Survey Shows Small Business Optimism for 2018

Small business entrepreneur

There are any number of things that can derail a small business owner’s dream, particularly external issues that are out of an owner’s control such as an economic downturn, shifting consumer habits, or technology changes rendering products or services outdated.

But small business owners are optimistic, according to a late 2017 survey conducted by Staples. The survey showed 86% of respondents were optimistic and four in five reported that their businesses were thriving or surviving in 2018.

There are business matters that small business owners point to as cause for concern, as outlined in the survey. Those issues include disorganization, tax preparation challenges and a lack of marketing knowledge.

A Staples press release announcing the survey results offer a closer look at the challenges:

Disorganization Kills Productivity

  • 53 percent of thriving/surviving small business owners describe their workplace as very organized, while only 23 percent of struggling/failing small business owners say the same
  • 1 in 3 business owners believe that workplace disorganization leads to less productivity
  • 3 in 4 owners with struggling or failing businesses believe disorganization has affected their company’s productivity

Tax Preparation Challenges

  • More than half of small business owners view tax preparation as complicated
  • Nearly 50 percent of small business owners handle their business’s taxes themselves
  • 2 in 5 believe that leaving tax preparation to the last-minute causes complications
  • Nearly 40 percent are not good with numbers or do not have accounting expertise

Professional Marketing Advice Makes All the Difference

  • More than one third of thriving business owners face challenges designing effective marketing materials for their business
  • Fifty percent do not know how to reach new prospective customers on their own
  • Thriving small businesses are more likely than others to use all forms of marketing; 63 percent of thriving small businesses use social media advertising, 59% use online advertising, and 46 percent use print advertising

Keeping Small Businesses in Business Through Crowdfunding

When I find a business that provides a product or service I love, I want to share it with the world because I want my family and friends to have a great experience and (a bit self-servingly, I’ll admit) because I want the business to continue existing so that I can continue being a customer.

To that end, if a favorite local business was in need of a cash infusion to fight off a takeover or to survive a financial hardship or a health crisis, I’d be willing to support the business. Would others be willing to do that? It seems likely. Crowdfunding via the internet is a medium to which more small business owners are turning in times of trouble.

On its face, the idea of a business – which is essentially designed to make money by selling its product or service – needing money from customers without exchanging those products or services is a bit absurd. Businesses fail for various reasons and getting close to closing down doesn’t necessarily instill confidence in the business owner’s capability.

But that’s a cynical viewpoint. Sometimes stuff just happens.

Crowdfunding small business

Communities can rally around their local small businesses. While crowdfunding is more traditionally used to launch new businesses or creations, small business owners are pursuing crowdfunding to raise money for survival. Some raise enough money; others attempt and fail.

This article from Entrepreneur highlights the stories of several small business owners, including a Brooklyn-based bar that needed money to survive a hurricane and then a protracted family dispute; and this story about a Philadelphia-based book store:

One of these businesses is Philly’s Black and Nobel, one of the last remaining black-owned independent bookstores in the country. Earlier this year, founder Hakim Hopkins was on the verge of shutting down the hulking, 14-year-old shop. Book sales were down, and the bulk of Black and Nobel’s revenue – currently about three-quarters, Hopkins says – came from shipping books to prison inmates, a business that can be run without a pricey brick-and-mortar location. “That’s why we’re still here. They’re still reading in prison. They still have time,” he says.

There was only one problem with Hopkins’ plan to wind down the business: His customers wouldn’t let him. “I’ve been fighting for the past few years to keep the doors open. The younger people were like, ‘No! This place saved my life!’”

So in June, he launched an ambitious $250,000 campaign on GoFundMe to keep Black and Nobel’s doors open and maintain the bookstore’s vital role as an event space, supporter of independent black writers and artists, and community hub. The campaign has gotten plenty of local press, and support from a few high-­profile local artists and athletes. But by the three-month mark, Black and Nobel raised just shy of $10,000, a far cry from what Hopkins was seeking.

