South Florida entrepreneurs maintain one of the nation’s strongest business outlooks

Local small business owners continue to project one of the strongest business outlooks nationwide this spring, according to the spring 2019 Bank of America Business Advantage Small Business Owner Report. At the same time, the report found that entrepreneurs in Miami-Dade, Broward and Monroe counties are less confident in the economy, and have mixed views on the impact of last year’s landmark tax reform and trade tariffs.

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

South Florida entrepreneurs’ business outlook weakens since fall 2018 but remains above national average. Over the next 12 months:

  • Eighty-three percent plan to expand their business (vs. 89 percent in fall 2018, and 16 percentage points above the national average of 67 percent this spring).
  • Sixty-nine percent believe their revenue will increase (down from 82 percent in fall 2018, but 10 percentage points above the national average of 59 percent this spring).
  • Forty percent plan to hire (down slightly from 47 percent last fall, but the highest percentage among business owners surveyed in 10 local markets).
  • Twenty-seven percent plan to apply for a loan (vs. 30 percent in fall 2018, and the highest percentage nationwide this spring, 15 percentage points above the national average of 12 percent).

Meanwhile confidence in the local economy declines while confidence in the national economy holds steady. Over the next 12 months:

  • Fifty-nine percent believe their local economy will improve (down from 67 percent in fall 2018, but 9 percentage points above the national average of 50 percent).
  • Fifty-eight percent believe the national economy will improve (vs. 61 percent in fall 2018, and 10 percentage points above the national average of 48 percent).
  • Top economic concerns include health care costs (67 percent), the political environment (62 percent), interest rates (52 percent) and corporate tax rates (51 percent).

“Local entrepreneurs are projecting a more cautious business outlook compared to last fall, but overall, they’re continuing to expand and hire at a higher rate than their peers nationwide,” said Odalis Martinez, Miami small business banker manager at Bank of America. “Overall, South Florida entrepreneurs’ more conservative business outlook echoes a nationwide trend of diminished economic confidence and cautious expectations.”

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

Sixty-two percent of South Florida entrepreneurs expressed concern about the current political environment, though they are divided over how major policy issues are directly impacting them. Fifty-four percent of South Florida business owners say the new tax code has had an impact on their business — with 33 percent reporting that impact as positive. This is down from the 46 percent who anticipated a positive impact one year ago.

Regarding U.S. trade policy, 49 percent say they have been impacted by tariffs, with 19 percent reporting the impact as mixed, 17 percent reporting it as negative and 13 percent reporting it as positive. Additionally, 48 percent of South Florida entrepreneurs say they’re concerned about climate change impacting their business, the highest level of concern nationwide.

Most entrepreneurs take steps to protect their business

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

  • Sixty-five percent have a business continuity plan in case of a flood, fire or other disaster.
  • Eighty percent have taken steps to protect their business in case of an economic downturn (highest percentage nationwide, and 11 percentage points above the national average of 69 percent).
  • Eighty-five percent have taken at least one step to protect customer data from a cybersecurity breach
  • Only 40 percent have a plan to manage reputational issues and threats (highest percentage nationwide, and 16 percentage points above the national average of 24 percent).

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 66 percent of business owners in South Florida have received a negative online review of their business, 67 percent believe that positive reviews matter the most, though 33 percent say negative reviews have a greater impact on their business.

Furthermore, 77 percent say reviews are important to the success of their business, with 85 percent reporting that positive reviews have helped generate business opportunities. Recognizing that negative reviews do have an impact, 77 percent of business owners in South Florida 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.

5/10/19


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