By Sacha Wedner
A study released in partnership with Bank of America revealed that most minority and women-owned businesses anticipate a spike in revenue and growth over the next 12 months.
The study conducted before the November election shows that 84% of Black/African Americans, 83% of Asian American and Pacific Islanders, 82% of Hispanic/Latino Americans, and 76% of women anticipate a growth in revenue over the upcoming year.
The results were published as part of the 2024 Bank of America Women & Minority Business Owner Spotlight. The survey consisted of 2,324 small and mid-sized business owners across the U.S. and provides insight into business outlook, access to capital, employee management, and interactions with the community.
“As inflation cools and interest rates decrease, we may see further improvement of this economic confidence, with business owners returning to loans to finance their expansion plans”, said Carol Lee Mitchel, the Managing Director at Bank of America, in an email interview with AsAmNews. “Bank of America Institute’s October Small Business Checkpoint also suggests this trend, with small businesses potentially rotating away from credit card usage and toward traditional loans which can be used to invest in the futures of their businesses.”
Across the board, U.S. business owners of different sizes were cautiously optimistic about economic improvement over the coming year, with 66% believing that the local economy will improve, 60% believing that the national economy will improve, and 57% believing that the global economy will improve.
When asked about the top concerns for the year ahead, 70% of Business owners said inflation. This was followed by the U.S. political environment at 67%, the 2024 U.S. Presidential Election at 65%, and interest rates and recession at 62%.
Smaller businesses, however, were less optimistic. 63% of mid-sized business owners have plans to expand, and 61% plan on hiring over the next year. As for small businesses, only 50% plan to expand, and only 39% plan to hire.
The report revealed that AAPI business owners strongly believe in economic success and growth over the coming year. The data shows that 73% of AAPI business owners plan to expand their businesses over the year, 71% believe that the national economy will improve, and 70% believe that their local economies will improve.
In an email interview with AsAmNews, Dr. Ashley Joves, owner of the Smile and Co. dentistry in Folsom and Roseville, California, said that her team utilized social media and internal referrals to help expand their patient base, and have also partnered with local small businesses “to deepen our connections within the community”.
“Moving forward we want to be more involved with community outreach such as attending the Chamber of Commerce networking events and helping to sponsor nonprofit organizations.”, said Joves.
When asked about some of the challenges her business faced over the past year, Joves said that handling the two locations was the biggest hurdle.
“The transition was not an easy one. I made a lot of mistakes as the leader of the business, including not setting up clear systems earlier on.”, explained Joves. “Being the sole practice owner, I also feel the weight of both practices resting on my shoulders, and the guilt of not being able to give 100% of myself to either. “
Despite these obstacles, Joves expects tremendous growth for both the Folsom and Roseville locations, saying “Our Roseville location is now one year old, and we are excited for the tremendous growth trajectory that we have ahead!”
“Our Folsom location is now 7 years old, and we continue to foster our longstanding relationships with our valued patients and community.”, Joves added. “We are excited to welcome new team members to both locations.”.
The survey also showed that AAPI business owners plan to seek capital and improve workforce stability. 91% of AAPI respondents reported that they had used AI as an approach to staffing over the past year This is almost 30 points higher than non-AAPI business owners. In addition, 60% of AAPI business owners plan on hiring more employees and utilizing technology and AI tools to support their hiring efforts.
In addition, the data showed that Black and African American business owners are confident in their success in the coming year and have reported strong economic and business outlooks. 94% of respondents said that they plan on obtaining funding for their businesses, and 77% of respondents said they plan to expand over the coming year. The survey also revealed that Black and African American entrepreneurs are prioritizing personal customer interactions, with 70% of respondents noting that this strategy is important to attract and retain customers. 92% of respondents also said that they have been making changes to their marketing strategies such as increasing their social media presence (54%) and offering individual customers personalized discounts and deals (45%).
Hispanic-Latino business owners hold a strong confidence in the economy, according to the report. 76% said that they expect to see the national economy improve and plan on obtaining funding (94%) and hiring new employees (64%). 78% said that they plan on expansion in the coming year. 81% of Hispanic-Latino business owners reported that labor shortages were a top concern, and in order to combat these challenges, 33% said that they are raising wages to attract more competitive talent, with another 33% saying that they are personally working more hours due to staffing shortages.
57% of women-owned businesses plan to expand in the coming year. Of those, 65% plan on expanding by growing their customer base, 48% plan on creating on online presence, and 35% plan on using professional services. The data showed that 54% of women business owners over the past year put an emphasis on work-life balance. 71% of women reportedly measure their work-life balance by having time to take care of their personal responsibilities, and 62% feel like they have enough energy to achieve anything they want to.
Ipsos conducted the survey online between August 7 – 21 using a pre-recruited online sample of small and mid-sized business owners. A national sample of 752 small business owners across the U.S. was also contacted by Ipsos. They each had annual revenue of $100,000 – $4,999,999 and had two – 99 employees. This sample also included 406 interviews of Hispanic-Latino small business owners, 269 interviews of Black/African American small business owners, and 160 interviews of Asian American Pacific Islander (AAPI) small business owners.
On top of this, Ipsos interviewed a national sample of 323 mid-sized business owners with annual revenue between $5,000,000 and $49,999,999 and a workforce consisting of two – 499 employees. This data was supplemented by 200 interviews of Hispanic-Latino mid-sized business owners, 159 interviews of Black/African American mid-sized business owners, and 55 interviews of AAPI mid-sized business owners.
“Data like this is crucial to understanding not only the current business outlook of business owners, but also the challenges and concerns among small and mid-sized business owners and how they’re being addressed. “, said Mitchell. “For example, this year’s spotlight found that most AAPI business owners are being impacted by labor shortages and are struggling with employee retention.” “
“As a result, 91% of AAPI business owners have used AI to bolster their approach to staffing in the past year, nearly 30 percentage points higher than non-AAPI business owners.”, Mitchell further explained. “We’re also seeing many business owners across the U.S. are investing in employee education and prioritizing employee satisfaction to combat these challenges.”.
The final results from the national and demographic samples, plus the combined samples of small and mid-sized business owners were weighed on the national benchmark standards for size, revenue, and region.
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