SBO optimism is up while other sources report concerns over the next round of tariffs
Welcome to the Small Business Run Down. Each day, we bring you stories and trends that impact small business owners and their workforce.
It’s Wednesday and Gallup says that SBO optimism is up while other sources report concerns over the next round of tariffs and the struggles with the increasing cost of doing business in New York City. Welcome to the roller coaster!
Glass is half full for more than half of small biz owners
The good news is that the bad news doesn’t seem to have small business owners down. According to a new Gallup survey, 79% of small business owners are optimistic about the future of their business.
The Number: 58%. An increase in revenue over the past 12 months was recorded by 58% of business owners.
The Quote: “One-third of owners say they are planning to apply for new credit products in the next 12 months.”
Uncertainty over impact of tariffs fuels action by SBOs
As trade negotiations with China continue, many SBOs are taking action and applying for small business loans now instead of waiting to see how things play out. According to one financial services company, the announcement about the new tariffs caused a jump in loan applications, particularly from the construction and retail sectors. Low interest rates make taking out larger loans more attractive, though experts warn against the danger of over-leveraging the business, especially when relations with China are in such a state of flux.
The Number: 10. Currently, a 10% tariff on Chinese goods is supposed to take effect on Sept. 10.
The Quote: “A lot of these things take time before we see the real impact of them. A lot of people are like, I want to know now, and we may not see it for a year.”
New York businesses find ways to pay the new minimum wage
The new $15 minimum wage requirement in New York City went into effect more than 6 months ago and small businesses are still grappling with the unintended consequences of the pay increase. Many SBOs are cutting employee overtime and scaling operations to avoid layoffs or price hikes. Small business closures are reportedly up in certain parts of the city, though the city and state unemployment rates remain stable.
The Number: 3. In New York City, the minimum wage has increased 3 times over the past 3 years for employers with more than 11 employees.
The Quote: “What it really forces you to do is make sure that nobody works more than 40 hours. You can only cut back so many people before the service starts to suffer.”