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Election 2020: Small Business Owners Split on Candidates, but Agree on Key Issues 

Priyanka Prakash, JD

Senior Staff Writer at Fundera
Priyanka Prakash is a senior staff writer at Fundera, specializing in small business finance, credit, law, and insurance. She has a law degree from the University of Washington and a bachelor's degree from U.C. Berkeley in communications and political science. Priyanka's work has been featured in Inc., Fast Company, CNBC, and other top publications. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.
Email: priyanka@fundera.com.
Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

Approximately one in 10 Americans in the labor force is self-employed, according to data from the Bureau of Labor Statistics (BLS). And small business growth is highest in crucial swing states like Florida and Pennsylvania. This makes small business owners a key voting group in the 2020 presidential election. Given the small margins that decided the last presidential race, the support (or lack thereof) of even one group can make a meaningful difference. 

We surveyed 750 U.S. small business owners with 500 or fewer employees, just weeks before the next Democratic presidential debate, scheduled to take place on November 20 in Georgia. The results show that, at this stage of the race, small business voters are split on who to support as their next president. However, there is some consensus, even spanning party aisles in some cases, on what issues are most important to small business owners. 

Both Donald Trump and the Democratic candidates can use these survey results to hone their messaging and gather support among entrepreneurs. In this report, we’ll delve further into the key survey findings.

Election 2020: Small Business Owner Survey Highlights

Key Takeaway #1. Small business voters care most about health insurance, immigration, and climate change, and there is cross-party agreement on some issues.

Election 2020 Survey

The Top Issues for Small Business Owners Aren’t Business-Focused

Heading into the 2020 election, small business owners aren’t necessarily prioritizing “typical” business issues, like regulation and trade. Three other issues clearly stood out as top of mind for small business owners: health insurance, immigration, and climate change. More than one-quarter of small business owners—26%—said health insurance was the number one issue they’d like the next president to focus on. Seventeen percent of business owners chose immigration, followed by 14% of respondents who said they’d like the next president to prioritize climate change policy.

Given these results, candidates have an opportunity to frame the top issues in business terms to attract the support of small business owners. For example, candidates can talk more about how climate change measures have the ability to create jobs for small businesses. Immigration, likewise, impacts hiring and pay scales and can present a daily challenge for small business owners. Health insurance, as it is currently administered, is very time-consuming for small businesses. Even after passage of the Affordable Care Act (ACA), small business owners spend an estimated 13 hours each month administering group health insurance. This expended time equates to more than $13,000 each year. 

There’s (Some) Consensus Among Business Owners on Top Issues 

Although health insurance is typically seen as a “better” issue for Democratic candidates, small business owners of all party affiliations believe this should be a priority. Small business owners who identify as strong Democrats, moderate Democrats, or independents chose health insurance as the number one issue that the next president should work on. Even strong Republicans and moderate Republicans chose it as the second-most important issue, behind immigration but ahead of taxes, business regulation, and job creation. This could be indicative of the time and cost, as mentioned above, that it takes small business owners to provide health benefits for themselves and their team, even after the passage of the ACA. 

Immigration and climate change showed more of the expected split along party lines. Forty-one percent of strong Republicans and 21% of moderate Republicans chose immigration as the top issue for the next president to handle, but only 6% of strong and moderate Democrats agreed. Conversely, more than one in five strong and moderate Democrats thought climate change was the most important issue for the next president of focus on, compared to only 5% of moderate Republicans and less than 1% of strong Republicans. Independents came together with Republicans on immigration, and with Democrats on climate change, to make these the top three priorities overall for business owners. This also demonstrates the important role that small business owners identifying as independents will play in next year’s election.

Tax Cuts Are Seen as Key to Business Growth Across Party Aisles

When asked what the next president could do that would most improve their business’s financial situation, small business owners overwhelmingly chose tax cuts and tax incentives as their answer. This was the most common choice across all party affiliations. About one-third of Democrats and independents chose this answer, and 45% of Republicans did so. 

This result provides an opening for Trump to highlight the beneficial impact to small businesses from his tax cuts, signed into law in December 2017 under the Tax Cuts and Jobs Act (TCJA). Democratic candidates can discuss their small business tax plans in more detail. Democratic frontrunners Joe Biden, Elizabeth Warren, and Bernie Sanders have proposed increasing corporate taxes and taxes on the wealthy, but none have spent much time addressing how they’d relieve the tax burden on small business owners.

Key Takeaway #2: Moderate Republicans show a willingness to compromise on progressive ideas if they accommodate small businesses.

Election 2020 Survey

The media has spent a lot of time this election cycle reporting on the deep divisions within the American electorate. However, this survey shows that there might be more common ground that we think—at least among small business owners. In particular, moderate Republicans showed a willingness to cross the aisle and compromise on progressive issues when accommodations are made for small business owners. With this in mind, Democratic candidates can fine-tune their messaging on debate night to reach across the aisle to Republican small business voters.

Moderate Republicans Are Okay With Tax Increases

Almost all of the Democratic presidential candidates have proposed increasing the corporate tax rate, as well as income taxes on wealthy individuals. As you might expect, more than half of strong Republicans in our survey were opposed to these proposals. 

