State regulations, mandates, and taxes are the main challenges for Connecticut small businesses according to a new survey released today.
CBIA's 2016 Survey of Connecticut Small Businesses shows widespread concerns over threats to profitability and growth, with over 40% listing state government regulations, mandates, taxes, and costs as major issues.
The biggest plus to doing business in Connecticut is location, including proximity to customers, vendors, family, other businesses in the supply chain, and major metropolitan centers, followed by quality of life and a skilled workforce.
The biggest drawbacks, respondents say, are the state’s taxes (particularly the personal income tax), regulatory burdens, an anti-business attitude among policymakers, and the high cost of doing business.
Nine out of 10 surveyed businesses said state government policies do not facilitate the efforts of small businesses in Connecticut.
And 69% said they were not confident that Connecticut state lawmakers would act consistently and predictably on legislation affecting businesses over the next three to five years.
'Death by a Thousand Cuts'
“Small businesses represent nearly 99% of all businesses in the United States,” said CBIA economist Pete Gioia.
“They are vital to communities, and are the backbone of our economy.
“This survey allows us to better understand what taxes, legislation, and issues concern them and how to correct it.”
The survey found that the state's personal income tax is the single biggest tax challenge for small firms, followed by the corporate tax and property taxes.
69% said they were not confident state lawmakers would act consistently and predictably on legislation affecting businesses.
Among state laws and regulations that businesses find most onerous, those governing labor and employment—in particular what respondents view as an unemployment compensation system that unfairly punishes businesses—were cited most often.
Several business owners indicated that it wasn’t any one particular regulation or set of regulations but the sheer number of them—or as one respondent put it, “death by a thousand cuts.”
Although concerns run high about the state’s economy and a shortage of qualified workers, many small businesses are optimistic about growth prospects in 2016.
By a factor of nearly three to one, businesses expect to grow this year (38% of respondents) rather than shrink (13%); just under half expect to stay the same.
About 29% plan to take out business loans; of these, most (77%) will take out bank loans.
The rest will tap into personal savings (18%), government grants (11%), equity financing (11%), and SBA loans (10%).
Sixty percent of respondents are hiring in 2016. While most are adding between one and three new workers, many are hiring in the double digits.
Connecticut small businesses are trying to positively influence policy at both the state and federal levels.
Almost two-thirds (64%) report that over the past year they or their employees communicated to legislators regarding their business challenges or needs.
Ninety-nine percent are registered to vote and 95% plan to cast their ballots in the Connecticut legislative elections this fall.