atlanta small business owners are more optimistic about their own revenue growth and their local economy than a year ago. Sixty-seven percent expect their revenue to increase over the next 12 months, up from 53 percent a year ago. In addition, 49 percent plan to hire staff this year, compared to 26 percent last year.
- Boston: In Boston, small business owners are significantly more likely to hire in 2015 than a year ago. Forty-four percent of small business owners reported plans to hire over the next 12 months, up from 28 percent the year before.
- Chicago: In Chicago, small business owners are eyeing expansion, with 66 percent reporting plans to grow their businesses over the next five years, up from 59 percent just last spring.
- Dallas/Fort Worth: Small business owners in the Dallas/Fort Worth area are exhibiting a positive spirit across the board, with 46 percent expecting to hire (up 18 percent from a year ago), 44 percent reporting optimism about the national economy (up 17 percent from a year ago) and 52 percent confident about the local economy (up 6 percent from a year ago).
- New York: In the metro New York area, 76 percent of small business owners are confident about hitting their revenue goals, and 64 percent plan to grow their business in the next five years. In addition, 60 percent believe their revenue will increase in 2015.
- San Francisco: San Francisco surprised everyone, with small business owners reporting less reliance on technology than their national counterparts. When asked how long they could run their business “indefinitely” without a smartphone or tablet, 54 percent responded that they could, compared with 47 percent nationwide.
- Washington, DC: In the greater Washington area, small business owners’ revenue expectations spiked significantly in the last 12 months, with 73 percent of local entrepreneurs forecasting an increase in revenue over the next year. This is more than any other market surveyed and a 15 percent increase over the previous year.
Politics, Health Care and Oil Prices
Despite these subtle differences by region, small business owners agreed on their biggest concerns about the year ahead, with 74 percent expressing concern about the effectiveness of government leaders, 72 percent being concerned about health care costs, and 63 percent worrying about commodity prices, despite the large drop in oil prices.
How does your company and outlook compare to the 1,000 surveyed for this study? See for yourself by downloading a copy of the report.
Robb Hilson is the Small Business Executive at Bank of America.