NEVADA STATE BANK SMALL BUSINESS SURVEY

Transcription

1 2015 NEVADA STATE BANK SMALL BUSINESS SURVEY

2 1 OUTLOOK & CONCERNS 4 2 ECONOMY page 6 3 EMPLOYMENTPage 8 4 FINANCINGpage 10 5 LEGISLATIONpage 12 6 THE BANKING RELATIONSHIPPage 14 This survey was conducted by Applied Analysis as commissioned by Nevada State Bank.

3 Small businesses are the backbone of our economy. If you ve heard that before, it s because it s a fact worth repeating. And it s especially true here in Nevada, where small businesses have played a key role in helping us bounce back from the Great Recession. At Nevada State Bank, we know that better than anyone. After all, the success of our bank is directly tied to the success of small businesses throughout our state. We pride ourselves on knowing everything we can about what the owners and managers of small businesses in Nevada want, need and think about important issues. One of the ways we do that is by investing in highly targeted, local research on these subjects. The following pages summarize what we learned in our most recent survey of more than 400 Nevadans who own or operate small businesses. We talked to people who run businesses that generate annual revenues of $500,000 to $5.5 million. This year s results are both encouraging and enlightening, showing Nevada s small business decision-makers generally have a more positive outlook this year than they did in past years. At the same time, we know small businesses face plenty of challenges. For example, the following page outlines the most common concerns we heard in this year s survey. We re eager to share what we learned from these folks. For even more information on this subject, please visit our website at Sincerely, Dallas Haun Chairman and CEO Nevada State Bank

4 OUTLOOK & CONCERNS WHAT IS THE SINGLE MOST IMPORTANT CHALLENGE YOU FACE AS A SMALL BUSINESS TODAY? Government Regulation Hiring/Retaining Quality Employees Financial Stability / Cash Flow Attracting New Customers / New Business Taxes Healthcare / Obamacare Competition / Larger Corporations/E-commerce Cost of Running the Business The Local Economy Expanding Business Operations/Product Lines Availability of Credit/Financing Employee Benefits (Excluding Healthcare Costs) The National Economy Other 14.4% 12.2% 11.4% 10.7% 10.2% 5.2% 4.7% 3.5% 3.2% 2.5% 2.2% 2.0% 1.7% 1.2% 14.7% IN THE LAST 12 MONTHS, HAS YOUR BUSINESS PROFITABILITY INCREASED, DECREASED OR REMAINED FLAT? 39.8% Remained Flat 36.6% Increased 22.6% Decreased 1.0% No Response Only about 2 in 10 small businesses report that their profitability has decreased in the last year, while the rest are largely split between flat and increased profits. 3

5 DO YOU PLAN TO EXPAND YOUR WORKSPACE, ADD A NEW BUILDING OR RENOVATE A CURRENT LOCATION IN THE NEXT 12 MONTHS? 15.7% Yes 82.3 % No 2.0% More than 8 in 10 respondents have no plans to expand or renovate their workspace in the next 12 months. HOW CONCERNED ARE YOU ABOUT THE FOLLOWING FACTORS? 83.1% CONCERNED HEALTHCARE COSTS The vast majority of respondents are concerned about healthcare costs having an impact on their business, with 60.0% saying they are very concerned. 79.6% CONCERNED BUSINESS TAXES Like last year s results, nearly half (48.5%) of respondents are very concerned with the impact of business taxes, slightly up from 46.9% in the previous survey. 77.6% CONCERNED GOVERNMENT REGULATION This is up from last year, with a full 53% being very concerned about government regulation having an impact on their business (versus 37.5% last year). 64.3% CONCERNED ATTRACTING CUSTOMERS/NEW BUSINESS Nearly two-thirds of respondents are concerned about attracting new customers/new business, with 30.8% saying they are very concerned. 60.5% CONCERNED CASH FLOW/CASH MANAGEMENT Similar to last year, about 6 in 10 respondents are concerned about cash flow/cash management having an impact on their business, with 26.4% feeling very concerned (versus 30.3% last year). 4

