Summary of Findings NFIB and NAM Survey of 800 Small Business Owners, Manufacturers, and Owners or C-Level Decision Makers August 13-September 4, 2012

Transcription

1 Summary of Findings NFIB and NAM Survey of 800 Small Business Owners, Manufacturers, and Owners or C-Level Decision Makers August 13-September 4, 2012 Glen Bolger, Partner Bill McInturff, Partner #12975 SEPTEMBER

2 Methodology On behalf of the National Federation of Independent Businesses and the National Association of Manufacturers, Public Opinion Strategies conducted a survey of 800 small business owners and manufacturers, owners, or C-level decision makers at companies with between 2 and 499 employees. Of the 800 interviews, 453 were conducted among small business owners and 347 were conducted among manufacturers and owners or C-level decision makers. The interviews were conducted August 13-September 4, Half were conducted by telephone and half on the internet. SEPTEMBER

3 Bottom Line SEPTEMBER

4 Bottom Line The data paints a bleak picture, with a majority of respondents saying in the last three years, the national economy is in a worse position for American small businesses and manufacturers. There is limited evidence these respondents see a respite in sight in terms of economic improvement ahead. SEPTEMBER

5 Bottom Line Two-thirds of these respondents say economic uncertainty in the market makes it hard for them to grow and hire more workers, for which they hold the Obama Administration or Congress responsible. SEPTEMBER

6 Bottom Line The theme of government being a barrier rather than a help is clear throughout this data. Two of the three biggest challenges facing small business owners and manufacturers are government spending and federal, state, and local taxes. SEPTEMBER

7 Bottom Line Throughout the open-ends and the data, these respondents express significant concern that the government regulatory environment is getting worse and is a significant burden on their business. The impact of the regulatory environment is clear, as respondents express concern about companies moving overseas, rising consumer prices, and job loss. SEPTEMBER

8 Bottom Line The frustration expressed in this survey can also be felt, as a majority say other foreign countries with growing economies, like China and India, are more supportive of their small businesses and manufacturers than the United States. SEPTEMBER

9 Bottom Line In this environment it may not be surprising, but is still concerning, that a majority of these respondents say that given what they know now and in the current economic climate for business, they would not start a business today. SEPTEMBER

10 Attitudes About the Direction of the Country, the Economy, and the Challenges Facing America s Businesses SEPTEMBER

11 These respondents make it clear they believe the national economy has created a worse position for their businesses. This is especially true for the smallest companies. Position of Economy for Small Businesses and Manufacturers Compared to Three Years Ago Total Better 24% Total Worse 55% Much Worse 35% Somewhat Worse 20% Much Better 6% Somewhat Better 18% About the Same 20% Don t Know 1% Better Worse Revenue <$100K 19% 63% Revenue $100K-$500K 22% 56% Revenue $500K-$1 mil. 25% 55% Revenue > $1 mil. 26% 53% Compared to three years ago Would you say the national economy is in a better or worse position for American small businesses and manufacturers to succeed, or is it in about the same position? SEPTEMBER

12 Small business owners and especially manufacturers say there is too much economic uncertainty for their companies to expand. My company is now operating from the standpoint that there is enough economic opportunity in the market today to expand, grow, or hire new workers. or There is too much economic uncertainty in the market today for my company to expand, grow, or hire new workers. Too Much Uncertainty 67% Enough Opportunity 32% Don t Know 1% -29% -43% 64% 71% 35% 28% Small Businesses Manufacturers Thinking some more about your company, I am going to read you two statements and please tell me which one comes closest to your opinion. SEPTEMBER

13 The actions taken by the Obama Administration or Congress have increased the level of economic uncertainty. And, have the federal regulations and decisions issued by President Obama s administration or laws passed by Congress increased or decreased the level of economic uncertainty facing your company? Among respondents who say there is too much uncertainty to expand Among all respondents Increased Level of 68% 45% Economic Uncertainty Decreased Level of 27% 18% Economic Uncertainty SEPTEMBER

14 The cost of health insurance and government spending are top challenges facing small business owners and manufacturers. Top Challenges Facing Your Business %8-10 Mean Score Health insurance costs 56% 7.1 Government spending 54% 7.0 Federal, state, and local taxes 49% 6.9 Energy costs 39% 6.3 Lack of available capital 36% 5.9 Regulatory costs 36% 5.9 Labor costs 30% 5.8 Employee benefit costs (excluding health care) 30% 5.7 Lack of skilled workers 28% 5.1 Foreign competition 25% 4.4 Now, I would like to read you a list of factors that some companies are concerned about. For each one, please rate how significant a challenge it is for your business using a scale from 1 to 10, where one means that it is not at all a significant challenge for your business and where ten means it is a very significant challenge. You can choose any number between one and ten depending on how strongly you feel about it. SEPTEMBER

