During our NYC Listening Tour on December 3rd, Hello Alice Co-founder Elizabeth Gore sat down with former United States Assistant Attorney General Robert Raben to chat about the state of small business. The most pressing question our owners had? How they can adapt to policy shifts with the new administration coming into office.
Every election cycle and administration change brings a wave of uncertainty for small business owners. Rather than dwelling on specific political outcomes, let’s focus on how successful businesses adapt and thrive during times of policy transition. Key areas such as taxation, regulation, and economic policy often undergo shifts that can directly impact small businesses—understanding and preparing for these changes is essential for long-term success.Here are 5 key strategic areas to focus on:
1. Tax Planning & Financial Resilience
Proposed policy changes could bring both opportunities and challenges for small businesses. Plans to lower corporate tax rates and maintain deductions could reduce tax burdens, especially for businesses manufacturing domestically. However, potential cuts to federal programs, like SBA lending, innovation initiatives, and workforce training, may limit access to critical resources. You can prepare your business by:
- Adaptable Tax Strategy: Create a tax plan that remains flexible to accommodate potential changes in rates and deductions.
- Emergency Reserves: Build a financial safety net to ensure stability during policy transitions.
- Diversified Funding: Explore funding options beyond traditional government programs to reduce reliance on federal initiatives.
2. Trade Policies and Supply Chain Resilience
Proposed increases in tariffs could raise costs for small businesses importing goods, impacting margins and supply chains. However, these changes may also encourage domestic manufacturing, creating opportunities for small businesses to join the inshore supply chain. Here are some tips for navigating trade policy changes:
- Diversify Supply Chains: Establish relationships with both domestic and international suppliers to reduce dependency on any one source.
- Build Resilience: Develop contingency plans with multi-source supply chains to manage cost fluctuations and minimize disruptions.
- Explore Local Opportunities: Position your business as a valuable part of the domestic supply chain to capitalize on shifts in trade policy.
3. Healthcare & Benefits Innovation
Healthcare changes could impact costs and options for small businesses, making it essential to explore creative approaches to employee benefits. Potential shifts may include reduced benefits, increased healthcare costs, and expanded Health Savings Account (HSA) options, offering tax benefits but shifting some costs to employees. Here are some guidelines to consider:
- Explore Alternative Healthcare Options: Consider innovative solutions like group purchasing plans or telemedicine services to manage costs.
- Build Competitive Benefits on a Budget: Offer creative perks, such as flexible work arrangements or wellness programs, to attract and retain talent.
- Leverage Tax-Advantaged Accounts: Utilize tools like HSAs to provide value for both employees and your business.
4. Workforce Development & Labor Strategy
Building strong training programs and creating inclusive hiring practices are essential for developing a skilled workforce. As immigration policies may tighten, small businesses that rely on immigrant labor, especially in industries like agriculture, construction, and hospitality, could face challenges in sourcing talent. Here are some strategies for workforce development:
- Develop Talent Pipelines: Partner with local communities, educational institutions, and workforce development programs to build a strong talent pool.
- Inclusive Hiring Practices: Create diverse and inclusive hiring policies to attract a broader range of candidates and ensure equal opportunities.
- Strengthen Training Programs: Invest in up-skilling and re-skilling initiatives to ensure your workforce remains adaptable and competitive.
5. Support for Veteran-Owned Small Businesses
Supporting veteran-owned small businesses is essential for fostering a diverse and resilient entrepreneurial ecosystem. The next administration may continue efforts to create an economic environment that supports growth and prosperity for veterans, particularly through initiatives like the SBA’s Office of Veterans Business Development. Programs such as Boots to Business help military personnel apply the skills and values they learned in the Armed Forces to their entrepreneurial ventures, empowering them to succeed in business. Here are ways you can support veteran owned businesses:
- Partner with Veteran-Owned Businesses: Collaborate and source from veteran-owned businesses through contracts or procurement opportunities.
- Provide Networking & Mentorship: Connect veteran entrepreneurs with industry leaders and offer mentorship to help grow their businesses.
Moving Forward
We encourage our fellow business owners to continue doing what we do best and stay flexible. As we adapt to evolving policies, we have the opportunity to explore new markets, reevaluate supply chains, and take advantage of potential tax incentives. Rather than predicting specific policy outcomes, successful businesses focus on building resilient operations that can thrive in any environment. Through our work with over 1.5 million small businesses, we’ve learned that adaptability and community support are more valuable than any particular policy change.