Author: Clint Sporhase, Vice President, Business Banking
As the election draws near, it’s natural for small businesses to wonder how it may affect them. A potential change of leadership could result in policy changes that may have an impact on your business.
While a recent Fundera survey of 750 business owners indicates that small and medium-sized businesses’ top priority for new lawmakers is healthcare, it isn’t the only topic on the minds of business leaders. Financial worries over higher taxes and even fears over environmental reforms can keep business leaders up at night.
If the upcoming presidential election has you wondering what it means for your business, there are things you can do. Keep reading for sound advice on approaching this election year.
No matter which topics are on your mind this election year, the first step in dealing with pre-election anxiety is to try to relax and avoid a panic based on headline-generating news. A proper perspective is key to understanding how potential policy changes could impact your way of working and your business outcomes.
When looking for the information you need to fully understand the issues, seek perspectives from multiple reliable sources. Read widely, and as you gather information, consider including trusted foreign news outlets that have less of an interest in the political aspects of the election or the issues involved. You may also want to connect with small business and trade organizations, such as your local Small Business Association or Chamber of Commerce, to get their take on important issues.
Research of historical trends indicates that presidential elections don’t always have the far-reaching impact you may expect. For example, wholesale tax reform has only happened once in the last 30 years, with the passing of the Tax Cuts and Jobs Act in 2017, according to Invesco U.S. Government Affairs. Additionally, financial markets have historically performed well in the wake of a presidential election, regardless of whether the incumbent party won or lost.
Entrepreneurs often enter business for themselves because it offers certain freedoms and opportunities that working as an employee does not. When proposed policies and politicians represent views that may impact your business, you may want to get involved or make your political beliefs known. However, business leaders should approach political activism with caution. Know the issues that impact your business, but also the implications of any actions you may take.
Writing to your representatives about your position and your concerns is often necessary to properly influence policy change, but some activities, such as posting political views on social media, may offend current or potential customers.
In the end, being your own boss allows the freedom to do what you want, but it’s important to weigh the potential outcomes of political activism against potential risk to your business, before deciding which approach to take.
As I mentioned previously, financial markets have been known to hold steady, even during changes in leadership. A similar effect can be seen across the economy as a whole.
A study conducted by Alan S. Blinder and Mark W. Watson, of the Woodrow Wilson School and Department of Economics at Princeton, show that over the 64-year range from Harry Truman’s elected term through Barack Obama’s first term, real gross domestic product continued to grow at an average 3.33%.
Just remember that entrepreneurship has been around as long as we’ve had presidential elections, and regardless of the outcomes over the years, small businesses have continued to thrive. The inherent optimism of business owners is clearly a driver of that success.
About the Author
Clint Sporhase leads FNBO’s efforts to serve small business owners. Clint has 25 years of sales, marketing and strategy experience.