President Obama has won reelection to a second term. So how does the country respond?
Let's see. Americans in over 30 states filed petitions to peacefully secede from the union. Newt Gingrich is "dumbfounded." Kim Kardashian is thrilled and Mariah Carey gives thanks to America. The stock market falls hundreds of points since election day, gun sales soar and this guy says he has "no regrets" (but I'm not believing him, are you?). A bunch of companies announce layoffs and Barbara Streisand belts out a few tunes to celebrities in Hollywood. Donald Trump is not happy, Vladimir Putin is, and Ted Nugent (ahem) respectfully believes that "pimps whores and welfare brats voted for economic and spiritual suicide." Meanwhile, an embarrassed Karl Rove is likely now weighing an advisory role to the Ahmadinejad administration.
Can everyone just calm down please?
I supported Governor Romney in the election. He lost. It's over. President Obama is our president. He deserves our support. Or at the very least our respect. Because that's what smart business people do. They put emotions aside and run their businesses based on the facts. Everyone has had their chance to cast their vote. But now that the election is over, life carries on and so does business. We have our employees, our families, our customers and partners to worry about. We need to adjust to the current climate and do what's necessary to grow our businesses, maximize our profits and provide for those that depend on us. So what will smart business people be doing to profit under the next four years while Barack Obama is president? They will be making lots of moves. I can think of many such moves, but here are just a few for now.
They will be focusing on certain industries and markets. The president has made no secret that he favors certain industries. He wants to hire more teachers and expand education. He wants to spend more on infrastructure. He wants to support green and alternative energies. He wants to give breaks to manufacturers, particularly those that keep jobs in the U.S. He is pushing for free trade agreements with Vietnam, Chile and Peru. He believes that the government can play a very positive role in our country's economy. In the meantime, many of his regulations affecting financial services, insurance and oil exploration will stand. And those regulations (with the exception of domestic oil exploration because no one's going to stop that trend unless fracking unleashes a swarm of man-eating piranhas or pre-historic dinosaurs who have been secretly living under the earth's surface) will like prohibit many in those industries from growing as much as they'd like. And the defense industry will definitely face cuts. Do a lot of business people agree with him? No. But will they play ball? Yes. So what does that mean for your business? Follow the money.
We know what the president's plans are and we know that he has the political capital to accomplish some of those plans. So therefore we know that these industries will be the ones that benefit over the next four years. You don't need to be in those industries to profit. You just need to sell into them. Because growing companies that are providing educational services, construction, engineering, technology, new batteries, and yes, even Hillary 2016 stickers may need your products. The same goes for those companies who have significant interests (or plan to expand into) Vietnam, Chile or Peru. Smart business people will be changing their marketing to sell to those businesses or into those industries and avoiding those industries that are expecting slower growth. They will buy lists, customize their offerings, hire salespeople with specialized vertical experience and re-cast themselves as "experts" in what those industries need, even if it's office supplies or roofing services.
Having a health care plan. Now that the president's been reelected, there is nothing to stop the progress of his Affordable Care Act. That means that on January 1,, 2014 every individual (i.e. your employees, your family members) will need to have health insurance or will face a penalty. And every business with more than 50 full time equivalent employees will need to have a qualified health care plan in place or also face penalties. This is a little more than a year away. Smart business people are right now scheduling meetings with their benefit consultants, going to seminars and (at least in a few cases) drinking heavily.
Do you have more than 50 full time equivalent employees? And what the heck is an "equivalent" employee anyway? Can your brother in law who shows up at 10AM every day be classified as an "equivalent" employee because he's not worth the salary you're giving him? If you decide not to carry insurance will your employees need to get their coverage on one of those state exchanges? Does your state even have an exchange? Given the lousy state of the economy, does your state even have the spare change for an exchange? Will I ever stop making these stupid jokes?
With the exception of the last, these are questions that smart business people need to get answered and now. You can't tell your employees on December 31, 2013 that you're no longer providing health insurance to them and "good luck, y'all." You need to have a plan. With the president's reelection you now know that there is nothing stopping health care reform. Take action or it could potentially not only cost you, but those people who are very important to your business.
Meeting with your CPA... now! I know, I know... no one likes this. The guy is just way too neat. And I hate all the silly demands he makes for "documentation" and "paperwork" and "proof." I mean... c'mon... like my word isn't good enough? But you'll be finding yourself giving thanks this holiday season to your CPA when you meet with him. Because he (or she) can save you a ton of money now if you make the right moves. With the president's reelection many taxes are legislated to go up in 2013. This includes potential increases on your earnings from capital gains, passive income, Medicare, social security and everything else, particularly if you're one of those filthy rich guys who make more than $250K per year. More deductions will be limited too. And don't even think of offing yourself unless you do it this year, because estate taxes could be going up next year too!
Some of this may change if the president and Congress take steps to avoid the 'fiscal cliff.' But President Obama is determined to increase taxes as part of his strategy for decreasing deficits. And it doesn't matter whether you agree with this strategy or not. You had your chance on election day. Now you must deal with reality. Smart business people know that increasing (or at least maintaining) their level of profits will come from either more revenues or less expenses. For many business people taxes are one of the largest expenses on the books. So minimizing them is critical. Which is why we are now forced to meet with our CPAs. I know... he's going to mention how great his kids are and re-tell that story about his last colonoscopy. Just deal with it. There are bigger issues at stake, OK?
Depressed? Angry? Frustrated? Don't be. President Obama was not my choice for president. But I don't think he's a bad person. He is a good communicator. He's very inexperienced when it comes to business, but he is a smart guy that hopefully learned from his first term. And he doesn't have control of Congress and faces a very vocal opposition so there are plenty of checks and balances. I, like many of my smartest clients, plan to put this election behind me and position my business to grow in this current environment. Plus, the holidays are right around the corner, a great new Bond film is out and I just learned that Brickleberry's been renewed for another season, so life can't be all that bad can it?
A version of this blog appeared on Inc.com.