What do small
business owners really want?
Politicians aren’t very popular right now. Congress’
approval rating is hovering around 10 percent in many polls. The two
Presidential nominees were viewed unfavorably by a majority of voters. Leading
up to the election, candidates did everything they could to associate
themselves with things Americans still respect. One of those things is small business.
A Gallup poll last year showed that 67 percent of Americans
have “a great deal” or “quite a lot” of confidence in small business. This makes small business one of the most
popular institutions in the United States today. Only the military has a higher
rate of public confidence in the Gallup results.
This is why it’s
difficult to find candidates or office holders who don’t praise small
businesses and encourage entrepreneurship. We know they’re talking about small
business. The question is whether they’re listening.
Every four years, the National Federation of Independent
Business polls our membership asking them about their problems and priorities. This is a complex study asking business owners
to weigh 78 issues on a scale of 1 (a critical problem) to 7 (not a problem). The
results of this scale give us a clear picture of the magnitude of the
challenges facing small business owners.
The top concern this year is the high cost of health
insurance. Small business owners know
that there is still a lot of work to be done to control costs and reduce the
headaches associated with trying to provide good coverage to workers.
Second in the rankings, is “unreasonable government
regulations.” This is up three positions
from the previous survey. When you consider that “federal paperwork” and
“state/local paperwork” are also in the top 15 problems, it is evident that
small business owners are frustrated with the level of government regulation.
The vast majority of our members operate very small
businesses. They have only a few employees and the owner often handles HR,
bookkeeping, and compliance issues along with running the shop. Each time the
government puts another requirement on them, it is time taken away from what
they must do to run their business and make it more profitable.
The third biggest problem is also directly related to the
government: “federal taxes on business income.” All told, 5 of the top 10 most
serious problems are related to taxes. According to our Index of Small Business
Optimism, small business owners’ outlook has still not recovered following the
recession. While Wall Street bounced back and corporate earnings soared, small business
owners, like most middle-class Americans, still feel like the economy isn’t working
for them.
Our typical member files their taxes at the individual rate.
Their business income and personal income is
taxed together, and while the IRS
might see them as wealthy, their actual take home pay is modest. While
corporate tax rate reform may help some of our members, only comprehensive
reform of both corporate and individual rates can help the entire sector.
The biggest mover in the survey this year is “locating
qualified employees,” moving up from 32nd place and into the top
ten. Our members tell us all the time that they struggle to find workers with
the right skills and qualities.
This result may show that the labor market is tightening,
which could be good for workers. However, small businesses who have little room
to raise wages or offer more benefits could find themselves struggling to
compete for good workers. Small firms may be losing out to big companies.
Small business owners have told us what they need from their
elected officials. Those lawmakers should listen closely and offer real
solutions to the big problems.
