Amid profound political uncertainty, U.S. small business owners are considering how political and policy issues could impact their companies. To discover which political threats are most concerning, we polled nearly 2,300 small business owners in all 50 states.
Among other things, we learned that local business owners tend to consider the Donald Trump presidency a benefit rather than a threat. In addition, increased tax and healthcare costs pose the biggest threats to Main Street companies, and there’s surprising agreement between Millennials, Gen Xers, and Baby Boomers about which political and policy threats are most damaging.
To evaluate perceived risk, we asked respondents to rank the business impact of political hazards ranging from increased taxes to rising interest rates to new restrictions on immigrant labor. Read our full report below.
The Trump effect
In analyzing relationship between politics and perceived business threats, we began by asking respondents how they view the Trump Administration in relation to their businesses. Here’s what we learned:
To summarize, 40% of American small business owners consider the Trump presidency to be a benefit, and 27% view it as a business threat.
To dig deeper, we looked at the structural differences between businesses whose owners’ views are on either extreme. Compared to those who consider the Trump presidency to be a major benefit, those who see it as a major threat are:
- 52% more likely to shut down within 1 month without revenue
- Half as likely to be able to survive at least 1 year without revenue
- 38% more likely to consider an economic recession “extremely damaging”
- 41% more likely to consider a rise in interest rates “extremely damaging”
In analyzing the survey data, our primary gauge of perceived risk was the ratio of respondents who said a threat would be “extremely damaging” to their business. Clearly, healthcare and taxes are top of mind, which reinforces our previous research into the political issues that most affect small business optimism.
To get a fuller picture, it’s helpful to evaluate perceived risk based on the ratio of respondents who say the threat would not harm their business at all. So, we flipped the question around.
Factoring in both measures, increased taxes are the most dangerous political threat to small businesses. Taxes are virtually tied with healthcare costs on the “extremely damaging” measure, but respondents were nearly 4x more likely to say increased healthcare costs would have no impact in comparison to increased taxes.
Threat would be “not damaging at all” to the business
We wanted to see if there was a generational effect on how small business owners view political and policy threats to their businesses. The chart below outlines responses to key questions from Millennials, Gen Xers, and Baby Boomers:
While there is general agreement on many issues, the biggest generational gaps are in how owners view the Trump presidency, and the impact of additional tax and healthcare costs:
A few observations:
- Older generations are at least twice as likely as Millennials to consider the Trump presidency a “major benefit” to their businesses
- Millennials are 70%-77% less likely than older owners to say increased healthcare costs would be “extremely damaging” to their businesses
- They’re also 19%-27% less likely than older owners to say a tax increase would be “extremely damaging” to their businesses
Womply polled 2,261 small business owners in all 50 U.S. states via an online survey in September 2017.