Business owners in Southern California are more optimistic about the economic future than they have been in prior years, according to the 9th Annual U.S. Bank Small Business Survey
Taxes, competition and regulations/red tape moved up into the top concerns categories, even after the 2017 tax reform legislation was passed in December.
“As a state, California has both high state tax rates and rising housing costs, both of which are a concern for business owners,” said Andi Garten, lead regional manager for Southern California Business Banking at U.S. Bank. “The changes to deductions of mortgage and home equity debt, as well as other changes to exemptions could result in employees moving out of Southern California to regions with more affordable housing and a more favorable tax structure. These are significant points of worry for our business owners.”
Southern California ranked taxes as the top concern and listed regulations and competition as tied for second concern. At the national level, competition took top concern, with taxes and economic uncertainty coming in for a tie as the second concern on the list. In both the national and local region, health care costs ranked as one of the lowest concerns.
Southern California business owners aren’t in agreement with the rest of the country on how the tax reform may impact their companies. In Southern California, 25 percent of small business owners said they thought national tax reform would have negative impact (19 percent at the national level), and another 25 percent said they thought it would have no impact (20 percent at the national level).
While regulations are giving entrepreneurs some worry, local survey results showed they are optimistic about the economic future, and those results echo what business owners across the nation are feeling. Surveys conducted in previous years had economic uncertainty as a top concern, but this year at the national level, it fell behind competition and tied with taxes.
“It’s great to see that small business owners are less worried about economic uncertainty,” Garten said. “This shows that small businesses are in a good place to possibly expand and grow.”
The 9th annual U.S. Bank Small Business Survey monitors the attitudes, perceptions and outlook of small business owners across the bank’s 25 state national footprint. The survey was conducted by LRW via an online sample with more than 2,500 small business owners reporting less than $10 million in annual revenue.