La nueva administración trae optimismo a las pequeñas empresas y muchos desafíos

Hey, everybody, it's Gene Marks, and welcome to this week's episode of the Paychex THRIVE Week in Review. Thank you so much for joining me. You know, this is the usual, usually on this podcast every week we take three news stories that impact your business and explain why. But this week is a little something different because there really is just one news story that's dominating the news, and that is the inauguration of President Trump, who has started his term earlier this week, and we are looking for four years coming up, some very interesting things.

I wanted to use this Week in Review episode to talk to you a little bit about a column that I wrote just two weeks ago in the news for the Washington Times, which is about small businesses heading into the next four years, and the fact that many small businesses are optimistic about, you know, the coming four years. But there are still a lot of challenges that are going to be facing us that we all need to be aware of.

So, this article that I wrote was in the Washington Times. It appeared, Dec. 31, actually, and it cited some of the most recent surveys that were out about small businesses. The surveys came from Intuit, the U.S. Chamber of Commerce, the National Federation of Independent Businesses Thrive, ZipRecruiter, and even American Express. They surveyed tens of thousands of small businesses when you combine them all together and for the most part, small businesses were looking, you know, optimistic.

The Intuit survey, for example, said that 72% of business owners plan to invest or grow their business and 44% are planning to hire full- or part-time employees next year. The U.S. chambers said that 7 in 10 small businesses expect next year's revenue to increase, which is up significantly from this time last year. And 46% said they plan to increase their own investments.

According to Thrive, which is a marketing platform for small businesses, 50% of those polled also expected their revenues to increase in 2025. ZipRecruiter said that 76% of surveyed employers say they plan to expand headcount in the coming year, with 53% anticipating modest increases and 23% expecting more significant growth.

And finally, American Express found that 91% of small businesses feel confident in their ability to grow their businesses next year.

By the way, the National Federation of Independent Business Study, it reported optimism among small business owners. It was the … it was after 34 months of remaining below the 50-year average reach the highest reading since 2021.

So yeah, lots of optimism heading into 2024. A lot of it does have to do, with, with, you know, with Trump coming into office. But I just wanted to sort of temper that optimism a bit and that's what I did in my recent Washington Times column, because there really are a lot of, challenges ahead of us that will create uncertainty, things that we'll be talking about over the year as I report on the news.

And let me, let me, let me just explain what some of those challenges are. Inflation is still about twice what the Fed's benchmark is, but they're trying to get to: It's about 3.9%. So, it is still much higher. Wages are just keeping up with inflation, as well. So, that is a continuing issue with small businesses as continuing rising costs. The same thing with interest rates. The national prime rate at most banks are around 7.5%, which means that businesses are still paying, you know, one, two, three points higher than that for their loans. So, there were still some financing costs and challenges involved.

And let's not even forget the looming national debt issue. I mean, as, the government maybe cutting taxes or increasing spending depending on what bills go through, there are a lot of issues affecting our national debt, which is at historic highs, which are incurring more and more interest expenses every year, and unless the government pays for it somehow, the then the only default is just issuing more money, which also has inflationary effects.

All this impacts our businesses, and I'm not done yet. Obviously, with President Trump coming into office, he's been speaking a lot about increasing tariffs on many countries, either a universal tariff or targeted tariffs at certain countries. Well, you know, that could have an inflationary effect, as well, depending on what your business is and where you're buying your products and where you're doing your manufacturing. So, that is a potential challenge.

Also in 2025, we are looking at major changes to our tax laws. The 2017 Tax Cuts and Jobs Act will be mostly expiring this year. So, a lot of these things are up in the air, including the small business tax deduction where pass-through companies can take up to a 20% deduction on the income that they earned. That could be going away.

Now, there will be a lot of discussion. President Trump is pushing hard to get these things made permanent or extended at the very least, but he's got a relatively small, majority in the House of Representatives, only about five or so. So, it's going to be a back and forth to see which tax laws get changed or not in 2025.

That makes things very disruptive and uncertain for us as we are trying to plan out our spending in 2025.

Immigration is also a big issue. There will be crackdowns on immigration. We know that that is going to be happening. The government plans to go after illegal immigrants, businesses with undocumented employees will certainly be affected. That will have an overall pressure on the labor market as more and more immigrants, you know, particularly illegal immigrants, leave the labor market. You know, those employers, that were, you know, rather, doing it, you know, voluntarily and involuntarily employing these people, they're going to be needing labor already in a tight labor market as it is.

And the labor market will continue to be tight. Unemployment is still low. So, businesses are still going to be challenged to offer benefits and offer, you know, the right kind of environment to attract, the right type of talent and also retain the right type of talent, as well.

So, 2025 will also be a tight labor market.

And finally, there's a lot of uncertainty around regulations. Different rules that passed last year are potentially being rolled back. Things like overtime, worker classification rules, rules coming from the EEOC. Other rules from the Department of Labor, OSHA, you know, are being looked at by this new government and, some of these things could be changed or rolled back or, you know, turn back so that, employers who are implementing some of these rules, may have to un-implement them or figure out what they're going to do.

So, we have big changes in the regulatory place, particularly when it has to do with our employees. And a lot of the new rules that we're going to be seeing will be local, minimum wages in particular, and paid time off. So, employers have to be aware of that.

That is the news for this week. Now, next week, I'll be back with three items in the news that impact our businesses and some thoughts on them. But this week that's the big news.

You have been watching the Paychex THRIVE Week in Review. My name is Gene Marks. I appreciate you spending the time with me this week. I'll be back to you next week with more news that impacts your business. We'll see you then. Take care.

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