Chicago small business owners look to grow, expand

Chicago small business owners maintain a strong business outlook this year, with many planning for revenue growth and expansion, according to the spring 2019 Bank of America Business Advantage Small Business Owner Report. Economic sentiment remains steady, but mixed, as entrepreneurs report varying views on the impact of tax reform and trade tariffs.

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

Chicago entrepreneurs maintain a strong business outlook over the next 12 months:

  • Sixty percent believe their revenue will increase (vs. 57 percent in fall 2018).
  • Seventy-eight percent plan to expand their business (up from 70 percent in fall 2018).
  • Twenty-three percent plan to hire (down from 27 percent in fall 2018).
  • Eighteen percent plan to apply for a loan (level since fall 2018).

Economic sentiment holds steady:

  • Forty-nine percent believe the local economy will improve (vs. 51 percent in fall 2018).
  • Forty-five percent believe the national economy will improve (vs. 46 percent in fall 2018).
  • Top economic concerns include health care costs (62 percent), the political environment (55 percent), consumer spending and interest rates (both 48 percent).

“Chicago business owners remain confident in their business prospects for 2019,” said Dana Roppo, Chicago small business banker manager at Bank of America. “While they are keeping an eye on various economic issues and other external factors that might impact their business, these entrepreneurs are committed to their plans for expansion and growth this year.”

Chicago business owners split on effects of recent policy changes

Fifty-five percent of Chicago entrepreneurs expressed concern about the current political environment, though they are divided over how major policy issues are directly impacting them. Just over half of Chicago business owners say the new tax code has had an impact on their business, with 29 percent reporting that impact as positive, down from the 37 percent who anticipated a positive impact one year ago.

Regarding U.S. trade policy, 42 percent say they have been impacted by tariffs, with 18 percent reporting that impact as mixed, 14 percent reporting it as negative and 9 percent reporting it as positive. Additionally, 33 percent of Chicago entrepreneurs say they’re concerned about climate change affecting their business.

Most Chicago entrepreneurs take steps to protect their business

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

  • Fifty-seven percent have a business continuity plan in case of a flood, fire or other disaster.
  • Sixty-six percent have taken steps to protect their business in case of an economic downturn.
  • Seventy-four percent have taken at least one step to protect customer data from a cybersecurity breach, the lowest percentage among national peers.
  • Only 25 percent have a plan to manage reputational issues and threats.

The power of posts — are online reviews 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 64 percent of Chicago business owners have received a negative online review of their business, 60 percent believe positive reviews matter the most, compared to 40 percent who say negative reviews have a greater impact.

Furthermore, 66 percent say reviews are important to the success of their business, with 76 percent reporting that positive reviews have helped generate business opportunities. Recognizing that negative reviews do have an impact, 66 percent of Chicago business owners who have received one say they respond as soon as possible to limit the reputational damage, consistent with the national average.

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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