Trump’s Tax Plan May Spur Small Business Hiring in 2018
Donald Trump is, historically, a businessman. As such, it may be no surprise that many small businesses could see a boost in 2018 due to his tax plan, also known as The Tax Cuts and Jobs Act of 2017. The effects of the bill on individual taxpayers are still uncertain, but business owners will be able to claim higher deductions and pay in at lower rates, which could leave extra money on the table to pay more employees.
According to a recent opinion poll from business broker BizBuySell, 60 percent of small business owners who believe they will benefit from the tax cuts plan to make new hires in 2018. Forty-one percent of these small business owners say they would not have made new hires without the tax reform.
Among those business owners who do not believe they will benefit, only 30 percent plan to make new hires.
Those business owners who believe they will benefit and who are making hires plan to add an average of 3.3 employees. Those who don’t believe they will benefit but who are nonetheless making hires plan to add an average of three employees.
It’s a Good Time to Be Small
While the market has been fairly positive for small businesses in 2017-18, businesses of this size often struggle to find money for new staff even in good times. A few extra bucks in tax savings could contribute to further growth for some business owners.
“This comes at a time when the small business environment is already thriving,” says Bob House, president of BizBuySell.
According to a separate BizBuySell survey, small business transactions reached a record high in 2017, up 27 percent from 2016.
“Much of this growth is due to healthier financials, which often require a larger workforce to sustain,” House says. “We asked owners their top reasons for hiring, and growing demand [was] a constant theme.”
Respondents to the BizBuySell opinion poll named “currently understaffed” as their top reason for making hires this year. In second and third place were, respectively, “expanding geographical presence” and “strong financials.”
“It’s safe to say that a combination of high optimism, a healthy market, and new incentives is encouraging hiring across the board,” House says.
BizBuySell’s data shows that more than two-thirds of small- and medium-sized business owners believe their businesses will perform better in 2018.
“Whether you attribute small business success to a healthy marketplace or the incoming tax reform policies, a majority of business owners are on an upward incline, which will inevitably result in increased hiring,” House says.
With the potential to hire new talent now on the table, small business owners must consider what they are looking for in new employees.
Asked what they were looking for in new hires, respondents to BizBuySell’s opinion poll most widely cited work ethic (60 percent) and trustworthiness (42 percent).
“It seems owners are willing to overlook a lack of experience in favor of employees they can count on,” House says.
Finding a Job at a Small Business
According to the opinion poll, “word of mouth” is the most common method small businesses use to recruit new hires. Those who want to work in a small business environment will need to keep their ears to the ground.
“Word of mouth doesn’t always have to be in person, so staying active on online professional networks such as LinkedIn is important,” House says. “It’s common for business owners to put open positions out to their online networks, so being ‘a share away’ [from the owner thanks to] a common acquaintance gives you an advantage.”
Beyond this, House recommends job seekers pay attention to community events, where small businesses often promote open roles.
Once you’ve found a role in which you’re interested, House recommends connecting directly with the company’s owner.
“Don’t be afraid to make an introduction,” House says. “Connect with the owner, and try to fully understand the heart of the business. A small business is usually the result of the owner’s passion, so the team will appreciate getting to know a potential new hire who shares similar interests.”
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