SMBs make-up half the GDP. How will they vote?

Page

Research Method 3

Executive Summary 4

Importance of the SMB Market 5

Political Affiliation 6

The Issues 12

Conclusions 20

TABLE OF CONTENTS

2

2016 RESEARCH METHOD

3

1,366 interviews Businesses with 5-499 employees Owners, C-level executives, key

decision makers

Phone internet interviews Fielded through January 16

Nationally representative

study

EXECUTIVE SUMMARY

4

SMBs have local influence and national economic power. As a group, they account for

roughly 7.6M businesses and make up 46% of the GDP. With 89% of SMBs generating

sales locally, decisions and policies impacting their communities and businesses are of

crucial importance.

SMB owners consist largely of Republicans, over indexing the US population at 148. Democrats are the clear minority, making up 19% of SMBs.

Democrats fare worse in annual sales Average annual sales of Republican-owned SMBs are $1.1 million higher than businesses

owned by Democrats, and $2.9 million higher than businesses owned by Undecideds.

but are more confident about the economy. Three quarters of Democrats believe the economy will improve in the next two years.

Republicans and Democrats are both politically active, but use different platforms for making their opinions heard.

Democrats are significantly more likely to sign a petition, while Republicans are more likely to

serve on a board.

Democrats and Republicans share business and personal concerns, but prioritize them differently.

Democrats are more focused on attracting new customers and having enough money to retire,

while Republicans are more focused on the cost of health insurance and employee benefits.

THE IMPORTANCE OF THE SMB MARKET

5

Small and mid-sized businesses* account for 46% of the GDP.

SMBs comprise 98% of all identified exporters; and 97% of all

identified importers.

SMBs in America account for 54% of all U.S. sales.

SMBs provide 55% of all jobs.

*Defined by Census as businesses with under 500 employees

Sources: Small Business & Entrepreneurship Council: Small Business Facts and Figures (sbecoucil.org) sourced from Census bureau; Small Business

Association: Small Business Trends (sba.gov); Small Business GDP: Update 2002-2010, private non-farm GDP; Census Bureau Statistics of U.S. Businesses

6

POLITICAL AFFILIATION

NEARLY HALF OF SMB OWNERS ARE

REPUBLICAN; OVER ONE-THIRD ARE

UNDECIDED

7

Sources: MRI 2015 Doublebase and The Business Journals SMB Insights 2016

Politically, do you consider yourself . ; Undecided includes those who identify as Independent, or selected Other or None

*Indexed versus Total U.S. Adults 18+

Political Party Affiliation

Democrat19%

(50 INDEX*)

Republican46%

(148 INDEX)

Undecided35%

(113 INDEX)

TOTAL SMB OWNERS

Democrat38%

Republican31%

Undecided31%

TOTAL U.S. ADULTS 18+

AGE, GENDER & RACE ARE KEY

DIFFERENTIATORS OF POLITICAL

PARTY AFFILIATION

8

75

90

109

90

64

150

110

88

126

182

138

110

90 94

109

Millennials GenXers Boomers+ Women-Owned Minority-Owned

Republicans Democrats Undecideds

Index Vs. Total

SMB Owners

(=100)

Profile Characteristics of Political Affiliation

Indexed Versus Total SMBs

274,875Estimated # of

Businesses: 996,421 2.13M 1.06M 377,953

Source for number of businesses: Small Business Research Center, based on Census and Bureau of Labor Statistics data for businesses with 5-499 employees; Q4 2015 projection

REPUBLICANS HAVE THE GREATEST

WEALTH & RUN THE MOST WELL

ESTABLISHED COMPANIES

9

Index Vs. Total

SMBs

72% men 106

28% women 88

$198K household income (average) 107

$1.7M net worth (average) 113

84% married 114

66% college graduates+ 97

$9.6M annual sales (average) 113

31.9 years in operation (average) 112

11% under 10 years in operation 73

24 employees (average) 96

DEMOCRATS INCLUDE THE MOST

COLLEGE GRADS & RUN THE

YOUNGEST COMPANIES

10

Index Vs. Total

SMBs

57% men 84

43% women 134



62% married 84






UNDECIDEDS HAVE THE LOWEST

SALES AND RUN YOUNGER COMPANIES

11

Index Vs. Total

SMBs

70% men 103

30% women 94



68% married 92






Undecided includes those who identify as Independent, or selected Other or None

12

THE ISSUES

ALL GENERATE LOCAL SALES; THUS

POLITICS & POLICIES THAT IMPACT

THE COMMUNITY ARE CRUCIAL

13

Using 100 % points, how would you break down your companys 2015 sales among the following three geographic categories? ...W ithin your local area, The

rest of the U.S., Outside of the U.S.

92% 89% 92%

59%64% 62%

23%29%

24%


Local National International

Geographies Where Sales Are

Generated

DEMOCRATS AND REPUBLICANS BOTH

SPEAK OUT, BUT USE DIFFERENT

APPROACHES

14

150

136

110

113

90

79

84

136

90

100

105

108

110

111

113

114

Signed a petition

Been published

Made a speech

Written/called a politican

Served on committee/officer for local org

Attended public meeting on town/school affairs

Served on a Board

Active member of group influencing public policy/govt

Republicans

Democrats

Index Vs. Total SMB Owners

(=100)

Which of the following public activities have you participated in over the past 12 months?

Civic Activities Participated in Past Year

Indexed Vs. Total SMB Owners

REPUBLICANS ARE MORE CONCERNED

ABOUT ALL ISSUES RIGHT NOW

15


AVERAGE % VERY CONCERNED ACROSS 17

BUSINESS & PERSONAL ISSUES43% 34% 36%

Lets face it-youre one of the people in your business who has to be concerned with ALL of the issues related to running the business. What are the issues

that youre most concerned about?

