MCLEAN, Va., April 5, 2018 /PRNewswire/ -- Small business
owners remain optimistic about current and future business
conditions despite having uncertainty around the impact of the Tax
Cuts and Job Act that was signed into law in late 2017. Capital
One's (NYSE: COF) latest Small Business Growth Index, a biannual
survey of 500 small business owners (SBOs), found that 52 percent
of businesses expect to pay the same or more in taxes and only 36
percent believe their taxes will decrease in 2018.
"Small business confidence continues to rise with more than half
of small business owners expecting a profitable 2018," shared
Celia Edwards Karam, head of small
business banking at Capital One. "As such, we're seeing many small
business leaders and entrepreneurs focus on industry challenges
such as taxes, technology and diversity."
Following are key themes uncovered by the Spring 2018 Small
Business Growth Index:
SBOs supporting the tax plan expect to reinvest the
savings into their business.
- Of the 36 percent of SBOs who believe they will pay less in
taxes, many plan to reinvest the funds to grow their business. The
top three areas where businesses expect to invest the funds
include:
-
- Purchasing new equipment (49 percent)
- Contributing to their business savings (47 percent)
- Raise employee wages (47 percent)
- While only 36 percent of SBOs believe they'll pay less in taxes
in 2018, 46 percent say they support the tax plan. Among the
46 percent of small businesses owners that support the new tax
law:
-
- Eighty-five percent say they expect it will lead to economic
growth
- Forty-six percent favor the ability to write off additional
purchases
- Forty-three percent believe it will make it easier to file
taxes
Optimism among SBOs remains high, with significant increases
among male SBOs; however, hiring remains flat.
- The majority (62 percent) feel current business conditions are
"good" or "excellent" and 51 percent feel their financial position
will improve six months from now.
- Optimism among male SBOs has considerably increased, as 62
percent believe business conditions are "good" or "excellent," up
from 46 percent a year ago. In comparison, 63 percent of female
SBOs feel business conditions are "good" or "excellent," up from 56
percent in 2017.
- Twenty-nine percent plan on hiring additional employees in the
next six months, up from 25 percent responding to the same question
in the fall of 2017.
- Of the 65 percent of businesses that do not plan on hiring in
the next six months:
-
- Seventy-percent say they do not currently have a need to hire
additional employees;
- Twenty-one percent say they do not have the financial resources
to add to their workforce; and
- Nineteen percent plan to invest in other areas of their
business.
Nearly half of small businesses believe a diverse workforce
will lead to future profitability.
- Forty-seven percent of SBOs with at least one employee believe
a diverse workforce is, or will be, important for their company's
profitability and growth.
- A majority (56 percent) of SBOs with 20 or more employees
believe a diverse workforce will drive future profitability,
compared to 47 percent of businesses with fewer than 20
employees.
- Of the business owners who believe a diverse workforce is
important for future profitability, 65 percent also believe their
financial position will improve six months from now, compared to 49
percent of SBOs who do not believe diversity will help their
business.
Forty percent of SBOs are concerned about technology
replacing jobs, yet those investing in technology are more likely
to hire.
- While 39 percent of SBOs are concerned that technology will
eventually replace certain jobs or prevent businesses from hiring,
65 percent believe technology innovations are making it easier to
streamline business operations.
- Millennial SBOs are most likely to state technology investments
have made managing their businesses easier (81 percent), compared
to 61 percent of Baby Boomers and 60 percent of mature business
owners.
- Thirty-three percent of SBOs who state technology advancements
have made it easier to manage their business have plans to hire in
the next six months, compared to just 17 percent of SBOs who have
not invested in technology.
"When it comes to running a business, small business owners face
many of the same challenges as leaders in larger organizations –
from building a diverse workforce to navigating the tax landscape –
yet they tackle these challenges with fewer resources," said
Buck Stinson, head of small business
card at Capital One. "We are encouraged to see that business owners
remain optimistic about their financial futures and we are
committed to providing innovative products to fuel continued
business growth."
Survey Methodology
Capital One's Spring
2018 Small Business Growth Index Survey was conducted by
the market research and business intelligence firm ORC
International. For this telephone study, ORC interviewed a national
sample of 500 for-profit small businesses in the U.S. Small
businesses are defined as those with a total annual revenue less
than $10 million. Interviews were conducted from February
1-14, 2018. One respondent per business was interviewed. The margin
of error is +/- 4.38 percentage points at a 95% confidence
level.
About Capital One Spark Business
Capital One® offers a
broad spectrum of financial products and services to consumers,
small businesses, and commercial clients. Spark Business®
from Capital One offers a diverse suite of financial
products, tools and services designed specifically for small
businesses, including credit cards with unlimited
rewards, banking products and services, in addition to retirement
plans. Today, Spark Business works to address the unique needs of
millions of business owners across the U.S., so they can focus on
what they are most passionate about – running and growing their
business. Spark Business provides tips, resources and inspiration
to help businesses thrive
at www.CapitalOne.com/Small-Business/SparkIQ.
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SOURCE Capital One Financial Corporation