A new KeyBank Small Business Flash Poll found 61 percent of respondents indicated they were likely to seek clarity and hold off on major business decisions until after the election, while 12 percent said the election would have no impact on their 2025 planning.
The poll also found business owners anticipate policy shifts will most affect areas such as:
- Taxation (45 percent)
- Regulations (34 percent)
- Trade policies (31 percent)
Despite challenges posed by pre-election uncertainty surrounding anticipated policy changes, small business owners are preparing for growth, with nearly one-third (32 percent) expecting to expand their staff in 2025.
“Small business owners faced many challenges in 2024, including political uncertainty,” says Mike Walters, president of Business Banking at KeyBank. “Despite challenges, they’ve displayed great resilience and patience navigating an election year.
“As they plan for 2025, it is important that they talk with their banker to develop strategies and explore solutions that can help them adapt to and persevere through potential policy shifts and changes.”
KeyBank’s recent Small Business Flash Poll also showed higher interest rates have impacted small business owners in many ways, including:
- 38 percent of respondents faced reduced profit margins
- 37 percent faced increased borrowing costs
- 31 percent have deferred capital investment due to high interest rates
At the same time, more than half of respondents (56 percent) expect interest rate changes to positively impact their businesses. The poll found they’ve adapted to the rate environment by increasing cash reserves (43 percent), reducing reliance on debt (37 percent), and diversifying funding sources (32 percent).
The survey, which was conducted online via Survey Monkey, included 1,796 respondents, ages 18-99, located in the United States, who own or operate a small-to-medium size business with an annual gross revenue of less than $10 million, completed the survey in August 2024.
KeyBank operates 15 branch locations in Michigan and a regional office center in Southfield.
KeyCorp’s roots trace back nearly 200 years to Albany, NY. Headquartered today in Cleveland, KeyBank is one of the nation’s largest bank-based financial services companies, with assets of approximately $190 billion at September 30, 2024.
For more information, visit https://www.key.com/.
IN RELATED NEWS, a new American Customer Satisfaction Index (ACSI) shows over the past five years, U.S. economic growth has outpaced the other G7 countries by about 300 percent.
Meanwhile, at a national level, customer satisfaction as measured by the ACSI, which is based in Ann Arbor, holds in the third quarter of 2024 with a score of 77.9 (out of 100) — nearly the highest it has ever been.
Consumer spending is by far the largest contributor to economic growth, and the degree to which buyers are satisfied or dissatisfied affects how much they spend. The advance estimate released by the U.S. Bureau of Economic Analysis shows 2.8 percent GDP growth in the third quarter and a 3.7 percent growth in consumer spending.
Over the past five years, the recession that caused economic havoc in many other countries, was largely averted in the U.S. However, worldwide supply chain problems caused product shortages and a strong labor market led to shortages in the service sector.
That, in turn, made consumer markets less efficient, causing inflation and diminished consumer power.
“During this period, customer satisfaction mattered less and the national ACSI score had its steepest decline ever,” says Claes Fornell, founder of the ACSI and the Distinguished Donald C. Cook Professor (emeritus) of Business Administration at the University of Michigan in Ann Arbor.
“The stock market became exceptionally concentrated, with fewer than 1 percent of the listed companies accounting for more than one-third of its capitalization. It no longer rewarded companies that provided strong customer satisfaction with excess returns. Although a recession was avoided, the markets did not function well.”
Now, things have changed. U.S. overall satisfaction is stable since the second quarter at a near record high. However, it is just 1.4 points higher than it was a decade ago. Companies still struggle with how to best allocate resources for improving the satisfaction of their customers.
While national customer satisfaction has not changed much, some individual companies show substantial ACSI movement. During the past decade, Bank of America, United Airlines, Cigna, HP, and Allegiant have seen double-digit percentage improvements in satisfaction.
On the other hand, Dillard’s, Entergy, and Chrysler are among those that have lost significant ground over the last several years.
Most industries continue to have high customer satisfaction elasticity. The higher it is, the more customer satisfaction impacts demand. Banks, internet service providers, financial advisors, and wireless phone service are among the highest elasticity industries. They stand to lose or gain the most from how they treat their customers.
Financial punishment and reward are generally lower for general merchandise retailers, gas stations, and supermarkets because demand is more responsive to price and location in these industries.
Overall, however, there is no industry or company in the Index that is financially immune to changes in the satisfaction of their customers. The higher the elasticity, the greater the competition.
For more information, visit theacsi.org/.