6 ECONOMY DO YOU BELIEVE THE NATIONAL ECONOMY IS GENERALLY HEADED IN THE RIGHT DIRECTION OR IN THE WRONG DIRECTION? 48 % 42.5% Wrong Direction 9.5% Right Direction Almost half of the respondents believe the U.S. economy is headed in the wrong direction. This is down from last year, when nearly 6 in 10 respondents felt the U.S. economy was headed in the wrong direction. WHAT ABOUT THE NEVADA ECONOMY? WOULD YOU SAY IT IS GENERALLY HEADING IN THE RIGHT DIRECTION OR THE WRONG DIRECTION? Nearly two-thirds of respondents said they think Nevada's economy is headed in the right direction. This is an improvement over last year, when results were roughly split between those who believed Nevada's economy was headed in the wrong direction and those who believed it was headed in the right direction. 27.6% Wrong Direction 63.4% Right Direction 9.0% No Response 5

7 THINKING BACK OVER THE PAST YEAR, WOULD YOU SAY THE BUSINESS ENVIRONMENT IN NEVADA HAS GOTTEN BETTER, GOTTEN WORSE OR STAYED THE SAME? 44.3 % Stayed about the same 1.2% 40.8 % Gotten Better Approximately 4 in 10 respondents feel the business environment in Nevada has gotten better over the past year % Gotten Worse This is up slightly from the 35.2% reported last year. DO YOU EXPECT THE BUSINESS ENVIRONMENT IN NEVADA TO GET BETTER, GET WORSE OR STAY ABOUT THE SAME OVER THE NEXT 12 MONTHS? More than half of respondents are optimistic about Nevada's business environment over the next 12 months. This is up from 41.2% who believed the business environment in Nevada would improve from 2013 to % Stay about the same 56.0 % Get Better 3.2 % 8.7 % Get Worse 6

8 EMPLOYMENT HOW MANY EMPLOYEES DO YOU HAVE AT YOUR COMPANY HERE IN THE STATE OF NEVADA? 72.9% 21.4% Consistent with last year, the majority of respondents, (more than 7 in 10), have between 0 and 15 employees. 3.5% 1.5% 0.5% 0.2% IN THE NEXT 12 MONTHS DO YOU PLAN TO INCREASE YOUR NUMBER OF EMPLOYEES, DECREASE YOUR NUMBER OF EMPLOYEES, OR KEEP YOUR EMPLOYEE BASE THE SAME? About 7 in 10 small businesses reported planning to keep their employee base the same over the next 12 months. Notably, businesses expecting to increase their number of employees outnumbered those expecting to decrease their employees by a 3-to-1 ratio. 1.0% 6.7% Decrease 23.9% Increase 68.4 % Keep the Same 7

9 HOW EASY OR DIFFICULT IS IT FOR YOU TO RECRUIT QUALITY JOB CANDIDATES FROM WITHIN YOUR MARKET? The majority of respondents said recruiting quality job candidates from within their market is at least somewhat to very difficult. 2.2 % 28.1 % 33.3 % very difficult somewhat difficult 28.4 % Somewhat Easy 8.0% Very Easy DO YOU RECRUIT JOB CANDIDATES FROM OUT OF STATE? 72.9 % No 26.4 % Yes 0.7 % Despite reporting having difficulty recruiting quality job candidates from within their market, the majority of small businesses (72.9%) said they do not recruit job candidates from out of state. HOW CONCERNED ARE YOU ABOUT HIRING/RETAINING QUALITY EMPLOYEES? 57.7% CONCERNED 30.1% NOT CONCERNED HIRING/RETAINING QUALITY EMPLOYEES Almost 6 in 10 respondents are concerned with hiring/retaining quality employees, and about a quarter of them are very concerned. 8

10 FINANCING IN YOUR OPINION, HOW DIFFICULT IS IT FOR A SMALL BUSINESS TO GET CREDIT FROM A BANK THESE DAYS? Not at all Difficult 12.7% 35.6 % Very Difficult 43.0 % Somewhat Difficult 8.7% Like last year, most respondents (about 8 in 10) believe that it is difficult for a small business to get credit from a bank. However, those who believe it is very difficult has decreased from 46.4% to 35.6%. HAVE YOU APPLIED FOR A LOAN, A CREDIT LINE OR ANY OTHER TYPE OF FINANCING OVER THE LAST 12 MONTHS? NO 65.9% YES 33.1% 1.0% } WHAT WAS THE OUTCOME OF THAT PROCESS? Unlike last year, almost two-thirds of respondents who applied for some type of financing in the last 12 months were approved for the full amount. This is up from 46.2% in the previous survey. 2.3% Still Pending Approved for less than full amount 9.0% 16.5% Denied 9.8% 62.4 % Approved for full amount 9

