The election of Donald Trump in 2024 introduces a set of anticipated economic, tax, regulatory, and trade policies that could significantly impact small and medium-sized enterprises (SMEs). Unlike large corporations, SMEs often lack the resources to pivot quickly, making it essential for them to proactively prepare for changes that may affect cash flow, labor costs, taxes, and operational strategy.

At PB Strategies Global Services, we combine recent insights from Deloitte, PwC, EY, and KPMG with our analysis to clarify the potential impacts of Trump’s proposed policies on SMEs. Here’s a practical, data-backed roadmap for navigating the road ahead, focusing on policies likely to directly impact small business owners.

1. Cash Flow Stability: Preparing for Inflationary Pressures Linked to Fiscal Stimulus

A primary focus of Trump’s 2024 economic policy agenda includes substantial infrastructure investments. In a speech delivered in Milwaukee on July 18, 2024, Trump outlined his vision to revitalize America’s infrastructure through major projects in transportation (highways, bridges, airports), energy (pipelines, refineries), and digital infrastructure, particularly rural broadband expansion. His administration’s proposed infrastructure spending aims to stimulate key sectors such as construction, engineering, and manufacturing, potentially creating new jobs and increasing demand within these industries.

However, increased demand often drives up wages and material costs, contributing to inflationary pressures. If inflation rises, the Federal Reserve could respond by raising interest rates to stabilize the economy, increasing borrowing costs for SMEs. According to a 2024 report from the National Federation of Independent Business (NFIB), 70% of SMEs cite cash flow as a top concern, and rising interest rates directly impact loan repayments and financing costs, making cash flow management crucial for SMEs in this environment.

What SMEs Can Do Now

Cash Flow Forecasting: SMEs should actively manage cash flow to anticipate periods of tight liquidity. For example, a retail business might analyze cash flow data to plan around high inventory costs and seasonal dips in sales. By timing bulk inventory purchases to align with peak sales periods or negotiating staggered payment terms with suppliers, the business can avoid unnecessary financing costs during periods of higher interest rates.

Building a Cash Buffer and Supplier Flexibility

• Establish a Cash Reserve: Rather than relying on new credit, which could carry higher rates, SMEs should aim to build a cash reserve covering 3-6 months of operating expenses. A 2024 Deloitte report indicates that SMEs with cash buffers experience 40% less financial stress during periods of rate fluctuations.
• Negotiate Payment Terms with Suppliers: For industries with high seasonality, such as retail or agriculture, negotiating terms with suppliers can reduce immediate cash demands. A retailer might arrange for inventory payments over a 90-day period to better align expenses with revenue cycles.

Key Takeaway: Trump’s targeted infrastructure policies, as outlined in his July 18 speech, could drive up demand for labor and materials, contributing to inflation and higher interest rates. This makes it crucial for SMEs to stabilize cash flow and minimize dependence on costly financing to navigate potential economic shifts effectively.

2. Maximizing Tax Opportunities: Benefiting from Corporate Tax Cuts and Investment Incentives

A cornerstone of Trump’s economic platform includes extending key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which is currently set to sunset in 2025. Trump has proposed lowering corporate tax rates further to stimulate domestic investment and extending TCJA provisions such as the Qualified Business Income (QBI) deduction and 100% bonus depreciation, both of which have been beneficial to small businesses.

If extended, the QBI deduction would continue to allow pass-through entities like S-corporations, partnerships, and sole proprietorships to deduct up to 20% of their qualified business income, significantly reducing taxable income for many SMEs. Similarly, the extension of 100% bonus depreciation would allow capital-intensive SMEs in sectors like manufacturing and construction to continue deducting the full cost of new equipment and property in the first year, preserving cash flow and reducing tax burdens.

Hyper Focus on Strategic Tax Planning: Businesses that purchase assets and equipment for production can leverage accelerated depreciation under Trump’s proposed tax extensions, further reducing taxable income. For instance, a factory that invests in new machinery could deduct a large portion of the cost in the first year, preserving cash flow that would otherwise go toward tax payments. Real estate investors could similarly benefit from cost segregation studies to maximize deductions on property investments, potentially leading to substantial tax savings if bonus depreciation remains in effect.

Actionable Strategies

• Work with a Tax Advisor on Deductions: To capture the full benefit of corporate tax cuts, SMEs should work closely with tax advisors to identify industry-specific deductions and confirm eligibility for the QBI deduction. Research from EY shows that proactive tax planning helps SMEs retain an average of 15% more cash flow.
• Leverage R&D Tax Credits: SMEs in tech, manufacturing, or software development could benefit from R&D tax credits, which may remain advantageous under Trump’s proposed tax policy. For example, a tech SME developing a new software product might qualify for these credits, reducing tax obligations and freeing up cash for reinvestment.

Key Takeaway: By potentially extending the TCJA’s benefits, including the QBI deduction and accelerated depreciation, Trump’s tax policy proposals could offer continued cash flow relief to SMEs, especially those in capital-intensive sectors. Service-based SMEs, however, should approach tax planning strategically to ensure they fully utilize available deductions.

