Small business confidence has reached its highest point in five years under President Donald Trump, according to a new report. Despite reporting increased sales and improved business conditions earlier this year, however, many entrepreneurs fear tax reform uncertainty.
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According to a new growth index released by Capital One Thursday, 60% of small business owners (SBOs) feel that their current business conditions are good or excellent, and 37% say their businesses are in a “better financial position” than a year ago, up from 31% from earlier this year.
Nearly half, though, say taxes and other regulations are the lingering factors on their confidence levels.
“There has been talk across the industry around tax reform for some time now, and I think the concern is really around the uncertainty of what it will mean for businesses,” Celia Edwards Karam, head of small business banking at Capital One, told FOX Business.
“The current proposal has received mixed reviews from small business advocates, and we’re likely to see changes as it moves through Congress. Until there is more clarity on what form of the proposal will be passed, there will always be some form uncertainty among business owners,” she said.
However, Monique Bernstein, co-founder of the global snack business Universal Yums, says her biggest business concerns are centered on regulations and hiring.
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“We're importing food into the USA, and we take following the rules and regulations set by the FDA and US Customs extremely seriously. Currently, the FDA is in the process of implementing a new and broad set of regulations, so we have to learn and adapt our plans quickly to ensure we're remaining compliant,” Bernstein says.
The second concern, she adds, is hiring. According to the report, it’s a worry many small business owners share, with only 25% of businesses planning to hire in the next six months, down two points from earlier this year.
“I think every small business likely struggles with hiring the right people at the right time. Sometimes we've hired too late, and the business suffers because [we] end up with too much on our plates, or we make a hire that ultimately doesn't work out. That's always the worst place for us to be, and it's a concern every time we bring on a new employee,” Bernstein adds.
Other top concerns include: managing cash flow (42%), keeping up with technology (32%), and the Affordable Care Act (ACA).
“We asked business owners what impact the Affordable Care Act was having on the growth of their business and 37% of business owners said it was having a negative impact, while 52% said it had no impact on their business growth,” Karam says.
Overall, optimism was relatively high across the board when it came to different sectors. However, certain industries were “definitely more optimistic than others,” Karam adds.
“For example, 83% of business owners in the transportation industry, 72% in the construction industry, 71% in the finance industry and 52% in retail reported business conditions were good or excellent (compared to 60% on average).”
And most notably, the retail industry, which has been struggling of late, reported that 41% of SBOs believe that they will be in a better financial position six months from now, compared to 33% in the transportation industry.