Mid-sized business owners maintain a positive outlook in the face of economic challenges, as 75% plan to expand their business and 67% expect the national economy to improve over the next 12 months, according to the inaugural Bank of America Mid-Sized Business Owner Report. The study is based on a survey of more than 300 mid-sized business owners (MSBOs), with $5 million to $50 million in annual revenues, and focuses on their business and economic outlooks.
The survey also found that 75% of mid-sized business owners expect their revenue to increase and 71% are planning to hire over the next 12 months,
“The strength of mid-sized businesses is essential to the health of the U.S. economy,” said Raul Anaya, President of Business Banking at Bank of America. “Preparation, optimism, and flexibility are traits of successful leaders in this environment, with investments in the workforce and digital transformation topping their current list of priorities to remain resilient and position their businesses for growth.”
Additional insights into mid-sized business operations and financing in the current environment include:
- Macroeconomic challenges in recent years, including inflation, the threat of a recession, and supply chain issues, are driving companies to make operational changes, such as raising prices (45%), revaluating cash flow and spending (37%), increasing employee wages (35%), and reducing business costs (33%).
- Among the more than half (54%) of MSBOs who plan to apply for a bank loan or line of credit in the next 12 months, they plan to use these funds to invest in new technology (43%), invest in new equipment (37%), and market/promote their business (35%).
Labor Market Realities
To attract qualified candidates, many MSBOS are increasing salaries (43%), offering more PTO (40%), strengthening retirement benefits (36%) and introducing new employee training and resource groups (34%).
Current labor shortages have challenged business owners looking to attract and retain talent. The report found that many MSBOs struggle to find skilled, experienced employees. To attract qualified candidates, many MSBOS are increasing salaries (43%), offering more PTO (40%), strengthening retirement benefits (36%) and introducing new employee training and resource groups (34%).
Given the complexity and competitiveness of this labor market, MSBOs are also employing strategies that emphasize their commitment to retaining their existing employees. Four out of five (78%) business owners say the following actions over the last year have led to a meaningful impact in employee morale and/or retention: increasing paid time off (PTO) (39%); offering cost-of-living bonuses (38%); providing additional healthcare benefits (37%); augmenting retirement benefits (34%).
Digitization On The Rise
Over the last 12 months, 90% of MSBOs have adopted digital strategies to further optimize their businesses and operations, with new digital tools helping them to save time (48%), increase customer satisfaction (43%), manage cash flow (43%), stay organized (41%) and reach new customers (37%).
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2023 FM Global Resilience Index Provides Site Selection InsightAdditional ways innovation is at play within mid-sized businesses include:
- 87% plan to further utilize automation and artificial intelligence (AI) to stand out from competitors (45%), assist with hiring (45%), and streamline payroll and bookkeeping (43%).
- 88% see cybersecurity as a threat to their business, and as a result are further investing in digital security systems (65%) and storing less business information online (39%).
“The digital landscape is complex and fast-moving,” concluded Anaya. “Staying on top of the latest innovations can help business owners create efficiencies, manage risk and unlock value that gives them a competitive edge.”
