Bank of America Corp : Bank of America Small Business Owner Report Finds San Francisco Small Business Owners More Confident in Local Economy Than National Economy
05/17/2012| 09:35am US/Eastern
Study Cites Rising Health Care Costs, Credit Availability and
Recovery of Consumer Spending Are All Top Concerns for San Francisco
Small Business Owners
Bank of America today released its inaugural Small
Business Owner Report1, a semi-annual study exploring the
concerns, aspirations and perspectives of small business owners across
the country. The survey, which includes an oversampling of small
business owners across the San Francisco market, uncovered that 52
percent of San Francisco small business owners surveyed are confident
their local economy will improve in the next 12 months, versus 42
percent who are confident the national economy will improve during the
same period. The report found that San Francisco small business owners
are more confident in their local economy than any other market
surveyed. Additionally, 65 percent of San Francisco small business
owners said that the local economy plays an important role in the
success of their business.
Small business owners in San Francisco have a number of specific
concerns about the economy's impact on the success of their business,
including health care costs (66 percent), credit availability (64
percent) and recovery of consumer spending (64 percent). Nationally,
however, the majority of small business owners found effectiveness of
U.S. government leaders to be their top concern (75 percent), while in
San Francisco only 56 percent of respondents felt this was an issue, the
lowest of all markets surveyed.
"The report reveals a streak of optimism and slightly greater confidence
among San Francisco small business owners when compared to the rest of
the nation, but a number of economic factors continue to present
challenges," said Martin Richards, San Francisco market president for
Bank of America. "Health care costs have been and continue to be the top
concern among San Francisco small business owners, adding to concerns
about a sustained recovery of consumer spending. Yet, despite the
immense pressures they face and sacrifices they make, San Francisco
small business owners remain confident about their future."
The survey found that running a small business is the most stressful
aspect of a San Francisco small business owner's lives. When asked to
identify one of the most stressful areas of their life, managing the
ongoing success of a small business was cited as the most stressful
aspect of their life (39 percent), more than three times as stressful as
raising children (11 percent) and almost four times as stressful as
maintaining a healthy relationship with a spouse or partner (10
percent). When asked what sacrifices had to be made in the past year for
the sake of their small business, more than half (53 percent) of San
Francisco small business owners cited finding time for themselves as
their top sacrifice, followed by keeping physically fit (39 percent) and
managing their own personal finances (16 percent).
San Francisco small business owners' concerns related to revenue
growth and talent
Despite day-to-day stresses, many small business owners in San Francisco
have expressed optimism about the future of their business, with more
than half (57 percent) of respondents anticipating an increase in
revenue over the next 12 months. When asked to identify the most
important action they plan to take to help generate this revenue, two in
five (42 percent) San Francisco small business owners cited increasing
the marketing of their business to acquire new customers.
When it comes to talent, one in four (27 percent) San Francisco small
business owners cited finding skilled employees as their top concern,
followed by providing competitive salaries (21 percent) and providing
competitive health care and retirement benefits (19 percent). Despite
acknowledging the importance of attracting and retaining top candidates,
39 percent of San Francisco small business owners admit to not offering
any type of financial benefits package to their employees, with only 19
percent said they offer their employees a 401(k) plan.
However, when asked how to describe their staffing projections over the
upcoming 12 months, one in four (24 percent) San Francisco small
business owners said they plan to hire more employees, with 58 percent
stating they plan to keep their staffing projections consistent.
San Francisco small business owners need more financial expertise
Slightly more than one in four (27 percent) San Francisco small business
owners consider themselves to be very financially savvy. The remaining
respondents admit to needing occasional or ongoing expert help. San
Francisco small business owners rely on a wide range of resources for
financial guidance, as shown in the graph below.
When asked if they could change one aspect of what their bank provides
their business, San Francisco small business owners most frequently
cited an enhanced level of expertise and more customized services, while
lower costs associated with the financial services they receive ranked
extremely low on their priority list.
"San Francisco small business owners are confident in their financial
acumen, but the survey also shows they're hungry for additional
expertise," said Emily Shanks, Small Business Banker regional executive,
West Region at Bank of America. "The best way to provide that support is
to have boots on the ground living and working alongside San Francisco
small businesses, which is the impetus behind the small business bankers
we're in the process of hiring here and across the country."
Bank of America has continued to actively lend to small businesses
across the U.S. and California. In the first quarter of 2012, Bank of
America extended $669.2 million in credit across California to
businesses with less than $20 million in revenue. This number includes
$356.6 million in new originations, which has helped enable Bank of
America to exceed its national small business lending pledge to the
White House and the SBA.
According to the Bank of America Small Business Owner Report, 62
percent of San Francisco small business owners believe they currently
have enough capital to effectively run their business. When asked what
their biggest challenge is with managing cash flow, two in five
respondents (40 percent) cited not getting paid on time by clients and
customers, followed by low profits/lack of business (29 percent) and not
invoicing customers in a timely fashion (9 percent).
Of the 300 San Francisco small business respondents, 45 percent have
applied for a loan within the past two years, and of those 65 percent
1 See "About the Bank of America Small Business Owner Report"
section for information about survey methodology.
About the Bank of America Small Business Owner Report
Braun Research conducted the Bank of America Small Business Owner Report
survey by phone between March 17 and April 9, 2012 on behalf of Bank of
America. Braun contacted a nationally representative sample of 1,000
small business owners in the United States with annual revenue between
$100,000 and $4,999,999 and employing between 2 and 99 employees. In
addition, 300 small business owners were also surveyed in nine target
markets including Los Angeles, Dallas, Washington, D.C., Metro New York,
Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error
for the national sample is +/- 3.1 percent, and +/- 5.7 percent for the
oversampled markets, with both reported at a 95 percent confidence level.
Bank of America
Bank of America is one of the world's largest 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 57 million consumer and small business
relationships with approximately 5,700 retail banking offices and
approximately 17,250 ATMs and award-winning online banking with 30
million active users. Bank of America is among the world's leading
wealth management companies and is a global leader in 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 4 million small business owners through a suite of
innovative, easy-to-use online products and services. The company serves
clients through operations in more than 40 countries. Bank of America
Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial
Average and is listed on the New York Stock Exchange.
For more Bank of America news, visit the Bank
of America newsroom.
The Braun Research survey results conducted on behalf of Bank of America
and interpretations in this release are not intended, nor implied, to be
a substitute for the professional advice received from a qualified
accountant, attorney or financial advisor. Always seek the advice of an
accountant, attorney or financial advisor with any questions you may
have regarding the decisions you undertake as a result of reviewing the
information contained herein. Nothing in this report should be construed
as either advice or legal opinion.
© 2012 Bank of America Corporation. All rights reserved.
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