Small businesses are thinking big.
That, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report.
Most Dallas/Fort Worth-area small business owners anticipating year-over-year revenue growth and have plans to hire and expand in the year ahead, according to the survey.
While the majority of business owners are pleased with the direction of the economy, Dallas/Fort Worth entrepreneurs are struggling to land qualified employees in a highly competitive local job market.
The report, based on a semiannual survey of 1,000 small business owners across the country and the greater Dallas/Fort Worth area, revealed that 86 percent of entrepreneurs are confident their year-end revenue will exceed that of 2017. In addition, over the next 12 months:
• Seventy-one percent of Dallas/Fort Worth business owners anticipate their revenue will increase (vs. 73 percent in fall 2017)
• Eighty percent plan to expand (vs. 84 percent in fall 2017)
• Forty-one percent plan to hire (up from 25 percent in fall 2017, and the highest level in three years)
• Sixty-eight percent are confident their local economy will improve (vs. 61 percent in fall 2017)
• Fifty-nine percent express similar confidence in the national economy (vs. 48 percent in fall 2017)
• Eighteen percent intend to apply for a loan (vs. 11 percent in fall 2017, and the highest level in two years)
“Dallas/Fort Worth entrepreneurs are feeling upbeat about both the economy and their businesses and are positioned for revenue growth and expansion in the year ahead,” said Ryan Parker, Dallas/Fort Worth small business banker manager at Bank of America. “As they look to expand, business owners are taking the necessary steps to attract and retain employees, taking into account the challenges of competing for talent in one of the tightest job markets in half a century.”
While they have hiring plans, small business owners in the Dallas/Fort Worth area acknowledge that identifying and retaining employees has become a significant challenge. In the last year, turnover affected 26 percent of Dallas/Fort Worth entrepreneurs. Among business owners who sought to hire new employees, 50 percent say they had difficulty finding qualified candidates, in large part due to the tightening job market.
To adjust to these challenges, business owners have modified their hiring strategies to find and recruit top talent by:
• More actively using social media (23 percent)
• Shifting to a more flexible culture in terms of hours, location and extra time off (22 percent)
• Offering higher salaries (15 percent)
When it comes to the top characteristics Dallas/Fort Worth business owners look for in potential job candidates, they primarily value integrity (61 percent), previous work experience (55 percent), and passion for the work and mission of the business (48 percent).
Aligning with their positive economic outlook, the survey found a general trend of declining concern over most economic factors that are tracked among Dallas/Fort Worth business owners. Health care costs remain the top economic concern at 55 percent, a decrease of 10 percentage points since fall 2017. Concern over corporate taxes decreased significantly, with only 33 percent identifying this as a burdensome issue nearly a year after the enactment of U.S. tax reform, down from 48 percent in fall 2017.
Perhaps a result of recent changes to and uncertainty about trade policies, 35 percent of Dallas/Fort Worth business owners identify U.S. trade policy as an economic concern. Thirty-three percent say the latest tariffs/U.S. trade policies have impacted their business, with 13 percent reporting both positive and negative effects, 10 percent reporting a negative impact and 10 percent reporting a positive impact.
Dallas/Fort Worth business owners are feeling the holiday spirit as 86 percent plan to offer at least one holiday perk to their employees. The top holiday perks planned this year are office closures (54 percent), flexible hours or vacation time (42 percent) and gifts for employees (42 percent). Finally, despite unique challenges in managing a small business, Dallas/Fort Worth entrepreneurs love what they do. Ninety-one percent say the added stress of entrepreneurship has been worth it, and 88 percent would recommend that others follow in their footsteps.
Nationally, small business owners are upbeat too, looking to expand and worrying less about financial concerns like health costs.
That’s the finding of a survey of 1,067 owners released last week by Bank of America. The survey shows owners are optimistic about the short and long term. Fifty-seven percent said they expect their revenue to increase in the next 12 months, and 56 percent have plans to increase business over the next five years. Two-thirds said they’re planning to expand in the coming year.
The survey also shows owners are less worried about health care costs than they were a year ago even as the price of insurance is still an issue for many. Sixty-three percent called health care a concern, compared to 72 percent a year ago. Owners were also less concerned about consumer spending, commodities prices, the strength of the dollar and minimum wage increases. But they were slightly more concerned about interest rates, not surprising considering that the Federal Reserve has raised rates four times in the past year.
The survey was conducted between late August and mid-September.
For a complete, in-depth look at the insights of the nation’s small business owners, read the fall 2018 Bank of America Business Advantage Small Business Owner Report and for additional insights, download the Small Business Owner Report infographic.
GfK Social and Strategic Research conducted the Bank of America Small Business Owner Report Survey for Fall of 2018 online between August 30 and September 13, 2018 using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,067 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees. In addition, a total of approximately 300 small business owners were also surveyed in each of ten target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C.