At a glance, the Black and Nobel campaign appears doomed. But Hopkins says he’s just getting started. He is planning a neighborhood block party to raise more funds, and he wants to launch a series of promotional videos. “I’m not just gonna brush it off after six months,” he says.

If he can make it to the $250,000 goal, Hopkins has big plans: buying his own building, renovating and expanding the bookstore space, buying a tour bus to put Black and Nobel’s programming on wheels and take it around the country. And although the campaign has a long way to go, he’s heartened by the progress he’s made. “Mainly we started it to keep up with rent,” he says. “It’s getting to the point now where I feel like we’re going to be open, because we do have people who care.”

Promoting the fund-raising campaign is a bit like having a second job, Hopkins says – a sentiment shared by many campaign founders. “It’s very draining. It’s like begging. And I’m an earner,” he says. Hopkins, who started his business as a street vendor with a table and a box of books, says he’s never had a bank loan, or even a credit card. Every dollar he spends on his business is a dollar he earned.

But Black and Nobel is too important to give up without a fight, he says. He’s watched elementary school kids who saw the bookstore as a haven grow up and graduate from college, and he feels his store made a difference in their lives.

“We helped build the community,” he says. “It’s more than a bookstore.”

Indiana Climbs in Small Business Policy Index

Indiana ranks seventh in the Small Business & Entrepreneurship Council’s 2017 Small Business Policy Index (up from 10th in last year’s ranking).

This is the SBE Council’s 21st annual look at how public policies in the 50 states affect entrepreneurship, small businesses and the economy. The report ranks the 50 states according to 55 different policy measures, including a tax, regulatory and government spending measurements.

According to the report, the most entrepreneur-friendly states under the “Small Business Policy Index 2017” are Nevada, Texas, South Dakota, Wyoming, Florida, Washington, Indiana, Arizona, Alabama, and Ohio. In contrast, the policy environments that rank at the bottom include Rhode Island, Oregon, Iowa, Connecticut, Maine, Hawaii, Vermont, Minnesota, New York, New Jersey, and California.

Ellis, Lawrance Bring Chamber Advocacy Team to Full Strength

lawrence ellisThe many programs and benefits of Indiana Chamber membership include the state’s deepest and most effective group of issue experts. That team welcomes two talented additions.

Mark Lawrance returns to the Chamber in the new position of vice president of engagement and innovation policy. That includes advocacy work in the areas of technology, economic development and infrastructure.

Greg Ellis begins his work May 31 as vice president of energy and environmental policy. His variety of public and private sector experiences, including serving as an administrative law judge for the Indiana Utility Regulatory Commission since 2010, will prove valuable in his work on behalf of Chamber members.

Chamber President and CEO Kevin Brinegar leads an experienced lobbying team that also includes: Caryl Auslander, education, workforce development and federal relations; Mike Ripley, health care policy and employment law; and Bill Waltz, taxation, public finance and local government reform.

“The hard work that takes place in the summer and fall – Chamber policy meetings, interim legislative panels, individual meetings with lawmakers and more – leads to effective General Assembly sessions,” Brinegar says. “Chamber members will be well represented by these issue experts and the support team we have around them.”

Most Small Businesses Really Are Small

Indiana Department of Workforce Development statistics for the first quarter of 2013 revealed that of nearly 160,000 businesses in the state, more than 87,000 had four or fewer employees. Building Indiana magazine published this breakdown:

  • 0 to 4 employees: 87,211 businesses; 54.5% of total
  • 5 to 9 employees: 28,258; 17.7%
  • 10 to 19 employees: 20,160; 12.6%
  • 20 to 49 employees: 14,328; 9.0%
  • 50 to 99 employees: 5,451; 3.4%
  • 100-plus employees: 4,529; 2.8%
  • Total: 159,947 businesses

Gigerich: Indiana Business Climate is Good News, Bad News Scenario

Larry Gigerich of site selector Ginovus penned an informative column for Inside INdiana Business about Indiana's business climate. While we have come a long way and are currently envied by many states, there is still work to be done. He writes:

A few weeks ago, the Kauffman Foundation and Thumbtack.com released an annual ranking of states for their friendliness to small businesses. Indiana ranked 15th for 2013. The study analyzed several factors including items related to tax climate, work force development and regulatory issues. Eight-thousand small businesses were contacted for feedback regarding the study's criteria. Here is how Indiana ranked in each category.

