Bank of America
October 9, 2024
Charlotte, NC – Nearly four in five (78%) small and medium business owners anticipate revenue growth in the next 12 months. This level of confidence includes the majority of business owners, with 76% of women, 82% of Hispanic-Latinos, 84% of Black/African Americans, and 83% of Asian American and Pacific Islander (AAPI) entrepreneurs anticipating increased income in the next year.
That’s according to Bank of America’s 2024 Women and Minority Business Owner Spotlight, published in partnership with the Bank of America Institute. The survey of more than 2,000 small and medium-sized business owners across the country explores feelings about the business outlook, access to capital, how they manage their employees and how they interact with their community. This annual survey samples a general population of small and medium-sized business owners and includes specific insights on the perspectives of women, Hispanic-Latino, Black/African American, and AAPI business owners.
“These businesses are the heart of the U.S. economy, and business owners expect to increase their earnings in the coming year, despite continued concerns about inflation,” said Raul Anaya, president and co-head of Business Banking for Bank of America. “Many also plan to hire and invest in employee education, such as training and mentoring programs, as they prioritize their workforce and explore opportunities for growth.”
Business owners in all groups surveyed are cautiously optimistic that economies will improve over the next 12 months. Nationwide, 66% believe the local economy will improve, 60% believe the national economy will improve, and 57% believe the global economy will improve.
However, the data suggests that smaller employers are less optimistic. About 78% of medium-sized business owners plan to expand and 61% plan to hire within the next year, while only 50% of small business owners plan to expand and 39% plan to hire.
“Finding quality labor is a challenge many smaller firms face, although employment growth remains strong and our clients continue to be optimistic about staffing,” said Sharon Miller, president and co-head of Business Banking for the Bank. of America. “In the coming year, they are looking to invest in their employees and use technology to strengthen their hiring and improve customer experiences.”
This divergence between business sizes is consistent with the Bank of America Institute’s September Small Business Checkpoint, which found lower confidence among smaller businesses compared to their larger counterparts. However, consistent with the survey’s finding that business owners are continuing to expand their businesses, the Small Business Checkpoint showed continued payroll growth and increased hiring demand compared to 2019.
Beyond employment concerns, business owners across the country identified inflation and the political environment as top issues.
Over half (57%) of women business owners plan to expand their business in the next year. Their expansion strategies include:
- Increasing their customer base (65%)
- Creating an online presence (48%)
- Use of professional services (35%)
Even with expansion goals in mind, 54% of women business owners increased their work-life balance priority over the past year. Women measure their work-life balance by having time to take care of personal responsibilities (71%) and feeling like they have enough energy to accomplish everything they want (62%). As they balance their life priorities and business needs, most women feel they have the support they need to grow their business.
Hispanic-Latino business owners report strong confidence in the economy. Of these business owners, 76% expect the national economy to improve over the next year and plan to receive funding (94%) and hire more employees (64%). About 78% plan to expand their businesses over the next year.
Esmeralda Hernandez, founder and CEO of Los Angeles-based cosmetics company Beauty Creations, said the conditions for her business reflect these sentiments. “We continued to scale key measures of growth this year – revenue, hiring, customer growth and physical expansion – and we remain confident that this momentum will continue into the new year. Despite some lingering uncertainty about inflationary costs and other economic pressures, we feel strongly about our growth forecasts. It’s a good time for our business in general,” she said.
Labor challenges are also top of mind for Hispanic-Latino business owners, with 81% of owners surveyed saying they are currently affecting their business. As a result of these challenges, they are:
- Raising wages to attract more competitive talent (33%)
- Work more hours in person due to staff shortages (33%)
To learn more about the opportunities and struggles for Hispanic-Latino business owners, see our 2024 Hispanic-Latino Business Owner Spotlight.
Black/African American business owners are optimistic about their success in the coming year and report strong business and economic prospects. Over the next year, 77% plan to expand and 94% plan to get funding for their businesses.
Black/African American entrepreneurs are prioritizing personalized customer interactions, with 70% noting the importance of this tactic to attract and retain customers. Ninety-two percent of respondents are also adapting their marketing strategies and approaches, such as
- Increasing their presence on social media (54%)
- Providing personalized offers and discounts to individual customers (45%)
AAPI business owners also have strong expectations for economic growth and success in the coming year:
- 71% believe that the national economy will improve
- 70% believe their local economies will improve
- 73% plan to expand their businesses during the year
AAPI business owners also plan to seek capital and plan to improve workforce stability in the coming year. Sixty percent plan to hire more employees, and many are using AI technology and tools to aid their hiring efforts.
- 91% of AAPI business owners reported using AI as a staffing approach in the past year, almost 30 percentage points higher than non-AAPI business owners.