Donald Trump’s rise to President of the United States remains a popular subject today, even 10 months after his election. He managed to galvanize the support of many Americans unhappy with the state of the US economy. Voters were angry that economic problems were piling up and nothing was being resolved among other main issues.
Now that Mr. Trump has settled into the presidency, the people are getting an idea of what they can expect from the economy during his term. The implications for US companies are significant, and business owners are seeking the best ways to navigate these murky waters.
What is the Trump Economy?
During the Presidential election campaign, “the Trump economy” became a well-known concept. It referred to the ideal economy Trump envisioned in his speeches to crowds across America. Trumponomics, as some call it, centers around stopping the outflow of jobs from the US. He proposes to achieve this by investing in infrastructure and rebuilding factories. He has also promised to cut taxes and regulations, spurring more business and wage growth, hiring, and consumption.
An optimistic man by nature, Mr. Trump’s jawboning has done much to keep markets in prime position. In practice, he is having a tough time passing his legislation and consolidating political influence. Frustrating as it is for him in the short term, he has already brought several important people to his side of the table, and will likely succeed in the end.
What Trumponomics Means for Businesses
Generally, businesses love the ideas presented by America’s new president. Lower tax rates and less compliance with strict regulations means growth is easier to obtain. While these are largely passive benefits, there are certain strategies that all business should consider to stay ahead of the curve. Not all things are certain, least of all the arrival date of such legislation, so savvy businesses need to contemplate much before making large decisions.
1. Choose How to Incorporate
A business’s official status with regulators and the IRS will likely become a bigger concern under President Trump. Since the start of his presidential campaign, the president has spoken about the benefits of lower taxes on businesses, and specifically on corporations. His belief is that corporations are one of the best ways to bring jobs and economic progression, like GDP growth, to the US.
Given this historic stance, he is likely to enact laws that result in taxes as low as 15% for companies incorporated in America. Being an LLC is the preferred model for smaller businesses due to low liability and simple reporting requirements. In this new climate, though, becoming a corporation may be considerably more lucrative.
2. Consider Alternative Funding Sources
Instead of applying for traditional loans, smart business owners are increasingly using alternative funding methods to expand. The fintech industry is making waves, but one of the potentially most bountiful sources of capital comes from cryptocurrencies.
While loans may be exposed to uncertain market conditions, cryptocurrencies are a closed ecosystem to raise capital. A company can hold a fundraiser for its future endeavors by selling off its cryptocurrency, which has liquid value from the blockchain technology supporting it. One of the few things stopping this strategy from overtaking institutional solutions is the lack of infrastructure.
Thankfully, revolutionary startups like CryptoPay are consolidating the crypto economy by creating a one-size-fits-all product, including both transaction and banking features. The company offers customers a bitcoin wallet and debit card to use their cryptocurrency anywhere. More importantly, companies using systems such as CryptoPay give businesses an edge in processing payments. This allows them to operate in cryptocurrency within a single system and save on overhead costs significantly.
By leveraging cryptocurrencies with real-world application, fintech companies offer entrepreneurs a new way to secure revenues.
3. Build a Loyal Staff
With market demand for employees pegged to rise, one must build loyalty to keep their staff happy. Companies must drive wage growth from inside instead of waiting for minimum wage laws to take effect. Though it may still feel like 2008, managers must reward reliable performance with generous financial incentives and praise. This way, staff will not feel compelled to jump ship for any offer. The best businesses build teams based on trust and loyalty.
There are many ways even small businesses can finance these employee benefits. Thanks to lowered taxes and regulation costs, companies should see an influx of cash. While it may be tempting to offer this as dividends to executives and other stakeholders, the smart play is to reinvest. By putting surplus funds back into employees, companies can ensure friendlier workers and a better environment in the office.
4. Keep Clean Records
Transparency and quality standards are changing quickly in finance. To keep up and avoid problems later, businesses should record their transactions diligently. The best strategy is to always plan for regulations to stiffen. The smartest businesses should invest heavily in guaranteeing they are on the right side of the law. While it is tempting to cut corners on record-keeping, such an attitude can haunt businesses in the long run. The cost of dealing with compliance may be lowering, but the cost of dealing with regulators is not. An audit, a lawsuit, or a visit from the IRS could potentially sink a company.
Surviving Trump’s Economy
Though people and even corporations have strong opinions about the President, Donald Trump’s effect on the economy is negligible. The president could have a deep impact, but those on both extremes of the conversation are likely to be disappointed. Keep up on current economic events, and you can make sure that your business’s sail has the wind at its back.