11 IF YOU APPLIED AND WERE DENIED, WERE YOU ABLE TO FIND ALTERNATIVE FINANCING? YES NO 36.4% 54.5% 9.1% Those able to find alternative financing (36.4%) is up from last year s 24.3%. DO YOU ANTICIPATE APPLYING FOR A LOAN, A CREDIT LINE OR ANY OTHER TYPE OF FINANCING OVER THE NEXT 12 MONTHS? Unchanged from last year, nearly three-quarters of respondents don t anticipate applying for any type of financing in the next year % No 25.4 % Yes 2.2% ARE YOU FAMILIAR WITH SBA LOAN PROGRAMS? 76.9% 22.6% YES NO 0.5% No RESPONSE The vast majority of small businesses are familiar with SBA loan programs. 10

12 LEGISLATION HAS THE IMPLEMENTATION OF THE AFFORDABLE CARE ACT (ALSO KNOWN AS OBAMACARE) AFFECTED YOUR BUSINESS POSITIVELY, NEGATIVELY, OR NOT AT ALL? 6.2% Positively 1.7% 38.8% No Impact 53.2% Negatively IN THE 2014 MIDTERM ELECTION, DID YOU VOTE YES OR NO ON QUESTION 3 (ALSO KNOWN AS THE EDUCATION INITIATIVE OR THE NEVADA MARGIN TAX INITIATIVE )? Three-quarters of small businesses said they voted no on Question 3, which is consistent with the 74.7% of last year s respondents who thought the initiative was a bad idea. 75.1% 10.7% 11.2% 1.2% Yes No Did Not Vote Would Have Voted Yes Did Not Vote Would Have Voted No 1.7% ALTHOUGH THE MARGIN TAX FAILED, DO YOU BELIEVE THAT STATE LEGISLATORS SHOULD IDENTIFY AN ALTERNATIVE SOURCE TO INCREASE FUNDING TO PROGRAMS SUCH AS EDUCATION AND HEALTHCARE? 7.5 % 38.8% No 53.7% Yes Despite the failure of the Margin Tax, just over half of small businesses (53.7%) believe the state should identify an alternative source of funding for education and healthcare. 11

13 THE NEVADA LEGISLATURE HAS BEEN IN THE NEWS FOR OFFERING INCENTIVES FOR BUSINESSES TO RELOCATE TO THE STATE. THESE HAVE COME IN THE FORM OF TAX ABATEMENTS, TRANSFERABLE TAX CREDITS AND REDUCED ELECTRICITY RATES, AMONG OTHERS. DO YOU BELIEVE THAT THE STATE S ECONOMIC DEVELOPMENT INITIATIVES WILL HAVE A POSITIVE OR NEGATIVE EFFECT, OR NO IMPACT ON NEVADA S ECONOMY? 68.4% Positive 4.7% 15.2% No Impact 11.7% Negative Almost 7 in 10 small businesses believe Nevada s recent economic initiatives will have a positive impact on the state s economy. ANOTHER ISSUE IN THE NEWS IS WAGE INFLATION, OR AN INCREASE IN THE MINIMUM WAGE. DO YOU BELIEVE INCREASING THE MINIMUM WAGE TO $10.10 PER HOUR WOULD HAVE A POSITIVE OR NEGATIVE EFFECT, OR NO IMPACT ON YOUR BUSINESS? 37.3% 48.5% Almost half of respondents (48.5%) believe there will be no impact on their business if the minimum wage is increased. 13.4% Positive Negative No Impact.7% No Response DO YOU THINK INCREASING THE MINIMUM WAGE TO $10.10 PER HOUR WOULD HAVE A POSITIVE OR NEGATIVE EFFECT, OR NO IMPACT ON NEVADA S ECONOMY? No Impact 12.9% 52.7% Negative 4.0% 30.3% Positive Despite almost half of respondents saying raising the minimum wage would have no impact on their business, slightly more than half believe it will have a negative impact on Nevada s economy. 12

