Is Trump Really the Cause of Soaring Small Business Optimism?
January 26, 2017
A recent study by Gallup and Wells Fargo claimed that in the wake of the election of Donald Trump, small business owners are feeling optimistic.
“Small-business owners’ optimism improved to its highest level in eight years after the 2016 presidential election. The latest Wells Fargo/Gallup Small Business Index, which measures the optimism of small-business owners, increased to +80 in mid-November from +68 in July. The November index represents the highest optimism reading since January 2008, when the index was at +83.”
We were curious whether our customers and followers were feeling similarly optimistic, so we put out a short survey taking their temperature. Responders included FreshBooks customers, blog readers and social followers. FreshBooks customers are small, service-based business owners, including creatives, legal professionals, business consultants, trades and construction and web developers and IT.
With the results in, we can now share…
Yes, Optimism is High Among Small Business Owners
Similar to the Gallup and Wells Fargo survey, we found our followers are optimistic for their small businesses in 2017. Indeed, 72% of participants expect their business performance in 2017 to be somewhat or much better than it was in 2016.
What of the other 28%? Notably, more responders expected their businesses to fare the same in 2017 (20%), leaving only 8% of responders expecting a somewhat worse or much worse year in 2017.
When we look at this sentiment across 3 demographic breakdowns, the results are fairly consistent:
- By Gender: Both males and females are overwhelming positive about their businesses in 2017, with men just slightly more optimistic than women (74% versus 60%). The majority of remaining women expect things to remain the same (28%).
- By Age: Individuals under 35 are more optimistic than those over 35 years old (78% versus 63%). Again, the remaining majority expect things to remain more or less the same.
- By Income: Consistently, both income buckets (under $50k and over $50K per annum) are optimistic about 2017 (73% and 71%). Again, the majority of remaining responders expect things to stay the same. Only a small minority in each income bucket (11% and 6%) expect things to be worse in 2017.
What’s Trump Gotta Do with It?
The Gallup and Wells Fargo survey positioned this optimism as a reaction to the election result.
“Overall, small-business owners are significantly more positive than negative about the prospect of the newly elected president and Congress. One-half (51%) of small-business owners think the actions of the new president and Congress will make their company better off, while 17% expect to be worse off and 26% feel the upcoming actions in Washington will have no impact on their business.”
So much so, that Trump has tweeted the survey as an indication of his popularity:
To many, the survey results may seem at odds with the visceral pulse-check one might take from social media and other coverage. Post-election, there have also been many stories reporting a rise in anxiety and an overall increase in stress.
Trump’s commitments to business owners have concentrated on less regulation and decreasing competition, but our responders did not cite these as reasons for their optimism (only 4% cited less regulation and 2% cited less competition as reasons for their optimism).
It’s also notable that 30% of responders cited “Entering new markets” as a reason for their optimism in 2017, while Trump has already withdrawn from TPP (Trans-Pacific Partnership) and promises to renegotiate or withdraw from NAFTA.
While our own survey validated that optimism is the dominant outlook, this feeling stems from business owners’ confidence in their small business rather than in politics or election results.
Small Business Optimism is Actually Rooted in Business Owners’ Own Abilities
What’s making people feel more optimistic? Their own business activities. Specifically, the strongest reasons for expecting 2017 to be a more successful year include:
- Gaining key clients (46%)
- Adding new products/services (34%)
- Entering new markets (30%)
- Adding key staff (24%)
Yep, Even Creatives Are Optimistic
Recent reports (e.g. from 99U) indicate that those working in creative fields are particularly struggling post-election.
Because so many FreshBooks customers work in creative fields, we were especially interested to see if our survey results would run contrary to the Gallup survey.
It’s worth noting that a significant 20% of responders to our survey identified themselves as working in creative fields. And yet the response to our survey was overwhelming optimistic.
Optimism Is the Right Outlook to Have
Regardless of your field, any successful leader will tell you to focus on the things you can control. While macroeconomics (government policy, global economics etc.) surely has an impact on us all, no one individual can solve for these conditions singlehandedly.
Established wisdom for entrepreneurs is usually, quite simply: Focus on the things you can control.
“Focusing on the conditions is counterproductive. There are plenty of things we can complain about, but it’s a waste of emotional energy to focus on things we cannot control. The ultimate test for us as entrepreneurs is to focus on the controllables.” – John Brubaker, Entrepreneur
What all small business owners can control is the quality of their work, the boldness of their execution, the customer experience they offer. These factors, more than who’s sitting in the oval office, will be the factors that make or break a small business. And surely that’s something to feel good about.