A majority of small and mid-sized business owners expect their revenues to increase this year, and their worries over a recession have declined substantially, according to the 2024 Bank of America Business Owner Report, conducted in partnership with Bank of America Institute. While business owners remain mindful of the impacts of inflation and interest rates on their bottom lines, both concerns have lessened since Spring 2023. And despite some lingering uncertainties over the broader economy, business owners plan to expand their businesses in the year ahead.
“Small business owners remain cautiously optimistic in 2024,” said Sharon Miller, President and Co-Head of Business Banking at Bank of America. “With anticipated revenue increases, many are focused on engaging with customers and implementing new technologies that will help them differentiate their businesses.”
The 2024 Bank of America Business Owner Report includes input from more than 1,400 small and mid-sized business owners (defined as businesses with $100,000 to $5 million and $5 million to $50 million in annual revenues, respectively). The report explores the viewpoints, goals, concerns and outlooks of business owners nationwide.
“Our report finds that most mid-sized business owners are planning to expand their businesses and hire in the coming year,” said Raul Anaya, President and Co-Head of Business Banking at Bank of America. “Most of these business owners are confident in their revenue growth as well as in the local, national and global economies.”
Business and Economic Outlook
When looking at attitudes concerning the national economy, business owners’ outlooks varied by the size of their business: 75% of mid-sized business owners expect the national economy to improve over the next 12 months, while just 33% of small business owners expect the same.
Mid-sized business owners (MSBOs) maintain a positive business outlook:
- 87% believe their revenue will increase over the next 12 months.
- 80% plan to expand their businesses in the year ahead.
- 69% plan to hire over the next 12 months.
- 84% said their revenues were higher in 2023 than in 2022.
Among small business owners (SBOs):
- 65% expect their revenue to increase in the year ahead (holding steady since last spring).
- 39% plan to expand their business over the next year.
- 30% plan to hire more employees over the next 12 months.
- 55% reported higher business revenues in 2023 than in 2022.
Top economic concerns for MSBOs include the U.S. political environment (68%), inflation (67%), supply chain (66%) and consumer spending (66%). SBOs share concern over the U.S. political environment (75%) and inflation (73%) but are also concerned about health care costs (69%) and interest rates (63%). 61% of MSBOs and 56% of SBOs noted concerns about recession, both down from 72% last spring. And while concerns over inflation have come down slightly since this time last year, 90% of MSBOs and 84% of SBOs still say that inflation is currently impacting their business.
Funding plans have increased for MSBOs in the year ahead, with 93% of MSBOs planning to obtain funding (90% in spring 2023). Financing plans have stayed steady with 54% planning to apply for a bank loan in the next 12 months. In contrast, funding and loan application plans have decreased for SBOs – with 71% planning to obtain funding for their business, down from 82% last spring; and 16% of SBOs plan to apply for a bank loan or line of credit this year, down from 24% last spring.
According to Bank of America Institute’s recent Small Business Checkpoint, small businesses have become more reliant on credit cards, with balances up 18% since 2019, based on the bank’s aggregated small business credit card data. While rising balances could raise some concerns, the Institute notes a few reasons to be less pessimistic. First, inflation increased over 22% since 2019, so inflation-adjusted credit card balances are comparable to, or even lower than, 2019 levels.
Second, across all categories of small business credit card spending, levels have come down since 2023, suggesting small businesses are taking steps to manage spending and reallocate or optimize cash flow. However, according to the Institute, while balance sheet conditions are relatively healthy for small businesses overall, an increasing portion of their credit card balances are revolving – carrying from one month to the next – after a decline in this behavior during and post pandemic.
Running a profitable business is important to business owners and, for many, it comes with personal and professional sacrifices. 70% of SBOs say they have made tradeoffs to maintain their business’ profitability, such as increasing prices (47%), working more hours (45%) and reducing their own salary (32%).
Using Digital Tools to Optimize Operations
Business owners are implementing digital tools across their operations. Over the past 12 months, most business owners (99% of MSBOs and 71% of SBOs) have digitally optimized their business. For many, that means doing their business banking online or via an app, accepting more forms of cashless payments and/or bolstering their social media presence. Using digital tools has helped business owners save time, stay organized, reach new customers, increase customer satisfaction and manage cash flow.
The vast majority of MSBOs (89%) plan to implement artificial intelligence (AI) tools this year. They plan to use these tools to streamline their payroll and bookkeeping (57%), assist with hiring efforts (49%) and stand out from competitors (44%).
Meanwhile, SBOs also are evaluating the benefits of AI tools, albeit to a lesser extent, with 37% planning to implement AI tools this year – citing similar ways they may use the technology, including to differentiate themselves from competitors (47%), streamline their payroll and bookkeeping (36%) and assist with hiring efforts (25%).
For an in-depth look at the insights of the nation’s small and mid-sized business owners, please read the full 2024 Bank of America Business Owner Report.
2024 Bank of America Business Owner Report Methodology
Previously conducted as two separate reports for small and mid-sized business owners, this year’s report explores sentiment among businesses of different sizes.
Ipsos conducted the 2024 Bank of America Business Owner Report survey online between March 4 and March 28, 2024 using a pre-recruited online sample of small business owners. Ipsos contacted a national sample of 1,038 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees. In addition, approximately 250 small business owners were surveyed in each of 10 target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C. The final results for the national and designated market area segments were weighted to national benchmark standards for size, revenue and region.
Ipsos also interviewed a national sample of 377 medium-sized business owners in the United States with annual revenue between $5,000,000 and $49,999,999 and employing between two and 499 employees. The final results for this national segment and a combined sample of the small and medium-sized business owners were weighted to national benchmark standards for size, revenue and region.
