Small businesses are gearing up for significant changes in 2025. A new administration in Washington is expected to be more business-friendly. However, there are several other developments that business owners should keep an eye on.
Changes to state-level overtime and minimum wage rules are on the horizon. The delayed federal FinCEN registration is also a factor to consider. New taxes on payments from third-party providers like Venmo and PayPal will come into play.
Additionally, factors affecting inflation, such as tariffs, will be worth monitoring. The Small Business Administration (SBA) is set to welcome a new leader. Trump loyalist Kelly Loeffler is expected to take on the role, pending Senate confirmation.
“I think there is a general sense that there will be a pro-business administration on the regulatory side,” says Karen Kerrigan, President and CEO of the Small Business & Entrepreneurship Council, an advocacy group. “However, there could be some nuances specifically on workplace or labor rules, but that’s still to be determined.”
According to a KeyBank Small Business Flash Poll, 61% of respondents indicated they were likely to seek clarity and hold off on major business decisions until after the election. Only 12% said the election would have no impact on their 2025 planning.
Preparing for 2025 policy changes
The poll also found business owners anticipate policy shifts will most affect areas such as taxation (45%), regulations (34%), and trade policies (31%). Despite challenges posed by pre-election uncertainty surrounding anticipated policy changes, small business owners are preparing for growth.
Nearly one-third (32%) expect to expand their staff in 2025. KeyBank’s recent Small Business Flash Poll also showed higher interest rates have impacted small business owners in various ways. 38% of respondents faced reduced profit margins, 37% faced increased borrowing costs, and 31% have deferred capital investment due to high interest rates.
At the same time, more than half of respondents (56%) expect interest rate changes to positively impact their businesses. The poll found they have adapted to the rate environment by increasing cash reserves (43%), reducing reliance on debt (37%), and diversifying funding sources (32%). As small business owners plan for 2025, it is important that they talk with their banker to develop strategies and explore solutions that can help them adapt to and persevere through potential policy shifts and changes.
Banks are at a pivotal moment to help their business clients navigate cash flow and business operations concerns. Working with a trusted banker can ensure small business owners have the resources they need to prepare for whatever lies ahead. As these changes unfold, small business owners will need to stay informed and adaptable to navigate the evolving landscape.
Running a business is never “business as usual,” but with proper planning and guidance, small businesses can position themselves for success in 2025 and beyond.
