Local Entrepreneurs Turn to Family, Friends and Community as They Grow Their Businesses
Atlanta small business owners’ expectations for future growth are higher than those of their peers nationwide, according to the fall 2016 Bank of America Small Business Owner Report. Seventy-one percent of local small business owners expect their revenue to increase over the next 12 months, compared to the national average of 52 percent and highest among the 10 major cities surveyed. Atlanta entrepreneurs are also 24 percentage points more likely to grow their business over the next five years than small business owners nationwide.
To support their growth plans, nearly half (46 percent) of Atlanta small business owners plan to hire more employees over the next 12 months, an increase of 14 percentage points in just six months and 21 percentage points higher than the national average.
The report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in Atlanta and around the country, also found that Atlanta entrepreneurs are much more positive about the direction of the economy than their peers across the country:
· Sixty-one percent expect their local economy to improve (vs. 37 percent nationwide)
· Forty-six percent expect the national economy to improve (vs. 31 percent nationwide)
“Perhaps encouraged by a more positive outlook on the economy, Atlanta entrepreneurs’ confidence is robust across all aspects of their business as many look to expand, hire new employees and expect higher revenue in the year ahead,” said Dean Bird, Atlanta small business banker manager at Bank of America. “Overall, Atlanta-area small business owners remain focused on growing their businesses and are optimistic for what the future holds.”
Top economic factors concerning Atlanta business owners
Despite optimism in the economy and business growth, Atlanta small business owners are concerned about the impact of many economic factors. The cost of health care is the most prominent concern, with 74 percent of local entrepreneurs worried it will impact their business during the next year. Other top concerns include:
· Strength of the U.S. dollar (66 percent vs. 52 percent nationwide)
· Consumer spending (61 percent vs. 51 percent nationwide)
Atlanta entrepreneurs rely on a mix of funding sources
When starting their businesses, the majority (72 percent) of Atlanta business owners used their personal savings, while 34 percent used personal credit cards. Compared to their national counterparts, local entrepreneurs were more likely to seek funding from banks (32 percent vs. 25 percent nationwide) and from friends and/or family (31 percent vs. 21 percent) when first starting their businesses. Even when their businesses are up and running, Atlanta-based business owners are more likely to rely on friends or family (17 percent vs. 7 percent nationwide) for financial support. The top two funding sources for established businesses are personal credit cards (43 percent) and banks (38 percent).
Two-thirds (64 percent) of Atlanta entrepreneurs have borrowed from a family member or friend, and of these, 85 percent don’t regret asking them to invest in their business. Instead, they feel grateful and appreciative (67 percent) and more motivated to succeed (51 percent), however, 19 percent of Atlanta business owners do say they feel anxious or pressure to pay it back.
Family, friends and community support Atlanta entrepreneurs
Nearly half (45 percent) of Atlanta small business owners say their family and friends help the most when it comes to running their business, compared to 35 percent nationally. Family provides support to small business owners in a number of ways, including emotional support (62 percent) and helping with the operation of their business (34 percent).
When it comes to the support of their local community, 69 percent of Atlanta entrepreneurs say it plays an important role in the success of their business – 22 percentage points higher than the national average and higher than any other city surveyed. Local small business owners say they rely on the Atlanta community for:
· Patronizing their business (39 percent)
· Giving online reviews and referrals (32 percent)
· Promotion and marketing of their small business (24 percent)
To show their gratitude, nearly three-quarters (74 percent) of Atlanta-based entrepreneurs support charitable or non-profit organizations in their local community.
Tis the season – year-end targets, seasonal sales and holiday perks
As 2016 comes to an end, the majority (77 percent) of Atlanta small business owners expect to hit their year-end revenue targets, 9 percentage points higher than the national average. Their year-end optimism is also reflected in holiday revenue expectations – 51 percent of local business owners expect to generate more revenue this holiday season, twice that of the national average (24 percent).
Many (78 percent) local entrepreneurs plan to offer their employees holiday perks, including:
· Closing the office during the holidays (44 percent)
· Giving employee gifts (35 percent)
· Awarding a salary bonus (27 percent)
Some local business owners say providing these employee perks comes at a personal sacrifice, with 25 percent expecting to work longer hours and 15 percent expecting to use a personal credit card to afford it.
For a complete, in-depth look at the insights of the nation’s small business owners, read the entire fall 2016 Bank of America Small Business Owner Report, and for additional insights, download the Small Business Owner Report national infographic here.
About the Bank of America Small Business Owner Report
GfK Public Affairs and Corporate Communications conducted the Bank of America Small Business Owner Report survey for fall of 2016 online between August 7 and October 4, 2016 using pre-recruited online sample of small business owners. GfK contacted a national 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, small business owners were surveyed in 10 target markets: Atlanta, Boston, Chicago, Dallas/Fort Worth, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C. A total of 300 small business owners were surveyed in Atlanta, Boston, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, San Francisco and Washington, D.C., and 100 small business owners were surveyed in Houston. The final results were weighted to national benchmark standards for size, revenue and region.