However, small business voters who lean Republican were in favor of such policies, as long as there are exemptions for small businesses. Forty-five percent of small business owners who lean Republican were in favor of raising the corporate tax rate if there are exemptions for small businesses. Without exemptions, support among moderate Republicans falls to just 5%. Thirty-five percent of small business owners who lean Republican are also in favor of upping taxes on wealthy individuals, if there were exemptions for small business owners. Without exemptions, support is at 18% among this voting bloc.

Independent voters were also in favor of both proposals if small business owners receive exemptions. These results demonstrate that gathering support for tax increases could depend on carving out special rules for small business owners, who collectively employ about half of American workers.

More Than One in Five Moderate Republicans Support $15 Minimum Wage

Most of the Democratic candidates have expressed support for a national $15 minimum wage. Forty-three percent of all survey takers were in favor of such a policy. Strong and moderate Republicans are more strongly opposed to this policy than they are to tax increases, but even here, there’s a significant level of support across party aisles. Twenty-two percent of moderate Republicans were in favor of a $15 minimum wage with no conditions attached. Another 18% were in favor of a $15 minimum wage if small employers can claim an exemption. Nearly 40% of independents were in favor of a $15 minimum wage with no conditions.

One-Quarter of Moderate Republicans Would End Most Tariffs

Since not all business owners import goods from overseas, many entrepreneurs don’t have a vested opinion on tariff policy. However, 40% of total survey respondents said that the next president should eliminate tariffs except when a country poses a human rights threat or engages in unfair trade practices. This answer choice was most popular among Democrats, with more than half choosing it. 

Most Republicans would opt to utilize tariffs and grant waivers for small businesses. However, the second-most popular choice among business owners leaning Republican—garnering 25% support—was to eliminate tariffs except in cases which pose a human rights threat or involve unfair trade practices. This indicates that there is a significant share of moderate Republican business owners who agree with Democrats on trade policy. 

Progressive Health Insurance Reform Has Cross-Party Support 

Small business owners in both parties favor the creation of a public option for health insurance. Granted, more than 60% of strong Republicans were opposed to any kind of government role in health insurance and would prefer complete privatization. However, more than one-third of business owners leaning Republican were in favor of a public option. Under a public option, a government-managed health insurance plan would compete with private, employer-sponsored health insurance. Twenty eight percent of independents favored a public option as well, as did 39% of moderate Democrats and 26% of strong Democrats (a much larger share of strong Democrats favor a Medicare for All program).

Key Takeaway #3: Independent business owners are split among the major candidates on key issues related to their business.

Election 2020 Survey

Most pundits and analysts—not to mention everyday Americans—would agree that the country is highly polarized on the question of whether Donald Trump should serve another term. For that reason, one of the major questions of the 2020 election isn’t how Democrats or Republicans feel about who would be the best president, but which way independents will cast their vote. The independent vote will likely have a big impact on the election results.

Independents Prefer the Collective Democratic Field, but Trump Gets a Plurality

Owing perhaps to the crowded Democratic field, no blue candidate was able to claim a stake on the independent vote. On the question of “Who do you think would make the best president overall for your small business?” the Democratic frontrunners—Biden, Warren, and Sanders—all received a nearly equal percentage of the vote, taking approximately 13% each. 

According to our results, 26% of independents currently feel that Donald Trump would be the best president overall for their business. Trump also won a plurality of the votes from independent voters on the issues, such as the best president for taxes (34% of independent vote)  and for hiring and jobs (31% of independent vote). He was seen as the best candidate for trade policy among independents as well, winning 30% of their vote—despite the fact that his ongoing trade war with China has been blamed for higher prices for American households and economic drag in his first term. 

Many Independents Still Seek a Different Choice

When asked “Who do you think would make the best president overall for your small business?” the second-place response among independents after Trump was “Other,” selected by 19% of independents. Small business owners identifying as independents included write-in responses, such as John Kasich, Tulsi Gabbard, Gary Johnson, Michael Bloomberg, and Justin Amash. Many independents were also undecided or wrote that “none of the above” candidates would be beneficial for their business. 

Independents Leave Trump Without a Majority Among All Small Business Voters

Due in part to the crowded field as well as general uncertainty, not enough independent business owners voiced support for Trump to give him a majority among all small business owners. 

When asked about who they would vote for in 2020, independent support for the entire Democratic field—meaning for the Democratic candidates combined— was significantly higher than for a Republican nominee, Trump or otherwise. Twenty-one percent of independents said they will vote for the eventual Democratic candidate, and 13% said they will vote for the eventual Republican candidate. As Democratic candidates drop out of the race, expect many independents—like all voter blocs—to coalesce around a single Democratic choice, or to vote for a third-party candidate. 

Key Takeaway #4: Democratic small business voters are split about who would be their favored president overall and on an issue-by-issue basis. 

One of the major themes of the 2020 presidential race so far has been the large field of Democratic candidates, which at one point could be measured in “the dozens.” Democratic-leaning voters do not lack for choice this time around. 

