By Marvin Dumont
Last week, the Small Business Administration (SBA) hosted events during National Small Business Week to commemorate the 28 million small businesses in the country. It’s estimated that small businesses employ half of private sector workers, as well as, create over two-thirds of net new jobs in the United States each year.
However, small business outlook shows a continued decline in the first half of 2016. According to Capital One’s latest Spark Business Barometer survey, concerns over taxes, regulation, and the impact of the November elections are cause for concern for many small business owners, many of whom are reconsidering short-term plans for hiring and investment.
There’s is a nine-point drop in the percentage of business owners who see conditions as “good” or “excellent” compared to one year ago. Additionally, fewer businesses are planning to hire — with 26 percent of respondents planning to add workers in the next six months, compared to 32 percent during the same period last year.
“Now is a critical time for small businesses as the country anticipates a change in leadership and new opportunities and challenges, such as market dynamics and new regulations and tax laws, which can have a significant impact on business results,” said Keri Gohman, head of small business banking at Capital One.
Decline in full-time hiring
The percentage of small businesses offering retirement benefits declined nearly 50 percent since the fourth quarter of 2014. Instead of hiring full-time workers, more small businesses plan to hire part-time employees (58 percent) or contractors and freelancers (27 percent), according to Capital One’s data. It’s estimated that by 2020, nearly 40 percent of U.S. workers will be freelancers.
Despite the regulatory and economic uncertainties, women and younger business owners continue to be the most optimistic. For example, 72 percent of millennials say their business will be in better financial shape in six months. And 44 percent of women business owners anticipate their businesses will be in better financial standing in the next six months, according to Spark Business Barometer.
Concerns over November elections
While the Small Business Person of the Year awards show examples of entrepreneurs who have operated successful ventures, regulatory and economic uncertainties have caused a drop in small business sentiment in the first half of 2016. According to the Spark Business Barometer, small business owners are most concerned about the potential impact the November elections may have on their small business.
One in four (25 percent) business owners say their primary concern is the impact of the upcoming elections. And respondents said they are most focused on tax policies on small business (29 percent), economic growth (18 percent), growing healthcare costs (17 percent), and hanging regulations at the local and national level (15 percent).
SBA hands out Small Business Awards
The SBA handed out awards to Small Business Person of the Year during National Small Business Week.
Among the winners are Paul Smiley from Arizona, the founder of Sonoran Technology and Professional Services. A military veteran, Smiley started his company in 2007, providing clients with trained professionals who are experts in program management, IT, cyber security, aircrew training, and medical administration. His company has grown to 235 employees — three-fourths of whom are military veterans.
Another awardee, Robert Palmer, hails from the District of Columbia. A disabled military veteran, Palmer started Creative Business Solutions (CBS) in 2007, a management and IT consulting firm. Under Palmer’s leadership, CBS has grown to 150 employees across seven states.
Marvin Dumont is a certified content developer who has served as senior editor to Fortune 500 companies. He writes about emerging trends, business and government. Marvin earned MPA, BBA and BA degrees from the University of Texas at Austin. Email: email@example.com