Survey finds Texas business owners expect business to be better in the next six months with younger business owners most confident

McLean, Va. (September 29, 2015) - Fifty-seven percent of small business owners find business conditions in Texas to be excellent or good, eight points more than the national average of 49 percent, according to Capital One's Spark Business Barometer, an ongoing survey measuring the economic perceptions and financial conditions of small business owners, as well as the most common trends and challenges facing entrepreneurs and local businesses.

More than half of business owners in Texas (57 percent) feel significantly more positive about current business conditions in their area than those in New York City (48 percent), but they are less optimistic than their surveyed peers in San Francisco (65 percent) and Washington, D.C. (60 percent). In Texas, women-owned businesses are more likely to acknowledge that business conditions are excellent or good than minority-owned businesses (53 percent vs. 34 percent).

The survey also finds that respondents in Texas are more likely to expect their financial position to be much better (16 percent) in the next six months, compared with just 10 percent nationally. Younger business owners (under age 50) in Texas are more positive about business conditions and 56 percent anticipate an improvement in their financial position in the next six months (compared to 31 percent of business owners ages 50 and older).

'In Texas, there are real signs of small business optimism,' said Paul Davidson, Capital One Bank's Business Banking Group Sales Manager for Texas. 'Seeing the majority of businesses gain financial strength in this business environment is a great indicator of the positive outlook ahead for business owners.'

The latest Capital One Spark Business Barometer uncovered the following insights related to Texas-based small business sentiment and plans for the future:

There are notable discrepancies in the optimism and performance of business owners of varying demographics:

· In Texas, minority-owned businesses are 15 times more likely than women-owned businesses to say that they expect their financial positions to worsen in the next six months.

· Despite their poor outlook, almost twice as many minority business owners express a greater interest in hiring new staff to support their businesses compared to women-owned businesses (37 percent vs. 20 percent).

· Almost half (48 percent) of surveyed business owners under the age of 50 say that their sales over the past six months have increased, compared to only one-third (33 percent) of business owners ages 50 and older.

· Twice as many younger business owners (under the age of 50) plan to hire additional employees in the next six months (38 percent vs. 19 percent of older business owners ages 50+).

Technology investments are not a main priority for business owners in Texas and it is mostly pursued by those who have performed well in the past year:

· Millennials (ages 18-34), Gen X (ages 35-49) and Baby Boomers (ages 50-69) are more likely to invest in commerce or digital tools than older small business owners ages 70+ (17 percent vs. two percent).

· Firms that plan to invest in commerce/digital tools (50 percent), technology for interacting with clients (51 percent), and tools to increase efficiency (54 percent) are more likely to have seen improvement in their financial positions in the last year.

· Significantly fewer small business owners in Texas indicate they plan to increase their budget for digital payment solutions in the next 12 months (4 percent), compared to those in New York City (8 percent), Washington, D.C. (9 percent), or San Francisco (9 percent).

Small business owners in Texas are not prepared to shift their payment systems to incorporate EMV/chip-and-PIN cards:

· A majority of small business owners ages 70+ are not aware of EMV/chip-and-PIN credit cards (73 percent).

· Minority-owned businesses are also less likely to be aware of EMV, with 71 percent saying that they had never heard of EMV.

Capital One also conducted similar research studies within three U.S. markets including the New York City DMA, San Francisco DMA, and Washington D.C. DMA.

Capital One is committed to understanding the challenges, trends and perceptions that affect small businesses' overall performance and day-to-day operations. Follow along on Facebook at Capital One Small Business and on Twitter at@CapitalOneSpark . Use hashtag #SparkBizBarometer to follow the conversation.

Survey Methodology

The following presents a summary the methodology used to execute Capital One's 1H 2015 Small Business Barometer Survey, conducted by the market research and business intelligence firm ORC International. For this telephone study, ORC interviewed a sample of 250 for-profit small businesses in Texas. Small businesses are defined as those with total annual revenues less than $10 million. Interviews were conducted from July 15 - August 3, 2015. One respondent per business was interviewed. The margin of error is +/- 6.2 percentage points at a 95% confidence level.

The initial sample for this study was constructed using a random selection from the extensive business database maintained by Infogroup, Inc., and drawn to be representative of qualifying small businesses throughout Texas by industry and employee size. To compensate for variation in response rate among different types of businesses, final data were weighted by gender and industry to help ensure the final results are proportionally representative of the small business population in that area.

About Spark Business

Capital One® offers a broad spectrum of financial products and services to consumers, small businesses, and commercial clients. Spark Business from Capital One comprises a suite of products and services specifically designed for small business, including credit cards with unlimited rewards, no-fee checking and savings, and secure and flexible merchant service offerings. Spark Business provides tips, resources, and inspiration to help your business thrive atwww.SparkBusinessIQ.com . For more information, visitwww.capitalone.com/smallbusiness .

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