After months and months of campaigning, the election has finally come to an end. With president Obama winning a second term in office, the question now becomes what does this mean for small business owners? The truth is no one really knows what it will mean for small business owners because so much is still left in doubt. While one question has been answered, many more remain. Much like the rest of the country, most small businesses were split over whether or not the president being reelected was a good thing.
Now the common topic has been the fiscal cliff that the country may or may not fall off of, depending on the actions of Congress between now and the end of the year. So what has become clear in certain for small business owners?
Healthcare: The first and most obvious item to remain intact is "Obamacare," the highly controversial piece of healthcare legislation that left many small businesses wondering what exactly it meant for them. Now it is a near certainty that the legislation will go into effect as planned, and small business owners will have to make themselves familiar with the legislation, how it affects them, and the steps they need to take in order to prepare.
Taxes: President Obama has stated that he is unwilling to extend tax cuts for earners over $250,000. Depending on whom you believe this could affect a large amount or a small amount of small business owners. However, one thing is for certain; if you claim personal income from a small business (like many do) of more than $250,000, your tax rate is likely to go up. According to the Joint Tax Committee, only 750,000 people â€“ about 3 percent of those who report positive net business income â€“ would be affected by the higher rates. But those businesses still need to prepare accordingly.
Access to capital: This has been and will continue to be an issue for small businesses looking to expand, grow, and hire. A new report commissioned by the Small Business Administration was released this week that confirmed what many business owners were leery of since the near collapse of the financial system. TARP did little to give small business owners access to more capital in the form of loans. In fact, banks that received TARP money actually decreased their lending to small businesses by more than 21%, compared to 14% for other banks. Money in the form of loans hasn't truly started flowing since then, and that is unlikely to change with the prospect of a fiscal cliff looming.
Job Growth: Something I have written about in the past was validated recently; the majority of small businesses in this country don't grow in a meaningful way. Most simply start up, provide a good living for a small number of people and are either kept in the family, sold, or close completely. Most of the time all small business owners are looking for is a steady paycheck. It seems unlikely with all the economic uncertainty, that small businesses on the whole will start hiring at in aggressive rate. Government policy could change that slightly but based on past research, but certainly not in a meaningful way.
As a small business, are you more certain or less certain of the future then you were two weeks ago? Do you feel better or worse?
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Jason Keith has been working for and with small businesses in the New England area for more than 10 years, specifically small, micro businesses. Born and raised in Massachusetts and a former journalist, he provides a unique perspective on the issues facing small businesses locally and nationally.To reach him directly email email@example.com.
This is a personal blog. The opinions expressed here are the author's alone.