President Donald Trump’s latest threat to impose tariffs on Chinese imports was followed by market volatility on Monday. But for most small business owners, it may just be business as usual.
In fact, most small business owners say they don’t see tariffs having any impact on their businesses, according to Bank of America’s Spring 2019 Small Business Owner Report.
Small businesses cover many different sectors, so of course the potential impact of tariffs depends the type of small business involved, according to Sharon Miller, head of small business at Bank of America.
Tariffs typically hurt agriculture and wholesale goods more than other businesses, but 59% of 1,504 small business owners surveyed said they don’t see any impact. Still, trade will likely continue to be on the minds of small business owners.
“Economies goes up and down,” Miller said. “The trade conversation continues to go on ... What we did find in our survey was that most were not worried.”
Of course, some small business owners have complained that tariffs will in fact affect them a great deal. Tiffany Williams, the owner of a luggage shop in Texas, told NPR last February that a 10% tariff on Chinese imports was “a big deal” because most of the items in her store came from China.
The hiring challenge
Economic confidence did fall slightly from last year, with just 48% expecting the national economy to improve, down from 55% last year. Yet business owners are continuing to project a strong business outlook for the year ahead with most respondents expecting their revenues to increase and expand.
This puts owners in a conundrum as they will need to hire more workers to help their businesses. With unemployment at a near 50-year low, businesses are facing higher competition to hire the right talent.
“The number one concern that continues to come to the top whenever we do this survey, is the ability for the small business to find the right talent, the right labor,” Miller said.
“It’s really up to the company. They’re putting together the attractive job opportunity for people to come work for them.”
Miller said benefits including flexible work hours, ability to work from home, the right 401K, and a competitive health care package are all ways to help attract the right talent.
Having the right package is key to attract right talent, but the study shows the number one concern for small business owners is healthcare costs.
“Healthcare costs, regulations. It continues to pop to the number one concern. This along with finding the right skilled labor,” she said.
Last year, about 58% of small business owners thought the tax reform was a “game-changer.” This number has dropped dramatically to 35%.
Miller said tax reform went from “game-changer” to “very neutral.”
The “small business owner today is still figuring out what does it mean for my business? When it comes to the surface, it’s neutral,” she said, referring to tax reform.
Bank of America contacted a national sample of 1,504 small businesses with revenue between $100,000 and $4,999,999 and between two and 99 employees. Additionally, it contacted 300 small business owners in 10 “target markets” throughout the U.S.