Even though the 2016 presidential election is more than a year away, small business owners are paying close attention to the presidential candidates and their platforms--and for good reason. Corporate tax restructuring, the federal minimum wage and immigration restrictions can play an outsized role in a small organization's success, especially where firms lack the flexibility or resources of their larger counterparts. At the same time, candidates' policy proposals can inform the business buying and selling decision-making process, encouraging or stunting deals during the months to come.
BizBuySell recently surveyed small business buyers and sellers to shed light on their political priorities, and found that many are already picking favorites based on key issues, including general economic policies, tax reform and the minimum wage.
Top Concerns and Candidates in the Small Business Community
Heading into 2016, economic issues are among the top concerns for small business buyers and sellers. Forty-five percent of sellers and 44 percent of buyers cite tax reform as a critical issue, while 38 percent of sellers and 41 percent of buyers point to economic policy more broadly as a topic to watch. Jobs and immigration also polled strongly with both groups, highlighting buyer and seller concern over labor force management.
Though the presidential playing field is still very much in flux, the small business community has already rallied behind Donald Trump. This comes as little surprise given some of Trump's proposed economic policies, including a simplified tax code and lower corporate tax rates. Forty-two percent of sellers and 34 percent of buyers believe Trump is the candidate most likely to improve the small business environment, and his backers listed tax reform, economic policy and health care as the most important issues this election cycle.
Hillary Clinton also enjoys some support from the small business community, but ranks a distant second to Trump with backing from only 13 percent of sellers and 16 percent of buyers. Bernie Sanders places third, with support from 10 and 8 percent of sellers and buyers, respectively.
Among the remaining candidates, none polled higher than six percent. While this may change as the primaries progress, it suggests that most candidates have yet to capture the small business community's attention.
Minimum Wage Worries
Business buyers and sellers alike express apprehension over the potential for a higher minimum wage, but have yet to let the unknown alter their long-term plans. Among those with strong opinions on the matter, 64 percent of business owners oppose a higher minimum wage, compared to only 36 percent in favor. Of the almost two-thirds against a wage hike, 63 percent believe that an increase in the minimum wage will hurt their business value and hamper their ability to sell. Interestingly, however, nearly half (49 percent) of respondents don't believe the minimum wage affects their business.
Business buyers are more divided on the issue: 38 percent oppose a higher minimum wage and 35 percent support one. Overall, buyers' willingness to purchase a small business is not affected by the minimum wage, with 77 percent claiming that new regulations would not affect the timing of their purchase. This is likely due in part to respondents' belief that a higher minimum wage would decrease the profits and therefore value of a business, bringing stronger negotiation leverage and resulting in a lower purchase price.
Keeping Tabs on Current Events
The general public is still getting acquainted with the 2016 presidential candidates and the nuances of their proposed policy changes, but many voters within the small business community have a clear idea of they're looking for in a political leader. No matter how campaigns unfold, one thing is certain: buyers and sellers need to stay tuned.
The next few months will significantly shape the discourse around economic policy and labor reform. Buyers and sellers must keep a close eye on these issues to understand how they could affect them at the negotiating table, and the voting booth.