It was Small Business Week last week. You know, everyone says how much they value small business in an election year- and does nothing about it. Depending upon how you define small business (a company that employs- with a payroll- one or more people OR include Mary or Tom working 2 hours a month on the side, with a full time job or mommyhood [or daddyhood] taking up most of the time), most small businesses are not incorporated and pay their taxes as part of an individual’s tax return. So, tax rates for corporations have no impact on their bottom line. (Another large segment of “small” business are pass-through entities, which have their profits taxed on an individual’s tax returns, too.) But, that’s not the subject of this post, either.
BankofAmerica, that stalwart supporter of small business (not) has released its first Small Business Owner Report (calling it a semi-annual study!) that explores the concerns and perspectives of small business owners across America. Their potential census included firms with sales ranging from $ 100,000 to $ 4,999,999 and with two to 99 employees on payroll. (I believe this was an excellent census base.)
One of the interesting findings of the study is the stress involved in running a small business. They found that it was thrice as stressful (38%) as raising children (13%) and almost thrice to stay happily married (15%). (Could that be because these business owners have great marriages and children or because they cede that effort to their spouse?)
The study also found that small business owners are optimistic about the future- because of their own decisions and their belief that their local economy is strong. 69% of the respondents understood that the strength of the local economy was more important for their futures than the national economy would be. (This means that most of these companies do not have national exposure.) And, the younger the small business owner, the more likely they were to believe their decisions would help them prevail (66% versus 53% overall).
Most small businesses have no faith in the effectiveness of the US government (75%)- but neither do most other folks given the filibuster mentality of the Senate and the gridlock desires in the House. Health care, transportation fuels, and consumer spending were high among their concerns, with credit availability almost 1/3 lower (at 54%).
On the employment front, it was not too optimistic. 56% expect to neither increase nor decrease their employment, while only 31% expect to add to their payrolls in the next 12 months. If this were indicative of the small business sector [the ones that HAVE employees, not the side businesses], it would mean an average of 100,000 new jobs would be created monthly for the next year . (Of course, we have HP killing 30,000 jobs in one fell swoop.)
The other key point is only 27% of small business owners consider themselves financially savvy, and need outside help. (Our phone number is Seven Oh Three.548.1343 and we are available 24 X 6).
47% of small business owners understand that marketing is critical; they need to acquire new customers for revenue growth, with 14% aiming to increase sales to existing customers. (Actually, both of these are critical concerns- and our phone number is still listed above.) Only 38% of the owners are using social media to contact customers or to offer discounts and deals to their customer base- even though 64% wished they leveraged technology better.