According to a recent survey released by Bank of America, small business owner optimism is at its highest level since 2015. More specifically, 60 percent of small business owners expect revenue to increase and 69 percent plan to expand their business over the course of the next year.
For the state of North Carolina, that spur in small business growth will be a boon for the economy. There are nearly 900,000 small businesses in the state that employ 1.6 million people — or almost 45 percent of the entire workforce. So, as these entrepreneurial endeavors succeed, so does North Carolina and all of its residents.
But the question is what caused this economic uptick?
Well, there are many factors at play in an economy as complex as North Carolina’s, but one of the major contributing factors is likely the Tax Cuts and Jobs Act — federal tax relief legislation that went into effect earlier this year.
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Not only did it lower the top marginal rate for pass-through small businesses, but it created a new 20 percent standard deduction for them as well.
For moderately sized enterprises with tight budget constraints, these new tax policies, in many cases, can be the difference between bankruptcy and profitability.
There are several North Carolina businesses that have publicly stated how the tax relief package has positively impacted their businesses and employees. For example, Ghostface Brewing — based out of Mooresville — hired more employees and purchased new equipment, allowing them to increase distribution of their beer. Atlantic Packaging — headquartered in Wilmington — distributed $1,000 bonuses to its 1,000 employees. And Benchmark Auto Sales — located in Asheville — now offers all of their employees health insurance.
I understand the difficulties of running a small business firsthand. Not only am I the CEO of ShelfGenie, the nation’s leading custom shelving and home improvement solutions franchise, but I have successfully owned and operated multiple local franchise businesses for decades.
And for those who don’t understand, running a franchise is very similar to owning a small business. While the brand may be associated with a larger parent company, the day-to-day operations and staffing decisions fall into the hands of franchisees who are independent owners.
On top of the recent boost in small business success, the last year has been a good one for the North Carolina economy as a whole. Nearly 30,000 jobs have been created and the unemployment rate has dropped from 4.5 percent to 4.3 percent. Furthermore, from a more national perspective, the U.S. economy is expected to grow by 3 percent this year — a far cry from just two years ago when growth was half that.
While federal public policy successes have led to a strong and dynamic economy, we must not become complacent. Some politicians in the nation’s capital are threatening to repeal the small business friendly Tax Cuts and Job Act come November if political conditions permit. If that happens, all of the economic progress made this year would be put in jeopardy and further growth would be stifled.
North Carolina has enjoyed sustained economic expansion over the past year. Let’s not let partisan politicians dismantle that progress at the expense of America’s entrepreneurs and the employees that depend on them.
Andy Pittman is a franchisee and the CEO of ShelfGenie, a custom shelving and home improvement solutions franchise in North Carolina.