1. Overall Friendliness: B+
2. Ease of Starting a Business: B+
3. Ease of Hiring: F
4. Regulations: C
5. Health and Safety: D
6. Employment, Labor and Hiring: C-
7. Tax Code: D
8. Licensing: A-
9. Environmental: D
10. Zoning: B-
11. Training and Networking Programs: C-

The grades given to Indiana are not surprising. Work force development and job training have been a focus of Governor Mike Pence and the legislature since the beginning of the year. Indiana's educational achievement, continuing learning for adults in the work force and availability of certification/credential programs have not been where they need to be. While progress has been made, there is still much to be done by government, educational providers, not-for-profits and the private sectors.

Indiana has been recognized as a relatively easy place to start and grow a business. This report points to that in terms of licensing, zoning and other factors affecting the launch of a new business.

The tax code ranking is a bit surprising, but the survey asked small businesses if they were paying too much in taxes for their locations. The elimination of the state inheritance tax, which impacts small and family-owned businesses, could help improve this ranking.

Indiana continues to struggle with rankings where health and environmental issues are considered. In particular, the state's obesity and smoking rates are unacceptably high. These items impact healthcare costs, number of missed days of work and quality of life. In terms of the environment, Indiana's long-term large manufacturing presence has impacted water, air and soil quality. While important steps have been taken in the areas, there is much left to be done.

The top five states for small businesses are (in order): Utah, Alabama, New Hampshire, Idaho and Texas. The bottom five are (in order): Illinois, California, Hawaii, Maine and Rhode Island.

In summary, Indiana's ranking relative to the rest of the country is good. Policymakers in the state should focus on ways to improve our weaknesses in order to move Indiana into the top 10. Due to the fact that Indiana has never been a location for large headquarters for companies, small businesses are and will continue to be the lifeblood of the state's economic growth.

IUPUI Symposium Focus: Government and Economic Development

State Governments’ Role in the Economic Development of Advanced Manufacturing and Small Business. It’s an interesting proposition and the title of a September 28 event hosted by the Indiana University Robert H. McKinney School of Law on the IUPUI campus.

The Program on Law and State Government Symposium includes addresses from two program fellows and a series of panel discussions. The focus is on how law and policy intersect with economic development strategies and identifying potential solutions for growing the employment base of the industrial Midwest.

Additional details and registration information are available.

Small Business Owners Send Clear Message in Poll

Small business owners are confident, but economic growth is not following due to too many regulations and concerns about energy prices. Those are among the results in the latest U.S. Chamber small business survey. More than eight in 10 respondents want Washington to "get out of the way."

Concerns about regulations and energy prices continue to impede growth for small businesses, according to a recent poll commissioned by the U.S. Chamber of Commerce. The survey, conducted by Harris Interactive between March 27 and April 2, 2012, found that while small business confidence grew in the first quarter of 2012, small businesses continue to lose employees. 30% of small businesses reported laying off employees in the last year.

“This survey confirms that slow gains in economic growth are being undermined by uncertainty over rising gas prices, an onslaught of pending regulations, and stalled pro-growth bills in Congress,”  said Dr. Martin Regalia, the Chamber’s chief economist. “To deliver long-term confidence to small businesses, Washington should act to provide certainty and enact regulatory reform that will boost their ability to grow.”

The poll of 1,339 small business executives found that eight out of ten of small business owners cite higher energy prices as an immediate threat to the success of their business. Concern about gas prices has more than doubled in the last three months, increasing from 10% to 24%. The majority of small businesses (78%) do not think the administration is doing enough to keep prices low, increase domestic sources of energy, or support American job creation. Additionally, three out of four (73%) say the new health care law is an obstacle to hiring new employees.

