As an experienced CPA working closely with small business owners, I understand the challenges that come with navigating policy changes under a new administration. The business landscape in 2025 is evolving rapidly, and small businesses must stay informed to remain competitive and compliant.
Below, I discuss the top five key focus areas or concerns small business owners face under the new administration and offer strategic recommendations on how to address them effectively.
1. Inflation and Rising Costs
One of the biggest concerns for small business owners right now is inflation. With supply chain disruptions, increasing wages, and rising operational costs, many entrepreneurs are struggling to maintain profitability. According to recent reports, over 55% of small business owners cite inflation as their number one issue.
How to Adapt:
Monitor Cash Flow Closely: Utilize financial forecasting tools and budgeting strategies to keep a close eye on expenses and revenue.
Reassess Pricing Strategies: Regularly evaluate pricing models and adjust as necessary while maintaining customer loyalty.
Negotiate with Suppliers: Consider bulk purchasing or long-term contracts to lock in better rates.
Improve Operational Efficiency: Streamline processes, invest in automation, and eliminate wasteful spending.
2. Tax Policy Changes
With the new administration implementing tax policy adjustments, including increased payroll taxes, small businesses are seeing a rise in employment costs. Many business owners are concerned about how these changes will impact their bottom line.
How to Prepare:
Consult a CPA Regularly: Keep up with tax law changes and strategize accordingly to maximize deductions and credits.
Consider Incorporation Changes: Depending on new tax policies, shifting from an LLC to an S-corp or vice versa may provide tax benefits.
Plan for Payroll Adjustments: Use tax-efficient compensation structures, such as retirement plan contributions, to mitigate increased costs.
Take Advantage of Small Business Tax Credits: Research potential tax credits, such as R&D credits or energy efficiency incentives, to offset tax burdens.
3. Regulatory Compliance and Labor Laws
With new labor laws and regulatory compliance updates, small businesses must stay informed to avoid penalties and ensure smooth operations. Changes in workplace regulations, employee classification, and wage laws require proactive planning.
How to Stay Compliant:
Stay Updated on New Laws: Follow industry publications and work with a legal expert to ensure compliance.
Invest in HR Training: Make sure HR personnel are well-versed in labor law changes.
Review Employee Classifications: Ensure that independent contractors and employees are properly classified to avoid legal issues.
Automate Compliance Tracking: Use payroll and HR software that updates automatically with new labor laws.
4. Access to Capital and Funding
Securing funding remains a major hurdle, especially with rising interest rates making loans more expensive. Many small businesses are finding it difficult to qualify for traditional financing.
How to Secure Financing:
Strengthen Business Credit: Maintain a good credit score by paying bills on time and reducing outstanding debt.
Explore Alternative Lending: Consider options such as SBA loans, microloans, and peer-to-peer lending.
Seek Out Grants and Government Assistance: Research available grants that can provide non-repayable funding.
Optimize Cash Flow Management: Implement better invoicing and collections practices to improve liquidity.
5. Supply Chain Disruptions
Despite some stabilization, supply chain issues continue to impact small businesses, causing delays, increased costs, and inventory challenges. The ability to adapt to these disruptions is key to maintaining operational efficiency.
How to Mitigate Supply Chain Risks:
Diversify Suppliers: Work with multiple vendors to reduce dependency on a single source.
Increase Inventory Buffer: Where feasible, maintain a strategic stockpile of critical supplies.
Adopt Technology for Inventory Management: Use AI-driven inventory tools to predict demand and avoid shortages.
Strengthen Supplier Relationships: Negotiate better contracts and collaborate on contingency planning.
My Final Thoughts
The new administration's policies bring both challenges and opportunities for small business owners. By focusing on financial health, tax strategy, compliance, funding, and supply chain resilience, small businesses can navigate these uncertain times with confidence. As an experienced CPA, I encourage business owners to stay proactive, seek expert advice, and leverage available resources to sustain and grow their businesses in 2025 and beyond.
If you need personalized financial guidance, don't hesitate to reach out. Staying ahead of changes and planning strategically can make all the difference in your business’s success!
About the Author
Cherie Sayban is a certified public accountant. She has over 25+ years of experience in Finance, Accounting and Bookkeeping.
Cherie Sayban CPA provides various financial and accounting solutions to small and mid-size businesses. Our portfolio includes: tax preparation, payroll preparation, accounts receivable and payables, general ledger, and QuickBooks . Our bookkeeping workshops are offered both in-person and virtually.
To learn more about how Cherie Sayban CPA can help you and your business, click HERE
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