Keith Hall, the president and CEO of the National Association for the Self-Employed (NASE) discusses what small business owners need to know to plan for success in 2025.
What has occurred within the small business community over the last couple of years?
The small business community has exploded in the past few years. There have been over 19 million new small business applications just in the last three years. The voice of small business has never been more powerful.
Speaking to legislators at the state and national levels, we’ve never had more influence as a small business community than we do now, and I think it started with COVID. A lot of people during the COVID pandemic found themselves working from home, whether they chose to or not, and they learned that most of the things they needed to accomplish could be done from home. That expanded the options people had.
What are some of the unique challenges and benefits of someone choosing to become their own boss, or to become an entrepreneur?
I think the biggest challenge for new small business owners is managing their time. Time is the most valuable asset. A small business isn’t going to have a chief marketing officer. They don’t have an accountant. They don’t have anybody to clean up at night. They have to do it all. When you start your own business, you’re the CEO, but you’re also the janitor at night. So, it’s all about managing your time wisely to get to that next best customer. I think that’s always a challenge for people moving into self-employment. Many people are used to working from 8 a.m. to 5 p.m.. Well, when you’re a small business owner, there is no such thing as 8 to 5. It’s 8 until 8 the next morning, so I think that’s one of the biggest challenges they have.
What are some of the key policies that help support existing and new small business owners?
One of the things we always advocate for is simplifying the tax code of every small business owner. All of us, in fact, have to deal with taxes. It’s universal. Everyone has to do taxes. The less time we have to commit to preparing that tax return or complying with payroll taxes, the better it is for small businesses. So, any policy that simplifies the tax code is a great benefit to small businesses. That can include standard deductions for the home office. It can include a standard deduction for Schedule C as a whole so that the small business owner just checks a box and doesn’t have to keep a bunch of receipts.
Another thing that we always hear from small business owners is better access to capital. The Small Business Administration has increased its emphasis on the micro-loan program. We need to make it easier for businesses to get smaller loans. They may not need a $2,000,000 loan. They may need $10,000, so policies that promote easier access to capital for small business owners would be a tremendous benefit.
Lastly, and I would say this is becoming more and more important, is policies that expand retirement plan options. Most people who work for a big business all their lives have employer-matched retirement plans, but if you’re self-employed, you have to do all of that yourself. There is no 401K matching plan. You have to invest in your own future. Any ideas that Congress can come up with to expand the options for retirement plan contributions to lower the expense of setting up a retirement plan would provide a tremendous benefit to the self-employed.
What are some of the resources and tools available to help new self-employed entrepreneurs and business owners throughout their journey?
It’s unbelievable the level of resources that are out there available to help a new small business owner — the Small Business Administration and the IRS, both have tremendous websites with a ton of detail. Any topic that you think of, they have ways to help you. The Small Business Administration sponsors small business development centers that are located throughout the country, usually in connection with universities in the local community. They have counselors who will help you free of charge. Organizations like ours have a slate of experts that provide one-on-one consulting with small business owners about any question they may have, whether it’s a tax question, general accounting question, marketing question, or contract question. We have attorneys on staff. If you have a question, we have an expert who can help you with that topic.
Anytime I do a webinar, anytime I do a seminar, I always leave it with this: As a self-employed business owner, it’s easy to feel like you’re out there all alone. Saturday night, you got the kids to bed, and you’re trying to do business planning, you’re trying to get a new customer, you have employee problems, or you’re trying to make payroll, and it’s easy to feel like you’re all alone. But if you have an Internet connection, you have resources. There are tons and tons of resources available. You’re never alone as a small business owner.
What should existing small business owners plan for moving into 2025?
If this is their first year in operation, this is going to be their first time filing a business tax return. Make sure you have your records in order. Make sure you’re reconciling your bank account. Make sure you have good control over all those records, because whether you do the tax return yourself or you have a tax professional do it for you, you’re going to need all that paperwork.
If you have employees, you’re going to have to do payroll tax returns and W-2s. All that paperwork happens at the end of the year, so get ready for that compliance stage of things, because you do have to dot the I’s and cross the T’s.
This goes back to the congressional policies that we push for. Any time we can make that process simpler, the better it’s going to be for small businesses. Also, if this is your first year as a small business, you probably have some type of business plan. If you don’t have a business plan, you should sit down and prepare one. I think, typically, people overestimate what they can do in one year but they dramatically underestimate what they can accomplish in five years. So, prepare a one-year business plan, but then also think about where you want to be in three years or five years and then ask yourself the questions to get there.
