This isn't a political post, but it's a prediction of what the election of Donald Trump will mean for professional services businesses in 2017. My main interest in US politics is how it affects small businesses like mine. I'm also a firm believer that a rising tide floats all boats - if we can grow our economy robustly, there will be money for social and other programs that this country sorely needs.
This post isn't meant to forward a political agenda; it's meant to predict how the elected presidential candidate's stated positions will impact the professional services business environment in 2017.
Lower corporate taxes will increase investment in professional services
Trump's stated plan for corporate business taxes is to reduce the rate from 35% to 15%. Plans don't always become reality, but let's assume that corporate tax rates will be reduced - maybe not all the way to 15%, but they will be reduced. This is even more likely with Republican majorities in the House and Senate.
With lower corporate taxes (not to mention more certainty about the business climate for the coming years), businesses will have more money to invest in professional services like management consulting, sales and marketing, finance and accounting, and corporate training. Many of these professional services (marketing and training) are the first things that get cut in times of economic uncertainty.
This will likely be a high priority for the incoming administration. History tells us that the Democrats will likely make gains in the House and Senate in 2018, so the Republicans will try to get these corporate tax cuts enacted as soon as possible.
As someone who owns a marketing agency, I'm expecting that 2017 will be a good year for my business as well as other professional services businesses.
Will the Republicans address entitlements?
Entitlements like Medicare and Social Security are a ticking time bomb in the American economy. Despite the importance of this issue, political considerations have kept anyone from doing anything about it. Again, with Republican majorities across the board, 2017 may be the year that the entitlement issues gets tackled. If it does, Paul Ryan's plan may be the starting point.
bNot to dispute the impact that Obamacare has had on giving health insurance to people who haven't had it before, but most business people agree that it has stifled business growth and discouraged employment. As someone who spent 25 years in the health insurance industry, I can tell you that the underwriting principles on which the plan was based doomed it to financial failure. Trump's plan to repeal and replace Obamacare focuses on Health Savings Accounts and other market-based principles to tackle the US healthcare problem. Time will tell whether he's successful or not, but most business people will welcome the changes.
What do these policy issues mean to businesses? First of all, it will reduce our need to finance our future from nations like China and Japan. This will give business across the world more confidence in our economy and hopefully improve our balance of foreign trade. It will also give US businesses more confidence in the future and make them more likely to invest in professional services.
Small businesses will get more attention from the government
I have some great business partners from Colombia. Triario S.A.S. helps me provide website design and development services to my customers. They are great people that do a great job. As part of their expansion into the U.S. market, they won a sizable grant from the Colombian government to finance their expansion into the U.S.
They are here in the US now for HubSpot's Inbound 2016 conference and got to experience an American election. We were talking and I explained to them that unlike Colombia, which helps small businesses expand, our government takes money from me and gives it to the too-big-to-fail crowd.
That's an opinion with which many may not agree, but I've given blood, sweat and tears (not to mention a fairly large bootstrap investment) to get my business going. For someone like me, hearing the words "you didn't build that" stung me to the core.
I predict that a government that comes from, the business environment will enact policies that take the shackles off small business and we will all have a great year. One of the things I like about a Trump administration is that they come into office not owing favors to the Goldman Sachs of the world.
We are a very divided country right now and I hope we can all come together. If we can, we can do great things. I realize that there are lot of social issues that divide us. But from a strictly small business point of view, the future's so bright that you got to wear shades. For professional services businesses, now is the time to double down on your sales and marketing efforts. That's what I'm doing!