Taxes now leading concern of small businesses
Taxes were the leading concern of business owners during the second quarter of 2007 replacing health care which previously was cited as being the single greatest issue impacting small businesses according to the latest Small Business Research Board (SBRB) study released this week.
Business owners in the U. S. responding to the nationwide poll co-sponsored by International Profit Associates (IPA) said taxes were closely followed by overall economic conditions and energy / fuel costs as key concerns affecting small businesses during the current quarter. Health care was fifth on the list of concerns as voiced by the more than 770 respondents.
IPA, with more than 1,800 professionals, is the largest privately-held provider of management consulting services to small and medium-size businesses in North America. IPA is based in Buffalo Grove, IL.
The quarterly poll of small business owners and managers also indicated that taxes were the leading concern in two of the four U. S. regions -- ranking number one in the South / Southeast and in the Western states. Taxes were ranked second in the Midwest and fourth in the Northeast. Economic conditions were identified as the leading concern by business owners in the both the Northeast and Midwest.
Energy and fuel costs were tied as the second greatest concern in three of the four regions -- the Northeast, Midwest and South / Southeast. Health care was fifth in each of those regions. Interestingly, neither energy and fuel nor health care finished in the top five in the Western U.S. where taxes and economic conditions were followed by foreign competition, the cost of materials and finding quality employees as the leading concerns.
"Taxes were the foremost concern of small business during the second quarter, however that does not mean paying the IRS is necessarily a seasonal issue. It does indicate that tax issues were more of a concern this year than other issues. Small businesses can adopt the same strategy as big businesses by strategically planning ahead and initiating actions to obtain the greatest tax efficiency," said Gregg M. Steinberg, President of IPA.
The same business owners also disclosed their expansion and productivity improvement priorities for the coming 12 months. Nearly one-third (32%) of the owners said they plan to expand their businesses. Expansion plans varied considerably throughout the U.S. Businesses in the Northeast appear most aggressive with 40 percent of the owners planning for expansion.
Of all the respondents indicating they intend to expand, business owners plan to invest first in current locations and second in providing more services. This was true throughout the U.S. as well as in every region. The addition of new products, enhancement of customer service and adding of locations were also identified as the next three leading areas included in expansion plans.
Staff training will get the most attention during the course of the next 12 months as owners seek to improve productivity. Improved staff training was rated first both throughout the U.S. as well as in each region. Improvements in existing automation, adding more automation and technology as well as staff additions followed as the next three priorities. Implementing or enhancing employee incentive programs was fifth, across the board.
"The tight labor market should compel small businesses to make certain they have programs in place to retain and train employees," said Steinberg. "Furthermore, while it ranks low on the list of priorities, businesses may need to consider creating or enhancing incentive programs as an offensive weapon to attract or retain quality employees."
Business owners are making these plans with increased confidence. The SBRB recently reported that its U.S. Small Business Confidence Index (SBCI) rose to 46 for the second quarter of 2007, a jump of 5.22 points from the previous quarter. Businesses in the Northeast, Midwest and South / Southeast all reported increased confidence from the prior quarter. The SBCI was only lower in the Western region, falling 3.82 points to 45.66.
The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. The SBRB conducts these studies for the benefit of small business owners and managers. The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research.
The universe of participants is developed from among small businesses across the United States. More than 700 small business owners and senior managers participated in this SBRB poll. The SBRB study is a voluntary survey conducted via phone and email.
The latest information about the Small Business Research Board can be found at www.ipasbrb.com.