‘Just pure uncertainty.’ Small businesses are hopeful and fearful ahead of Trump’s second term

By Alicia Wallace, CNN

(CNN) — Family-run furniture and barware maker Barrel-Art has now been through three US presidential elections. While business before the 2024 race felt similar to 2016 and 2020, this year has also brought more unpredictability.

Sales petered out in the months ahead of Election Day as businesses and shoppers paused their purchases while waiting for an outcome. Sales for their handcrafted products, made from whiskey and wine barrels, bounced back as soon as the race was called.

However, the post-election environment is hitting different this time around for many small business owners, such as Barrel-Art’s Michael Prieto, and leaving them wondering what comes next.

While President-elect Donald Trump will be a familiar face in the White House, his campaign trail rhetoric was amplified and ambitious, sweeping policy proposals have raised more questions than answers, said John Arensmeyer, founder and chief executive of Small Business Majority, a center-left business advocacy group.

“I think business owners don’t know how much of what they’ve heard from the president-elect on the campaign is real, how much is going to actually happen and how much he can do,” Arensmeyer said.

For business owners who already were unsettled about the economy or its direction prior to the election, navigating the months and years ahead could be even more precarious, he added.

“It’s just pure uncertainty,” he said.

For Barrel-Art’s Prieto, his biggest question mark is how tariffs or trade restrictions could ripple through his US-based suppliers and make materials harder to obtain or more costly.

“I want to be optimistic, but I’m skeptical as well on some of the proposed policies,” he said.

Running leaner, hoping for cheaper money

In the months leading up to the election, Prieto was taking a wait-and-see approach. He didn’t want to send Barrel-Art down two different scenarios.

A week after the election, Prieto said he was very hopeful that his small, family-owned business could benefit from any “Made in America” pushes from the new administration as well as a more favorable lending environment.

Barrel-Art is running a lot leaner staffing-wise than Prieto would want it to be, which means longer hours for him. High inflation has squeezed the business, driving up costs while driving down customers’ disposable incomes.

“It’s started getting more and more difficult because of inflation,” he said. “We are a discretionary product, we’re not a necessity. So if people don’t have the disposable income, our products are going to fall to the wayside.”

Barrel-Art also is heading into the busy Christmas season carrying bigger credit card debt because of the combination of slower sales due to the election and the business still trying to recover from a destructive fire a year ago, he said.

Prieto said he’d love to see the return of some small business lending products similar to the Economic Injury Disaster Loans that were made available during the pandemic.

“We’ve had to borrow more than we normally would have, so it would have been nice if we had access to cheaper money,” he said.

Trying to get ahead of tariffs

Small Business Majority has yet to conduct a full post-election survey of businesses, but in the days since the election was decided, Arensmeyer and colleagues have heard some similar themes from its network of 80,000 small businesses.

The biggest areas of concerns were tariffs and the potential impacts to supply chain and costs; stricter immigration policies, including mass deportations, which could affect food and labor supply; whether Affordable Care Act subsidies will be left to die on the vine in 2025; and whether federal contracts will no longer favor women- and minority-owned businesses, he said.

Small business owners, by their nature, are optimistic, he said. However, some have already started loading up on inventory from China or holding off on making new hires until things get clearer.

Man & Machine, which makes waterproof keyboards and computer mice primarily for the medical field, is ramping up imports and cramming in a year’s worth of production in four to five months to try to avoid the brunt of any price hikes.

“If I wait, I’ve lost,” said Clifton Broumand, founder and CEO of the Maryland-based company. “If I don’t have enough inventory in place, I’m going to pay a 20% tax, and people will not buy my product.”

Seeking support for a support system

Some small business owners, like daycare owner Janna Rodriguez, are pushing harder on the advocacy front. She said the country’s child care infrastructure desperately needs help from the federal government.

Some of those specific recommendations include establishing an enrollment-based versus an attendance-based payment system, greater public-private collaborations, professional development for educators, a comprehensive benefits system, a tiered reimbursement system and infrastructure grants.

Rodriguez has been an early childhood educator for 11 years. Six years ago, she opened the Innovative Daycare Corp., a home-based child care business that serves primarily low-income and minority families in the Freeport, New York, area.

Although her business plays a critical role in the economy — allowing parents to be fuller participants in the labor force — it also faces challenges similar to others in the industry, she said, noting her daycare is “stretched and under-resourced.”

