By Cathie Ericson
New York City’s small business owners are entering 2018 more optimistic than in years past, with half of them confident that the national economy will improve in the next 12 months. That’s a 15 percent increase from Fall 2016, according to the most recent Bank of America Small Business Owner Report.
And they’re acting on that new-found optimism: 64 percent intend to hire new employees in the next five years—up 12 percent since the previous study. For some, like Dan Biederman, president of the Bryant Park Corporation, Biederman Redevelopment Ventures Corporation and the 34th Street Partnership, that growth is due to advances in tax policy. “I’m more optimistic about economic growth than before the tax cut for S corporations became a realistic possibility,” he says. “I’m on the verge of three hires that I would not have made if S corp tax cut weren’t likely.”
Finding the balance
In general, New York City entrepreneurs feel relatively balanced about their “unbalanced lives.” Although nearly 85 percent report that work interferes with their home life, an almost similar percentage believe they have achieved an appropriate work-life balance.
Getting the help she needs will allow Rachel Beider to better cope with the long hours of her clinical massage studios, which are open 10 a.m. to 10 p.m., seven days a week. The owner of the Brooklyn-based centers Massage Greenpoint and Massage Williamsburg brought on a chief operating officer earlier this month to help run the day-to-day operations so that she can expand without feeling overwhelmed.
Fear of failure is still an ever-present worry for New York City entrepreneurs. The survey found that nearly two out of five New York small business owners report having had a nightmare about their business failing. Beider is no exception. “When I expanded from one to two locations last year, I regularly woke from nightmares that I was forgetting a detail and had regular fears about failure,” she says, adding that growth can feel risky, even when the changes are exciting and positive.
Plotting careful growth
Among survey respondents, 14 percent intend to apply for a loan, a small drop from the 16 percent who planned to do so in Fall of 2016. Beider is among them. She recently began the process of applying for an SBA loan to help finance future expansion rather than using a line of credit from her bank as she had in the past.
“I appreciate the flexibility and longer term of an SBA loan, as well as the reasonable interest rates,” she says. “For a small business, it can be a struggle to find financing with good rates, and often commercial lending is downright predatory.”
Even with a renewed sense of hope going into 2018, many small business owners remain cautious about their plans for growth. While Jack Anzarouth, president of New York City-based Digital Ink Marketing, says he’s optimistic about the future and thinks his own firm’s revenue will stay relatively steady, he still sees it as a volatile time. Uncertainty over healthcare regulations coming out of Washington and the proposed tax reforms are among the reasons. “I don’t think it’s a great time to take a big risk,” he says. “Many of my own clients are keeping their marketing budgets fairly steady, and I think that speaks to the uncertainty people are feeling.”
Future looks brighter in New York City
Nearly 70 percent of New York City entrepreneurs are worried about health care costs, although that’s down nine percentage points since Fall 2016. However, on many elements New York City small business owners are more optimistic than the rest of the country.
Among the one-third of New York small business owners who contribute to employee health care:
- Thirty-nine percent believe annual health care cost increases have slowed, compared to 21 percent nationwide.
- Thirty-five percent believe the quality of health care has improved, versus only 25 percent nationwide.
- Forty-six percent are more optimistic about the availability, almost twice the 27 percent nationwide who say that.
New York City small business owners also feel more confident about a number of economic factors, including the stock market, which is a concern to just 36 percent, down 23 percentage points since Fall 2016. Similarly, fewer entrepreneurs are worried about interest rates: just 45 percent of small business owners are worried about what the Federal Reserve might do, compared with 58 percent who felt that way last year.