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With the Presidential Election looming, small business owners across America are wondering how the uncertainty will affect their businesses. Here are some things your business should know about what to expect and plan for leading up to November 8.
Negativity and uncertainty
Various research data indicates that business leaders are feeling negative about the political landscape. According to the National Federation of Independent Business (NFIB), small business owners perceive the current political climate, including the uncertainty surrounding the election, as a cause of poor economic conditions, such as low economic growth. The NFIB Small Business Optimism Index in August reveals that optimism is at an unprecedented low. The August Index revealed a drop to 94.4 points – a number that's significantly lower than the Index's 42-year average of 98 points. The index is generated by surveying10 components, ranging from Plans to Increase Employment, to Now a Good Time to Expand. The survey revealed that 39% of business leaders see political uncertainty as a reason to avoid expanding. A National Association for Business Economics poll showed that 11% of the association's members will be deferring hiring and investment decisions until after the election, when they will know who is in office and what their actual policies are – and when they feel confident that consumers are feeling more optimistic.
Negativity and uncertainty aren't completely partisan-based. A poll taken in March by the National Small Business Association showed that 40% of small business leaders feel overall that politicians generally don't follow through on their promises. An Ipsos poll conducted from September 29 – October 3 revealed that Clinton's favorability score was just 50%, while Trump's was 44%. Added to this is the fear that consumers may spend less money during a close election cycle, especially one with polarizing candidates.
What should your business do?
Polling data reveals a climate in which a lot of businesses are sitting tight. Many business leaders simply want to wait and see what happens before making big changes, such as expanding locations, hiring new staff or launching new products and services. But is this wise? And what about after the election, when either Trump or Clinton assume the Presidency? In theory, many businesses may react favorably or negatively based on which candidate wins, but this isn't necessarily rational.
First, whether you agree with the promises each candidate has made, can you really depend on them? We've never seen a candidate like Trump. He's suggested bold policy moves such as putting tariffs on foreign goods and nullifying free trade deals, but would he be able to get these through Congress? Clinton has said she would do things like cutting red tape for small businesses, increase tax write-offs and deductions for small businesses, as well as making it easier for small companies to qualify for the health care tax credit. But as with all politicians, promises often go to the wayside. It's hard to predict whether political pressures will cause her to postpone or forget about certain policy decisions.
Complicating all this is the strong possibility that Congress will still be party-divided after November 8, meaning that it could be difficult for either candidate to get things done. In a way, then, it's not too hard to imagine business as usual for the next four years. Because of Republican opposition, the Obama administration has faced tough challenges getting bills passed in Congress over the last eight years, and if the number of Republicans in Congress remains high after November 8 there's a good chance this trend would continue for Clinton. Trump would also have a hard time getting bills passed, not only because of opposing Democrats in Congress but because there are a number of representatives in his own party who are against him.
Whether you sit tight as other companies are doing or move boldly forward should really depend on your specific business. How are your own numbers? If you offer a unique product or service that's selling very well right now despite the political uncertainty, there may be good reason to believe that the upward trajectory will continue after the election. Some products and services are election-proof. No matter who's in office, people need basic products and services such as food and Internet. And in terms of investing in infrastructure such as computer hardware, mobile devices, restaurant equipment or anything else you might need, today's uncertain climate may provide ideal buying opportunities. If sales on business equipment, vehicles and other products or services are down overall, you might just get a bargain. Having a little optimism, even in these uncertain times, may be a good thing.
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