Percentage of Small Businesses Looking to Expand Rises
All this year, we’ve talked repeatedly about small business optimism and the historic highs that positive sentiment among entrepreneurs has reached. Now yet another study has found that small business owners are feeling cheery about their prospects, with more businesses looking to expand in the year ahead. Additionally, according to the Fall 2018 Bank of America Business Advantage Small Business Owner Report, the majority of entrepreneurs continue to be confident about the U.S. economy as well as their local economies and expect revenues to increase in the new year.
In nearly every positive measure, the Fall 2018 edition of B of A’s semi-annual report topped last year’s release. The latest report found that 57% of business owners believe their revenues will increase in the next 12 months — up six percentage points from Fall 2017. Likewise a full two-thirds of businesses say they have plans to expand, compared to 59% who said the same last year. As mentioned, having confidence that both the national and local economies would improve in the coming year became a majority opinion, coming in at 55% and 54% respectively (and rising from 46% and 48% last fall). Finally the percentage of business owners who intend to apply for a loan in the coming months nearly doubled, climbing from 8% to 15%.
Of course another recurring theme that’s emerged in recent months is that businesses are finding it harder to fill open positions. Bank of America’s report shows similar concerns as 50% of respondents said the current labor market has had a direct effect on their ability to hire. Furthermore small businesses are having to compete to retain employees, with 24% saying turnover has impacted their operations and 11% saying they’ve lost upwards of 10% of their workforce in the past year. So, while 27% of owners say they plan on hiring in the next year (up from 16% in 2017), many are making changes to their hiring process and policies. According to B of A, 23% of business owners report using social media more actively in order to attract workers while 9% have turned to outside recruiters to help their efforts. In addition to the 17% of businesses that have been offering higher salaries, one-quarter say they’ve been adjusting perks such as time off, flexible hours, and to entice new talent. Interestingly another strategy cited by small businesses was promoting their community impact and charity work, which 12% of owners say they’ve done to help with hiring.
On the whole, the latest Bank of America Business Advantage Small Business Owner Report drives home many of the same points we’ve seen from similar surveys. However it is fascinating to see some of the other ways small business owners are attempting to compete in the competitive job market aside from just raising wages. Assuming that the economy continues along as strongly as the majority of entrepreneurs think it will, expect businesses to grow even more creative with this hiring strategies and they seek expansion in 2019.