2024 Election Results Will Impact Small Business Owners: Here’s How

Election day is behind us and following the 2024 election results of Nov. 5, Republican nominee Donald Trump will become America’s 47th president in January 2025.

The president-elect secured 312 electoral college votes, bringing him back to Washington for the first time since he left office in 2021. He achieved this thanks to his electoral wins in several battleground states, including Pennsylvania, Georgia Arizona, and Wisconsin. Trump’s White House win might have wide-reaching consequences for small business owners.

Democratic candidate Vice President Kamala Harris, meanwhile, secured 226 electoral college votes as her ‘blue wall’ electoral strategy failed to prevent the Republican wave across the Rust Belt and Sun Belt states.

Now, Harris’ push to continue helping minority-owned small businesses – a signature selling point to business owners of the Democratic Biden-Harris administration - is left in the dust by her election loss.

Here’s what you need to know about how the 2024 election results could impact small business owners.

3 Key Takeaways: How Trump Win Will Impact SMBs

• President-elect Donald Trump’s economic agenda has positives and negatives for small business owners.    
• Inflation and high rates are still important concerns for voters and SMBs specifically.
• Following the election results, new Republican proposals such as tariffs, tackling inflation, deregulation, and tax changes could all impact SMBs.

The Different Small Business Policies At Stake in the 2024 Election

Trump and Harris outlined their economic agendas quite differently during the campaign. While Democratic candidate Vice President Harris had a detailed economic platform, including in-depth recommendations on small business policy, Trump leaned on the record of his prior administration to communicate his vision for small business owners.

The Republican’s signature economic proposals may give an idea of how this election, which many have referred to as a ‘vibes’ election - will impact small business owners.

For instance, Trump’s plan to impose tariffs, which are taxes on imported goods, could become an additional financial burden for SMBs who sell imported goods or who rely on international manufacturing. On the other hand, some of the tax cuts the Republican president-elect wants to enact might be beneficial for business owners, including preserving a low corporate tax rate that could lead to greater retained earnings.

Inflation and Interest Rates Still Top Election Concerns for Business Owners

The results from election night came as inflation and high interest rates have hurt many American small business owners over the last several years. At the same time, many of them also feel optimistic about 2025. A recent U.S. Chamber of Commerce report noted that “the economy/inflation is the single most important issue that small businesses would like the new U.S. Congress and presidential administration to address in 2025.”

Meanwhile, the report noted that 73% of small business owners “expect next year’s revenue to increase—identical to last quarter and the highest number recorded since the Index began in 2017.” So although inflation remains a concern, business owner sentiment had been improving leading up to Election Day.

Ultimately, the economy and inflation became determining factors in voters’ decisions. Harris could not overcome these issues as a de facto incumbent, and Trump attacked her political platform with these two problems throughout the campaign. Now it is Trump who will be given the voters’ mandate to try to preserve the gains made on both inflation and high rates.

What the Presidential Election Result Means for SMBs

Trump and Harris outlined very different economic agendas. During her campaign, Harris said that small businesses are “the backbone of our communities”.  Her Democratic platform and proposals for SMBs provided many details. Some of these policies were geared toward continuing to help underserved communities and minority-owned businesses.  Harris also offered to boost the startup expense deduction to $50,000 from $5,000.

In addition, under the Biden-Harris administration, small business applications reached a record high, with 19 million new applications filed as of August 2024.

Trump, meanwhile provided fewer details on his Republican platform. Yet, some of his economic proposals might have a direct impact on how SMBs will conduct business going forward.

Here are some of Trump’s proposals and how they could affect owners.

How Donald Trump’s Economic Policy Could Impact SMBs

Tariffs have been a cornerstone of Trump’s economic agenda. These could become one of the election result’s most significant potential impacts on SMBs. During the campaign, he has called for tariffs to range from 20% to up to 60% for Chinese goods.

What it means for small business owners: Many SMBs use imported products or components. The degree to which this could affect a business will depend on how much it relies on imports. In turn, this added tax could become a substantial financial burden for some of them.

There is another potential impact for SMBs. Tariffs might result in higher consumer prices, as these production costs will be passed on to them. In turn, this could lead to decreased sales activity for SMBs.