Overall small businesses see Washington as the problem instead of the solution, with 81% asking Washington to get out of the way and 92% believing the business community is the best entity to lead the economic recovery.

Almost all small business owners (97%) say it is important to vote for a candidate who is a strong supporter of free enterprise; 84% say it is very important. Only 9% of small business owners approve of the job the Democratic Senate Majority is doing on the economy; 87% disapprove. The House Republican majority’s approval rating on handling the economy has increased from 40% approval in January to 46% in April.

“Small business owners are increasingly demanding accountability from members of Congress on how they vote on the issues that impact their operations,” said the Chamber’s Senior Vice President and National Political Director Rob Engstrom. “We’re seeing small businesses unable to hire, or worse, forced to let employees go because of the Senate’s refusal to take up job-creating measures like domestic energy exploration and regulatory reform.”

The survey defined a small business as a company with fewer than 500 employees and annual revenues of less than $25 million.  To read a complete copy of the Q1 Small Business Outlook Survey, please visit: http://www.uschambersmallbusinessnation.com/community/small-business-outlook-survey—march-2012

Small Businesses: Avoid These Mistakes When Buying Health Benefits

It’s a tough world out there for small businesses. That’s one of the big reasons Chambers like ours exist, I suppose. But in recent years, the burdens of health insurance have grown remarkably, often being a key reason some have had to close their doors. So here’s a valuable blog from Forbes about the top 10 mistakes small businesses make when buying health benefits. Here’s the list, but read the full article for more detail:

  1. They fail to hire a qualified agent, broker or consultant to help.
  2. When selecting an agent, broker or consultant, they rush through the interviews.
  3. They fail to decide in advance what they can afford.
  4. They do not research the market.
  5. They release their employees’ personal information while shopping.
  6. They’re afraid of high-deductible medical plans.
  7. They offer their employees “free” benefits.
  8. They forget to make parts of the plan optional.
  9. They are careless when discussing healthcare options with employees.
  10. They enjoy shopping for health care plans too much.

 

IRS Decision Good News for Small Businesses

You don’t hear this often: Kudos to the IRS. They’ve stopped plans that would have been a nightmare for small business recordkeeping. The Phoenix Business Journal reports:

The Internal Revenue Service has dropped plans to require businesses to reconcile their receipts from credit card transactions with reports filed with the IRS by third-party payment entities.

Legislation enacted in 2008 requires these third parties to report how much every merchant is paid each year through credit cards, debit cards or services like PayPal. For the 2012 tax year, the IRS planned to require businesses to reconcile their records with these third-party reports when they file their tax returns.

The IRS decided to drop this requirement after complaints from small-business owners, who said it would pose a significant burden on them. They noted that the amount recorded on credit or debit card purchases often does not equal the revenue a business receives from the transaction. For example, customers often get cash back on debit card purchases or receive cash when they return merchandise purchased with credit cards.

Legislation to overturn the requirement recently was introduced in the House. On Feb. 9, however, the IRS told small-business groups it would not impose the reconciliation requirement for 2012 tax returns, “nor do we intend to require reconciliation going forward.”

“We appreciate your work with us in this and other areas as we continually seek to improve our processes and to minimize compliance burden on taxpayers,” wrote Steven Miller, the IRS’ deputy commissioner for services and enforcement.

Business groups praised the agency’s decision.

“The IRS did the right thing, and they should be applauded for listening to the concerns of the small-business community,” said Giovanni Coratolo, vice president of small-business policy at the U.S. Chamber of Commerce.

“We were very pleased that the IRS took time to listen and work with us to resolve this matter in a satisfactory manner,” said Bill Hughes, senior vice president for government affairs at the Retail Industry Leaders Association. “This will relieve retailers of an unnecessary burden while still providing the IRS with the tools it needs to ensure tax compliance.”

Dan Danner, CEO of the National Federation of Independent Business, called the IRS reversal on the reconciliation requirement “a small, but important victory for small business."