Entrepreneurs have diminished confidence in the economy and have a growing concern for a variety of key issues, including healthcare costs, interest rates and the stock market, a new survey from Bank of America found.
Despite their concerns, entrepreneurs remain largely optimistic about their own business outlook, with revenue forecasts, growth and hiring plans holding steady since the fall of 2018, the national survey found.
“What I’m hearing mirrors the national report,” said Chad Clark, Bank of America’s senior vice president and small business banker manager in Tampa Bay. “I don’t hear doom and gloom … The feedback I get is small business owners still feel very positive about the economy and growth and expansion.”
Clark leads a team of 14 bankers in the Tampa Bay area, covering St. Petersburg, Tampa and Clearwater, as well as an area as far north as Spring Hill and Zephyrhills and as far east as Plant City. They typically work with businesses with annual revenue of $1 million to $10 million. Clark attends client meetings with the bankers on the team, seeing about four or five clients a week.
There are issues on their minds, he said. “When we talk about some of the concerns we talk a lot about hiring, rising healthcare costs and having the liquidity to sustain a larger workforce and the cash flow to sustain that.”
Low unemployment has made it harder to find qualified candidates for job openings, especially those where skilled labor is required.
“The bank helps with that through some of our partners like ZipRecruiter and Indeed [online job posting and recruiting sites],” Clark said. “I’ve been in the market for 12 years and it’s more top of mind, and they have to get more aggressive with using recruiting tools.”
Real estate also can be a challenge, although it depends on the industry sector.
“In some industries it’s challenging to find space to buy that’s in their price point. In other industries, such as health care, it might be easier than an industry that needs more square footage,” Clark said. “I think people who are leasing are actively pursuing buying opportunities, but they are not jumping at them. It’s got to the right price point and the right size, something they can grow into.”
Some issues are specific to Florida, such as preparations for disaster recovery.
“The hurricanes in Florida can be a severe disruption to small business owners. They could be down a week or two and that could be a significant impact on their business,” he said. “I was just with a client last week who was talking about financing a generator.”
Some economists says a recession is looming. Clark was working as a banker in the Tampa Bay market during the Great Recession of 2008 and said it’s still a fresh memory for his clients.
“That’s always something now that’s in the back of their mind. I don’t think they are panicking over it, or hear anyone say an economic downturn is coming, but through experience I think they are more prepared and have put things in place to be prepared,” he said. “It could be their business model, more liquidity, more open lines of credit that they might not need at the moment, but it’s like insurance.”
The Bank of America Small Business Owner Report Survey for Spring of 2019 was conducted online Feb. 8-24, using a pre-recruited online sample of small business owners. Ipsos Public Affairs contacted a national sample of 1,504 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees.
Here are some more specific findings from the national report.