15 Measuring the Impact of Today s Environment on These Business Owners and Senior Executives SEPTEMBER

16 About one in four small business owners and manufacturers report considering or cancelling a planned capital investment, laying off employees, and using their own personal savings. Sacrifices Made or Considered %Yes Cancelling a planned capital investment or expansion 26% Laying off workers 24% Putting my own savings in to remain open 23% Dropping employee health care plans 11% Borrowing to remain open 11% Closing a business or businesses 6% Personally taken a pay cut 6% [Asked of those who report having made financial sacrifices] And, what sacrifices have you made, or considered making? SEPTEMBER

17 A majority of respondents say they would not start a new business today. Surprisingly, this percentage is higher among those whose companies have higher sales revenues. %No Small businesses 51% No, Would Not Start Business Today 55% Yes, Would Start Business Today 45% Manufacturer 59% Revenue <$100K 49% Revenue $100K-$500K 57% Revenue $500K-$1 mil. 56% Revenue > $1 mil. 55% Still thinking about your business, given what you know now and in the current economic climate for businesses, would you start a business today? SEPTEMBER

18 Manufacturers told us the reasons they would not start a business today. Regulations at the federal, state, and local levels are too numerous and too costly; The economy is not doing well, and small business owners face uncertainty as to whether or not it will improve soon; Taxes are too high; and, The costs of many factors, including health care, fuel, and workers compensation have skyrocketed. SEPTEMBER

19 Small business owners also told us why they would not start a business today. Burdensome regulations; An economy with high uncertainty and low disposable income; High taxes; and Higher costs of health care, fuel, and other necessities. SEPTEMBER

20 Attitudes About Regulation SEPTEMBER

21 These respondents, especially from the smaller businesses, report a worsening of the relationship between small businesses and federal regulators. Would you say that the efforts of federal regulatory agencies to work with small businesses are getting better or getting worse? Worse 55% Better 13% About the Same 26% Don t Know 6% -44% -44% 55% 57% 11% 13% -21% -24% 42% 48% 21% 24% 2-5 Employees 6-20 Employees Employees 100+ Employees SEPTEMBER

22 Small business owners and manufacturers say that small businesses and consumers are hurt most by new federal regulations. Hurt Most by New Federal Regulations Small Businesses 60% Consumers 32% Workers 26% Large Businesses 10% Labor Unions 4% The Federal Government 3% Attorneys or Lawyers 2% And whom do you think is hurt the MOST by new federal regulations? SEPTEMBER

23 These respondents say the most likely results of new regulations would be negative and would impact jobs and increase prices. Most Likely Result of the Passage of New Federal Regulations Total Small Business Manufacturers More businesses closing or moving overseas 27% 30% 24% Higher prices for US goods and services 24% 25% 22% Job losses 23% 19% 28% Better wages and opportunities for US workers 7% 7% 6% Greater consumer protections 6% 6% 8% Additional health, safety, and environmental benefits 6% 7% 5% And, which of the following do you believe will be the most likely to occur if many of the proposed legislative and regulatory actions impacting small businesses and manufacturing coming out of Washington, DC, go into effect? SEPTEMBER

24 China, India, and a View of America s Competition SEPTEMBER

25 Foreign competitors are not perceived to be as significant a negative influence as the United States own regulations and taxes. Thinking again about your company, which of the following has the MOST negative impact on your company s ability to compete in today s market. Is it Foreign competitors who receive subsidies and have access to lower operating costs and fewer regulations? or The United States own laws, regulations, rules, taxes, and fees that impose unnecessary costs and business impediments? Foreign Competitors 32% U.S. Regulations 62% -36% -23% Don t Know 6% 65% 59% 29% 36% Small Businesses Manufacturers SEPTEMBER

26 Small business owners and manufacturers say that developing countries are more supportive of their small businesses and manufacturers. And would you say that foreign governments with growing economies like China and India are more supportive or less supportive of their small businesses and manufacturers than the United States? Total More 54% Total Less 30% +22% +25% Much More 29% Much Less 11% Somewhat Less 19% 54% 53% 32% 28% Somewhat More 25% Don t Know 16% Small Businesses Manufacturers SEPTEMBER

27 Looking at the Issue of Health Care SEPTEMBER

28 Two-thirds of respondents who offer their employees health insurance think the health care law will cause insurance costs to increase. More than one in five say they will consider dropping health insurance coverage for their employees. Health Care Costs With ACA Among Employers Who Offer Insurance Changes Because of the ACA Among Employers Who Offer Insurance Increase 67% Decrease 10% Stay About the Same 22% 59% Consider making changes in view of the new health law Among those who offer insurance Increasing the amount employees have to pay for their health care coverage 38% Don t Know 1% Dropping coverage for 21% employees With the federal health insurance law now in effect, do you expect your health care costs to increase, decrease, or stay about the same? Which of the following changes, if any, is your company considering in view of the health law SEPTEMBER

