Shifting political winds in Washington have placed the business world in wait-and-see mode, as business leaders await specific announcements on everything from deregulation to free trade to infrastructure projects.
Small businesses are not immune to the uncertainty. In addition to traditional concerns—like hiring new employees and increasing profits—small businesses have singled out the rising cost of health care and tax reform as major worries.
Small Businesses Brace for Change
Despite the hand-wringing, however, there is a current of optimism streaming through the small business sector as the new year continues to unfold. Perhaps their size helps tell the story. Small businesses, after all, by their very nature are more nimble and reactive to shifting circumstances. And for the most part, small companies are more susceptible to local and state regulations than they are to directives emanating from Washington.
This might help explain a recent study issued by the National Federation of Independent Business, which found levels of optimism among small businesses surge after the election of Donald Trump as president. Small companies pointed to sales expectations and business conditions, which are already leading to increased business activity, as major sources of confidence.
“We haven’t seen numbers like this in a long time,” Juanita Duggan, president of the NFIB, said in the report. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy.”
During this in-between time—while the full effects of a new, active administration in Washington continue to unfold—we checked in with small business owners to hear how they’re coping with uncertainty and keeping their businesses moving forward.
Inward Focused for Now
For Joe Cirulli, founder and CEO of Gainesville Health & Fitness, there are bigger concerns than the overall economy. Yes, as 2017 rolls in, he would welcome reductions in taxes and regulations. But, as he puts it, “I’ve never had a time when something on the outside affected what we’re doing on the inside.”
In 1978 Cirulli borrowed $1,700 to buy his first health club, and he’s been innovating and building ever since, including an expansion project that he began during the recession of the late aughts. Today, Gainesville Health & Fitness employs 500 people. Its annual revenue tops $16 million, and his flagship health center spreads out over 80,000 square feet, featuring basketball courts, a pool, in addition to an expansive gym space.
But Cirulli points to several themed boutique studios he has installed within the massive gym space, as the component that has placed Gainesville Health & Fitness five years ahead of the entire industry. Within the health club, customers are exposed to sleek, personalized boutiques that offer indoor cycle venues with video projections, boot-camp style workouts, and efficient fat-loss programs utilizing specialized equipment.
“It’s always a matter of thinking and outthinking the competition,” said Cirulli. “That’s a bigger issue than the overall economy.”
Persisting Through Uncertain Times
For the Female Health Company, the only maker of a female condom approved by the U.S. Food and Drug Administration, challenges have come in other forms. Launched 26 years ago, the company has carved a niche for itself by selling female contraception to non-governmental organizations and governments tackling unwanted pregnancies and sexually transmitted diseases. In 2015 its female condom, which is covered by the Affordable Care Act, sold 62 million units.
But public health initiatives, both in the U.S. and overseas, face unprecedented uncertainties given the vows by the Trump administration and Congress to repeal the ACA. Despite the potential political headwinds, the Female Health Company believes it’s well positioned to take on adversity.
Last October the company merged with Aspen Park Pharmaceuticals to form a new entity, Veru Healthcare, although the Female Health Company brand remains tied to the global public health sector of the company.
Despite the pressures that the ACA faces, Mitchell Steiner, CEO of Veru Healthcare, believes portions of the act related to women’s health will remain intact. Next month, Vera will launch the female condom as a prescription product, making its costs reimbursable.
“The idea is that we have an immediate revenue stream by taking advantage of the fact that we’re the only female condom that’s approved,” said Steiner. “We’ve been spending a lot of our tie creating the infrastructure for that.”
Steiner says the company is focused primarily on the female condom in the U.S. as a solution for sexually transmitted diseases, which are on the rise. He points out that the U.S. government and health groups pay close to $16 billion annually to treat and manage STDs.
The merger with Aspen Park has also placed the company on more sure footing. Vera is now a women’s and men’s health company, with many other products in the pipeline, says Steiner.
“Because of the merger, we’re going to be in a good position to take advantage of what I think is a very positive trend for business,” said Steiner, “which is deregulation, accelerated FDA approvals, and the desire for new and effective medicines.”
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from Fundera Ledger https://www.fundera.com/blog/washington-uncertainty