President Obama’s successful re-election to a seconded term is now a fact. No matter who you voted for, the election takes away some of the uncertainty that businesses have been carrying around for the last four years. I have talked with scores of business owners since the election and they are not happy with the fact that Obama was able to win another election; but facts are facts and we have to deal with the hand we are dealt.
Based on available research, there are 4 areas that we need to keep our eye on:
Taxes: Congress will battle over Obama’s request to raise the top tax rate to 39.6% but it is highly likely that Republicans will cave and those taxes will be raised. After re-election, one of Obama’s first meetings was with the head of the AFL-CIO and that outtake was continued spending and increased taxes. The new definition of rich is those with taxable income of $250,000 which will impact many small business owners that file taxes as an S corporation. The Bottom line is small business owners have got to become more effective and efficient.
Health care: Obama’s re-election means the overhaul will continue to be implemented, but small businesses still must wait to find out how much it will eat into profits.
Key provisions of the law go into effect in 2014, including the requirement that businesses with 50 or more employees provide affordable health insurance for their workers. What employers don’t know yet is how much that insurance will cost. That won’t be determined until states set up exchanges where individuals and companies can buy coverage.
Economy/federal budget: The federal deficit is a big problem and if the Obama administration continues to spend like the last four years, taxes will increase and small businesses will have less money to invest in growth and their businesses.
That’s according to a survey of business owners conducted by American City Business Journals between Nov. 7th and 15th. More than 200 business owners, randomly sampled from nationally representative Dun and Bradstreet lists, completed the survey.
When asked about the election’s impact, 54 percent said the outcome “will impede the ongoing recovery of small and mid-sized businesses.” The survey found that 24 percent thought Obama’s re-election would have a positive impact on business. The remainder were either uncertain or felt the election would have no impact on the business climate.
Most owners of small and medium-size businesses think President Barack Obama’s re-election will have a negative impact on the business climate.
Regulation: Look for Obama to continue a mixed record – creating more rules that small businesses will need to follow. Some industries are going to be hit hard by regulations and others are going to be over-looked. Just keep an eye on your industry for out of the ordinary government oversight.
Final thoughts: The next four years are going to be more like the last four years without much improvement in the economy. It is critical that business become more focused on growing revenue and operating more efficiently: operations, finance, marketing, sales and management strength.
Dan Lacy
Growth & Profit Coach, Financial Strategist, Cash Flow Doctor, CEO Mentor
dan@dynastybuilder.com
phone: 765-644-8887