29 Attitudes About President Obama and the Obama Administration SEPTEMBER

30 Respondents say President Obama s recent executive and regulatory policies have hurt American small businesses and manufacturers. Now I am going to read you two statements about President Obama s recent executive and regulatory policies, and please tell me which one comes closest to your own opinion. Total Small Business Owners Manufacturers President Obama s executive branch and regulatory policies have helped American small businesses and manufacturers. or President Obama s Executive Branch and regulatory policies have hurt American small businesses and manufacturers. 29% 31% 27% 69% 67% 71% SEPTEMBER

31 Final Thoughts SEPTEMBER

32 Appendix: I. Additional Notes on Methodology II. Quotes from Small Business Owners and Manufacturers SEPTEMBER

33 Additional Notes on Methodology SEPTEMBER

34 Comparing this survey to government data. This Survey Government and Other Data Female-Owned Businesses 33% 29% 1 Minority-Owned Businesses 16% 15% 2 Northeast 22% 22% 3 Midwest 22% 23% 3 South 34% 32% 3 West 23% 24% 3 1 National Women's Business Council, 2 US Census Bureau, 3 US Census Bureau, SEPTEMBER

35 Comparing this survey to government data. Types of Women-Owned Businesses This Survey Census Data 1 Retail 15% 14% Food Service 7% 9% Real Estate 7% 6% Service 7% 8% Construction 5% 6% Health Care 5% n/a Types of Minority-Owned Businesses This Survey Census Data 2 Food Service 16% 18% Retail 10% 15% Software 7% n/a Engineering 7% n/a Real Estate 6% 3% Service 6% 8% Farming 5% n/a 1 US Census Bureau, 2 US Census Bureau, SEPTEMBER

36 Comparing this survey to other national data. Party Identification of Small Business Owners This Survey National Data 1 Republican 46% 48% Independent 16% 16% Democrat 36% 35% 1 Based on national surveys conducted by Public Opinion Strategies over the past two years. A total of 5,600 interviews were conducted among registered voters using both landlines and cell phones using random digit dialing. The total number of selfdescribed small business owners was 633, or 11% of the interviews conducted. SEPTEMBER

37 Quotes from Small Business Owners and Manufacturers SEPTEMBER

38 Small business owners put a greater emphasis on two additional points. Although a few manufacturers also mentioned these points, there was a stronger sense among small business owners that the capital needed to begin was simply not as readily available as it had been in the past. Many also noted a lack of qualified employees or other problems with new entrants into the work force. Training is the key word. Training. Go to a trade school and vocational training in high school. It s desperately needed. Small business owner A real lack of skilled workers. Small business owner What I would like to see is...having kids better educated so that they can come out through vocational school or high school with the skills that are required in my industry. Small business owner SEPTEMBER

39 What respondents told us about the economy and uncertainty: The current climate has sucked all the discretionary funds out of the American public Everybody s on edge because of the current economic climate. Manufacturer There is just too much uncertainty. The government is always looking over your shoulder instead of staying out of the way With today s business climate you put in too many hours for very little return. There is no certainty. Small business owner Not knowing how much taxes a small business has to pay I wonder where this country is going on the federal level. Small business owner We keep waiting for improvement in the economy where more people will come through the door. Small business owner Just the complete lack of confidence in the future Disposable income is something people don t have Not knowing what our taxes are going to be next year, or in the next two years. These are questions that I don t know, nobody knows what the answer is. I don t know if there is a future for my business. Manufacturer SEPTEMBER

40 What respondents told us about taxes, regulations, and a lack of capital: There s no money. Banks don t loan money to start these things. Small business owner The cost of starting a business is ridiculous. The government regulations make it very difficult for us. Manufacturer Government regulations that retard development. Manufacturer Thanks to the rules and regulations, it is too hard and confusing to start one up. Small business owner Basically, I would say access to capital and regulation. Banks have a ton of money, but they re not loaning it to small businesses The number of federal and state regulations I think a lot of bureaucrats don t realize that they re adding to the cost of opening a small business. Small business owner Your tax rates, capital gains taxes, new federal programs that will cost employers money, the cost of healthcare, personal tax rates, lack of activity in the market, lack of demand Small business owner SEPTEMBER

41 PUBLIC OPINION STRATEGIES 214 N. Fayette St. Alexandria, VA Glen Bolger, Partner Bill McInturff, Partner SEPTEMBER