Entrepreneurs Split on Impact of Tax Reform,
Trade Policies Economic Outlook Conforms With Slower Economic
Growth
U.S. entrepreneurs continued to project a strong business
outlook this spring even as confidence in the national and local
economy weakened, according to the spring 2019 Bank of America
Business Advantage Small Business Owner Report. Health care costs
and the political environment topped the list of small business
owners’ concerns for the year ahead, while entrepreneurs reported a
mixed view on the impact of last year’s landmark tax reform and
shifts in trade policy.
The report, based on a semiannual survey of more than 1,500
small business owners across the country, reveals that:
Small business owners’ business outlook over the next 12
months remains strong and steady:
- Sixty-seven percent of entrepreneurs
plan to expand their business (steady from fall 2018).
- Fifty-nine percent believe their
revenue will increase (vs. 57 percent in fall 2018).
- Twenty-four percent plan to hire (vs.
27 percent in fall 2018).
- Twelve percent plan to apply for a loan
(vs. 15 percent in fall 2018).
While their economic outlook weakens slightly:
- Forty-eight percent are confident the
national economy will improve (vs. 55 percent in fall 2018).
- Fifty-one percent express similar
confidence in their local economies (vs. 54 percent in fall
2018).
- Top economic concerns have all risen
since fall 2018, including health care costs (66 percent), interest
rates (48 percent), stock market and consumer spending (both 47
percent).
- The political environment, a new
concern measured this spring, ranks as business owners’
second-greatest concern (65 percent).
“Small business owners remain optimistic about the outlook for
their own businesses and project revenue increases in the year
ahead,” said Sharon Miller, head of Small Business, Bank of
America. “However, these entrepreneurs are also feeling slightly
less confident in the economy and are expressing more concern about
a variety of economic factors.”
Entrepreneurs split on effects of recent policy changes,
contemplate impact of climate change
Nearly two-thirds of entrepreneurs expressed concern about the
current political environment, though they are divided over how
major policy issues are directly impacting them. Half of small
business owners say the new tax code has impacted their business —
with 28 percent reporting that impact as positive. This is down
from the 45 percent who anticipated a positive impact one year
ago.
Regarding U.S. trade policy, 41 percent say they have been
impacted by tariffs, with 18 percent reporting a negative impact, 9
percent reporting a positive impact and 14 percent reporting a
mixed impact. Additionally, 33 percent of entrepreneurs say they’re
concerned about climate change affecting their business.
Most business owners preparing for the worst — but are they
doing enough?
Unexpected or major economic events can transform a business in
the blink of an eye. While most entrepreneurs are taking steps to
protect their business from potential threats, such as natural
disasters, an economic downturn or a cyber-breach, a sizeable
number are not. Additionally, most entrepreneurs do not have a plan
to address reputational crises or challenges.
- Sixty-one percent have a business
continuity plan in case of a flood, fire or other disaster, though
39 percent do not have such a plan.
- Sixty-nine percent have taken steps to
prepare for an economic downturn, while 31 percent have not.
- Eighty percent of business owners have
taken at least one step to protect customer data from a
cyber-breach, while 20 percent have not taken any steps.
- Seventy-six percent do not have a plan
to manage reputational issues and threats.
Perhaps a result of growing up in a time of greater economic
turmoil, millennial business owners are more likely to have taken
steps to prepare their business for an economic downturn (79
percent vs. national average of 69 percent) and are more likely to
have a plan in place to address reputational issues (36 percent vs.
national average of 24 percent).
The power of posts — are online reviews more of a trust
broker or breaker?
Customer feedback holds tremendous sway in the digital era, with
online reviews serving as a powerful channel for sharing both
compliments and criticisms. While a majority of business owners
have received a negative online review of their business (54
percent), more believe positive reviews have greater impact than
negative ones (62 percent vs. 38 percent).
Furthermore, 63 percent say reviews are important to the success
of their business, with 80 percent reporting that positive reviews
have helped generate business opportunities. However, recognizing
that negative reviews also have an impact, 66 percent of business
owners who have received one say they respond as soon as possible
to limit the reputational damage.
For a complete, in-depth look at the insights of the nation’s
small business owners, read the spring 2019 Bank of America
Business Advantage Small Business Owner Report. For additional
insights, download the Small Business Owner Report infographic.
Bank of America Business Advantage Small Business Owner Report
SurveyIpsos Public Affairs conducted the Bank of America Small
Business Owner Report Survey for spring 2019 online between
February 8 and February 24, 2019, using a pre-recruited online
sample of small business owners. Ipsos contacted a national sample
of 1,504 small business owners in the United States with annual
revenue between $100,000 and $4,999,999 and employing between two
and 99 employees. In addition, a total of approximately 300
small business owners were also surveyed in each of 10 target
markets: Atlanta, Boston, Chicago, Dallas, Houston, 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.
Prior to 2016, previous waves of the Small Business Owner Report
Survey were conducted by telephone, and while best efforts were
made to replicate processes, differences in sample, weighting and
method suggests caution when making direct statistical comparisons
of the results from pre-2016 and post-2016.
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
66 million consumer and small business clients with approximately
4,400 retail financial centers, including approximately 1,800
lending centers, 2,200 financial centers with a Consumer Investment
Financial Solutions Advisor, and 1,500 business centers;
approximately 16,400 ATMs; and award-winning digital banking with
more than 37 million active users, including over 27 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 across
the United States, its territories and approximately 35 countries.
Bank of America Corporation stock (NYSE: BAC) is listed on the New
York Stock Exchange.
For more Bank of America news, including dividend announcements
and other important information, visit the Bank of America
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www.bankofamerica.com
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version on businesswire.com: https://www.businesswire.com/news/home/20190430005065/en/
Reporters May Contact:Don Vecchiarello, Bank of America,
1.980.387.4899don.vecchiarello@bankofamerica.com
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