And if federal funding were to be cut, she fears she’d have to let go of one of her three full-time staff members, which would put the center out of compliance and force a smaller capacity, she said. At a time when the daycare industry already has had to cut back on meals and hold off on hiring part-time staff, Rodriguez fears she’d not be that lifeline for families in need.

“You can’t put profits over children,” she said.

You ‘deal with the hand you’re dealt’

On the Monday before Election Day, JD Opel opened ICON Hair Studio in downtown Evansville, Indiana.

“There’s the pit in your stomach, that ‘Oh God, what’s going to happen?’ They’re both so different,” he said of the two presidential candidates.

He and his customers were surprised by the results of the election, but the 20-year hair industry veteran said he’s taking a simple approach:

“It’s like poker,” Opel said. “You deal with the hand you’re dealt, and you just roll with it, and play as much as you can so that you can still win … even though I don’t agree with a lot of (Trump’s) policies or the way he thinks, he’s still my president, and I have to trust and believe and hope that he’s going to help me out just as much as everyone else.”

Some of Opel’s biggest concerns are around the extent of tariffs and what that could mean for his hair products and supplies that come from overseas. Additionally, if those tariff-related costs were to be passed on to households — as economists have warned — Opel said he’s worried that his customers’ finances will take a hit.

“I’ve always said it’s a recession-proof business; I lived through 2008 and that whole crisis then,” he said of the Great Recession. “And we actually saw growth in our industry, because we wanted to feel good. But what if we aren’t really that recession-proof? What if we aren’t going to survive tariffs and all these hikes on the cost of goods?”

“But, hopefully, fingers crossed, we are that recession-proof industry and business that people still want to come feel good and don’t care if they’re going to spend money.”

Pressing the pedal on expansion

While Opel, Prieto and others expressed hope that small businesses like theirs could benefit from any expansion of tax cuts, another business owner jumped right into expansion mode after Trump was declared victor.

Jeff Wood’s Coldwater Capital is a real estate development business with projects ranging from small multi-family properties to self-storage properties and express car washes.

“In 2018, we started developing these car washes, primarily in Florida, Georgia and Utah and we’ve expanded into Pennsylvania and Maryland,” Wood said. “And one of the things that really put fuel on that fire for us was the Trump tax cuts.”

One of the provisions within the 2017 Tax Cuts and Jobs Act was hyper-depreciation benefits for businesses such as car washes, he said.

The tax benefits excited some investors, who backed the expansion of the facilities, which now total 35 across five states.

“Through those 35 car washes, we typically have about 10 people on payroll for each of those, so it’s been about 350 people we’ve been able to employ,” he said.

But during the past 18 months, growth plans stalled in the high interest rate environment and investor concerns that the tax deductions could burn off if certain TCJA provisions were to expire next year.

“If a typical car wash costs us $6 million to build, with interest rates going as high as they have, it’s been difficult to make the numbers work,” he said.

That investor sentiment changed after Trump was elected, he said, adding that he put two new sites under contract in the days after the election.

Fears of being silenced

The impending Trump administration could have a significant effect on a Los Angeles-based talent agency and, its owner fears, a chilling effect on human rights.

Reel Management, which got its start in 2004, represents hundreds of actors in the reality and unscripted television space, booking appearances through a variety of events, including social media promotions, in-person appearances and corporate and college diversity, equity and inclusion initiatives.

The drag queens from ‘RuPaul’s Drag Race’ are “probably our number-one booked event across the college market,” said Marc Marcuse, Reel Management’s founder and owner. “They love a good drag show, it enhances diversity, and it’s just fun.”

Through these events, the hope is to build community, understanding, “plant the seeds to make generational change,” he said.

But those appearances and deep discussions around race, gender, identity and sexual orientation have dropped off in recent years, he said, noting movements by Republican-led states, such as Florida, to try and prohibit DEI and LGBTQ+ events and programs.

With Trump headed to the White House and a Republican-controlled Congress, Marcuse fears those efforts could easily spread.

“Hate is difficult; hate, when it impacts your bottom line is even more so,” he said. “Nobody wants to wander the world feeling like they’re a pariah and then lose their income on top of it. It’s a double gut punch.”

He added: “I’m a cisgendered, straight, white male who’s middle-aged … this is not me fighting for my own interests, this is me seeing this is a struggle and a concern of the civil rights movement of our time, and I believe in being on the right side of history, being kind and understanding and working with others to elevate the tide for everybody.”

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