A majority of small and mid-sized business owners expect their revenues to increase this year, and their worries over a recession have declined, according to the 2024 Bank of America Business Owner Report, conducted in partnership with Bank of America Institute.
The survey states while business owners remain mindful of the impacts of inflation and interest rates on their bottom lines, both concerns have lessened since the spring of 2023. Despite some lingering uncertainties over the broader economy, business owners plan to expand their businesses in the year ahead.
“Small business owners remain cautiously optimistic in 2024,” says Sharon Miller, president and co-head of Business Banking at Bank of America. “With anticipated revenue increases, many are focused on engaging with customers and implementing new technologies that will help them differentiate their businesses.”
The 2024 Bank of America Business Owner Report includes input from more than 1,400 small and mid-sized business owners (defined as businesses with $100,000 to $5 million and $5 million to $50 million in annual revenues, respectively). The report explores the viewpoints, goals, concerns, and outlooks of business owners nationwide.
“Our report finds that most mid-sized business owners are planning to expand their businesses and hire in the coming year,” says Raul Anaya, president and co-head of Business Banking at Bank of America. “Most of these business owners are confident in their revenue growth as well as in the local, national, and global economies.”
When looking at attitudes concerning the national economy, business owners’ outlooks varied by the size of their business. About 75 percent of mid-sized business owners expect the national economy to improve over the next 12 months, while just 33 percent of small business owners expect the same.
Mid-sized business owners (MSBOs) maintain a positive business outlook:
- 87 percent believe their revenue will increase over the next 12 months.
- 80 percent plan to expand their businesses in the year ahead.
- 69 percent plan to hire over the next 12 months.
- 84 percent said their revenues were higher in 2023 than in 2022.
Among small business owners (SBOs):
- 65 percent expect their revenue to increase in the year ahead (holding steady since last spring).
- 39 percent plan to expand their business over the next year.
- 30 percent plan to hire more employees over the next 12 months.
- 55 percent reported higher business revenues in 2023 than in 2022.
Top economic concerns for MSBOs include the U.S. political environment (68 percent), inflation (67 percent), supply chain (66 percent), and consumer spending (66 percent). SBOs share concern over the U.S. political environment (75 percent) and inflation (73 percent) but are also concerned about health care costs (69 percent) and interest rates (63 percent).
About 61 percent of MSBOs and 56 percent of SBOs noted concerns about recession, both down from 72 percent last spring. While concerns over inflation have come down slightly since this time last year, 90 percent of MSBOs and 84 percent of SBOs still say that inflation is currently impacting their business.
Funding plans have increased for MSBOs in the year ahead, with 93 percent of MSBOs planning to obtain funding (90 percent in spring 2023). Financing plans have stayed steady with 54 percent planning to apply for a bank loan in the next 12 months.
In contrast, funding and loan application plans have decreased for SBOs – with 71 percent planning to obtain funding for their business, down from 82 percent last spring; and 16 percent of SBOs plan to apply for a bank loan or line of credit this year, down from 24 percent last spring.
According to Bank of America Institute’s recent Small Business Checkpoint, small businesses have become more reliant on credit cards, with balances up 18 percent since 2019, based on the bank’s aggregated small business credit card data. While rising balances could raise some concerns, the Institute notes a few reasons to be less pessimistic.
First, inflation increased over 22 percent since 2019, so inflation-adjusted credit card balances are comparable to, or even lower than, 2019 levels.
Second, across all categories of small business credit card spending, levels have come down since 2023, suggesting small businesses are taking steps to manage spending and reallocate or optimize cash flow.
According to the Institute, while balance sheet conditions are relatively healthy for small businesses overall, an increasing portion of their credit card balances are revolving — carrying from one month to the next — after a decline in this behavior during and post pandemic.
Running a profitable business is important to business owners and, for many, it comes with personal and professional sacrifices. About 70 percent of SBOs say they have made tradeoffs to maintain their business’ profitability, such as increasing prices (47 percent), working more hours (45 percent), and reducing their own salary (32 percent).
Business owners are implementing digital tools across their operations. Over the past 12 months, most business owners (99 percent of MSBOs and 71 percent of SBOs) have digitally optimized their business. For many, that means doing their business banking online or via an app, accepting more forms of cashless payments, and/or bolstering their social media presence.
Using digital tools has helped business owners save time, stay organized, reach new customers, increase customer satisfaction, and manage cash flow.
The vast majority of MSBOs (89 percent) plan to implement artificial intelligence (AI) tools this year. They plan to use these tools to streamline their payroll and bookkeeping (57 percent), assist with hiring efforts (49 percent), and stand out from competitors (44 percent).
Meanwhile, SBOs also are evaluating the benefits of AI tools, albeit to a lesser extent, with 37 percent planning to implement AI tools this year — citing similar ways they may use the technology, including to differentiate themselves from competitors (47 percent), streamline their payroll and bookkeeping (36 percent), and assist with hiring efforts (25 percent).
For an in-depth look at the insights of the nation’s small and mid-sized business owners, visit here.
Ipsos conducted the 2024 Bank of America Business Owner Report survey online between March 4 and March 28, using a pre-recruited online sample of small business owners.
Ipsos contacted a national sample of 1,038 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, approximately 250 small business owners were surveyed in each of 10 target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco, and Washington, D.C. The results for the national and designated market area segments were weighted to national benchmark standards for size, revenue, and region.
