SBAM Member Summer Survey Results: Higher Costs Continue to Hinder Small Biz Expansion

Lansing, MI – The results of SBAM’s summer member survey are in – and the economy continues to dominate the long list of challenges facing small businesses owners – particularly when it comes to higher costs.

91 percent of those surveyed said costs are increasing more than usual compared to previous years. In last year’s summer survey, this number was 93 percent. A two percent drop is hardly an improvement on this metric. The cost increases are punitive, and they clearly continue to hinder expansion. A small business owner cannot afford to invest in technology or a new product line, hire more people or otherwise expand when they’re paying more for, well – everything.

When asked what the single biggest problem is facing their small business, the economy was the #1 response. Quality of labor came in second, and yet 68 percent of members surveyed said they’ve increased compensation for employees within the past year. Another rapidly increasing cost is that of health insurance for employees – 55 percent of members said it has increased by 10 percent or more.

Half of respondents to the summer survey said their gross revenues stayed the same over the past 12 months.

The data certainly paints the picture here: the cost of everything has gone up. More revenue is being dedicated to employee compensation and benefits. And yet, for the most part, revenue remains flat. Small business owners continue to do more with less. If the current trajectory continues, future small business growth will be greatly inhibited. If it’s bad for small business, it’s bad for Michigan’s economy.

70 percent of those who responded are opposed to the graduated income tax proposal taking shape. We didn’t ask at the individual level how each respondent’s filing structure is set up, but most small businesses in Michigan are pass-through entities that file as individuals.

SBAM has set up a webpage dedicated to explaining the graduated income tax ballot proposal as it moves through the process. Because proponents are not being forthcoming with how Michigan’s tax structure is set up, it’s critical that voters learn this massive tax increase will disproportionately fall on the backs of small business owners.

Click here for more News & Resources.