Boston entrepreneurs maintain strong business outlooks

Local small business owners are projecting strong outlooks for their business this spring, though revenue, growth and hiring plans have declined somewhat in the last six months, according to the spring 2019 Bank of America Business Advantage Small Business Owner Report. At the same time, Boston entrepreneurs are less confident in the economy, reporting concern over several economic issues.

The report, based on a semiannual survey of over 1,500 small business owners across the country and the greater Boston area, reveals that:

Boston entrepreneurs’ business outlook over the next 12 months is strong but tempered:

  • Seventy-three percent plan to expand their business (down from 75 percent in fall 2018).
  • Sixty percent believe their revenue will increase (down from 70 percent in fall 2018).
  • Thirty-one percent plan to hire (down from 38 percent in fall 2018, but 7 percentage points above the national average of 24 percent this spring).
  • Fourteen percent plan to apply for a loan (vs. 17 percent last fall).

While their economic outlook for the next 12 months weakens slightly:

  • Fifty-four percent believe their local economy will improve (down from 58 percent last fall).
  • Forty-one percent believe the national economy will improve (down from 50 percent in fall 2018, and 7 percentage points below the national average of 48 percent this spring).
  • Top economic concerns include health care costs (67 percent), the political environment (61 percent), interest rates (52 percent) and the stock market (51 percent).

“Boston business owners anticipate a positive 2019 but are adopting a more conservative business outlook amidst growing economic concerns,” said Kevin Kelly, Northeast small business division executive at Bank of America. “Despite the more cautious view, Boston entrepreneurs are planning to grow their businesses and hire more employees than many of their peers nationwide.”

Boston business owners split on effects of recent policy changes, contemplate impact of climate change

Sixty-one percent of Boston entrepreneurs expressed concern about the current political environment, though they are divided over how major policy issues are directly impacting them. Half of Boston business owners say the new tax code has had an impact on their business — with 24 percent reporting that impact as positive. This is down from the 40 percent who anticipated a positive impact one year ago.

Regarding U.S. trade policy, 47 percent say they have been impacted by tariffs, with 19 percent reporting that impact as negative, 19 percent reporting it as mixed and 9 percent reporting it as positive. Additionally, 39 percent of Boston entrepreneurs say they’re concerned about climate change impacting their business.

Most Boston entrepreneurs take steps to protect their business

Unexpected or major economic events can transform a business in the blink of an eye. While many Boston entrepreneurs are taking steps to protect their business from potential threats such as natural disasters, an economic downturn or a cyber breach, most Boston business owners do not have a plan to address reputational crises or challenges.

  • Fifty-six percent have a business continuity plan in case of a flood, fire or other disaster.
  • Sixty-seven percent have taken steps to protect their business in case of an economic downturn.
  • Seventy-eight percent have taken at least one step to protect customer data from a cybersecurity breach.
  • Only 23 percent have a plan to manage reputational issues and threats.

The power of posts — are online reviews more of a trust broker or breaker?

Customer feedback holds tremendous sway in the digital era, with online reviews serving as a powerful channel for sharing both compliments and criticisms. While 60 percent of Boston business owners have received a negative online review of their business, 65 percent believe positive reviews have a greater impact, and 35 percent say negative reviews matter more.

Furthermore, 73 percent say reviews are important to the success of their business, with 82 percent reporting that positive reviews have helped generate business opportunities. Recognizing that negative reviews do have an impact, 72 percent of Boston business owners who have received one say they respond as soon as possible to limit the reputational damage.

For a complete, in-depth look at the insights of the nation’s small business owners, read the spring 2019 Bank of America Business Advantage Small Business Owner Report. For additional insights, download the Small Business Owner Report infographic.

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