The majority of small business owners are putting greater emphasis on the bottom line and do not plan on hiring in the next year, according to a recent survey from The Hartford Financial Services Group (NYSE: HIG).
Only 33% of the 2,000 business owners surveyed by Hartford are optimistic that the national economy will strengthen this year. They also cited slow economic growth (67%), taxes (59%) and uncertainty with federal regulations (56%) as major risks to small businesses.
Small business owners’ economic concerns are shaping their business strategies, as 80% said they are finding ways to cut costs during a slower economy. Hiring expectations are tepid, with 67% reporting no plans to hire, while 59% said they have not hired in the last 12 months. Roughly half of those surveyed told Hartford that they are trying to maintain their current size in terms of revenue or employees, and the percentage of small businesses focused on growth declined to 41% from 51% in 2011.
“Small businesses are the foundation of the American economy. If we can restore their confidence in the future, they can hire, add jobs and help fuel growth,” Liam E. McGee, chairman, president and chief executive officer for Hartford, said in a statement. “The good news is that there are solutions that can help eliminate uncertainty around the tax and regulatory environment, and encourage small businesses to hire. While many small business owners clearly have concerns, they are resilient and dedicated to doing the right things for their businesses and employees.”
Despite economic concerns, 68% of small business owners characterized their businesses as operating at a successful level right now. Owners are also increasingly focused on making enough money to have a comfortable lifestyle and increasing the profitably of their businesses. The percentage of surveyed owners who defined success as making a lot of money increased 13 points to 59%.
Meanwhile, many owners are bracing themselves for an increase in taxes. A majority (77%) believes their taxes will likely increase, and 71% of owners plan to offset the impact of taxation by taking less money out of the business. Consumers would also pay the price, as 66% of small businesses said they will pass along costs to customers if taxes increase. But 33% do not take advantage of tax incentives or deductions because they don’t know what they are (37%) or they do not qualify (35%).
And with less than three weeks to go before the presidential election, a large majority of small business owners (83%) said that pro-small business policies will impact their vote.