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Survey of 800 Small Business Owners, Manufacturers, and Owners or C-Level Decision Makers
#12975
EPTEMBER
2012
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, 2012. Half were conducted by telephone and half on the internet.
SEPTEMBER 2012
Bottom Line
SEPTEMBER 2012
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 2012
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 2012
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 2012
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 2012
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 2012
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 2012
Attitudes About the Direction of the Country, the Economy, and the Challenges Facing Americas Businesses
SEPTEMBER 2012
10
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 Total Worse 24% 55% Revenue <$100K Revenue $100K-$500K Revenue $500K-$1 mil. Better Worse
Compared to three years agoWould 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 2012
11
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.
Enough Opportunity 32% Too Much Uncertainty 67% -29% 64% 35% Dont Know 1% -43% 71% 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 2012
12
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 Obamas 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 Increased Level of Economic Uncertainty
68% 27%
SEPTEMBER 2012
45% 18%
13
The cost of health insurance and government spending are top challenges facing small business owners and manufacturers.
Top Challenges Facing Your Business %8-10 Health insurance costs Government spending Federal, state, and local taxes Energy costs Lack of available capital Regulatory costs Labor costs Employee benefit costs (excluding health care) Lack of skilled workers Foreign competition 56% 54% 49% 39% 36% 36% 30% 30% 28% 25% Mean Score 7.1 7.0 6.9 6.3 5.9 5.9 5.8 5.7 5.1 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.
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Measuring the Impact of Todays Environment on These Business Owners and Senior Executives
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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 Laying off workers Putting my own savings in to remain open Dropping employee health care plans Borrowing to remain open Closing a business or businesses Personally taken a pay cut
[Asked of those who report having made financial sacrifices] And, what sacrifices have you made, or considered making?
SEPTEMBER 2012
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 No, Would Not Start Business Today 55% Yes, Would Start Business Today 45% Manufacturer Revenue <$100K Revenue $100K-$500K Revenue $500K-$1 mil. Revenue > $1 mil.
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 2012
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.
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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 2012
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20
These respondents, especially from the smaller businesses, report a worsening of the relationship between small businesses and federal regulators.
Better 13%
Would you say that the efforts of federal regulatory agencies to work with small businesses are getting better or getting worse?
Worse 55%
-44% 55%
-44% 57%
-21% 42%
21%
21-99 Employees
100+ Employees 21
SEPTEMBER 2012
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 Consumers Workers Large Businesses Labor Unions The Federal Government Attorneys or Lawyers
SEPTEMBER 2012
And whom do you think is hurt the MOST by new federal regulations?
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 Higher prices for US goods and services Job losses Better wages and opportunities for US workers Greater consumer protections Additional health, safety, and environmental benefits
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 2012
24
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 companys ability to compete in todays 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?
Small Businesses
SEPTEMBER 2012
Manufacturers 25
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 Total Less 54% 30%
Much Less 11% Somewhat Less 19% Dont Know 16%
+25%
32%
28%
Small Businesses
SEPTEMBER 2012
Manufacturers 26
SEPTEMBER 2012
27
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 Decrease 10% Stay About the Same 22% Increase 67% Dont Know 1% Changes Because of the ACA Among Employers Who Offer Insurance
59%
Among those who offer insurance Increasing the amount employees have to pay for their health care coverage Dropping coverage for employees
38% 21%
28
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 2012
SEPTEMBER 2012
29
Respondents say President Obamas recent executive and regulatory policies have hurt American small businesses and manufacturers.
Now I am going to read you two statements about President Obamas recent executive and regulatory policies, and please tell me which one comes closest to your own opinion. President Obamas executive branch and regulatory policies have helped American small businesses and manufacturers. or President Obamas Executive Branch and regulatory policies have hurt American small businesses and manufacturers.
Total
Manufacturers
SEPTEMBER 2012
Final Thoughts
SEPTEMBER 2012
31
Appendix:
I. II. Additional Notes on Methodology Quotes from Small Business Owners and Manufacturers
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33
1 2
National Women's Business Council, http://www.nwbc.gov/sites/default/files/women-owned%20businesses%20general.pdf US Census Bureau, http://www2.census.gov/econ/sbo/07/pums/2007_sbo_pums_users_guide.pdf 3 US Census Bureau, http://www2.census.gov/econ/susb/data/2006/us_state_totals_2006.xls
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Retail Food Service Real Estate Service Construction Health Care Farming
1 2
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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 2012
36
37
Training is the key word. Training. Go to a trade school and vocational training in high school. Its desperately needed. Small business owner
SEPTEMBER 2012
38
Not knowing how much taxes a small business has to payI wonder where this country is going on the federal level. Small business owner
Just the complete lack of confidence in the futureDisposable income is something people dont haveNot knowing what our taxes are going to be next year, or in the next two years. These are questions that I dont know, nobody knows what the answer is. I dont know if there is a future for my business. Manufacturer
SEPTEMBER 2012
39
Theres no money. Banks dont 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
Thanks to the rules and regulations, it is too hard and confusing to start one up. 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 2012
40
41