U.S. lawmakers have been in the news a lot in the last few months because of their various squabbles over the federal budget and the accompanying government shutdown, which wreaked havoc for many small businesses that have contracts with various federal agencies. Now, some experts say that those elected officials may need to do more to ensure that independent enterprises can continue to thrive in the new year.
Fortunately for small business owners across the country, the U.S. Congress has already agreed to a federal budget that will allow the government to continue functioning without interrupting for some time to come, according to U.S. News and World Report. That, in turn, should give entrepreneurs nationwide more confidence in their abilities to succeed financially, but that does not mean that lawmakers can begin resting on their laurels when it comes to making sure smaller companies can improve as much as they might like.
For instance, while one aspect of the new budget allows for more contracting with the federal government, only about 10 percent of small businesses have such deals with it, the report said. Further, their ability to compete with larger competitors seems to have been adversely impacted by the recent sequestration spending cuts, so that could continue to create problems going forward.
One way in which there may be some wiggle room for further assistance to independent companies' owners and workers is through the U.S. Small Business Administration's various training programs, the report said. About 2.5 million people have taken small business training programs through this government body in the last four years, and expanding the availability of them could go a long way toward helping more to achieve the success they desire. If Congress allows for an expanded budget to this entity in particular, that could be of a benefit to entrepreneurship on a broad scale, and part of the new budget for next year includes $7 million to help fund an SBA program that helps military members find small business opportunities.
"While we don't comment specifically on pending legislation, funding is critical to fully support … counseling and training missions," SBA spokesman Terrence Sutherland told the magazine. "The demand for these services is high and requested funding allows the resources to support and meet that demand."
Some tax issues linger
One of the problems many small business owners continue to cite when asked what presents them with the most challenges over the course of the year is the often complicated ways in which federal tax laws affect them, the report said. This could become an even greater difficulty in the near future because of a huge reduction in a tax credit for small business equipment purchases. Currently, this rule – known as Section 179 – allows companies to write off up to $500,000 in equipment purchases, but that will drop to just $25,000 at the start of the new year. Further, a number of credits related to when companies are just starting up – such as for investment efforts – could continue to weigh heavily on many entrepreneurs nationwide.
Owners worried about their tax liability and other financial aspects of their companies in the coming year may want to think about the ways in which they can improve their bottom lines on their own, such as by finding more affordable small business insurance. For instance, shopping around for lower-cost workers' compensation or errors and omissions insurance may help any business to save as much as a few thousand dollars or more per year, which can, in turn, help to spread out any enterprise's margins.