2017 promises to be great for small business in America. There are many drivers for the rise of the small business: growing economy, housing market boom, lower gas prices, and low unemployment being the most important ones. However, the New Year under the New Administration brings fresh optimism and changes for small business. What are the 3 Big Drivers small businesses can leverage to grow in 2017?
Reduced Regulations and Lower Taxes To Jumpstart Small Business Growth
Small businesses are quite bullish about their future after Donald Trump got elected as the President of USA, and this is indirectly evident from the consumers picking up their shopping habits (albeit we are in a growing economy). e.g. “people who had put off fixing their cars have decided it was time to get them serviced” at Dean Bingham’s auto shop in Greenville, SC according to this story in LA Times. Business owners are expecting lower taxes and reduced regulations in 2017, including parts of the healthcare law, under the Trump administration. Further, Donald Trump’s nominee for labor secretary, Andy Puzder, the CEO of Carl’s Jr., could make key changes on overtime pay and make the law more business friendly. Owners believe these new conditions will create a better operating environment for small business, leading to higher sales growth and reduced taxes in 2017.
Rise In Optimism Will Increase Small Business Spending
According to a recent Wells Fargo survey, small business optimism is at the highest point in eight years. The business owners’ survey was taken shortly after the elections between November 11-17, 2016. “The overall Optimism Index score increased significantly to 80 in November, up 12 points from July and up 26 points from a year ago. This represents the highest small business owners optimism reading since January 2008, and the largest quarterly increase in a year.” Small businesses have never been more confident about their future in recent times.
Why are U.S. small business owners so optimistic? “Forty-five percent business owners expect an improving operating environment for their business in 2017. Not only that, these owners expect that their finances will markedly improve in 2017.” Rise in small business optimism will lead to greater spending by these businesses, local hiring, and even plans to expand their businesses.
Easier Access To New Small Business Capital
What do small businesses need most to grow? Access to good capital. Although the Federal Reserve increased the interest rate by 0.25 percent in 2016, it was a much lower increase than previously anticipated. This is a huge boon for small business owners and new borrowers. Most importantly, there is growing confidence in the economy, especially small business performance. “According to the newly released Biz2Credit Small Business Lending Index report for November 2016, loan approval rates at both big banks and institutional lenders continued to rise, improving to new highs. Further, small banks showed an increase in small business loan approval rates.” Another surprising trend: Loan approval rates at institutional lenders is going higher. Loan approvals increased to a new Index high of 63.3% in November 2016.
Not only are the large banks and institutional lenders approving higher percentages of business loan applications, but also smaller banks granting about half of the loan requests. Easier, greater and faster access to much-needed small business capital helps owners expand their business with new products, new hiring plans, and new markets in 2017 and beyond. This is a win-win for both the economy and small business.
How did your business perform in 2016? Are you equally optimistic about your business in the new year? Please share your comments here and join the discussion.
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