One layer of uncertainty was removed for small-business owners Tuesday, when President Obama was reelected to a second term. While issues like the fiscal cliff and potential new regulations are still unresolved, the small-business community now knows the Affordable Care Act will stand, and tax increases for those making above $250,000 annually are likely.
Upon hearing the election results, Craig Dunaway called a meeting of his 75 franchisees to assure them as best he could about what their future holds. Cincinnati, Ohio-based Dunaway is the president of Penn Station East Coast Subs and the owner of 14 Penn Station restaurants. In total, he has 250 locations in 13 states.
“I wanted to bring everyone together to talk about what we can do, and make sure we are beacons of light for our franchisees,” he said. “No one can change the results of the election.”
Prior to the election, he said his 75 franchisees and their 3,000-plus workers had solid sales and return on investment, and he hopes this will continue under a second Obama term. The biggest concern for his workers is health-care reform, and the nitty gritty of the law, which will require his franchisees to begin displaying their menu items’ calorie counts, among other things.
“It’s those hidden unknowns that can cost them thousands of dollars,” he said. “To recoup those costs they may raise their prices or cut hours.”
Dunaway's immediate plan is to bring in experts on the law to break down its contents for franchisees before they make any major decisions as a company.
Evan Kirkpatrick, 28, CEO and chief investment strategist of Wendell Charles Financial in Manhattan Beach, Calif., said his major concerns are with taxes and health-care coverage. Currently, he has 10 employees, but the notion of having to provide coverage for workers once he hits the 50-employee mark under Obamacare may hold him back from hiring.
“My business clients, and myself, are concerned about paying that $2,000 penalty, especially in the emerging [entrepreneur] space,” Kirkpatrick said. “It’s difficult to be backed into a corner. That makes the decision whether or not to hire new employees for people like myself.”
With the president’s promises to raise taxes on top earners, Kirkpatrick said he is concerned. However, he remains optimistic and won’t alter his own business plan just yet.
“I am optimistic about the future, and what I am seeing from young entrepreneurs, and the innovation that is taking place,” he said.
Mike Brey, 50, owner of Hobby Works in Maryland and Virginia, shares this optimistic outlook, and said the poll results reflect how Americans are feeling about the economic recovery.
“Maybe they aren’t as enamored of Obama as they were four years ago, but things are still improving,” Brey said. “No one needs anything that I sell, but starting last summer, things really started to pick up. People are spending with a bit more confidence.”
He has been working toward adding to his roster of five stores and 50 employees, and doesn’t plan to change course.
“We have some concerns about the sequestration situation, but I personally believe it will be dealt with,” he said. “I am not saying Mitt Romney wouldn’t have been capable of producing that change, but I think the message of ‘Hope and Change’ is still resonating with people. “
Las Vegas-based Ron Nelson, owner of Pioneer Overhead Door, a five-person business, said he also plans to stay the course with Obama in office. He has provided health coverage to employees for decades, and recently dropped his coverage from 100% of cost to 50% due to skyrocketing prices. He says Obamacare has allowed him to benefit from tax breaks the past two years, and he doesn’t’ feel burdened by regulation at the time.
“We are keeping the same [health care] policy,” he said. “I know I can go and shop for insurance in 2014, and that my wife will no longer have the preexisting condition of being a woman [under Obamacare].”
He said tax hikes also aren’t of concern, as he hasn’t been profitable since the recession. However, under Obama, he feels things have slowly started to turn around.
“I will hire as demand picks up,” he said. “Government regulations honestly don’t hurt me, it’s just lack of consumer business that does.”