A semiannual survey by Bank of America reports that small business owners feel their personal health has improved as a result of running their own small businesses, and that their employees’ well-being is also a priority. But the report, which polled 1,000 small business owners nationally and an oversampling of 300 additional businesses in nine target markets, including Boston, also found that, on national average, a small business would survive financially for only five months in the event of a major disruption – four months in the Northeast.
The survey was conducted between March 14 and 31 of this year, before the Boston Marathon bombing. But it did take into consideration natural disasters such as Superstorm Sandy and the massive winter storm nicknamed Nemo, both of which impacted transportation and resulted in property damage in the Northeast.
Only 32 percent of smallbusiness owners contacted their bank or other financial advisor after a business disruption. “They feel as if they’ve got to carry the challenge of running the business by themselves,” says Wendell Chesnut, senior vice president, small business banking market manager at Bank of America. “They don’t see their banker or attorney as the first to go to after a disaster.” In the aftermath of significant business disruption events such as the storms and the bombing, the bank reached out to small business clients in an effort to help them get whole again, Chesnut said.
Two-thirds (66 percent) of the Boston-market small business owners polled said that they feel they are well capitalized, and two out of 10 said they intend to apply for a loan this year.
Chesnut sees the Boston area as more conservative than other parts of the country. The experiences of Superstorm Sandy and the Boston Marathon bombing – although it took place after the survey was conducted – has made small-business owners consider having reserves not only as a conservative measure but as a safety net.
Optimistic … With Caveats
The survey found that small business owners are optimistic about their businesses but cautious about the economy. “They realize that what they do is important,” said Chesnut – controlling their own destiny, keeping workers happy and healthy, and making sure their products or services stand up to the competition. If they feel that lawmakers are not assisting them in these endeavors, they have to have contingency plans to adjust for it.
A particular standout in the survey was the mindset of millennial small business owners, ages 18 to 34. These youngest business owners were the most optimistic about the future of their businesses. Nationally, 70 percent expected increases in revenue; 52 percent expected an increase in hiring, mostly because their businesses are likely to be startups.
Millennials look at businesses in a different way than in the past due to advances in technology, with which they may feel more comfortable than their older peers. Equity firms are hiring younger workers who understand technology, but that must be balanced by maturity in the board room, Chesnut said. “They’ve certainly done well with raising capital to allow their businesses to grow, particularly in Cambridge,” where colleges and universities serve as good business incubators. While optimism is high compared to other regions of the country, the key part is keeping small businesses in the area.
The Boston market survey found that 52 percent of small business owners polled felt their personal health has improved, and that 34 percent said they exercise more and 29 percent said they eat healthier as a result of owning a small business. Fifty-two percent reported that they successfully manage the stress of running a small business, while only 14 percent said they felt that they do not.
The Small Business Owner Report, prepared for Bank of America by Braun Research, was a phone survey conducted between March 14 and March 31, of 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: Los Angeles, Dallas, Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error for the national sample is +/- 3.1 percent and the margin of error for the targeted markets is +/- 5.7 percent, with both reported at a 95 percent confidence level.
Email: coneill@thewarrengroup.com