3. Diversifying Funding Sources Amid Anticipated Changes to Financial Regulations

During his 2024 campaign, Trump expressed intentions to revisit and potentially roll back aspects of the Dodd-Frank Act, a regulatory framework established after the 2008 financial crisis. Trump has argued that easing these regulations could stimulate economic growth by reducing compliance burdens on banks, potentially making credit more accessible for larger corporations. However, decreased regulatory oversight may also lead to more selective lending criteria by financial institutions, which could disadvantage SMEs—particularly those without extensive credit histories—by making loans more difficult to secure or more expensive in a competitive, high-interest-rate environment.

In a 2024 Federal Reserve SME Finance Survey, 65% of SMEs cited access to affordable capital as a major growth factor. With rising interest rates and potential shifts in financial regulations, many SMEs may find it challenging to secure traditional financing. Exploring alternative financing options, such as venture debt, peer-to-peer lending, and government-backed grants, could help bridge funding gaps, allowing SMEs to avoid the full impact of these changes.

Practical Steps for Securing Diverse Funding: 

• Strengthen Financial Transparency: Clear, accurate financial records make SMEs more attractive to investors and alternative lenders. According to a 2024 KPMG analysis, SMEs with robust financial reporting are 20% more likely to secure favorable lending terms.
• Consider Government Grants: Trump’s administration has signaled interest in supporting renewable energy initiatives. SMEs in industries like green energy may qualify for government grants, offering non-repayable funding that avoids the burden of high-interest debt.

Key Takeaway: As Trump’s administration revisits financial regulations, potentially altering lending practices, SMEs should proactively diversify funding sources and focus on financial transparency to improve their attractiveness to lenders and investors. These strategies can help SMEs mitigate the potential impacts of tighter or more selective credit markets.

4. Retaining Talent in a Competitive Job Market Amidst Deregulatory Labor Policies

During his 2024 campaign, Trump indicated plans to implement labor policies aimed at reducing compliance costs and offering additional flexibility in hiring practices. Notably, Trump has proposed eliminating taxes on tips, a policy that could directly affect sectors like hospitality and food service, where tipped employees are a significant portion of the workforce. Additionally, he has expressed interest in revisiting overtime pay regulations, potentially easing restrictions for employers and reducing labor costs in industries with extensive overtime requirements. While these deregulatory efforts may benefit employers by lowering payroll expenses, they come at a time when the job market is competitive, making talent retention a key challenge.

Data from EY in 2024 shows that 60% of SMEs consider talent retention a primary challenge, especially in high-turnover sectors such as retail, hospitality, and healthcare. To remain competitive and attract quality talent, SMEs will need to adopt innovative retention strategies, leveraging non-traditional benefits and creating a strong, purpose-driven culture that appeals to today’s workforce.

Examples of Effective Talent Retention Strategies

• Enhance Employee Development Opportunities: Research from SHRM indicates that companies investing in employee growth see a 34% reduction in turnover. SMEs can provide professional development stipends or mentorship programs, demonstrating a commitment to employee advancement and increasing engagement.
• Build a Strong Cultural Brand: Deloitte’s 2024 Human Capital Trends report notes that SMEs with a purpose-driven culture experience 70% higher retention rates. For instance, a retail SME might enhance its retention by fostering a community-focused brand, which resonates with both employees and customers, making the organization more attractive to talent.

Key Takeaway: Trump’s proposed labor policies—such as eliminating taxes on tips and revisiting overtime regulations—may reduce labor costs for SMEs. However, in a competitive job market, these cost savings should be complemented by a focus on flexible benefits, development opportunities, and a strong cultural brand to improve retention and appeal to quality talent.

5. Adapting to Shifts in Consumer Confidence and Spending Patterns

During his 2024 campaign, Trump proposed tax cuts intended to increase disposable income for American households, particularly targeting middle-income earners. This policy aims to stimulate consumer spending by allowing individuals to retain more of their earnings. While this approach is likely to create an initial boost in consumer spending, Trump has also signaled plans to reevaluate trade policies, potentially implementing tariffs on imported goods to protect U.S. industries. Such tariffs could lead to increased prices on imports, particularly in sectors like electronics, apparel, and household goods, affecting both consumer spending patterns and supply chains.

The University of Michigan’s Consumer Sentiment Index shows high confidence among consumers following the election, partly fueled by expectations of tax relief. However, economic uncertainty related to trade policy remains, as tariffs on imported goods could raise costs for both consumers and businesses. For SMEs that rely heavily on imported goods, such as those in retail and manufacturing, tariff-related cost increases may necessitate adjustments in pricing or sourcing strategies to maintain profitability.

For example, a retail SME that anticipates price increases due to tariffs on imported goods might pivot to locally sourced products, marketing them as American-made to align with shifting consumer sentiment and avoid passing cost increases onto customers. This approach can help the SME maintain margins while aligning with consumer preferences for domestic products.

