⚡ Get All Content for 20% Off ⚡

Why a Local Economy's Strength Is Critical to Small-Business Success (Infographic) A new Bank of America survey reveals that small-business owners rely heavily on their local economies.

By Cheryl Winokur Munk

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Even if fiscal cliff fears play out and the national economy cools down, strong local economies may provide an extra layer of insulation for many small businesses.

A new Bank of America survey published today underscores just how important the local community is to small businesses. The Bank of America Fall 2012 Strong Local Economies May Shield Small Businesses From Possible National Downturn shows that the majority of small business's customers come from the community in which their business is based. The survey of 1,003 small business owners in the U.S. was conducted by Braun Research in September and October.

Sixty-three percent of respondents said most of their customers come from their local community, while 27 percent said the majority of customers come from outside their local community, but within the U.S. Just 3 percent said that most customers are from outside the U.S.

Related: Why Your New Neighbors May Hold the Key to Your Business Success [Infographic]

When asked about the role that the local, national and global economy plays in their business, 75 percent of respondents said the local economy plays a significant role in their business, while 59 percent said the national economy plays a significant role.

The dependence on local business is one reason small businesses continue to be optimistic about their future prospects, despite continued uncertainty about the national economy and the looming fiscal cliff.

Related: Should Small Business Fear the Fiscal Cliff? (Opinion)

Thirty-eight percent of small-business owners believe their local economy will improve over the next year. What's more, the majority of small-business owners are planning to sustaining or growing their business over the next year, and 31 percent plan on hiring more employees, while 56 percent anticipate their staffing needs will remain consistent. These results are similar to what Bank of America found when it conducted the survey for the first time in May.

When it comes to entrepreneurs, confidence and optimism are "part of their DNA," says Robb Hilson, small business executive at Bank of America.

According to the survey, the top concerns of small business owners over the next year are the effectiveness of government leaders, commodities prices, healthcare costs, recovery of consumer spending and the strength of the U.S. dollar.

None of these issues, however, are enough to shake their confidence in their business prospects. "At the end of the day, there's this overriding theme that they are going to manage through, no matter what," Hilson says.

Below is an infographic of the study's findings.

Strong Local Economies May Shield Small Businesses From Possible National Downturn

Cheryl Winokur Munk is a freelance writer and editor in West Orange, NJ. She is a former reporter for Dow Jones Newswires and American Banker where she covered the financial services industry. She earned a B.S. in journalism from Boston University.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Franchise

The Top Franchise Brands Growing Globally

While our main Fastest-Growing Franchises list focuses on North American growth, more and more brands are looking to grow worldwide. These are the 25 that had the greatest franchise growth outside the U.S. and Canada from July 2022 to July 2023.