There is no denying this year’s election became larger than life. Not only in the form of soon-to-be President Trump, but also in what the results could mean for small businesses across the country. Look, running your own business has never been easy, but in recent years the yoke of taxes, regulations, and other factors have weighed heavily. While there is a lot of work to be done, here are five ways 2017 will be a great year for small businesses.
1. Taxes
No one worries about paying taxes more than a business owner and as President, Donald Trump has stated that he will reduce taxed for millions of Americans. While the this might not reduce the burden of state and local taxes, the move will help to lessen the ‘tax fatigue’ felt by small businesses across the country.
While the details of the tax relief bill which will be debated in Washington are largely unknown. What is known is that the party in power has said they want to reduce taxes and any movement on this issue will help to improve the business environment.
Another benefit of tax reform is that millions of Americans will have more disposable income. While some of this will be saved, most will be spent of products and service and with initiatives like Small Business Saturday, it is likely that more of that money will be spent at small businesses than ever before.
2. Unaffordable Care
There is no denying that Obamacare has helped millions of uninsured Americans gain access to health insurance. But at what cost? According to the Brookings Institute, government mandated insurance coverage has actually increased healthcare expenses for small businesses by forcing them to purchase stop-loss insurance. This is insurance which protects a business from the costs of a large insurance loss.
For large businesses, they either don’t need this sort of coverage, as the potential for loss is hedged against the size of the organization, or they can negotiate better rates with the few insurers who offer this coverage. However, neither option is available to small business owners, and they are forced to choose between no coverage or expensive coverage.
As such, any effort to make Obamacare more workable for small businesses will help to reduce operating costs. This savings can be used by business owners to reinvest in in their businesses, take on more staff, or get back some of the money they have already invested in their business.
3. It’s the Economy, Stupid
Yes, the economy is growing and we are lucky that the U.S. is not in a recession like Canada. But economic growth over the last eight years has been uneven. So, times are good if you have a restaurant in Manhattan, but if you are running a specialty manufacturer in Des Moines, Iowa is a completely different story. As James Carville said during the 1992 election – ‘it’s the economy, stupid.’ Unfortunately, many people in Washington have forgotten this.
The hope for small businesses is that stimulus will help to dramatically improve the economy throughout the country, not just in a few enclaves at the coast. This will be a welcome development for small business owners, many of whom have been treading water since the recession.
4. Access to Capital
Besides getting the economy going, another big question facing the administration is how to help small business owners get funding. Based on a New York-Fed survey of small businesses owners, only 33% could get the funding they sought. This doesn’t even take into consideration the cost of the funding. As such, the hope is that the government will enact legislation to make it easier for small businesses to get the short-term and long-term funding they need to help rebuild their communities. Doing so will empower millions of small businesses across the country to grow.
5. Regulation
A certain amount of regulation is useful. After all, it helps to keep poisons out of the food our children eat and keeps our air and water clean. However, many of the regulations faced by small business owners across the country are nothing more than a tax on innovation.
It has gotten so bad that both parties are guilty of removing regulations which have hurt the economy (e.g. the reversal of Glass–Steagall), while supporting dumb regulations (e.g. license to close a business in Milwaukee).
Given the current direction of the new administration, it is likely that many of the regulations which are stifling small businesses across the country will be repealed. If this happens then 2017 will truly be a great year for small businesses.