Political trends can impact any level of society, whether individuals, families or organizations such as small businesses. Trends in policies set by government agencies and leaders can affect the legal framework within which small businesses operate, the market conditions that affect consumer behavior and the amount of assistance offered to small businesses by the government. Being aware of political trends at the national and local level is an essential part of planning and strategy development for your small business.
Economic Trends Different political parties or individuals enact different policies to guide national and local economies to prosperity, based on their own economic ideologies. This means that political trends can have an impact on taxes levied on businesses and individuals, leaving your customers and yourself with more or less money to spend in the marketplace. Economic policies can also influence interest rates throughout the economy, including rates for small business loans. The sentiment of all economic actors in society can be affected by the government’s ability to control economic conditions. For example, in a struggling economy, consumers may spend less in the marketplace, causing banks to offer fewer and smaller loans to businesses. National Security National-security concerns can have an impact on consumers’ buying and saving habits throughout the economy, and trends in politics can do much to heighten or calm security fears. The people and parties in power at any time have a direct influence over the relationships of a nation with its neighbors in the global community, including hostile rivals. A nation at peace can encourage people not only to spend more overall, but to invest more in long-term assets such as homes and businesses. Labor Laws Changes in labor laws can be anticipated by keeping an eye on political trends. Political candidates are often vocal on their stances regarding minimum wages, insurance requirements, labor-related taxes and regulation on the terms of employment. Any change in labor laws can mean a change in expenses for a business, and these expenses can be significant for small businesses without large cash reserves. A change in the minimum wage, for example, can cut directly into a small company’s profitability. Small Business Assistance Small businesses in the United States can take advantage of a wide range of free or low-cost services from federal and state agencies, including grant funds, insured loans, advisory services and even tax breaks. Trends in legislative politics can serve to increase or decrease the number and amount of these services, which can impact the opportunities that small business owners have to build a sustainable and profitable enterprise.