At this point, Democratic small business voters are unable to agree on which of the many available candidates would be best for their small business. There are, however, some interesting trends to note among the strong Democrat and moderate Democrat groups. 

Strong Democrats Give the Edge to Warren

Election 2020 SurveyAmong the business owners polled, those who identified as strong Democrats gave the most support to Warren, one of the most progressive candidates. She garnered 29% of their vote, besting Biden by about four points and Sanders by about eight points. 

Warren may prove to be the most polarizing of the Democratic candidates. A few strong Republicans and moderate Republicans gave votes to both Biden and Sanders, but no strong Republicans cast a vote for Warren. 

Note that when we asked small business owners about individual candidates, it was in the context of whether they would be best “for their small business.” Therefore, Republicans don’t see Warren as a small business-friendly choice. 

Lean Democrats Give Biden the Nod, and Some Support Trump

More moderate Democrats, however, tended to side with Biden above all other Democratic candidates: Biden received exactly one-quarter of the moderate Democratic vote when asked who would be best for their small business. Interestingly, around 7% of moderate Democrats also indicated they preferred Trump in this regard, even over Democratic candidates like Kamala Harris and Pete Buttigieg. 

Biden also performed quite well with lean Democrats when asked about the best president for trade policy, garnering 36% of the vote—about twice what Warren polled. (Strong Democrats also favored Biden in this regard.) On other topics—taxes and hiring/jobs—Biden, Warren, and Sanders all polled in the 20s or high teens among moderate Democrats, without one standout candidate. 

Andrew Yang Punched Well Above His Weight

One of the most surprising results from this survey was the support Andrew Yang received compared to his competition. Yang received around 8% of the moderate Democrat vote, and 5% of the strong Democrat vote, when asked who the best president would be for small business. This placed him well behind the frontrunners, but well ahead of the other also-rans. 

Yang’s background as an entrepreneur, and his messaging about domestic issues affecting the economy such as automation and universal basic income, likely resonated with small business voters. 

Key Takeaway #5:  A quarter of all small business owners, including half of independents, are unsure who they plan to vote for next November.

Believe it or not, we still have about a year to go from the time this survey was conducted (in October 2019) until the election in 2020. That’s a good thing for many small business owners, since a quarter of them are still unsure of who they’ll vote for in this race. 

Many Voters, Mainly Independents, Don’t Know Who They’ll Vote For

When asked who they’ll vote for in 2020, about 36% of small business owners said the Democratic candidate, and about 31% said the Republican. But 26% of respondents said they weren’t sure who they would vote for—and that number includes half of all independents. 

Of the independents who say they will vote, 21% plan to vote Democratic, and 13% plan to vote Republican.

There is still plenty of time before a single Democratic candidate emerges from the field, and that person will likely sway many independents’ decision to vote for one major party or another. The status of the incumbent is also unclear, as Trump faces possible impeachment proceedings heading into 2020—and the outcome of that process will likely also swing voters. 

A Notable Chunk Of Small Business Owners Say They Won’t Vote

Whether due to ambivalence about the voting process, a lack of affinity for any candidate, or other reasons, 5% of business owners polled said they didn’t plan to vote at all in November 2020. 

Combine that with the 3% of voters who said they would choose a third-party candidate or write in another choice, and nearly 8% of this population’s vote won’t go toward a major party candidate. Considering that some counties and even states will end up going to either candidate by a slim margin, this is a major bloc of votes that could decide the election. 

Candidates Must Engage Business Owners on the Issues

With about one year to go until the 2020 presidential election, small business owners appear as divided as the rest of the country on who the best choice will be to lead the country going forward. At the same time, small business owners were in some agreement about what issues the new president should tackle and what policies to put forward.

As discussed above, issues like health insurance, immigration, and climate change make the most impact on this group of voters—and the importance of many issues resonate across party lines.  In order to win over moderate voters, as well as a wide swath of independents, candidates must speak up and excite voters with these topics in mind. 

Many survey takers appeared to answer questions based not just on their status as small business owners, but as American citizens concerned with the direction of the country. The fact that many cited health insurance as a top issue, for example, shows that the interests of small business owners extend far beyond questions of their own tax rates or business regulations. 

Survey Methodology 

We conducted this survey by polling 750 U.S. small business owners with 500 or fewer employees, using the SurveyMonkey Audience platform. The survey was conducted between October 9, 2019, to October 14, 2019. 

Of the business owners we surveyed, 34.26% self-reported as Democrats, 32.8% as independents, and 32.94% as Republicans. The gender breakdown was 51% male to 49% female. The age breakdown was 47% between the ages of 18 to 44, and 53% between the ages of 45 to 99. 

The margin of error was +/- 3.65%. Note that we have used the terminology lean Democrat and lean Republican interchangeably with moderate Democrat and moderate Republican.

Priyanka Prakash, JD

Senior Staff Writer at Fundera
Priyanka Prakash is a senior staff writer at Fundera, specializing in small business finance, credit, law, and insurance. She has a law degree from the University of Washington and a bachelor's degree from U.C. Berkeley in communications and political science. Priyanka's work has been featured in Inc., Fast Company, CNBC, and other top publications. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.
Email: priyanka@fundera.com.

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