Other Tactical Approaches

• Use Predictive Analytics for Demand Forecasting: Real-time data tools can help SMEs anticipate demand shifts due to changes in disposable income and pricing impacts from tariffs. For instance, a restaurant could analyze customer trends to optimize staffing and inventory during peak times, enhancing operational efficiency.
• Implement Dynamic Pricing Models: PwC data shows that 52% of SMEs in retail saw profitability gains after adopting dynamic pricing. A spa, for example, could adjust pricing during off-peak hours to maximize utilization and revenue, allowing it to better absorb cost fluctuations linked to tariff impacts.

Key Takeaway: Trump’s proposed tax cuts could boost disposable income and consumer spending, but SMEs must monitor potential trade policy shifts closely. Adjusting pricing strategies, sourcing domestically, and leveraging consumer sentiment for American-made goods can help SMEs remain competitive amidst changing spending patterns.

6. Increasing Operational Efficiency to Mitigate Trade Policy Risks

As previously mentioned, Trump’s administration has signaled an intent to revisit trade agreements and potentially impose tariffs on certain imported goods, aiming to protect U.S. industries and encourage domestic manufacturing. However, these trade policies could lead to higher costs for imported materials and goods, affecting SMEs that rely heavily on international suppliers. A 2024 KPMG report highlights that SMEs with diversified supply chains report 25% fewer disruptions than those relying solely on single foreign suppliers, underscoring the value of resilience in a shifting trade environment.

Boosting Efficiency and Reducing Supply Chain Risks Diversifying Supply Chains: SMEs, especially those in manufacturing, may consider establishing secondary suppliers within North America to reduce exposure to potential tariff impacts on Asian imports. For example, a small manufacturing company that traditionally sources materials from Asia could identify local suppliers for critical components. While local sourcing may come at a slightly higher cost, it provides a safeguard against disruptions, allowing operations to continue smoothly even if tariffs on imports are enacted.

Operational Efficiency Tips

• Invest in Process Automation: Process automation can offset some of the increased costs associated with diversified supply chains by improving operational efficiency. A small accounting firm, for example, might automate routine tasks such as invoicing and data entry, which could reduce time spent on administrative tasks. According to a 2024 McKinsey report, SMEs that implemented automation saw a 30% boost in productivity.
• Use Inventory Management Tools: Retailers and manufacturers alike can benefit from digital inventory systems that provide real-time tracking. These tools help reduce overstock, optimize reorder points, and free up cash flow. Deloitte’s research shows that SMEs using advanced inventory management systems see, on average, a 15% reduction in holding costs, leading to immediate financial benefits.

Key Takeaway: Trump’s trade policies—if tariffs and revised trade agreements are implemented—may increase supply chain costs, making it essential for SMEs to build resilience. By diversifying supply sources and adopting automation, SMEs can better manage these risks and enhance operational efficiency.

Strategic Roadmap for SMEs: Achieving Resilience and Growth Post-Election

The 2024 election introduces a new era with significant policy shifts under Trump’s administration. To thrive in this environment, SMEs must adopt a strategic, data-driven approach, integrating resilience across cash flow management, tax strategy, workforce planning, consumer insights, and operational efficiency. Here’s a roadmap to help small businesses prepare:

1. Strengthen Cash Flow Reserves: Establishing a cash buffer of 3-6 months provides a critical safety net, allowing SMEs to weather rate hikes and inflationary pressures from fiscal stimulus policies. With prudent cash flow forecasting, businesses can mitigate financial risks and adapt to changing conditions.
2. Optimize Tax Strategy: Trump’s proposed tax cuts, alongside potential extensions of the TCJA provisions, present opportunities for SMEs to enhance cash flow through targeted deductions, such as R&D credits and accelerated depreciation. A proactive approach to tax planning can yield substantial savings, supporting reinvestment and growth.
3. Develop a Flexible Workforce Strategy: Trump’s anticipated deregulatory policies may ease some labor constraints, yet a competitive job market requires SMEs to think creatively about talent retention. By offering flexible, purpose-driven work environments and professional development, businesses can attract and retain skilled talent even as labor dynamics shift.
4. Leverage Consumer Insights: Changes in disposable income and trade policies will shape consumer behavior, making it vital for SMEs to monitor spending patterns closely. Using predictive analytics to understand demand, businesses can adjust pricing and tailor offerings, creating a resilient strategy that responds effectively to evolving consumer preferences.
5. Build Operational Resilience: Trump’s trade policy intentions emphasize the need for supply chain adaptability. SMEs can mitigate supply chain risks by diversifying suppliers and implementing process automation, which helps streamline operations and reduces reliance on single, potentially vulnerable sources.

A Path Forward with PB Strategies Global Services

The evolving landscape under Trump’s presidency requires SMEs to be proactive, flexible, and data-driven. By integrating each element of this strategic roadmap—strengthening cash flow, optimizing tax planning, enhancing workforce flexibility, leveraging consumer insights, and building operational resilience—small businesses can convert challenges into opportunities.

At PB Strategies Global Services, we believe in empowering SMEs to navigate these complexities with tailored insights and practical tools that make change manageable and profitable. As partners in your journey, we are dedicated to helping you harness data to drive resilience, profitability, and growth in this transformative time. For customized guidance on these strategies, connect with PB Strategies Global Services—our team is here to help you thrive in the road ahead.