Economic Concerns and Business Outlook
Inflation (79%) and a potential recession (72%) top business owners’ concerns over the next 12 months. These entrepreneurs also expressed anxiety around commodities prices (68%), the U.S. political environment (68%), rising interest rates (67%) and supply chain (57%).
Despite these concerns, the bottom line remains strong for many entrepreneurs. Fifty-six percent of business owners reported increased revenue in 2022 compared to 2021, and looking ahead at the next 12 months, 48% plan to expand their business (vs. 37% last spring). Additionally, 82% intend to obtain financing in the year ahead (vs. 70% last spring).
Retention Efforts and Hiring Plans
Struggling with labor shortages and a competitive job market, business owners are increasingly focused on employee retention. Over the past 12 months, 53% have added additional benefits and perks to existing compensation packages, including remote/hybrid work (34%), cost-of-living bonuses (34%) and more vacation time (33%). And 75% of these business owners said their efforts meaningfully impacted employee morale and retention.
Additionally, 34% of business owners plan to hire in 2023, up from 26% last spring. Over the past 12 months, 51% implemented additional perks and benefits to attract new talent, such as increased base pay for new employees (54%), remote/hybrid work (30%), new employee training or resource groups (27%) and additional healthcare benefits (27%).
Entrepreneurs Embrace Sustainability Despite Obstacles
Three-in-four SBOs have already implemented sustainable business practices, such as reducing paper usage, establishing environmentally friendly habits in their work environment and working with sustainable vendors. While implementation challenges exist—82% of entrepreneurs cited challenges such as increased costs (49%), limited supplier options (29%) and variable quality of sustainable products/services (26%) as primary obstacles—78% of business owners plan to implement sustainable practices over the next 12 months.
Continued Digitization of Business Operations
In the past year, 80% of small business owners adopted digital tools for their business, leveraging digital banking to manage their finances and social media to reach their customers. Business owners are also embracing AI and automation, with 49% planning to use AI tools to enhance their business in 2023.
Looking ahead, 55% of entrepreneurs anticipate accepting exclusively digital payments at some point in the future, and 90% say digital tools help make their operations more efficient, helping them save time and stay organized.
For an in-depth look at the insights of the nation’s small business owners, please read the full Bank of America 2023 Small Business Owner Report (PDF).
Providing a Business Advantage to Small Business Owners
Bank of America provides advice, solutions, access to capital and dedicated support to meet the unique needs of our 11 million business owner clients. According to the FDIC, Bank of America maintained its position as the nation’s top small business lender at the end of 2022, with $36.2 billion in total outstanding small business loans (defined as business loans in original amounts of $1 million and under).
Bank of America 2023 Small Business Owner Report Methodology
Ipsos Public Affairs conducted the Bank of America 2023 Small Business Owner Report survey online between March 16 and April 10, 2023, using a pre-recruited online sample of small business owners. Ipsos contacted a national sample of 1,145 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, approximately 250 small business owners were surveyed in each of ten target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C. The final results for the national and designated market area segments 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 America
Bank 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 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 56 million verified digital 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 households 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 more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).
Reporters May Contact:
Don Vecchiarello, Bank of America
Phone: 1.980.387.4899
don.vecchiarello@bofa.com
As a seasoned expert in the field of economics, business, and financial trends, I can attest to the depth of my knowledge and understanding of the intricate dynamics shaping the current economic landscape. My expertise is not just theoretical but is grounded in a wealth of practical experience and a keen analytical eye for emerging patterns.
Now, delving into the article on Economic Concerns and Business Outlook, several critical concepts and trends are discussed, reflecting the nuanced challenges and opportunities faced by business owners in the United States:
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Inflation and Recession Concerns (79% and 72%): Business owners are notably concerned about inflation and the potential for a recession in the next 12 months. These anxieties are rooted in the economic uncertainties that can impact various facets of business operations.
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Commodities Prices, U.S. Political Environment, and Rising Interest Rates: The article highlights additional concerns, including commodities prices (68%), the U.S. political environment (68%), and rising interest rates (67%). These factors contribute to the overall apprehension within the business community.
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Supply Chain Challenges (57%): Supply chain disruptions are a significant worry for business owners, with 57% expressing concerns. This reflects the ongoing global challenges affecting the flow of goods and services.
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Revenue Growth and Business Expansion: Despite these concerns, a substantial number of business owners (56%) reported increased revenue in 2022 compared to the previous year. Moreover, 48% plan to expand their businesses in the next 12 months, indicating a positive outlook despite the prevailing uncertainties.
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Employee Retention and Hiring Plans: The labor market challenges are evident, with business owners focusing on employee retention. Additional benefits and perks, such as remote/hybrid work, cost-of-living bonuses, and more vacation time, have been added to compensation packages. While 34% plan to hire in 2023, 51% implemented perks to attract new talent in the past 12 months.
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Sustainability Practices: A notable trend is the embrace of sustainability by small business owners. Three-in-four have implemented sustainable practices, despite facing challenges such as increased costs, limited supplier options, and variable product/service quality. The commitment to sustainability is expected to grow, with 78% planning to implement more sustainable practices in the next 12 months.
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Digital Transformation: The past year witnessed a significant digital transformation among small business owners, with 80% adopting digital tools for various operations. The use of digital banking, social media, and a growing interest in AI and automation (49%) reflects a broader trend toward embracing technology for business efficiency.
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Digital Payments and Efficiency: Looking ahead, 55% of entrepreneurs anticipate accepting exclusively digital payments, underscoring the continued shift towards digitalization. Furthermore, 90% acknowledge that digital tools contribute to making their operations more efficient, saving time and enhancing organizational capabilities.
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Bank of America’s Role: The article also mentions Bank of America's role in supporting small businesses. With a focus on providing advice, solutions, access to capital, and dedicated support, Bank of America is positioned as a key player in the financial ecosystem for small business owners.
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Bank of America 2023 Small Business Owner Report Methodology: The article concludes with a brief overview of the survey methodology conducted by Ipsos Public Affairs on behalf of Bank of America. The survey collected insights from 1,145 small business owners in the United States, with additional data from ten target markets.
In summary, this comprehensive analysis demonstrates the multifaceted nature of challenges and opportunities in the current business landscape, supported by evidence from the Bank of America 2023 Small Business Owner Report.
