Tax reform making small businesses rethink their business plans
Many small businesses are feeling more optimistic and plan to grow their businesses.
This week kicks off the Small Business Administration’s National Small Business Week. Thanks to tax reform and new data from a survey published by the Bank of America, small businesses have more to celebrate this year.
According to a report compiled from the survey’s respondents, many entrepreneurs are feeling more optimistic about their businesses, thanks in part to the new tax laws surrounding small businesses.
A semiannual survey of 1,000 business owners shows that 54% of entrepreneurs believe the US economy will continue to improve in 2018. This reflects a slight improvement of the outlook business owners had from last year.
The survey shows businesses are making plans in response to renewed optimism.
The results of the survey show increased confidence on all economic fronts – local, national and global. 71% of entrepreneurs forecast a significant enough savings from the tax reform to reinvest in their business, while 37% have already changed their business plans for the year.
In fact, 60% of those polled say they expect their revenue to increase this year, a 12% increase from last year. Some entrepreneurs expect to hire more workers while others plan to give raises and bonuses to their employees. And 14% expect to expand the operations of their business.
Sharon Miller, head of small business for Bank of America, says optimism about the economy and small businesses has reached the highest levels since 2015. She points out that business owners are seizing the opportunity provided by changing tax policies and newer technologies by investing back in their businesses.
Challenges still remain for small businesses, in spite of the increased confidence.
Even though there’s plenty to be hopeful for in the small business community, a few hurdles still exist that could present some challenges.
75% of entrepreneurs polled cite rising health care costs as their top concern for the fifth year in a row. The stock market, the strength of the US dollar, consumer spending, corporate taxes and lack of available credit are other top concerns.
Technological reliance is another issue that challenges the small business sector. Only 59% of small business owners have a website for their business. Only 31% believe it’s an important part of driving sales.
89% say they’re dependent on their mobile phones to manage their business and 46% believe it would impact their business if they lost their smartphone or their Internet crashed.
However, 77% of respondents believe the future of their business is dependent on technology. Another 44% are currently utilizing or exploring at least one advanced technology for their business, such as the Internet of Things (IoT), data analytics or 3D printing.
The report also indicates that while nearly two-thirds report they aren’t familiar with distributed ledger technology, 13% believe blockchain will be an integral part of their future business. Cryptocurrency is a more familiar concept to many business owners, and 19% of them expect to accept cryptocurrency payments within the next five years.
As small business optimism rises, more and more businesses are seeking to expand their business, while others may realize there’s no time like the present to focus on opening a new business.
If you need capital to grow your business or to finance the business of your dreams, check out our guide to funding the purchase of a small business. There you’ll learn more and be able to compare your options for financing your business.
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