The seventeen issues include:

The U.S. economy

Having enough money to retire

Keeping up with demands on your time

Being able find and keep good employees

The cost of health insurance and other employee

benefits

Access to capital, business loans or credit

Rising cost of doing business

Spending enough time with my family

Your own daily stress level

The global economy

Possible tax changes that could hurt your business

Being able to attract new customers

Maintaining existing customer base

The outcome of the upcoming presidential election

New competitive paradigms, such as the new shared

economy

Inability to attract qualified, younger staff

The world environment and global warming

REPUBLICANS ARE HIGHLY CONCERNED

ABOUT THE OUTCOME OF THE

UPCOMING PRESIDENTIAL ELECTION

16Lets face it-youre one of the people in your business who has to be concerned with ALL of the issues related to running the business. What are the

issues that youre most concerned about?

31%42%

31%

51%21%

30%


Concern About the Outcome of the Upcoming

Presidential Election on Your Business

82%

63% 61%

Very Concerned

Somewhat

Concerned

DEMOCRATS ARE SUBSTANTIALLY MORE

CONFIDENT IN THE U.S. ECONOMY THAN

REPUBLICANS

17

23%

35%

14%

29%

7%

12%

Republicans Democrats

Confident

Very Confident

Extremely Confident

What is your level of confidence that the U.S. economy will continue to improve over the next 24 months?

Confidence in the Improvement of U.S. Economy

Over the Next 24 Months

76%

44%

+32%

points

DEMOCRATS GREATER ECONOMIC

CONFIDENCE TRANSLATES INTO MORE

PLANNED FULL-TIME HIRES

18Approximately how many full-time employees are you planning to hire over the next 12 months?

Plan to Hire Full-Time Employees Next 12 Months

83%

73%

78%

Democrats Republicans Undecideds

Average Number

Estimated to be Hired: 3.3 employees3.8 employees 4.5 employees

REPUBLICANS ARE FOCUSED ON THE

ECONOMY, TAXES & RISING COSTS;

DEMOCRATS, ON CUSTOMERS & RETIREMENT

19


The cost of health insurance and other employee benefits 1 3 1

The U.S. economy 2 8 6

Rising cost of doing business 3 7 2

Being able to attract new customers 4 1 4

Possible tax changes that could hurt your business 5 10 7

Maintaining existing customer base 5 4 4

Being able to find and keep good employees 7 4 2

Having enough money to retire 8 2 8

Top Five Concerns of SMB Owners Across Political AffiliationsRank Ordered by % Very Concerned

Lets face it-youre one of the people in your business who has to be concerned with ALL of the issues related to running the business. What are the

issues that youre most concerned about?

20

CONCLUSIONS

KEY DIFFERENTIATORS

21

Demographics Firmographics Issues

Republicans

Skew older & male

Have the highest net

worth

More likely to be

married

Run the most established

companies (avg. 32

years in operation)

Highest annual sales

Highest degree of concern across all

business issues.

Especially high degree of concern about the

Presidential election.

Least confident about potential

improvement of the U.S. economy.

Top concerns: cost of health insurance, U.S.

economy, rising costs, possible tax

changes.

Most impacted by skills shortage.

Democrats

Skew younger

Highest share of

college grads

Most equitable share

of male and female

owners

Highest share of Women

and Minority owned

businesses

Younger companies

(21% in operation under

10 years)

High confidence in future success of the

U.S. economy.

Top concerns: Attracting new customers,

having enough money for retirement.

Strong views about the role of business as

regards the environment, sustainability, and

social responsibility.

Undecideds Skew younger &

male

Younger companies

(19% in operation under

10 years)

Moderate confidence in future success of

the U.S. economy.

Moderate concern about the outcome of the

Presidential election.

Top concerns: Cost of health insurance,

rising costs, being able find/keep

employees.

DEMOGRAPHIC/FIRMOGRAPHIC

COMPARISON

22

Republicans Democrats Undecideds Total SMBs

Male / Female 72% / 28% 57% / 43% 70% / 30% 68%/32%

Average Household Income $198K $170K $176K $185K

Average Net Worth $1.7M $1.3M $1.6M $1.5M

Average Age

- Millennials

- Gen X

- Boomers or older

54.1

6%

27

67

51.7

12%

33

55

51.8

11%

33

56

52.8

8%

30

62

Married / Single 84% / 16% 62% / 38% 68% / 32% 74% / 23%

College Graduate + 66% 76% 67% 68%

Average annual sales $9.6M $8.5M $6.7M $8.5M

Average years in operation

% in operation under 10 years

31.9

11%

25.2

21%

25.5

19%

28.5

15%

Average # employees 24 22 26 25

Women-owned business

Minority-owned business

28%

7

39%

20

29%

12

31%

11%

Research:

Jessie Shaw

212-500-0611

[email protected]

CONTACTS

23

National Advertising:

Ryan Whittington, SVP

704-973-1839

[email protected]

About The Business Journals:

The Business Journals is a division of American City Business Journals; the

nations largest publisher of local business news and information in print and

online, deploying more than 600 journalists across 43 major U.S. cities.

American City Business Journals serves audiences valuable news and data

anytime and anywhere they seek it.

Local Advertising:

Alex Orfinger, EVP

703-258-0888

[email protected]

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704-973-1005

[email protected]

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SMBs make-up half the GDP. How will they vote?

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