14 THE BANKING RELATIONSHIP HOW IMPORTANT IS THE FOLLOWING PROFESSIONAL TO YOUR BUSINESS? 74.6% 53.0% 39.3% CPA/ACCOUNTANT BANKER ATTORNEY Practically identical to last year s results, approximately three-quarters of respondents said a CPA/Accountant is important to their business, with 36.1% rating this type of professional as very important. More than half of respondents said a banker is important to their business, with 17.9% deeming bankers very important. This is down slightly from last year. About 4 in 10 consider an attorney important to their business, down from last year s 52.4%. HOW IMPORTANT IS YOUR BANKING RELATIONSHIP TO THE SUCCESS OF YOUR SMALL BUSINESS? Similar to last year, more than 8 in 10 respondents said their banking relationship was somewhat to very important to the success of their business. However, those who said it was very important is down significantly from last year (38.1% versus 51.9%). 43.0% Somewhat Important 38.1% Very Important 18.7% Not Important 0.2% WHEN THINKING ABOUT YOUR BANKING RELATIONSHIP, HOW IMPORTANT IS THIS TO YOU AND YOUR BUSINESS? TOPICS MORE IMPORTANT NOT IMPORTANT Quality of Service and Expertise Approximately 75% of small businesses said the quality of service and expertise is important, with nearly 40% considering it to be very important. 74.9% 15.7% Level of Interest Rates/Fees The level of interest rates/fees is important to the majority of small businesses, with 42.5% indicating it is very important. 73.6% 17.4% Cost of Products/Services The cost of products and services is important to 7 in 10 small businesses and very important to one-third of respondents. 70.6% 18.7% Cash Flow/Cash Management Nearly 67% of respondents consider cash flow/cash management important, with 4 in 10 considering it very important. 66.9% 21.2% Your Relationship with Your Banker Approximately two-thirds of respondents feel their relationship with their banker is important, with 31.8% saying it is very important. 64.1% 22.4% Access to Capital such as Loans and Credit Lines Consistent with last year s results, access to capital is important for 6 in 10 respondents, with 26.6% saying it is very important (compared to 28.0% previously). 59.9% 30.3% 13

15 DO YOU FEEL LIKE YOUR BANKER DOES A GOOD JOB OF KEEPING YOU INFORMED ABOUT SERVICES AND PRODUCTS THAT MAY HELP YOUR BUSINESS, SUCH AS MERCHANT SERVICES, CREDIT CARDS, SBA PROGRAMS, AND TREASURY MANAGEMENT SERVICES? YES 69.4% NO 26.1% NO RESPONSE 4.5% IF THERE WAS ONE PRODUCT OR SERVICE YOUR BANKER COULD PROVIDE FOR YOUR BUSINESS THAT YOU ARE NOT ALREADY RECEIVING, WHAT WOULD THAT BE? (Descending order of importance) Line of Credit More Personal Attention Lower Fees Info on the Local Economy and Economic Trends No Fees Free Money Better Personal Relationship Easier Access to Capital Pick Up Our Deposits Extended Business Hours Financial Advice GENERALLY SPEAKING, DO YOU PREFER NATIONAL BANKS OR COMMUNITY BANKS? COMMUNITY 50.5% NATIONAL 25.6% NO PREFERENCE 21.4% NO RESPONSE 2.5% Similar to last year, half of all respondents prefer community banks; however, 21.4% have no preference (up from 13.4% in the previous survey). Among those who prefer national banks, the most-cited reasons were national reach, convenience and ATMs, service, and more security/safety. Among those who prefer community banks, service and part of the community were oft-cited reasons. More Personal was another important factor, as well as better relationships and community banks support of the local economy. DO YOU THINK COMMUNITY BANKS SHOULD PROVIDE OR SHOULD NOT PROVIDE? Support of Local Charities 71.4% Should 23.6% Should Not 5.0% Reports & Data on Local Economic Performance 69.9% Should 24.6% Should Not 5.5% Meetings With Industry Leaders for Bank Clients 58.5% Should 30.8% Should Not 10.7% Webinars/Online Business Education Events 57.5% Should 33.1% Should Not 9.5% 14

16 FOR A PDF OF THIS SURVEY, visit nevadasmallbusiness.com/survey You can also visit NevadaSmallBusiness.com for more information, additional resources, and the latest economic trends affecting our state. 55 years in Nevada nsbank.com NVSB