Image: Bank of America
Business owners are often typecast as an optimistic bunch, but a recent survey indicates that less experience in business might be another predictor of optimism.
In August and September, Bank of America surveyed a nationally representative sample of 1,001 small business owners in the U.S. with annual revenue between $100,000 and $4,999,999 and between 2 and 99 employees. Responses to the bi-annual survey showed revenue growth expectations and hiring plans to be at a three-year high. Bank of America says small business optimism is at its highest since the survey’s inception in 2012. More than 60 percent of respondents forecast improvements in their local economy in 2016, and more than half believe the national economy will improve in the next 12 months.
But new small business owners were more optimistic than established owners. More than 70 percent of newbies expect to see local economic improvements, and 65 percent predict national improvements. Millennial and GenX (ages 18-34 and 35-49) small business owners exhibited even more confidence: 74 percent say the local economy will improve and 70 percent see the national economy headed up.
Overall, 67 percent of small business owners plan to hire more employees over the next 12 months–more than double the number of owners that claimed in the fall of 2013 to have hiring plans. But 80 percent of Millennials and 73 percent of Gen-Xers plan to hire. Just 43 percent of Baby Boomers do.
A parallel survey analyze the mindset of small business owners in 9 local markets across the country. It found that in Washington, DC, Miami, and Dallas/Fort Worth, more than three-fourths plan to grow their business over the next five years. In Atlanta, San Francisco, and Metro New York 70 percent or more expect their revenues to increase in the next year.
Greater numbers of small business owners this year are also confident about hitting their year-end revenue goals than last year and about the impact Black Friday and Cyber Monday will have on their business’ bottom line.
Small business owners “see a light at the end of the tunnel,” said Bank of America Small Business executive Robb Hilson. “Even with instability in the global markets and the uncertainty they have about the upcoming election, small business owners are confident and ready to expand their businesses.”
The good news for Bank of America is that more small businesses are applying for loans. More than one-third of respondents said they will apply for a loan in 2016, and 44 percent reported applying for a loan in the past two years–up from 29 percent a year ago.