Bryan Riley, director of the National Taxpayers Union Free Trade Initiative, said that these could be especially harmful to small businesses that may not have the resources to weather higher prices, as happened under Trump’s first term.

Riley added that the uncertainty surrounding tariff threats makes it difficult for small businesses to plan for the future.

“Mom-and-pop retailers will face lower sales as their prices increase, and manufacturers that have to pay more for imported inputs may have to scale back as a result,” said Riley.

Finally, many experts noted that tariffs could have an inflationary impact since they directly increase the cost of imported goods or materials. This could put further pressure on owners if inflation does indeed resume under a tariff-heavy policy.

How Trump’s Tax and Fiscal Policy Could Impact SMBs

Trump also wants to make permanent the changes enacted in the Trump Tax Cuts and Job Acts (TCJA) in 2017 - a major piece of legislation under his previous Republican administration. These changes are set to expire in 2025. One of these was cutting the corporate tax rate to 21% from 35%.  The expiration of these tax cuts could bring in more fiscal revenue, but would also leave companies with lower after-tax profits, increasing the burden on small businesses already struggling with high costs and low profit margins.

The Republican president-elect went even further during the campaign, proposing to lower this rate to 15%. Whether Trump wants to make the tax cuts permanent, or lower business taxes even further, he will need an act of Congress to do it. But if he can get that passed, it could be a huge help for business owners, as it would free up capital to expand their business or pay off high-cost debt, for example.

How Republican Deregulation Could Impact SMBs

Trump is a big proponent of deregulation, which could help cut costs and boost growth for business owners.

Dr. Peter C. Earle, senior economist with the American Institute for Economic Research noted that the type of deregulation that characterized the first Trump administration is likely to continue. It may even accelerate under his next term of office.

“By dismantling the web of red tape and redundancies at various levels, small- and medium-sized businesses are likely to become more profitable, expand their workforces, and all during a period wherein interest rates are likely to be falling – lowering debt service costs,” explained Earle.

According to Trump, fewer regulations foster economic growth for SMBs. Some of the deregulations that could help small businesses include the deregulation of financial services that will make access to capital easier.

How the Race for Congress Will Impact Business Owners

Enacting Republican Policies Faster

The race for Congress and its outcome could also shape many of these policies. Ballots were still being counted days after the presidential result in several congressional districts. The Republican party won control of the Senate. However, days following the election results, several House races that would determine the outcome of control of the House were still uncalled, notably in key states such as Nevada, Arizona, Pennsylvania, and California.

What it means for SMBs: A Republican sweep of Congress would enable the new President to enact some of his policies that require new legislation even faster, such as tax cuts. This could be beneficial for small business owners, depending on the final shape that these policies take.

Appointment of Business-Friendly Cabinet Members

Axios reported that the President-elect intends to retain several pro-business cabinet members for his new administration. In a sign of how this might shape up, Axios noted that “Trump's transition also is business-friendly.”

“The co-chairs [of the Trump transition team] are Howard Lutnick, chairman and CEO of Cantor Fitzgerald, and Linda McMahon, who headed the Small Business Administration during Trump's first term,” according to Axios.

What’s more, Tesla and SpaceX CEO Elon Musk might also play a significant role in the new Republican administration notably as part of a so-called efficiency commission.

This task force could also be beneficial for SMBs, as it intends to streamline government services and cut through red tape.   For instance, less bureaucracy could result in faster processes for businesses to get up and running or expand.

Another potential way this task force could benefit SMBs is by lessening legal and administrative costs.

Bottom Line: Election 2024 and Small Business

It is still too soon to determine all of the changes in policy that a new Trump presidency will bring and how these electoral results will impact small business owners. In addition, it is difficult to estimate how fast his administration will implement the new economic policies he campaigned on, or how Republicans and Democrats in Congress will respond.

Regardless, Trump’s return to the White House is sure to have a lasting effect on American small businesses, some positive and some negative. Favorable tax policy, deregulation and a business-friendly climate could all boost business owners’ bottom lines, but a return of inflation fueled by tariffs or global economic uncertainty would potentially set struggling businesses back.

The best way to prepare for any economic shift is to keep up to date with changes and regulations, such as tax implications or potential inflationary actions, and adjust your business plan accordingly.

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