Local Entrepreneurs Plan for a Robust 2016
While Los Angeles small business owners are concerned about
minimum wage hikes, they are very optimistic about revenue growth
and many have plans to hire in 2016, according to the fall 2015
Bank of America Small Business Owner Report, a semi-annual study
exploring the concerns, aspirations and perspectives of small
business owners in Los Angeles and around the country.
Following a minimum wage vote that passed in Los Angeles this
summer, area small business owners are expressing greater concern
over its impact: 40 percent expressed concern over minimum wage
increases, compared to 35 percent of small business owners
nationwide. Los Angeles small business owners are also concerned
about potential interest rate hikes (40 percent) and the outcome of
the upcoming U.S. presidential election (37 percent).
Despite these concerns, Los Angeles owners are planning to hire
more than ever before and are confident about revenue growth in
2016, with 68 percent expecting revenues to increase over the next
12 months. Additionally, 62 percent of Los Angeles-area small
businesses plan to hire in the upcoming year, more than double what
it was two years ago and the highest since the inception of the
report in 2012.
“Los Angeles small business owners realize that talent is the
backbone of any successful business,” said Troy Bosch, Los Angeles
small business banker manager at Bank of America. “Despite their
reticence over minimum wage increases, Los Angeles small business
owners continue to prioritize hiring, which will fuel success
within their business and across the entire community.”
While confidence in business grows, local economic optimism
dipsIn contrast to increased confidence in their businesses,
Los Angeles small business owners report decreased confidence in
their local economy: Just over half (53 percent) believe it will
improve in the next year, a decrease of 9 percentage points from a
year ago. Los Angeles was the only market surveyed that saw a
decline in local economic confidence. Confidence in the national
economy is flat from a year ago (48 percent in fall 2015, versus 47
percent in fall 2014). However, optimism around the global economy
has increased from a year ago, with 33 percent saying it will
improve, compared to 29 percent last year.
Tempering confidence in the economy are a few concerns beyond
minimum wage hikes. These include:
- The effectiveness of U.S. government
leaders (73 percent).
- Health care costs (69 percent).
- Interest rate increases (59
percent).
- Strength of the U.S. dollar (56
percent).
Los Angeles small business owners embrace workplace
2.0Los Angeles area small business owners are paving the way
for more collaborative, tech-friendly and flexible work
environments. For example, most (89 percent) report technology
helps boost their business. Nearly as many (84 percent) report that
technology practices have helped to better serve customers and
expressed willingness to adopt new technologies in the future.
Collaboration is becoming increasingly important to area
business owners, with 39 percent saying their workplace has become
more focused on teamwork in the past five years. Collaboration is
increasing even as employers are offering more flexible work
arrangements, including telecommuting options (45 percent), which
nearly half of small business owners (48 percent) say improve
employee attitudes at work.
Area small business owners are beginning to offer nontraditional
perks as well, including areas to relax and unwind such as nap pods
or game rooms (20 percent), transportation stipends (19 percent) or
the ability to bring pets to work (17 percent).
Cybersecurity raises concerns; Los Angeles small businesses
preparingAlthough 14 percent of Los Angeles small business
owners have been the victim of a cybersecurity breach, nearly
two-thirds (63 percent) have expressed concerns about the security
of their customers’ proprietary data. In order to better protect
themselves, 71 percent are upgrading their technology once a year
or more. As a result, more than half (58 percent) of local business
owners feel prepared for a cybersecurity breach.
Los Angeles owners looking forward to a successful
year-endLos Angeles small business owners expect to end the
year on a high note: 79 percent say it’s likely they will hit their
year-end revenue goal. Many small business owners intend to offer
year-end perks to their employees, including salary bonuses (49
percent), a holiday party (47 percent) or holiday office closures
(47 percent).
When it comes to holiday shopping milestones, Black Friday and
Cyber Monday are not top revenue drivers for Los Angeles small
business owners. Fifty-five percent say Black Friday has no impact
on their business’ bottom line (compared to 58 percent a year ago),
and 59 percent think Cyber Monday is overhyped and has no
significance to their business’ bottom line (compared to 63 percent
in fall 2014).
For an in-depth look at the attributes of the nation’s small
business owners, read the full fall 2015 Bank of America Small
Business Owner Report, and for additional insights from small
business owners in Los Angeles and across the country, download the
Small Business Owner Report local insights infographic here.
About the Bank of America Small Business Owner ReportBraun
Research, Inc. conducted the Bank of America Small Business Owner
Report survey by phone from August 21 through September 22, 2015,
on behalf of Bank of America. Braun contacted a nationally
representative sample of 1,001 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 surveyed in each of 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 is +/- 5.7 percent, reported at a 95 percent confidence
level.
The Braun Research survey results conducted on behalf and for
the exclusive use 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 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 16,100
ATMs, and award-winning online banking with 32 million active users
and more than 18 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 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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