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Welcome to this week's Founder Focus! I'm Sarah Lynch, a staff reporter here at Inc. filling in for Melissa Angell. I'll be dissecting one of the top policy issues small businesses are facing right now. You can sign up to get this newsletter in your inbox every week here if this email was forwarded to you. If you've already signed up for the newsletter, we want to hear from you! We invite you to share your feedback with us here.
Small-business owners smashed a new record in October – but not a good one.
According to the latest report from the National Federation of Independent Business, the Uncertainty Index among U.S. small-business owners spiked to 110 last month, a seven-point jump from September’s then record-setting reading and the new highest level of uncertainty on record.
Doesn’t sound good, does it? But Holly Wade, executive director of the NFIB Research Center, points to two culprits: the presidential election and policy from the Federal Reserve.
The NFIB survey was conducted in October, before Donald Trump’s win. And while uncertainty tends to rise around elections in general, Wade says this time around, the increase was particularly prominent, as the “stakes were pretty high for small-business owners related to some of their most important issues.”
Take, for instance, the coming tax cliff, Wade says – numerous provisions of the Tax Cuts and Jobs Act of 2017 are set to expire at the end of 2025. Here, the presidential candidates had different stances, and that left small-business owners “thinking through the configuration of Congress and the administration and what that might mean for them,” Wade says.
But with the election in the rearview, Wade now expects to see some easing uncertainty on that front. Meanwhile, when and how quickly the Fed will cut rates remains a stressor for small-business owners. “We know that interest rates have been a concern for them in higher financing costs and how they should best proceed in making capital expenditures,” Wade says.
That’s culminated in a wait-and-see posture from owners, she adds.
Gregory Zamfotis, 42, founder and CEO of Gregory’s Coffee, a New York City-based coffee brand, has been keeping a close eye on the price of coffee in commodity markets – which climbed again this year – as well as on commentary around tariffs. The tariffs Trump has proposed – in the realm of 10 to 20 percent on all imported goods – could impact his purchases of products like cups from abroad. And while it’s too early to tell what the “potential ramifications” could be, Zamfotis says he’s monitoring these factors and having conversations with his team now about potential alternatives to imported products. “We're at a point where we really don't want to be increasing prices,” he says.
Still, Zamfotis is feeling optimistic. Despite cost pressures, sales for Gregory’s Coffee are up about 7.5 percent over last year, he says: “In general, the sentiment seems to be pretty positive across our fleet and with our customers.”
Kian Katanforoosh, 31, founder and CEO of Workera, a Palo Alto, California-based AI-powered skills intelligence platform, is likewise optimistic. In fact, Katanforoosh sees the potential for business opportunities amid the uncertainty – but the onus is on business owners: You have to peek around the corners, he says, and “place your bets.”
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