The tax reform bill passed by Congress in December 2017 has caused a wave of optimism and positivity among small business owners in the US. Many are eagerly anticipating the 20% net business income deduction which will enable them to inject more funds into business investment.
A recent poll of 2,700 small business owners conducted by industry experts Insureon and Manta found that 80% of small business owners support the Tax Cuts and Jobs Act of 2017, and 83% expect the tax plan to positively impact their business.
Of the 83% who expect the tax bill to have a positive impact, 38% said they would use their tax savings to hire additional employees. In addition, 28% plan to invest in new technology, 26% hope to offer new services, and 23% plan to offer additional benefits or bonuses to their employees.
“Many small business owners are looking at the new tax bill as a potential source of investment for their businesses. The overwhelming majority of business owners who answered our poll are very optimistic about the near future,” commented Jeff Somers, president of Insureon. “As businesses grow and change, their insurance needs also evolve.
“The optimism among the small business community in the US is very exciting. It’s now up to us – the insurance industry – to make sure small business owners think about insurance as more than just a tick box item. We need to partner with them as they invest in their businesses and make sure they have adequate coverage as their businesses grow.”
More than half (56%) of the optimistic respondents said they did not plan to make any changes to their current level of insurance coverage despite the extra tax savings and having plans to invest in their businesses. This is “not terribly surprising” as insurance doesn’t often come top of mind amid exciting growth plans, Somers commented.
“This is a great opportunity for small business owners to pause for a moment, take a look at their current insurance coverages and ensure they’re meeting the needs of the new business models they’re building,” Somers told Insurance Business. “For example, if they’re hiring new employees or even their first employees, then they need to think about workers’ compensation insurance.
“If they’re planning to expand their service offerings they might need to update their professional liability insurance. If they’re going to purchase a vehicle then they will need commercial auto insurance. And those who want to invest in office expansion or move to a new location will need to think about updating their commercial property insurance. Put simply, insurance needs to keep up with business investment – and now’s a great time for small business owners to take a step back and think about that.”