Mid-size business owners (MSBOs) maintain a positive business outlook.
- 87% believe their revenue will increase over the next 12 months.
- 80% plan to expand their business over the next 12 months.
- 69% plan to hire within the next 12 months.
- 84% said their revenues in 2023 are higher than in 2022.
For Small Business Owners (SBOs):
- 65% expect revenue to increase over the next 12 months (having remained flat since last spring).
- 39% plan to expand their business over the next 12 months.
- 30% plan to hire more employees in the next 12 months.
- 55% of companies reported that their business revenues in 2023 will be higher than in 2022.
The top economic concerns for MSBOs are the U.S. political environment (68%), inflation (67%), supply chains (66%) and consumer spending (66%). SBOs are more concerned about the U.S. political environment (75%) and inflation (73%), but also about healthcare costs (69%) and interest rates (63%). 61% of MSBOs and 56% of SBOs say they are concerned about an economic recession, both down from 72% last spring. Concerns about inflation have decreased slightly from this time last year, but 90% of MSBOs and 84% of SBOs still say inflation is currently affecting their business.
MSBOs' fundraising plans for the next year are increasing, with 93% of MSBOs planning to raise funds (90% in spring 2023). Fundraising plans are stable, with 54% planning to apply for a bank loan in the next 12 months. In contrast, SBOs' fundraising and loan application plans are decreasing, with 71% planning to raise business funds, down from 82% last spring. Additionally, 16% of SBOs plan to apply for a bank loan or line of credit this year, down from 24% last spring.
Small businesses are becoming more reliant on credit cards, with balances increasing 18% since 2019, according to a recent Small Business Checkpoint from the Bank of America Institute, based on small business credit card data compiled by the bank. While rising balances could be a cause for concern, the institute cited several reasons not to be pessimistic: First, inflation has increased by more than 22% since 2019, and inflation-adjusted credit card balances are at or below 2019 levels.
Second, credit card spending for small businesses has declined since 2023 across all categories, suggesting that small businesses are taking steps to control spending and reallocate or optimize cash flow. However, the Institute noted that the share of revolving (carrying over from one month to the next) credit card balances has increased after this behavior decreased during and after the pandemic, although the overall balance sheet position of small businesses remains relatively healthy.
Running a profitable business is important to business owners, but for many, it comes at personal and professional sacrifices: 70% of SBOs say they've made trade-offs to keep their business profitable, such as raising prices (47%), increasing work hours (45%) or taking a cut in their own pay (32%).
Business owners are implementing digital tools across their operations. In the past 12 months, most business owners (99% of MSBOs and 71% of SBOs) have optimized their business digitally. For many, that means conducting business banking online or via an app, accepting more cashless payment forms, and increasing their social media presence. Using digital tools helps business owners save time, stay organized, acquire new customers, increase customer satisfaction, and manage cash flow.
The majority of MSBOs (89%) plan to adopt artificial intelligence (AI) tools this year, using them to streamline payroll and bookkeeping (57%), aid recruiting efforts (49%), and differentiate themselves from competitors (44%).
Meanwhile, SBOs also value the benefits of AI tools, albeit to a lesser extent, with 37% planning to adopt them this year and saying they are using the technology in similar ways, including to differentiate themselves from competitors (47%), make payroll and bookkeeping more efficient (36%), and assist with recruiting efforts (25%).
For more insights from small business owners across the country, read the full 2024 Bank of America Executive Report.
Previously conducted as two separate reports aimed at small business owners, this year's report explores sentiment among businesses of different sizes.
Ipsos conducted the 2024 Bank of America Employer Report survey online from March 4 to March 28, 2024, using a pre-recruited online sample of small business owners. Ipsos surveyed 1,038 U.S. small business owners with annual revenues between $100,000 and $4,999,999 and 2 to 99 employees. In addition, Ipsos surveyed approximately 250 small business owners in each of 10 target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco and Washington, DC. Final results for the national and designated market area segments were weighted based on national benchmark criteria for size, revenue and geography.
Ipsos also interviewed 377 owners of mid-sized U.S. businesses with annual revenues between $5,000,000 and $49,999,999 and between 2 and 499 employees. The final results from this national segment and composite sample of small business owners were weighted based on national benchmark criteria for size, revenue and region.
The Bank of America Institute is committed to uncovering powerful insights that advance business and society. Founded in 2022, the Institute is a think tank that leverages data and analytics from across the bank and around the world to provide timely and unique perspectives on the economy, sustainability, and global transformation. The Institute leverages the depth and breadth of the Bank's proprietary data from 69 million consumer and small business customers, 57 million authenticated digital users, $4.1 trillion in total payment volume in 2023, and $1.27 trillion in consumer and wealth management deposits. From this robust dataset, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership addressing longer-term trends from across the bank and shares these findings with the public.
Bank of America is one of the world's leading financial institutions, providing a full range of banking, investing, wealth management and other financial and risk management products and services to individual consumers, small businesses and large corporations. The company offers unmatched convenience in the United States, serving approximately 69 million individual and small business customers through approximately 3,800 retail financial centers, approximately 15,000 ATMs and award-winning digital banking with approximately 57 million authenticated 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 to corporations, governments, institutions and individuals around the world. Bank of America provides industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves its customers through operations in the United States, its territories and more than 35 countries. Bank of America Corporation shares are listed on the New York Stock Exchange (NYSE: BAC).
Susan Atlant, Bank of America
Phone: 1.646.743.0791
susan.atran@bofa.com
Anu Ahluwalia, Bank of America
Phone: 1.646.855.3375
anu.ahluwalia@bofa.com
