Also Finds 44 Percent of Millennials Can’t Run
Their Business for More Than a Day Without Their Smartphone or
Tablet
Small business owners, particularly members of the millennial
generation, are more confident in the future of the local and
national economies, according to the fall 2014 Small Business Owner
Report, released today by Bank of America. According to the report,
based on a semi-annual survey of 1,000 small business owners across
the country, half (50 percent) of respondents believe their local
economy will improve over the next 12 months, up from 45 percent a
year ago, and 45 percent believe the national economy will improve
over the same period, up from 41 percent a year ago. This iteration
of the report examines specific concerns, aspirations and
perspectives of three different generations of small business
owners: millennials (ages 18-34), Generation-X (ages 35-49) and
baby boomers (ages 50-68).
“Millennial small business owners have become a positive,
driving force in our economy,” said Robb Hilson, Bank of America
Small Business executive. “Whether it’s embracing and adapting to
new technology, growing their business or confidently contributing
to their local economies, they are a growing influence on our
country’s economic success.”
The survey results vary significantly by age group, with the
greatest optimism expressed by millennials. According to the
survey, 82 percent of millennial respondents say they are confident
that their local economy will improve over the next 12 months,
followed by Gen-Xers at 50 percent and baby boomers at 41 percent.
Additionally, the study shows that nearly three-quarters (74
percent) of millennials feel confident that the national economy
will improve over the next 12 months, while only 45 percent of
Gen-Xers and 35 percent of boomers feel the same way.
The research also finds a number of generational differences
among small business owners in their perspectives on business
growth:
- Seventy-eight percent of millennial
small business owners and 71 percent of Gen-Xers expect their
revenue to increase over the next 12 months, compared to 52 percent
of boomers.
- Nearly nine in 10 millennials (87
percent) plan to grow their business over the next five years,
compared to 73 percent of Gen-Xers and 57 percent of boomers.
- When asked about expansion plans for
their business in the next 12 months, Gen-Xers and boomers are most
likely to target new industries and new customers (51 percent and
40 percent, respectively), while millennials are most likely to
expand by hiring additional staff (59 percent).
- Small business owners believe they will
be ending their year on a good note, with more than three-quarters
(77 percent) expecting to achieve their year-end revenue goals.
Millennials are the most optimistic, with 93 percent believing they
will meet their target, compared to 80 percent of Gen-Xers and 73
percent of boomers.
Influence of technology different among generationsWhile
more than half (58 percent) of boomer small business owners give
themselves an “A” or “B” when asked to grade the tech savviness of
themselves or their business, millennial and Gen-X business owners
rate their tech savviness significantly higher. Not surprisingly,
85 percent of millennials gave themselves an A or B, and 74 percent
of Gen-Xers graded themselves an A or B.
Despite the fact that more than half the boomer respondents
rated their tech savviness at an A or B level, the majority (59
percent) also indicated they could run their business successfully
“indefinitely” without their smartphone or tablet, compared to only
22 percent of millennials and 39 percent of Gen-Xers. In fact, 44
percent of millennials and Gen-Xers said they could only
successfully run their business without a smartphone or tablet for
one day or less.
Across all three generations, small business owners agree that
technology allows them to feel more in control of their business.
When asked about technology as it relates to managing the
day-to-day aspects of their business, 58 percent of survey
respondents said it allows them to feel more in control, and 71
percent believe that technology saves them time.
Generational identities and perceptionsThe report also
asked small business owners to identify key traits that best
describe their generation. One-third of Gen-Xers (33 percent) and
more than half (52 percent) of boomers describe their respective
generations as “hardworking/dedicated,” compared to only 7 percent
of millennials who share that view about their generation. At the
same time, however, millennials view their generation as “creative”
(26 percent), “confident” (18 percent), and “optimistic” (15
percent). Gen-Xers are more likely than any other generation to
describe themselves as “independent” (15 percent) and “realistic”
(11 percent).
