Small business owners need to prepare for election uncertainty
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As the United States prepares for the upcoming presidential election, small business owners have unique concerns about how the outcome will impact their day-to-day operations. From laws that can impact taxes, health care costs, and regulations, political developments have a domino effect on consumer behavior, financial markets, and more.
Regardless of who wins, new laws could reshape things like employee benefits and compliance requirements, so small business owners should stay informed of new policy and regulatory changes. That is important. With one month left, many small business owners want to know what proactive steps they can take to prepare for the upcoming uncertainty. Experts suggest five key principles for preparing for election outcomes.
1. Monitor policy changes.
It is widely known that market volatility can increase during election years. That's why it's important for small business owners to stay informed about proposed regulatory, tax, health care, and labor law changes that may directly impact their operations. Understanding a candidate's platform can help you anticipate changes and plan potential changes accordingly.
Jenn Stark, strategic advisor for Don't Ban Equality, urges small business owners to be aware of local laws that may impact employee health benefits, especially reproductive health concerns. We advise you to pay.
“Small businesses in states that have passed abortion bans and regulations are left with the burden of bearing the costs and disruptions faced by their workers and communities. These workers are forced to travel out of state. “That means more vacation time and better health care,” she says. Even if their employer has a benefits program to support them, the cost is their own. ”
Changes in economic regulations are also an area that small business owners should pay close attention to.
“Political uncertainty in the months leading up to the presidential election can impact consumer confidence and decision-making, which may impact small business owners,” said Kate Ruzio, a former banker and founder of Luminary. “This could have an impact on consumers and cause a decline in consumer spending.” , a professional education and networking platform. “Small business owners should be aware that the election results themselves may ultimately trigger changes in business regulations, which could impact their business, growth, customers and more.”
2. Focus on consumer and employee engagement.
In election years, uncertainty can shift consumer spending patterns. When people feel worried about the economy, they tend to cut back on discretionary spending.
Consider changes you can make to your business to prepare for this change in sentiment. Do you offer essential products or services that are less sensitive to economic fluctuations? Is there a way to re-engage your most loyal consumers now? Focus on those if possible.
At the same time, this is a great opportunity to foster civic engagement among your employees.
“As this election season gets into full swing, entrepreneurs and business leaders have an opportunity to be a trusted voice to protect American democracy,” said Katie Vriestra, Principal, Public Private Strategies. Wonenberg says. And we support actions to ensure that. ”
Wannenberg cited research from the Business & Democracy Initiative that found 75% of consumers support companies that promote civic education among employees and agree that employees should take time off for political activities. I made it clear that I was doing it.
“Taking these steps during the election period can promote employee retention and build trust and loyalty with consumers,” she points out.
3. Scenario planning.
Given the potential for significant regulatory changes, business owners should consider changes that may occur under different management. When considering factors such as minimum wage increases, health care mandates, and trade policy, be sure to consider the adjustments that may need to be made within your operations and budget.
“Company leaders need to discuss and prepare their teams for different scenarios and always be prepared for uncontrollable change,” says Chantel Preston, a healthcare development consultant who advises small and medium-sized businesses on risk mitigation. .
Preston suggests envisioning a variety of scenarios to ensure your company and employees are prepared for any outcome. “Ask for feedback and engage with stakeholders so they understand what you are doing to prepare,” she says. “Communicate and be transparent with your employees to build trust and reduce uncertainty.”
4. Remind employees that they have a voice.
Presidential elections can affect labor laws and healthcare regulations, which in turn affect employee pay and human resources policies. Employers should stay on top of proposed changes to health care, minimum wage, and employee benefits that could impact overhead costs, communicate openly with employees, and stay informed of any changes that may occur post-election. You need to be prepared.
Kimber Lanning, CEO of Local First Arizona, suggests starting this conversation by reminding employees before an election that they do have a say in shaping the outcome.
“A great way to participate in elections while staying away from divisive politics is to stick to your message of getting out the vote,” she says. “Consider giving your employees time off to vote on Election Day. Encourage customers to vote by placing signage inside your facility or placing stickers at your register. Voter registration events As a business owner, speaking out in support of democracy is a noble act.”
5. Be prepared to burn through your cash.
Election years bring economic uncertainty, which can cause market volatility. Small businesses should consider increasing their cash reserves in case of a potential economic downturn.
Experts recommend postponing large investments until after the election, reviewing current tax strategies and being prepared to draw down cash reserves in case of significant disruption.
Preston recommends having at least 18 months worth of funds. She also suggests investigating regulatory perspectives from all parties and evaluating the supply chain if issues arise.
Lanning suggests treating election cycles like any other off-season. She points out: “With Phoenix's hot summers, businesses know they need to plan for lost revenue from customers going away on vacation. In the months leading up to a major election, business owners are doing the same. You should.”
“Sales efforts are becoming more and more difficult as Americans, in every industry, are tightening up their finances as they worry about what the outcome of the election will be and what policies the new president will implement that will affect their pockets. will decline,” Lanning said. “To keep your business healthy, you may need to pause hiring, tap into savings, or wait until you make a major purchase.”
Ruzio acknowledged that the economic uncertainty surrounding the election could lead to impulsive and short-sighted decisions.
“Organize your 2025 financial projections with scenarios for growth, flat, or declining performance,” she suggests. “At a macro level, important issues such as taxes, regulation, trade, and consumer spending/customer acquisition can impact the numbers. No matter which way the election goes, business owners will be informed about the issues and It's important to make sure you have an up-to-date SWOT analysis of your business, especially as it relates to how you can mitigate or protect your business from threats.
Finally, Luzio recommends consulting with trusted professionals, such as insurance professionals, financial advisors, cybersecurity experts, attorneys, and partner banks, to reduce your risk.
“Discussing potential business implications with these experts will help ensure that your business decisions are well-informed,” Ruzio says.
“Elections are out of your control,” she says. “Don't panic. Vote and focus on raising awareness to support your business through this time.”
