Bank of America/CFI Group Small Business
Forecast Finds More Confidence About Growth Potential, Though Many
Still Taking Modest Approach to Hiring and Investing
Small business owners handed out significantly higher scores
when asked about the health of the economy and their potential for
economic growth than they did six months ago, according to the Bank
of America/CFI Group Small Business Forecast released today.
Small business owners rated the health of their local economy 20
percent higher than they did in August 2014. In addition, they are
14 percent more optimistic about their potential for economic
growth over the next six months. Overall, the small business
owners’ satisfaction/optimism index moved from a 69 to a 70, on a
scale of 1-100.
“Entrepreneurs are feeling the effects of an improving economy
and they believe 2015 will be a strong year for small businesses,”
said Robb Hilson, small business executive at Bank of America.
“Economic optimism is running high, and we’re excited to see how
small business owners’ enthusiasm and increased confidence will
shape their plans for long-term business growth.”
The Bank of America/CFI Group Small Business Forecast measures
the factors that drive development and the economy in the small
business community at large. Results of the study, which can be
found here, reveal small business owners’ expectations for
staffing, spending and revenue along with economic health and
lifestyle satisfaction in the coming year. The index results are
derived from a statistical model designed to identify the key
predictors of small business owners’ growth expectations.
Small business owners feel business is stronger yet remain
cautious about growthWhen asked to assess the health of their
small businesses, 37 percent of respondents said small businesses
are doing “well” or “very well,” up from 27 percent in August 2014.
On the flip side, just 15 percent feel the health of their small
business is “poor” or “very poor,” compared to 21 percent who
shared those responses six months ago. Similar to previous findings
though, entrepreneurs aren’t making immediate changes to their
business just yet and are still taking a relatively cautious
approach to growing in terms of hiring and investment.
One reason these businesses may be hesitant to make decisions
that affect growth could be attributed to difficulty in finding
qualified candidates to fill open positions at their companies,
with small business owners indicating a slight downturn (4 percent)
in availability of qualified candidates from six months ago.
Additionally, as the economy continues to improve, the survey
suggests that small business owners are increasingly worried about
staff turnover.
“We’re seeing a really dramatic shift in small business owners’
optimism about the health of the economy and the prospects for
their own businesses from just a few months ago,” said Rodger Park,
director of Customer Analytics at CFI Group. “However, the survey
results suggest that small business owners are still cautious about
making large staff and capital investments.”
Financial environment increasingly strong but taxes remain a
concernThe financial environment is also primed to support
small business growth, with small business owners rating their
access to credit up 7 percent from six months ago. Small business
owners also reported a better cash flow position for their
business, with research indicating a 4 percent improvement from the
previous study.
When it comes to characterizing the local tax environment for
small businesses, one-third (33 percent) of respondents say it is
“unfavorable,” while 12 percent say “very favorable.” This was
virtually unchanged from the August index.
Small businesses owners less concerned about risks to their
businessWhen asked about risks facing their business, small
business owners were less concerned across a variety of categories
than they were six months ago.
Health care costs continue to be viewed by small business owners
as the biggest risk facing their business, scoring a 56 out of a
100 on the Small Business Forecast. However, they are less
concerned than they were six months ago when health care cost risks
scored a 62, a 10 percent decrease from six months ago.
Other top risks highlighted by entrepreneurs include the
strength of the U.S. dollar, regulatory environment, consumer
spending and reputational risk. However, our top five risk
categories all scored lower when compared to six months ago.
Generations differ on confidence in the economy and growth
plansMillennials tend to be the most positive about the future
of their business, scoring 80 out of 100 in the Optimism category,
with Gen-Xers scoring 73 and boomers 67. They are also the most
confident about the state of the economy (58 out of 100), while
boomers are more negative (49). This was similar to findings in the
fall 2014 Bank of America Small Business Owner Report. In addition,
millennials are also most likely to plan to grow their business (65
out of 100), followed closely by Gen-Xers (61).
To receive a full copy of the report, please visit
http://www.cfigroup.com/. For additional insights, download the
Bank of America/CFI Group Small Business Forecast infographic
here.
Bank of AmericaBank of America is one of the world's largest
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
48 million consumer and small business relationships with
approximately 4,800 retail banking offices and approximately 15,800
ATMs and award-winning online banking with 31 million active users
and approximately 17 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
news.
www.bankofamerica.com
CFI GroupCFI Group is a global leader in providing customer
feedback insights through analytics. CFI Group provides a platform
that leverages the science of its exclusive partner, the American
Customer Satisfaction Index (ACSI) to assess the customer
experience across multiple channels, benchmark performance, and
prioritize improvement initiatives for maximum impact. Founded in
1988 and headquartered in Ann Arbor, Michigan, CFI Group serves
global clients from a network of offices worldwide. Its clients
span a variety of industries, including financial services,
hospitality, manufacturing, telecom, retail and government.
CFI Group conducted the second wave of the Bank of America/CFI
Group Small Business Forecast survey by phone between January 2 and
January 26, 2015. The nationally representative survey sample
included 1,000 small business owners and managers in the
continental U.S. whose companies reported annual revenue between
$100,000 and $5,000,000. Following data cleaning and validation,
995 responses were used for the analysis. Factor/Index scores have
a margin of error of approximately +/- 1.5 points and individual
item scores have a margin of error of approximately +/- 2.5 points
at the 95% level of statistical confidence.
Reporters May Contact:Don Vecchiarello, Bank of America,
1.980.387.4899don.vecchiarello@bankofamerica.comRich Rezler, Rezler
Communications, 1.734.358.1910rich@rezlercommunications.com
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