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Small Businesses Can't Afford To Stand Still

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It’s been nearly four months since we swore in a new president, a transition many U.S. business owners viewed with confidence and optimism. The administrative shift signaled the potential for substantial legislative and regulatory changes that would benefit small businesses and alleviate some of the challenges they’ve faced during the recovery. So far, however, little tangible progress has been made in key areas that affect most Americans, such as tax reform, infrastructure, regulatory relief and healthcare reform.

This state of inertia is not particularly surprising. Getting things done in Washington is a grueling process that requires time, compromise, and major political navigating. Among hopeful business owners, the gridlock around some of these key issues has caused a lack of clarity about where we stand and where we’re headed. Despite uncertain circumstances, it’s important for small business owners not to let confusion cloud their decisions or paralyze their growth—because when it comes to the economy and your business, the worst possible thing any of us can do is nothing.

According to the NFIB’s April Small Business Optimism Index, optimism among American small business owners is still historically high, though it dipped slightly from the previous month. The biggest slide in sentiment was around expectations for future business conditions, which dropped eight points and was mainly attributed to the lack of movement on tax reform and repealing and replacing the Affordable Care Act.

For many entrepreneurs, the anticipated healthcare overhaul has huge business implications. The current policy has raised compliance costs, making expansion difficult, and has caused some businesses to hold off on hiring. The current tax system and regulatory environment, both also on the administration’s reform agenda, have similarly saddled companies with high costs and heavy requirements. As today’s business owners weigh current conditions with hopes for policy change, deciding how and where it makes sense to invest can be challenging. For some, these decisions are never made.

This state of immobility can have major consequences on overall economic growth—stagnating business investment, hiring and promotions, and spending. As NFIB Chief Economist Bill Dunkelberg stated, “The drop in expected business conditions should be a warning to Washington that health care reform, regulatory reform, and tax reform have implications far bigger than politics.”

But as we’ve seen in recent months, making policy changes that will benefit small businesses is easier said than done.  As we wait in limbo, how can small businesses ensure they don’t fall behind?

For starters, it’s important for business owners not to put all decisions on hold because of an uncertain environment. Whether it’s onboarding a new hire, opening a new location, or investing in new software, every decision involves myriad factors and its own assortment of pros and cons. Bringing every other hypothetical scenario into the equation—whether it’s a possible new corporate tax rate or a proposed change in regulations—only adds to the clutter and makes it harder to see a clear path ahead.

To avoid this trap, small businesses should operate based on the best information available at the time, making decisions that are best for the business and recognizing that—like anything else—no circumstance is set in stone. This means acknowledging that you may have to make decisions, change decisions, and change minds if a new set of circumstances comes into play. Otherwise, you may find that while you waited for a certain solution to pan out, your competitor gained an edge by making the investments that you kept on the backburner.

There is always a level of risk involved, but when the alternative is total paralysis, it’s worthwhile to take as many steps forward as possible. For small business owners, this doesn’t just mean investing capital; it can also mean investing time and energy to advocate for the issues and causes that affect your business. Because while strides will likely be made in some of the major areas impacting small businesses today, much is still unknown. And treading water is never the best way to win a race.