Small business owners are holding to a conservative outlook for their companies, with many scaling back their hiring plans for the next year.
That’s the finding of a survey of 1,000 owners released Tuesday by Bank of America. The survey, taken between early August and early October, was completed about a month before Republican Donald Trump’s election as president.
Although the survey results don’t reflect last week’s vote, some of owners’ key concerns remain unresolved, making it likely that the uncertainty continues for many businesses following the election. Three-quarters of the owners cited health care costs as a top economic concern, little changed from a similar survey in the spring. Just over half cited consumer spending as a concern, up from 44 per cent.
Fewer owners cited the effectiveness of the federal government as a concern — 64 per cent versus 79 per cent during the spring. When the most recent survey was taken, the presidential race had moved from the primaries to its final phase, the contest between Trump and Democrat Hillary Clinton.
Owners’ uncertainty was reflected in their diminished hiring plans. Nearly two-thirds said they’d hold off on hiring over the next 12 months, up from 59 per cent in the spring and sharply higher than 29 per cent in a survey a year ago.
The survey is in line with others over the past few years; owners have said they would hold off hiring or expanding amid ongoing economic uncertainty. Many have said they wouldn’t take on new staffers until they had enough new revenue to justify the risk.
In the Bank of America survey, owners’ plans to expand were unchanged from the spring, with 55 per cent saying they’d keep their plans steady over the next five years. A year ago, 78 per cent planned to expand.
Revenue expectations were little changed from the spring, but down sharply from a year ago. Fifty-two per cent of owners said they expected their revenue to grow in the next year, up from 51 per cent in the spring. In the fall of 2015, 72 per cent expected higher revenues.
Similarly, 31 per cent expected the national economy to improve over the next 12 months, up 2 percentage points from the spring but down from over 56 per cent a year ago.
The most optimistic owners were those with the newest companies, those up to five years old. Nearly 40 per cent said they’re confident the national economy will improve over the next 12 months. About a third of owners with six-to-10-year-old companies expect the economy to improve, and 28 per cent of those with older companies made that forecast.
DIVERSIFYING YOUR AUDIENCE
Many owners want to reach a broader, more diverse audience but may not know how. SCORE, which gives free advice to small businesses, is sponsoring an online seminar on how to reach multicultural and female customers. It will be held Thursday, Dec. 1 at 1 p.m. Eastern time. Learn more and register at http://bit.ly/2g8zTZ2
Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg . Her work can be found here: http://bigstory.ap.org/content/joyce-m-rosenberg