Top Issues Facing Small Business in 2017Data sources , NFIB’s January 2017 report on

Small Business Economic Trends

When asked to rank the top 10 in the 2016 NFIB survey

9 of top 10 are government related

When asked to rank the single most important problem in January 2017, the results are below.

Those that are government related

1. Taxes2. Inflation3. Govt. Reqs. & Red Tape4. Finance and interest rates5. Cost of labor6. Cost / availability of insurance

Those that we have some control over

1. Poor Sales2. Cost of labor ( I know it’s on both lists, more on this later)3. Competition from large businesses4. Quality of labor

• Let’s look closer at these 4

Poor Sales• Usually result in lower earnings• What are the reasons?

Poor Sales• Cutting costs to drive sales, while admittedly cost of sales is

increasing, might be an indication of one or more of the following:• Lack of a strong and clearly understood value proposition forcing you

to sell on price• Lack of Subject matter experts to help the prospect make an informed

decision• Relying on cold calling and traditional methods of reaching your

customers which are getting less effective and more costly• Not using your website as an interactive tool to generate more

qualified leads

Cost of Labor• Government owns some of this• Driving the labor labor participation rate down to 62%.• Increased health care costs• Increased regulations

• Some things we can control• Do we have the right people in the right jobs? Or are we “waiting on taking action?”• Do we have too many people on board due to productivity , quality or rework issues?• Do we have key production measurements to help us spot problem trends?

Competition from large business

• Digital marketing, content marketing and an iterative website really present great opportunities for small business. They level the playing field with large companies. • Large companies could buy exposure through ads and media• Those methods are less effective than ever• Small companies can create an advantage• Develop SME’s (subject matter experts)• Content marketing• Narrow their focus and attract more qualified leads

Quality of labor• This too is supported by data from NFIB’s survey 31% of

companies had jobs they couldn't fill in January

Several reasons for that• Smaller selection

Quality of labor• Government has a role in the low participation rate • Benefit ceilings for working and receiving health insurance assistance and other benefits• It becomes a choice for lower income workers to collect benefits or work• “A single parent with a couple kids can easily get $35,000 a year in total benefits between the health care and the earned income credit and the

FoodShare and the low-income housing and what have you. … That’s after taxes.”

• — Incoming Rep. Glenn Grothman (R-Wis.)

• Adds to cost of labor as well as availability of labor. To match the $35K, a the worker must be paid at least $18 per hour to think about working• That varies by state but a $12/ $14 per hour labor position that requires them

to pay taxes and child care and maybe some health care is a bad decision.

Quality of labor

• Lack of apprenticeship programs for skilled labor• Smaller percentage of people going to technical schools• Expectations of millennials are different• See Simon Sinek’s video on that subject here

• Lots of reasons what do we do about it?

Quality of labor

• Like it or not we have to learn how to attract quality people and keep them.• It’s not always a money issue• Strong competent leadership is crucial• Is yours a place where people want to work?• More importantly is it a place where they want to engage and contribute,

and refer others?• If not, we had better find a way to change our outlooks because it won’t get

any easier.

Take A ways:

• Skilled labor will continue to be a problem, we may need to think about in-house apprentice programs• Unskilled labor may be a bigger problem with the current

compensation questions• We need to rethink our sales and marketing strategies• We need a compelling value proposition that our customer

base understands and agrees with.

Business optimism is on the rise

Take A ways:

• We need to control our costs and use KPI’s to trend results• We need to develop a culture for our organization that people want to

be a part of• We need to address internal problems and ready the organization for

growth

More information

• To read a full copy of NFID’s January report click here • To contact us to learn more about how we can help click here• To comment on this subject, or see other articles click here