Impact of federal law rollout on smaller businesses
A clearer view of the future should help business
If clarity provides greater focus, business decision-makers should have at least a slightly better view of the future, thanks to two recent decisions from the federal government. The end-of-year passage of the Bipartisan Budget Act (BBA) of 2013 and the official rollout of the Affordable Care Act shed helpful light on the federal government's plans in 2014.
Greater federal certainty = better business planning
For business, perhaps the greatest benefit of the rollout of these two major federal acts is psychological. Amid years of bipartisan rancor and uncertainty in the federal government — which hit a wall with the 16-day federal government shutdown in October 2013 — it has been challenging for business owners and leaders to make long-term plans for their businesses. They never knew which way the federal government would roll. No wonder U.S. corporations were still hoarding $1.5 trillion in cash at the end of 2013, according to Moody's Investor Services.
The relatively stable economic recovery and the BBA, recently signed into law, should give smaller businesses more confidence heading into the new year, according to Molly Brogan Day, spokeswoman for the National Small Business Association. The BBA, valid for fiscal years 2014 and 2015, reduces the risk of another federal government shutdown for at least the next two years, and is projected to lower the federal deficit by $23 billion over the long term.
Will new federal budget benefit your business?
The BBA also contains provisions that should help some businesses, such as those with federal contracts. The BBA rolls back automatic spending cuts, known as sequestration, which will give federal agencies more financial latitude in their contracting and make it easier for smaller businesses to conduct business with the government, according to Day. That is good news for companies in or serving the defense industry — particularly important in defense-oriented California.
Veterans seeking start-up business assistance should get a boost from the BBA's designated $7 million for the U.S. Small Business Administration's (SBA) "Boots to Business" program, designed to provide the more than 250,000 service members returning each year with the opportunity of small business ownership and entrepreneurship.
The new budget also gives financial stability to the SBA's small business mentoring and support programs, which are in high demand. Since 2009, more than 2.5 million people took training courses available from the SBA, including courses on how to write a business plan and how to navigate the federal contracting landscape, according to SBA spokesman Terrence Sutherland.
As the year progresses, we'll keep you updated on these initiatives and how they are benefiting our area's small businesses. Check back often!