Why The Candidates Aren’t Talking About Your Business
(This post originally appeared on Inc.)
We’ve been hearing a whole lot during this presidential election cycle about walls, e-mail messages, inappropriate behavior, and corruption. But one subject that has gone largely unaddressed is the issues facing small and midsize businesses (SMBs).
Surprisingly, that might be good news.
A recent study by Carbonite found that SMB owners have some big concerns. Seventy-five percent say that Washington is actually hurting their companies. Thirty-four percent believe it’s likely they’ll be hacked this year, and 81 percent feel that Washington needs to do more about the problem. They also ranked trade policies, student loans, and rising insurance costs as chief concerns.
Those are serious issues. But the real reason behind the drought of headlines announcing new SMB initiatives might be that the sector is doing better than it has been in a while. Recent research and market factors point to a pretty rosy outlook in several key areas.
Sales are growing. While the post-Great Recession presidential elections in 2008 and 2012 saw SMBs struggling, 2015 SMB growth increased nearly a full percentage point year-over-year. According to research from financial software firm Sageworks, businesses with less than $5 million in annual revenue experienced an average of 7.8 percent annual sales growth during that year. Net profit margins, representing how many cents of profit were generated for each dollar of sales, improved to 7.5 percent from 6.4 percent among privately held small businesses, the fourth consecutive annual improvement in this study.
Financial situations are improving. Two-thirds of 600 small business owners said their companies’ financial situation was “good” at the start of this year, and 71 percent of them said they expected their companies to be in “good financial shape” throughout 2016 in a Wells Fargo survey conducted earlier this year.
Optimism is strong. While the National Federation of Independent Businesses (NFIB) monthly optimism index has been underwhelming, Wells Fargo reports that small business optimism had improved slightly and overall has remained relatively stable throughout 2016. More recent analysis from online lender CAN Capital found that 64 percent of small business owners are expecting growth in the next 12 months, and Chase Bank released news this month that, despite a volatile U.S. Presidential election and the upcoming holiday season, a majority of small business owners are optimistic about their prospects. PNC bank also just reported similar good news: more than 70 percent of nearly 2,000 business owners and executives surveyed said they were comfortable with the way things were going at the national level, while 77 percent also said they were “optimistic” about their local economy.
Overall business conditions are favorable. Interest rates are still historically low, and companies with good credit and strong balance sheets have access to funds. Inflation has also been low, keeping many costs of doing business manageable. While economic growth isn’t going to break any records, it’s still in positive territory. New technology has increased productivity. Energy prices remain affordable, and although historically higher, certain tax incentives for capital investment and research and development were made permanent at the end of 2015, making planning easier and reducing uncertainty.
Of course, challenges remain. The concerns evidenced by the Carbonite poll are similar to ones articulated by most business owners I know. Like me, they are working very hard to stay profitable and grow their companies. But most of my clients admit that things aren’t so bad, especially when compared to the last two election cycles. So that’s good news. And we all know that good news rarely makes it to the TV networks. The presidential candidates know that too. So maybe the fact that they’re not talking so much about small business right now isn’t such a bad thing at all.