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December 22, 2016 2017 Banking Outlook

Improving business climate key to CT's economic future

Jeff Hubbard
By Jeff Hubbard

“Current interest rates are attractive for borrowers.”

“It's a borrowers' market.”

“Now might be a good time to reinvest in my business.”

We hear phrases like these all the time from Connecticut's financial professionals. And while these statements are true and the market appears favorable for borrowers, there are still several factors limiting business investment, expansion and overall growth in our state.

A recent small business survey from the Connecticut Business and Industry Association (CBIA) found the top three challenges for small businesses in the state were increasing profitability and growth, overly restrictive government regulations and policy decisions, and the rising costs of doing business in the state.

According to that survey, business owners ranked high personal income, tax rates, and the increasing cost of doing business in Connecticut as the most problematic and least favorable aspects of owning a company in the state. If you combine that with the 92 percent of businesses that said they do not believe Connecticut's public policies facilitate the efforts of small business interests, there is a case to be made that despite favorable lending markets, it's still a challenging time for businesses to grow and invest in the state of Connecticut.

In order to alleviate the concerns expressed by Connecticut's small businesses, it is important for owners and company leadership to work with legislators to help them better appreciate the interests and apprehensions of the small business community. This dialogue will help facilitate the type of environment that business owners want to see in order to confidently invest in a long-term business plan in our state.

Developing a short- or long-term plan that supports growth and profitability is often a challenge; it's important for business owners to focus on their company's unique strengths in order to establish them as industry leaders. Touting the benefits of your organization's products and services will help position you as a competitive business looking to expand its relationships with customers and employees.

Company culture is also important. It's a modern phrase with big impacts on acquiring talent and retaining employees. Showcasing the values important to your business and the people who work there can make a big difference in overall image, particularly in a booming age full of digital and social-media channels.

Investing in talent will also increase long-term profitability. Our state is home to a skilled-workforce population, and growth and development initiatives designed to improve these skills and match workers with unfilled employment opportunities in industries like manufacturing, finance and health care, will only strengthen our state's economy.

We also need to continue to support public policy initiatives that improve transportation infrastructure, lower energy costs and decrease the overall cost of living and working in the state. If the cost of doing business in the state goes down, employers can reinvest those savings in their businesses and their workers will benefit from a greater quality of life. Millennials are a big part of this — instead of flocking to Boston or New York City, let's give them a reason to stay in Connecticut and build their careers.

Looking ahead to 2017

While we are addressing solutions to the challenges that we face, we must also capitalize on our strengths. That same CBIA survey found several positive attributes that exist in Connecticut for the small business community — the biggest one being location, location, location.

Connecticut's proximity to customers, vendors and major metropolitan areas make it an attractive place to locate a business. We have a skilled workforce that has access to some of the best academic institutions. Centrally located in a developed and urban region of the United States, our quality of life is often considered a selling point of living and working here. We must promote these unique, positive attributes of our state and use them in recruiting more business investment in Connecticut.

This is a critical time for the business community to take a hard look at the future of business in our state. We need to work together with our state and federal elected officials on business-friendly initiatives, leverage the favorable market conditions that exist and promote the unique quality-of-life characteristics that Connecticut possesses. Doing so will serve as a springboard to jump-start small business growth and create a strong future for our local economy.

Jeff Hubbard is KeyBank's market president for Connecticut and western Massachusetts.

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