Survey: The majority of small business owners expect revenue growth by 2024

A majority of small and medium-sized business owners expect their revenues to increase this year, and their concerns about a recession have diminished, according to the 2024 Bank of America Business Owner Report, conducted in partnership with the Bank of America Institute.

The survey shows that while business owners remain aware of the impact of inflation and interest rates on their bottom line, both concerns have diminished since spring 2023. Despite some lingering uncertainties about the broader economy, entrepreneurs are planning to expand their businesses this year. forward.

“Small business owners remain cautiously optimistic heading into 2024,” said Sharon Miller, president and co-head of Business Banking at Bank of America. “With expected sales increases, many are focused on communicating 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 revenue, respectively). The report examines the views, objectives, concerns and prospects of entrepreneurs across the country.

“Our report shows that most midsize business owners plan to expand their businesses and hire new employees in the coming year,” said Raul Anaya, president and co-head of Business Banking at Bank of America. “Most of these entrepreneurs are confident in their sales growth and in the local, national and global economies.”

When looking at attitudes toward the national economy, business owners’ prospects varied depending on the size of their business. About 75 percent of mid-sized business owners expect the national economy to improve over the next twelve months, while only 33 percent of small business owners expect the same.

Mid-market business owners (MSBOs) have a positive business outlook:

• 87 percent believe their sales will increase in the next twelve months.
• 80 percent plan to expand their business in the coming year.
• 69 percent plan to hire in the next twelve months.
• 84 percent said their revenues would be higher in 2023 than in 2022.

Among small business owners (SBOs):

• 65 percent expect their sales to increase in the coming year (having remained stable since last spring).
• 39 percent plan to expand their business in the coming year.
• 30 percent plan to hire more employees in the next twelve months.
• 55 percent reported higher operating revenues in 2023 than in 2022.

The top economic concerns for MSBOs include the U.S. political environment (68 percent), inflation (67 percent), supply chain (66 percent) and consumer spending (66 percent). SBOs share concerns about the U.S. political climate (75 percent) and inflation (73 percent), but are also concerned about healthcare costs (69 percent) and interest rates (63 percent).

About 61 percent of MSBOs and 56 percent of SBOs were concerned about the recession, both down from 72 percent last spring. While concerns about inflation have subsided somewhat since this time last year, 90 percent of MSBOs and 84 percent of SBOs still say inflation is currently impacting their business.

Financing plans for MSBOs have increased in the coming year, with 93 percent of MSBOs planning to obtain financing (90 percent by spring 2023). Financing plans have remained stable: 54 percent plan to apply for a bank loan in the next twelve months.

In contrast, financing and loan application plans for SBOs have declined, with 71 percent planning to obtain financing for their business, down from 82 percent last spring; and 16 percent of SBOs plan to apply for a bank loan or line of credit this year, up from 24 percent last spring.

According to the Bank of America Institute’s recent Small Business Checkpoint, small businesses have become more reliant on credit cards, with balances increasing 18 percent since 2019, based on the bank’s collected small business credit card data. While rising balances may cause some concern, the Institute offers some reasons to be less pessimistic.

First, inflation has increased by more than 22 percent since 2019, leaving inflation-adjusted credit card balances comparable to or even lower than 2019 levels.

Second, levels of credit card spending for small businesses have declined since 2023, indicating that small businesses are taking steps to manage spending and reallocate or optimize cash flow.

While balance sheet conditions for small businesses overall are relatively healthy, according to the Institute, an increasing portion of their credit card balances continue to roll over – from one month to the next – following a decline in this behavior during and after the pandemic.

Running a profitable business is important to entrepreneurs and for many it comes with personal and professional sacrifices. About 70 percent of SBOs say they have made compromises to maintain their company’s profitability, such as raising prices (47 percent), working longer hours (45 percent) and reducing their own salaries (32 percent ).

Business owners are implementing digital tools throughout their operations. Over the past twelve months, most entrepreneurs (99 percent of MSBOs and 71 percent of SBOs) have digitally optimized their businesses. For many, this means doing their business banking online or through an app, accepting more forms of cashless payments and/or strengthening 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 percent) plan to implement artificial intelligence (AI) tools this year. They plan to use these tools to streamline their payroll and accounting (57 percent), assist with recruiting efforts (49 percent), and differentiate themselves from the competition (44 percent).

Meanwhile, SBOs are also evaluating the benefits of AI tools, albeit to a lesser extent. 37 percent plan to implement AI tools this year – citing similar ways they can use the technology, including to differentiate themselves from competitors (47 percent), to streamline their payroll and accounting (36 percent) , and assisting with recruitment efforts (25 percent).

Visit here for an in-depth look at the insights of the small and medium business owners in the country.

Ipsos conducted the 2024 Bank of America Business Owner Report survey online between March 4 and 28, 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 revenues between $100,000 and $4,999,999 and 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, DC. The results for the national and designated market area segments were weighted according to national benchmark standards for size, revenue and region.