Small business owners across the US continue to be bullish on their business outlook, as 67% anticipate revenue growth over the next 12 months despite the ongoing impacts of inflation and high operating costs, according to Bank of America’s 2023 Women & Minority Business Owner Spotlight.
The survey of more than 1,000 small business owners across the country explores the outlook of all entrepreneurs, with specific insights on the perspectives of women, Black, Hispanic-Latino, and Asian American and Pacific Islander (AAPI) business owners around access to capital, business outlook, work-life balance and community support. Notably, the study found:
- Economic confidence has dropped since last fall, as 34% of entrepreneurs believe the national economy will improve over the next 12 months (down from 44%), and 41% believe their local economy will improve (down from 48%).
- 77% of small business owners plan to obtain funding for their business, down from 83% in Fall 2022.
- 51% of women business owners believe they currently have equal access to capital, up from 48% in Fall 2022.
- Hispanic-Latino business owners’ revenue expectations held steady despite a notable drop in economic confidence, with 91% believing their revenue will increase or stay the same over the coming year.
- Over the next 12 months, 56% of Black business owners plan to hire more employees, up significantly from 44% in Fall 2022.
- 89% of AAPI business owners think their revenue will increase or stay the same over the next year.
“While facing multiple obstacles and challenges over the past year, today’s entrepreneurs continue to persevere and move forward with their growth and expansion plans,” said Sharon Miller, President, Small Business, Head of Specialty Banking and Lending at Bank of America. “Our newest report illustrates that despite a changing business landscape, women and minority small business owners continue to forge their own pathways to success while remaining pillars in their local economies.”
Inflation concerns top-of-mind for business owners, as supply chain and labour issues ease
Small business owners across the country identified inflation (78%) and the U.S. political environment (67%) as their primary concerns for next year, followed by interest rates (65%), commodities prices (63%), and concerns over a recession (60%).
Business owners are experiencing some relief from issues that have impacted their supply chains, with 68% indicating that supply chain issues are still affecting their business, a notable drop from 80% in Fall 2022. Employers are also starting to find it easier to attract and retain talent, with 46% reporting that labour shortages are currently impacting their business, down significantly from 61% in Fall 2022.
Women and minority entrepreneurs continue to experience barriers accessing capital
31% of women business owners said they do not think they will ever have equal access to capital to start a business; 35% of Black business owners, 20% of Hispanic-Latino business owners and 20% of AAPI business owners said the same. Minority business owners also reported challenges accessing capital, with 44% of Black, 43% Hispanic-Latino, and 31% of AAPI business owners reporting they’ve personally faced challenges.
Women business owners report an overall positive business outlook, with 63% expecting revenue growth and 45% planning to expand their business over the next 12 months. Additionally, 74% of women business owners plan to obtain funding and 32% plan to hire more employees.
On top of juggling business responsibilities, women business owners are more likely to take on caregiving roles than their male counterparts (34% of women versus 23% of men). Many also reported modifying their daily routines around caregiving, even planning their business schedule around caregiving duties (32%) and taking time off from work due to these responsibilities (31%).
Hispanic-Latino business owners temper economic outlook while they aim to increase education
Revenue expectations for Hispanic-Latino business owners have held steady since Fall 2022, as 91% believe their revenue will increase or stay the same over the next year. However, their economic confidence has dropped significantly since last fall, as 35% of Hispanic-Latino entrepreneurs believe the national economy will improve (down from 45%), and 45% believe their local economy will improve (down from 52%).
84% of Hispanic-Latino business owners wish they had more educational resources to enhance their small business knowledge, and 77% are prioritising investing in educational resources for their employees, including online training programs (44%), on-site training (43%) and mentoring (40%).
Black business owners see strong growth potential, embrace new ways of working
Many Black entrepreneurs are optimistic about their revenue for the year ahead, even with a slightly tempered economic outlook – with 86% foreseeing their revenue increasing in the next 12 months, up from 72% in Fall 2022.
This revenue optimism is fuelling hiring and expansion plans. 56% of Black business owners plan to hire more employees over the next 12 months, up significantly from 44% last fall. Additionally, expansion plans are up six percentage points this year, as 71% of Black entrepreneurs report plans to grow their business. To facilitate growth, 96% of Black business owners plan to obtain financing for their business in the year ahead.
With their optimistic outlook, Black business owners continue innovating in a changing business environment. Half of Black entrepreneurs said they offer their employees hybrid work options and are seeing positive impacts on hiring and retention. Of those who provide hybrid work, 54% say it has made it easier to hire employees, and 53% have seen increased employee retention.
AAPI business owners plan to seek financing, revenue expectations down slightly
Business growth, investment and expansion are top-of-mind for AAPI business owners this year. A majority (78%) reported they plan to obtain financing for their business, and 45% plan to expand their business in the year ahead. Among AAPI entrepreneurs seeking financing, 59% plan to use a business credit card to finance their business.
When asked about their business outlook for the coming 12 months, AAPI business owners have tempered their overall outlook, including revenue expectations down eight percentage points since last fall.
Finally, AAPI entrepreneurs lag behind when looking at work-life balance, as only 36% say their work-life balance is better as a small business owner, compared with 49% of non-AAPI business owners.
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