Five Things Small Business Owners Can Do To Prepare For The Election

As the U.S. braces for the upcoming presidential election, small business owners harbor a unique set of concerns around how the outcome might impact their day to day operations. From legislation that could affect taxes, healthcare costs and regulation, the political climate will have a domino effect on consumer behavior, financial markets and more.

Regardless of who wins, it’s critical for small business owners to stay informed on new policies and regulatory shifts, as new legislation could reshape things like employee benefits and compliance requirements. With one month to go, many small business owners are curious about proactive steps they can take to prepare for the looming uncertainty. Experts suggest five key principles to prepare for the election’s outcome:

1. Monitor policy changes.

It’s widely known that election years can bring market volatility. That’s why it’s critical for small business owners to stay informed about proposed changes in regulations, taxes, healthcare and labor laws that could directly impact their operations. Understanding candidates’ platforms will help anticipate shifts and plan for potential changes accordingly.

Jen Stark, who serves as a strategic advisor to Don’t Ban Equality, advises small business owners to pay attention to local laws that might impact employee health benefit concerns, especially around reproductive care.

“Small businesses in states that have passed abortion bans and restrictions are left with the burden of shouldering the costs and chaos facing workers and communities,” she says. “Those workers have to travel out of state, resulting in more time off and greater healthcare costs out of pocket even if their employer has a benefits program to support them.”

Shifts in economic regulations are another area small business owners should pay close attention to.

“Political uncertainty in the months leading up to the presidential election can affect confidence and decision-making for consumers, which leads to impact on small business owners and can cause a decrease in consumer spending,” says Cate Luzio, former banker and founder of Luminary, a professional education and networking platform. “The election results themselves can eventually cause a change in business regulations that small business owners need to be aware of, along with the impact that might have on their business, their growth, their customers and more.”

2. Focus on consumer and employee engagement.

Consumer spending patterns may shift during an election year due to uncertainty. Many people tend to cut back on discretionary spending when they feel uneasy about the economy.

Consider changes you can make to your business to prepare for this sentiment shift. Do you offer essential products or services that are less impacted by economic swings? Are there ways to re-engage your most loyal consumers right now? Focus on those if possible.

At the same time, this is a prime opportunity to foster civic engagement among employees.

“As this election season kicks into high gear, entrepreneurs and business leaders have an opportunity to use their trusted voice to protect American democracy,” says Katie Vlietstra Wonnenberg, principal of Public Private Strategies. “Consumers want businesses to be active in protecting America’s democracy and they support actions to ensure it.”

Wonnenberg cited research from the Business & Democracy Initiative, which revealed that 75% of consumers support businesses who promote employee civic education and agree that employees should have time off for political engagement.

“Taking these steps during election season can help with employee retention and can build trust and loyalty with consumers,” she points out.

3. Scenario plan.

Given the potential for significant regulatory changes, business owners should consider the changes that might occur under different administrations. Think through any adjustments you might need to make within operations or budgets when considering factors like minimum wage hikes, healthcare mandates, trade policies and more.

“Company leadership should always be preparing for uncontrollable changes by discussing different scenarios with their teams so they are prepared,” says Chantell Preston, a healthcare development consultant who advises small businesses on reducing risk.

Preston suggests playing out different scenarios so your company and employees are prepared for any outcome. “Enlist feedback and engage with your stakeholders so they know you are preparing,” she says. “Communicate and be transparent with your employees to build trust and reduce uncertainty.”

4. Remind your employees that they have a say.

Presidential elections can influence labor laws and healthcare regulations, which impact employee pay and HR policies. Business owners should keep a close eye on any proposed changes to healthcare, minimum wage, or employee benefits that could impact overhead costs, communicating openly with employees to prepare for any potential changes that might occur following the election.

Kimber Lanning, CEO of Local First Arizona, suggests starting this conversation prior to the election by reminding employees that they actually do have a say in shaping the outcome.

“A great way to get involved in an election while staying out of divisive politics is to stick to a message of getting out the vote,” she says. “Consider giving your employees time off to go to the polls on Election Day. Encourage your customers to vote by placing signs in your establishment or stickers at the cash register. Sponsor or organize a voter registration event. Using your voice as a business owner to support democracy is a noble thing to do.”

5. Be prepared to dip into cash reserves.

Election years can bring about economic uncertainty, which leads to market volatility. Small businesses should consider building up cash reserves to cushion against any potential downturns.

Experts recommend postponing major investments until after the election, reviewing current tax strategies and being prepared to dip into cash reserves in case of significant disruption.

Preston recommends having at least 18 months of capital available. She also suggests researching regulatory perspectives from all parties and evaluating supply chains in case of issues.

Lanning suggests treating an election cycle like any other slow season. She points out that, “In Phoenix, our summers are hot, so businesses know to plan for decreased revenue as customers go away on vacation. In the months running up to a major election, business owners should do the same thing.”

“No matter what industry you’re in, sales activity slumps as Americans hold their money tighter, wondering how the election will turn out and what policies a new president will implement that may affect their pocket book,” says Lanning. “You may need to pause hiring, dip into savings or wait to make a big purchase to keep your business healthy.”

Luzio acknowledges the financial anxiety that comes with the election can lead to impulsive, shortsighted decisions.

“Get your 2025 financial projections in order with scenarios around growth, flat and down performance,” she suggests. “At a macro level, key issues may have an impact on your numbers: taxes, regulation, trade and consumer spending/customer acquisition. It is important for business owners to be informed about issues and make sure they’re aware regardless of which way the election goes. Doing an updated SWOT analysis for your business can help, especially as it relates to how to mitigate or protect your business against threats.”

Finally, Luzio recommends talking to your trusted experts such as insurance professionals, financial advisors, cybersecurity experts, attorneys and banking partners to help mitigate risk.

“Discuss potential business impacts with these experts to help you feel informed about decision making around the business,” says Luzio.

“The election is out of your control,” she says. “So don’t panic, please vote, and focus on awareness to support your business through this time.”