Small-business owners are optimistic

Andrew Edwards

A survey of California small-business owners reported Orange County

entrepreneurs look forward to 2005 being a good year, though they

worry about taxes and rising healthcare costs.

The survey was conducted by Union Bank in January, and 228 of

1,941 business owners responding to questions were from Orange

County. The bank defined small business as companies with sales

numbers at $5 million or less.

Results of the survey were published last week. Union Bank

executive vice president Barbara Hoos described the survey as a cross

between an economic forecast for the state and market research for

the bank.

In Orange County, 72.4% of respondents said they anticipated

profits would improve this year. Most small-business owners surveyed

(53.1%) said they expected to keep staffing levels steady over 2005,

and 43.9% of those surveyed anticipated hiring more workers.

“What they’re saying is, ‘It’s OK....” Hoos said.

The majority of Orange County respondents (57.9%) stated rising

workers’ compensation costs posed their greatest challenge.

Taxes came in as the second biggest difficulty for local small

businesses, with 33.3% of responses. Healthcare costs came in a close

third, with 32% of replies.

Across the state, workers’ compensation and healthcare costs were

among top concerns, but Orange County businesses were unique among

selecting taxes as a chief hardship, Hoos said.

The concerns of Costa Mesa’s small-business owners are in line

with the survey’s results, Costa Mesa Chamber of Commerce president

Ed Fawcett said.

He said local business owners are especially rankled by taxes

because many perceive the state using tax revenues from Orange County

to pay for programs in other parts of California.

“Orange County has always perceived themselves -- and we are -- as

the proverbial donor county,” Fawcett said.

One of the business owners surveyed, Susan Kline, who has owned

the Kline School in Costa Mesa for 20 years, said her workers’

compensation costs have increased from about $5,700 three years ago

to about $12,000.

“We’re talking about $5,000 to $10,000 a year. These are not small

numbers -- these are gouging numbers,” Kline said.

Newport Beach business owners also worry about “the high cost of

doing business in California,” Newport Beach Chamber of Commerce

president Richard Luehrs said. Luehrs cited high electric bills,

unemployment insurance and litigation as other expenses disliked by

business owners.