Why 2018 was a big year for small business
December is the time of year we reflect on the highs and lows of the past 12 months. When it comes to small business, 2018 was definitely a high.
In fact, I believe it was one of the best years for our region’s entrepreneurs and job creators. When you look at the following highlights, it’s easy to see why 2018 was a big year for small business.
Small business optimism reached an all-time high. For the 35 years the National Federation of Independent Business has conducted the survey, small business optimism was at its highest in 2018. Plus, manufacturer optimism reached its highest level in the 20-year history of the National Association of Manufacturers survey.
Job creation led to lowest unemployment rate on record. Small businesses create two out of every three net new jobs. Thanks in part to that job growth, the American economy is booming with the number of job openings surpassing the number of job seekers for the first time on record. The November unemployment rate was at 3.7 percent, making it eight straight months at 4 percent or lower.
Small Business Saturday sales boasted an all-time high. 2018 marked the ninth year of Small Business Saturday, the day between Black Friday and Cyber Monday when holiday shoppers are encouraged to shop small. Total reported spending among U.S. consumers who said they shopped at independent retailers and restaurants Nov. 24 reached a record high of an estimated $17.8 billion, according to data released from the 2018 Small Business Saturday Consumer Insights Survey from American Express and the NFIB. Small Business Saturday spending has now reached a reported accumulative estimate of $103 billion.
The Tax Cuts and Jobs Act empowered small business owners to further invest in employees and operations. This is exactly what Ross Black of Simple Box Storage Containers saw with his business. When Washington state implemented a new minimum wage and sick leave requirements at the beginning of the year, he says the corresponding timing of the federal tax cuts helped offset these new costs and balance his bottom line. As a further result of the tax cuts, he added a team member and purchased more delivery equipment.
Government contracting to small business breaks record. Earlier in 2018, the SBA announced the federal government met its small business federal contracting goal for the fifth consecutive year awarding 23.88 percent in federal contract dollars to small businesses totaling $105.7 billion, an increase of $5 billion. This marked the first time more than $100 billion in prime contracts were awarded to small businesses.
Burdensome federal regulations were rolled back. Entrepreneurs continually ask for fewer regulations that can hinder growth and are typically more burdensome on small businesses compared to large corporations. The Trump Administration eliminated 12 regulations for every new one in FY 2018 and these efforts saved American families and business owners an estimated $23 billion last year. This is great progress to move unnecessary hurdles out of the way of small business innovation.
Small business lending momentum continued. More than 3,300 SBA-guaranteed loans valued at $1.6 billion went to small businesses and startups in the Pacific Northwest during FY 2018. These are businesses that otherwise wouldn’t have access to capital to start, grow and expand. In April, the SBA launched the 25-year Debenture which provides an extra 60 months of financing at a fixed rate for small businesses. This frees up cash flow and offers fixed rates to small businesses in a rising interest rate environment.
As we head into 2019, the SBA will continue to be an advocate and ally for America’s 30 million small business owners. I’m optimistic and eager to see what problems our region’s entrepreneurs will solve, the powerful ways they will enrich their communities and the strength small businesses will bring to our economy.
Jeremy Field is the regional administrator for the U.S. Small Business Administration Pacific Northwest Region.