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Covid-19 has thrown many of America’s small businesses into survival mode. Although some are starting to rebound, others are still focusing on reclaiming lost revenues — many with fewer employees and resources than they had before the pandemic.
There’s no denying that economic outlooks remain uncertain, and workloads are high. With everything you’re dealing with, the general election may be the last thing on your mind. But as small business owners strive to make a difference, it’s more important than ever to vote. Not only for president, but also for the Congressional and Senate lawmakers on the ballot who will lead policies impacting your business and community. Let’s take a deeper look.
Government regulations directly impact businesses. For small businesses, in particular, it’s difficult to stay compliant when laws suddenly and quickly change — especially now, when you have limited resources. At BlueVine, we hear from business owners like you all the time, and if there’s one thing you want and need this year, it’s stability. Many of you need predictability when it comes to things like regulation.
Common business regulations such as licenses and permits, employment law, environmental legislation and consumer advertising, dictate how you do business and where you spend your time. When laws constantly change, it’s not only hard to keep up; it’s also difficult to focus on vital revenue-generating activities.
Regulation is here to stay, but you can influence how it changes and affects your small business by voting on November 3.
Federal taxes are a significant burden for small business owners, both financially and administratively. Depending on your business, you could be on the hook for federal and state income tax, self-employment tax, payroll tax, capital gains tax, property tax and dividend tax.
The cost can add up quickly. According to the SBA, small businesses in the U.S. have an average effective tax rate of 19.8 percent. This means that, on average, nearly 20 percent of your revenue goes to taxes.
Fortunately, tax legislation exists to benefit small businesses — like deductions and exemptions for businesses of a certain size. The thing is, these benefits often have expiration dates, meaning you need to continue making your voice heard at the polls.
3. Access to credit
As a business owner, you need to continually invest in new inventory, product launches, marketing campaigns and new hires. But investments like these can be difficult to make when cash flow is tight and credit access is low.
Under normal circumstances, cash flow is a major pain point for small businesses. In 2020, it is even more so. For example:
Studies show that cash and credit constraints are top concerns for business owners.
In August of this year, big banks approved only 13.6 percent of business loan applications.
According to SCORE’s latest Megaphone of Main Street, a report on small business trends, cash reserves are shrinking for small business owners due to the Covid-19 pandemic.
All this to say, access to credit is critical for small businesses. Local, state and federal programs offering low-interest loans to new small businesses need widespread support. And because minority owners face greater barriers to capital, there’s a lot of room to improve inclusive financial legislation.
4. Health insurance
The cost of health insurance remains the number one problem for small businesses. According to the NFIB, it has held this top spot for 29 years.
Many small businesses have found ways to decrease healthcare costs (for example, by increasing employee deductibles, copayments and premiums, eliminating dependent care, or negotiating with carriers), but doing so opens up another issue: finding and keeping top employees.
If you can offer an attractive, affordable healthcare option to employees, you gain a competitive edge in the job market. More than that, many of you need affordable and flexible healthcare to stay financially solvent.
5. The economy
Small businesses make up 99.9 percent of all U.S. businesses and drive economic growth. At the same time, you’re often the first to feel the impact of economic changes (especially when there’s a decline). The economy can’t exist without small businesses and vice versa.
The Wells Fargo/Gallup Small Business Index from August 2020 looks at the small business owners’ views on the economy and their ability to recover from this pandemic. A few interesting points:
The majority of owners do not expect to see a full recovery for a year or more.
Owners are more optimistic now than they were back in April.
Top issues in this year’s election include the economic impact of COVID-19, the overall handling of COVID-19, and economic policies.
So, even though optimism is rising, there’s a long road to recovery. What that looks like depends on election outcomes.
On November 3, small business owners like you can shape policies that will impact your business for years to come. So can your employees, so remind them to hit the polls, too. This election day, make small business count.