SAN FRANCISCO--(BUSINESS WIRE)--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 were approved.
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.
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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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