(This column originally appeared in The Guardian)
It may seem crazy out there, but small business owners are feeling fine. According to PNC Bank, 78% are optimistic about prospects this year, near the 23-year high mark. The banking platform Bluevine reported last week that small business confidence had “surged” and is “higher than ever”. A recent index from the National Federation of Independent Businesses shows small business optimism is rising across industries, led by manufacturing, and that overall sentiment is at historical highs.
Do these people not read the news?
Donald Trump’s will he/won’t he threat to impose tariffs on the US’s biggest trading partners has stock markets reeling. We’re told that mass deportations will squeeze an already tight labor market. Small businesses and non-profits that work on government-funded projects are facing cashflow shortages thanks to his freeze on payments, while vast numbers of government workers who use local small businesses for everything from dry cleaning to getting pizza are finding themselves unemployed. Economists are predicting that our economy will contract — contract! — next quarter.
This all seems like bad news for a small business owner. And yet … optimism. Why?
One reason could be that these surveys were taken before all this stuff happened. But I’m not sure I buy that theory because this assumes that we didn’t know what we were getting when Trump won the election. He’s always been quite clear about his plans to tariff, deport undocumented immigrants and cut federal spending. He’s doing exactly what he said he was going to do.
You could argue that small business owners are simply naive and didn’t truly understand the implications of his policies. I’ve heard people raise this point and it’s a little offensive. Through the years I’ve met thousands of small business owners. The naive ones don’t stay in business very long. The small business owners who voted for Trump — and there were many — were fully aware of the economic implications that would be caused by his proposals. These are not stupid people.
Business owners are also optimistic because in Trump they see someone like themselves: transactional and profit-driven
We are just six weeks into his administration but my smartest clients don’t operate on that kind of timetable. They’re looking ahead months, even years. They’re making decisions and investments now that will affect their businesses in the future. They have to always be thinking ahead because they have people that rely on them — employees, customers, partners, suppliers — and if they’re not looking forward these people’s livelihoods would be in jeopardy. They understand that Trump’s policies will cause disruption. But they’re looking beyond just the short term. And the polls suggest they’re optimistic about what he’s doing.
Business owners understand Trump. They like that he’s cutting costs, despite the disruptions, because they see the looming fiscal cliff ahead. They like that he’s fighting to lower tariffs by raising our own because so many have suffered the consequences of competing against foreign companies backed by their own governments. They, too, are anticipating him making permanent or at least extending many of the tax benefits from his 2017 Tax Cuts and Jobs Act.
Business owners are also optimistic because in Trump they see someone like themselves: transactional, profit-driven, impatient with workers who don’t work hard, critical of bureaucracy that kills productivity. And, like so many successful business owners and entrepreneurs I know, he’s a fighter. He also clearly loves being the boss and enjoys doing what he’s doing.
Clinton, Bush, Obama and Biden were all career politicians. Trump now has political experience too. But he’s still a businessman at heart. To him, everything’s a deal. Agree with him or not, love him or hate him, small business owners, at the very least, understand him. Still — it’s going to be a disruptive four years.
