Bank of America survey: Chicagoland small businesses bullish despite economic and labor concerns
Despite economic headwinds, Chicago small business owners report having confidence in their ability to manage their businesses through difficult times.
That's great news for the largest metro region in Illinois, a state whose economy exceeded $1 trillion in annual gross domestic product (GDP) last year alone and leads the Midwest in economic activity.
According to Bank of America's 2023 Small Business Owner Report, small business owners are feeling the effects of inflation and supply chain challenges, but the majority surveyed feel well-positioned to weather the challenges ahead. Chicago-area business owners echo these sentiments, with 80% signaling their businesses are equipped to survive a recession.
Founders and entrepreneurs across Chicagoland are actively monitoring a handful of challenges to their business plans in 2023, reporting concerns around inflation, funding, commodities prices, and a potential recession. Still, nearly half of local small business owners plan to expand their business this year, and 65% expect revenue to increase.
As small business owners with a growth mindset navigate the intersection of optimism and uncertainty, there are several insights, trends and obstacles they should bear in mind.
Labor challenges
Fifty-four percent of Chicagoland business owners say labor shortages are impacting their business, causing them to work more hours, modify operations and aggressively recruit talent. One-third of local business owners plan to hire more employees this year to offset shortages.
To combat these challenges, business owners are adopting creative strategies to attract and retain employees. Over the past 12 months, 43% of business owners modified policies to allow for hybrid or remote work, 33% increased vacation time, and 30% offered cost of living bonuses. Additional perks for local companies included higher base pay for new employees, expanded learning and development opportunities, and additional health care benefits.
Entrepreneurs who have already implemented those changes are seeing their efforts pay dividends - a vast majority of business owners reported that providing additional incentives and benefits had a meaningful impact on employee morale and retention.
Digital expansion
Entrepreneurs recognized that, to grow their businesses in creative, sustainable ways, they needed to tap into the latest digital tools and resources. That's why 81% of Chicagoland business owners digitally optimized their businesses last year, weaving in technology like cashless payments, mobile banking and social media engagement to stay organized and reach new customers. Looking ahead, 46% of local business owners plan to incorporate automation and artificial intelligence (AI) tools this year alone, opening the door for unprecedented efficiency and opportunity.
Adaptability
Adaptability is a core skill for today's small business owners. For those looking to grow, the ability to balance creativity and optimism with a commitment to revisiting and revising their business plans is critical.
By setting specific, measurable goals and evaluating those goals regularly, business owners will have greater insight into the effectiveness of their business strategies and tactics while identifying areas for enhancement and improvement. And, now more than ever, it's beneficial for business owners to learn from one another, sharing best practices with fellow entrepreneurs and partners and gathering diverse perspectives on how to grow and enhance their businesses.
Whether your small business has been around for decades or is just opening its doors, a Bank of America Small Business Banking Adviser can help you navigate the resources necessary to open, operate, and grow your business at every stage.
• Kasia Leiter is a small business banker manager in for Bank of America in Chicagoland. She counsels small business owners on their banking and financial needs, helping them establish, maintain, and grow their businesses.