38% of small-business owners feel 'very concerned' about election

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Small-business election anxiety

With the election just days away, small-business owners are increasingly concerned about which candidate will secure the presidency and how that might impact their future.

Data released Tuesday from the Los Angeles-based Pepperdine Graziadio School of Business and Management finds that, by a nearly 2-to-1 margin, 38 percent of small-business owners are "very concerned" about the impact of a new president on their business, compared with 19 percent who say they are "not at all" concerned. This finding comes as Republican Donald Trump and Democrat Hillary Clinton focus on different battleground states in an increasingly tight race.

"We saw the same thing in 2012, right before the election, a lot of trepidation with business owners concerned about the future and staying on the sidelines a bit," says Craig Everett, assistant professor of finance at Pepperdine. "It is concerning that they don't seem to be seeking capital quite as much nor are they pursuing aggressive growth strategies."

A second poll from the National Federation of Independent Business echoes that theory. The NFIB saw its own uncertainty index hit a 42-year high Wednesday. Political uncertainty continues to be a key reason small-business owners are choosing not to expand right now, the conservative lobbying group finds in its monthly report on small-business optimism.

"Small-business owners who cannot reasonably anticipate government policies or economic conditions are unwilling to deploy capital, hire new employees, borrow money, or make any long-term financial decisions," said the NFIB's president and CEO, Juanita Duggan, in a release. "Uncertainty is a drag on the economy, and the nature of this campaign is creating record levels of anxiety among small-business owners."

Uncertainty is a drag on the economy.
Juanita Duggan
President and CEO, National Federation of Independent Business

Business owners are seeking answers on key Main Street issues this election cycle, from how health-care reform will be handled to what will be done to simplify the tax code, which places a real burden on America's smallest companies. In the Pepperdine poll, respondents were asked who their preferred candidate was on different issues, in terms of who they believed would best support key initiatives.

When it came to fiscal issues, respondents largely supported Trump over Clinton. On health care, respondents favored Trump, 55 percent to 45 percent, as they did on taxes, 66 percent to 34 percent. Small-business owners also said they believed Trump would best handle regulation (64 percent to 36 percent) and access to capital (65 percent to 35 percent).

Trump has not put out a formal small-business plan, while Clinton has posted one on her website.

Advocacy groups claim neither candidate has been particularly detailed on key issues and solutions for them, though both bring up Main Street pain points from regulations to taxes repeatedly on the campaign trail.

"Independent business owners may feel like Donald Trump is a member of their tribe — entrepreneurs have their own culture and mentality and he may be one of them," Everett said. "Overall, when you drill down into specifics, small companies are busy trying to run their businesses and may be more connected with themes and ideas than specific policies."

There was a huge shift in support among respondents when it came to social issues: small-business owners overwhelmingly favored Clinton. On pay equity, Clinton got the support of 59 percent of respondents compared to 41 percent for Trump. Family leave created a similar split, with 58 percent favoring Clinton and 42 percent favoring Trump, as did support for women-owned small businesses: Clinton received 59 percent support and Trump 41 percent.

"That breakout really jumps off the page," Everett says. "It's not a surprise on gender issues that Hillary has the advantage given her background and some of his comments."