Eight in 10 Atlanta entrepreneurs foresee long-term growth – highest since 2014

Atlanta entrepreneurs are extremely optimistic about the economy and the future of their businesses

Dean Bird
Atlanta small business banker manager at Bank of America

Eighty-one percent of local Atlanta entrepreneurs plan to grow their businesses over the next five years, the strongest small business growth forecast recorded in Atlanta since spring 2014, and the highest among business owners surveyed in 10 major cities, according to the spring 2018 Bank of America Business Advantage Small Business Owner Report.

The report, based on a semiannual survey of 1,000 small business owners across the country and in the greater Atlanta area, finds Atlanta entrepreneurs are highly optimistic about their local economy, with 71 percent expressing confidence it will improve in 2018, 15 percentage points higher than the national average. Similarly, 61 percent of Atlanta entrepreneurs are confident the national economy will improve in 2018, the highest among business owners surveyed in 10 major cities.

 

Steady economic confidence has translated into an extremely positive outlook on revenue, long-term growth and hiring. Seventy-four percent of local entrepreneurs believe their revenue will increase in 2018, the highest among small business owners surveyed and 14 percentage points higher than the national average. Additionally, 36 percent of Atlanta entrepreneurs plan to hire more employees over the next 12 months, 14 percentage points higher than the national average.

“Atlanta entrepreneurs are extremely optimistic about the economy and the future of their businesses,” said Dean Bird, Atlanta small business banker manager at Bank of America. “Additionally, local small business owners feel positive about tax reform and are excited by the potential of emerging technologies creating more opportunity for business growth.”

Tax reform seen as a game-changer, while concern over interest rates and strength of the U.S. dollar on the rise

According to the report, one of the greatest opportunities for Atlanta small business owners in the near term may be recently enacted changes to the federal tax code. Sixty-nine percent cite the new policy as a game-changer for small businesses overall, and 65 percent say it’s made them more optimistic about their own business’ outlook.

Furthermore, 44 percent of Atlanta entrepreneurs say they have altered their business plans for 2018 as a result of the new tax code. Eighty-one percent expect to receive savings for their business because of the policy, and they plan to use those funds to fuel further growth in different ways, including:

• Investing back into their business (46 percent).

• Expanding operations (26 percent).

• Hiring more employees (20 percent).

• Awarding raises and bonuses to employees (19 percent).

Despite optimism from the tax law changes, Atlanta business owners anticipate some economic challenges in the year ahead. Health care costs remain a top concern for Atlanta entrepreneurs (66 percent), and the report found a variety of other mounting economic concerns, including:

• Strength of the U.S. dollar (58 percent, up 14 percentage points year over year).

• Interest rates (55 percent, up 20 percentage points year over year).

• U.S. and global stock market (54 percent, up 20 percentage points year over year).

• Commodities pricing (51 percent, up 12 percentage points year over year).

All-digital payments predicted within the next five years, while smartphone use is widespread

The report found that mobile use is nearly universal among local business owners, with 94 percent using smartphones and other mobile devices to manage their business, including:

• Basic tasks (77 percent).

• Digital banking (58 percent).

• Social media updates (56 percent).

• Digital payments (44 percent).

Two decades into the internet era, the role of the business website is less significant, as only 55 percent of Atlanta entrepreneurs report having one. Sixty-six percent of those who have a website say its primary function is for sharing basic information, while 22 percent say its primary use is to drive sales.

Greater adoption and reliance on technology comes with some risk

Greater reliance on technology can also create challenges for entrepreneurs, as more than 53 percent of local business owners believe their business would suffer if the internet crashed for a week, including 40 percent who say they would lose revenue and 30 percent who would lose customers. Eight percent of Atlanta entrepreneurs say they have been impacted by a data breach in the last year.

Although the expanding role of new technologies presents some risks and challenges, Atlanta business owners believe the positives far outweigh the negatives. Eighty-three percent believe their future success is dependent on technology, more so than threatened by it. Additionally, 77 percent of Atlanta business owners make investments at least annually in technology, and 43 percent do so at least once per quarter.

Emerging technologies set to transform the small business landscape, blockchain remains a question mark

Atlanta business owners are investing in emerging technology at a rapid pace, with half of survey respondents reporting they currently use or are exploring advanced technologies for their business, specifically:

• The Internet of things (28 percent).

• Data analytics (19 percent).

• 3D printing (10 percent).

• Virtual/augmented reality (8 percent).

Atlanta entrepreneurs are still uncertain about blockchain and cryptocurrencies. Fifty-seven percent are unfamiliar with distributed ledger technology, and only 16 percent believe it will be relevant to their business in the near future.

Download the spring 2018 Bank of America Small Business Owner Report

6/13/2018


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