Small business owners in New York City are taking a step back in growing their companies this year as they wait to see who will occupy the Oval Office, according to a recent report.
Bank of America announced Monday that based on its spring 2016 Small Business Owner Report, entrepreneurs have expressed “greater caution” on their growth plans and hiring this year.
The report found that 52 percent of small business owners expect to grow their businesses over the next five years — a number down from 64 percent last year — and plans to hire have also dropped from 44 to 22 percent.
A total of 300 small business owners were surveyed during the semi-annual study. When asked what is affecting their outlooks this year, the top factor — with a 54 percent of owners agreeing — was the upcoming U.S. presidential election. Others include rising interest rates and social crises and violence both domestically and abroad.
Two-thirds of the entrepreneurs expect the election to have “a lot” or “some” impact on their business, while 55 percent are uncertain what the impact will be.
“It’s not uncommon for small business owners to take a more cautious, wait-and-see approach to their business strategies during election years,” said Michael Angelone, New York small business banker manager at Bank of America. “The good news is that most New York City entrepreneurs still expect continued revenue growth and remain enthusiastic about their opportunities.”
The report also found that 40 percent of local entrepreneurs believe the national economy will improve over the next 12 months, down 11 percentage points from 2015. Forty-six percent do believe the local economy would improve during the same time frame.
Along with the “effectiveness of U.S. government leader” being the top economic concern, small business owners in New York City also worry about health care costs and the nation and world’s stock market.
With minimum wage in the city making its way up to $15 in the next few years, 65 percent of small business owners believe the increase will have a positive impact on the economy — 18 percentage points higher than the national average.
Although the plans to hire have dropped, 49 percent of entrepreneurs say skill level is the most important factor when hiring, followed by previous work experience with 28 percent and fit with company culture at 17 percent. Six percent of business owners said education level is an important factor when hiring.
When it comes to characteristics of potential employees, business owners say they value individuals who are trustworthy, hardworking and have strong communication skills.