Reports and Insights
BofA Survey: 76% of Small Businesses Feel Well-Equipped to Survive a Recession
The majority of U.S. small business owners (72%) are concerned about the impact of a potential recession, however 76% are confident their business could withstand the downturn, according to the Bank of America 2023 Small Business Owner Report (PDF). The survey of more than 1,000 business owners across the country found that, despite the continued impact of inflation and supply chain issues, 65% of business owners anticipate revenue growth in the next 12 months.
Small business owners were also asked about topics including future plans, sustainability, employee retention and labor. Conducted in March and April, other findings include:
- 79% of business owners raised prices over the last 12 months.
- 53% added benefits and perks to retain talent.
- 49% plan to use automation and artificial intelligence (AI) tools for their business in 2023.
- 34% believe the national economy will improve in the next 12 months.
“While the dual pressures of inflation and supply chain disruptions continue to incumber operations, small business owners remain bullish about their prospects for the year ahead,” said Sharon Miller, President of Small Business and Head of Specialty Banking and Lending at Bank of America. “Small businesses are poised for growth, implementing strategies to retain and attract talent and exploring new tools including artificial intelligence to gain an edge in a highly competitive market.”
Economic Concerns and Business Outlook
Inflation (79%) and a potential recession (72%) top business owners’ concerns over the next 12 months. These entrepreneurs also expressed anxiety around commodities prices (68%), the U.S. political environment (68%), rising interest rates (67%) and supply chain (57%).
Despite these concerns, the bottom line remains strong for many entrepreneurs. Fifty-six percent of business owners reported increased revenue in 2022 compared to 2021, and looking ahead at the next 12 months, 48% plan to expand their business (vs. 37% last spring). Additionally, 82% intend to obtain financing in the year ahead (vs. 70% last spring).
Retention Efforts and Hiring Plans
Struggli8ng with labor shortages and a competitive job market, business owners are increasingly focused on employee retention. Over the past 12 months, 53% have added additional benefits and perks to existing compensation packages, including remote/hybrid work (34%), cost-of-living bonuses (34%) and more vacation time (33%). And 75% of these business owners said their efforts meaningfully impacted employee morale and retention.
Additionally, 34% of business owners plan to hire in 2023, up from 26% last spring. Over the past 12 months, 51% implemented additional perks and benefits to attract new talent, such as increased base pay for new employees (54%), remote/hybrid work (30%), new employee training or resource groups (27%) and additional healthcare benefits (27%).
Entrepreneurs Embrace Sustainability Despite Obstacles
Three-in-four SBOs have already implemented sustainable business practices, such as reducing paper usage, establishing environmentally friendly habits in their work environment and working with sustainable vendors. While implementation challenges exist—82% of entrepreneurs cited challenges such as increased costs (49%), limited supplier options (29%) and variable quality of sustainable products/services (26%) as primary obstacles—78% of business owners plan to implement sustainable practices over the next 12 months.
Continued Digitization of Business Operations
In the past year, 80% of small business owners adopted digital tools for their business, leveraging digital banking to manage their finances and social media to reach their customers. Business owners are also embracing AI and automation, with 49% planning to use AI tools to enhance their business in 2023.
Looking ahead, 55% of entrepreneurs anticipate accepting exclusively digital payments at some point in the future, and 90% say digital tools help make their operations more efficient, helping them save time and stay organized.
For an in-depth look at the insights of the nation’s small business owners, please read the full Bank of America 2023 Small Business Owner Report (PDF).
Providing a Business Advantage to Small Business Owners
Bank of America provides advice, solutions, access to capital and dedicated support to meet the unique needs of our 11 million business owner clients. According to the FDIC, Bank of America maintained its position as the nation’s top small business lender at the end of 2022, with $36.2 billion in total outstanding small business loans (defined as business loans in original amounts of $1 million and under).
Bank of America 2023 Small Business Owner Report Methodology
Ipsos Public Affairs conducted the Bank of America 2023 Small Business Owner Report survey online between March 16 and April 10, 2023, using a pre-recruited online sample of small business owners. Ipsos contacted a national sample of 1,145 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 ten target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C. The final results for the national and designated market area segments were weighted to national benchmark standards for size, revenue and region.
Prior to 2016, previous waves of the Small Business Owner Report survey were conducted by telephone and while best efforts were made to replicate processes, differences in sample, weighting and method suggests caution when making direct statistical comparisons of the results from pre-2016 and post-2016.
Source: Bank of America