Even though millennial small business owners seem to be most
poised for growth, 37 percent of Gen-Xers and 38 percent of boomers
think millennials are entitled and want success without putting in
hard work. On the other hand, 21 percent of millennials say they
value the mentorship that older generations provide and believe
Gen-Xers and boomers value and reward loyalty (22 percent).
Living the American DreamDespite the differing
perceptions by generation, the study found that nearly eight in 10
small business owners (79 percent) believe they have achieved the
“American Dream.” More specifically, 88 percent of millennial
respondents believe they have achieved the American Dream, compared
to 79 percent of Gen-Xers and 76 percent of boomers. Across all
small business owners, when asked which statement best describes
their view of the American Dream for entrepreneurs, respondents
said:
- It’s possible to achieve with hard work
(51 percent).
- It has meant something different to me
at various stages of my life (32 percent).
- It’s too expensive to achieve (5
percent).
- It only applies to those from an
affluent background (5 percent).
Small business owners more generous this holiday
seasonAccording to the report, many small business owners are
feeling generous this holiday season with more than half (52
percent) planning to offer holiday salary bonuses to their
employees, compared to 49 percent last year, and nearly half (49
percent) planning to throw a party for their employees, up from 43
percent last year.
Survey participants were also asked about the impact on their
business of the Black Friday and Cyber Monday holiday sales
periods. Despite the hype these sales days have created in recent
years, few small business owners feel that Black Friday (38
percent) and Cyber Monday (29 percent) have an impact on their
business’s bottom line. However, these numbers have increased from
last year, when 34 percent and 26 percent viewed Black Friday and
Cyber Monday, respectively, as having an impact on their bottom
line.
The increased significance of Black Friday could be driven by
millennial small business owners, 41 percent of which feel this
holiday is one of many significant factors that impact their
business’s bottom line.
Local insights across the countryThe report also analyzed
specific needs of small business owners in nine local markets
across the country. Key insights gathered include:
- Small business owners in Los Angeles
and Miami are most optimistic about their local economy and
staffing prospects. According to the survey, 62 percent of
respondents in Los Angeles say they are confident that their local
economy will improve over the next 12 months, followed by Miami at
59 percent. More than half of small business owners in Los Angeles
(58 percent) and Miami (55 percent) plan to hire more employees in
the next year.
- About three-quarters of small business
owners in Atlanta (76 percent), Los Angeles (75 percent) and San
Francisco (75 percent) are most likely to give themselves an “A” or
“B” when asked to grade the tech savviness of themselves or their
business. Conversely, only 58 percent of small business owners in
Dallas would give themselves a top A or B letter grade.
- Greater Washington small business
owners’ revenue expectations have spiked in the last 12 months.
Seventy-three percent of local entrepreneurs in this region
forecast an increase in revenue over the next year, more than any
market surveyed and a 15 percent increase from last year.
For more information about the mindset of small business owners
across the country, read the fall 2014 Small Business Owner
Report.
About the Bank of America Small Business Owner ReportBraun
Research conducted the Bank of America Small Business Owner Report
survey by phone in October 2014, 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: Los Angeles, Dallas, Washington, D.C., New York,
Boston, Chicago, San Francisco, Atlanta and Miami. The margin of
error for the national sample is +/- 3.1 percent; the margin of
error for the oversampled markets (where n=300) is +/ 5.7 percent;
and the margin of error for the oversampled markets (where n=301)
is +/ 5.6 percent, with each reported at a 95 percent confidence
level.
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.
Bank of AmericaBank of America is one of the world's largest
financial institutions, serving individual consumers, small
businesses, 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 48 million consumer and small business relationships
with approximately 4,900 retail banking offices and approximately
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users and more than 16 million mobile 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 3 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 listed on the New York Stock Exchange.
Visit the Bank of America newsroom for more Bank of America
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Reporters May Contact:Don Vecchiarello, Bank of America,
1.980.387.4899don.vecchiarello@bankofamerica.com
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