Donald Trump finally gets declared as the official presidential candidate of the Republican Party. While it remains to be seen who will win the national elections, and as nothing is set in stone just yet, small business owners might want to start preparing for a potential Trump presidency. Two major planks of his platform – trade and immigration – would change the economic landscape if executed and would affect small business owners in varying ways.
The idea of restricting business operations in China might sound good on paper because of US competition with cheap labor overseas, but short-term benefits could lead to long-term negative economic outcomes. Trump is proposing a 45 percent tariff, and for business owners who import low-cost goods from China and sell them in the US, higher tariffs on Chinese goods could spell disaster.
As bad as trade wars are for business, military wars can be even worse in terms of disrupting the economy, and Trump will have zero foreign policy experience going into the presidency. While wars might create defense-industry jobs, they make market trading and private investing unstable. If investors are uncomfortable, then innovation and new technology can’t move forward and the economy stalls.
Much of Trump’s presidential platform centers on deporting immigrants living illegally in the US, but it would be difficult, if not impossible, to fill all their jobs with US labor. Trump himself used laborers working illegally at one of his properties in Florida.
In addition, immigrants are often the job creators in the US workforce; 40 percent of Fortune 500 companies were started by immigrants or children of immigrants. Steve Jobs was the son of a Syrian immigrant, and Robert Herjavec immigrated from Croatia to build up a US$200 million net worth in the States. Stalling immigration to the U.S. could severely impair the innovation and technology industries that many immigrants have helped to expand.
So what can small business do today to prepare for the possibility of a Trump administration?
1. Take action.
Check your calendar; it’s time to get to work. If you need money from venture capitalists or private equity investors, start now. Deals never go through as quickly as they should, and the general election will be here before you know it. The markets are going anticipate change before the next president is sworn in, so investments need to be secured before any forthcoming economic shift.
2. Focus on recruitment.
Increase your outreach to job candidates. If you compete with or purchase goods from China, you’ll need to look at different options. And if you are a manufacturer based in the US, you could see a sudden boom in business. Either way, you need to be prepared to hire more skilled laborers to keep up with demand.
3. Establish long-term purchase agreements.
If you buy from overseas, you should start investigating long-term purchase agreements for your business. New tariffs imposed under a Trump administration may not apply to existing purchase orders, and you don’t want this to hurt your bottom line.
The solutions to Trump-proofing a business are as varied as business itself. But as with any big change, it’s important to sit down now and determine how your business will look and how you can make adjustments to continue operating. If you are caught unprepared, Trump might just call you a “loser” from the Oval Office.
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This article originally appeared on Entrepreneur.com. Minor edits have been done by Entrepreneur.com.ph.
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