Macy’s and Kmart are each closing a Lansing location – but did you know that retail spending is up?
It’s easier than ever to collect customer data, but business owners beware: you need to protect that data or you could be on the hook for a breach.
And, get ready, driverless cars are definitely coming – and sooner than you might think!
In what has quickly grown into one of the most popular presentations in the Lansing Regional Chamber’s Small Business Education Series, Fraser Trebilcock business attorney Mark Kellogg joined a panel of experts for a rapid-fire session on top business trends for the coming year.
“Business owners are busy enough running their businesses,” said Tom Donaldson, Regional Director of the Capital Area for the Small Business Development Center. “It’s hard to keep up with everything going on in the world, too.”
To give business owners a snapshot of what’s happening now and what’s to come in 2017, area experts provided: a look at legal and business changes, financial forecasting, technology trends, a public policy preview, and what’s on the horizon in marketing for small businesses.
Administrative Law & Regulatory Changes
As with any changes in leadership on Capitol Hill, small business owners can anticipate a number of administrative law and regulatory changes ahead in 2017. Attorney Mark Kellogg said that while President Trump has not discussed his plans in detail, the President has said that he will “unburden” small business owners.
What exactly does this mean? From changes to labor and employment laws to key legislation like the Affordable Care Act (ACA), Mark said the only certainty we have is that change is coming.
Health Care Reform 2.0
Top of mind for many is health care reform. In January, President Trump signed an executive order titled, “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal”. Then, just last week, Republicans in Congress introduced the “American Health Care Reform Act of 2017” to overhaul the Affordable Care Act. The bill rolls back some of the ACA’s taxes, replaces insurance subsidies with tax credits, and makes big changes to Medicaid.
As the legislation evolves, Mark urged business owners to keep an eye on possible mandate changes, as the new administration modifies the Affordable Care Act. Updates are posted to our Fraser Trebilcock Employee Benefits Blog
Employee Overtime Rules
Changes once anticipated to labor and employment laws under the previous administration, may now be off the table. For instance, the rules that would have made more workers eligible for overtime is likely now to disappear altogether, said Mark. If the new administration decides to move forward with the change, he said the rules will likely be altered to include a lower salary cap than the original $47,476. This is something that our labor and employment attorneys will be watching closely.
Two-for-One Regulation Repeal
Another major change coming out of Washington, is a change to the process of how regulations are enacted. In an Executive order issued by President Trump, for every new regulation put into place, two old regulations must be repealed.
Attorney Mark Kellogg said this could have a big impact on emerging markets, such as drones rules and regulations. This is an area, he said, which will likely need more regulations as the technology evolves. However, in order to create these potential new regulations, the Federal Aviation Administration would need to repeal other rules.
Sick Leave Requirements
In the state of Michigan, changes to employee sick leave are also under consideration. Michigan lawmakers are debating a requirement for employers to give employees paid time off for sick leave. This could be especially critical for small business owners, Mark said. He shared that as a franchise owner himself, he will be watching this legislation closely as it develops in Lansing. With the current-make up of the State Legislature, this type of legislation may be difficult to advance at this time.
Businesses Succession & Sales
Expect to see more businesses for sale in 2017.
“10,000 people a day in the U.S. are turning 65,” said Mark, and as baby boomer business owners retire, we are finding that many do not have succession plans in place. Mark said that he has closed on three business sales transactions in just the last month and a half, a trend he expects to continue. He elaborates further in a recent article.
Data breach incidents continue to make headlines, and unfortunately this is a trend not likely to go away in 2017. Any company that stories sensitive information, like customer credit card data, driver’s license numbers, or social security numbers, is susceptible to theft. Mark explained that it’s important to have a plan in place in case that data is compromised. Michigan has specific breach notification requirements under Michigan’s Identity Theft Protection Act that all businesses, regardless of size, must follow. These steps are outlined for you in a recent blog post.
Despite the security considerations, data collection is more important now than ever, added panelist Amanda Stitt of Change Media Group. Collecting and using data about customers adds to the creation of more personalized marketing, she explained. For example, companies can create ads that target returning customers and then use data to make sure only returning customers will see that ad. If you have ever put something in your online shopping cart and decided not to buy it, then been haunted by advertisements for that product elsewhere online, you have experienced this kind of targeted advertising. She said that messaging has to be more authentic and demonstrate the values of the company, pointing to the 2017 Super Bowl ads as examples. And, If you’re a fan of long-form writing, you’re in luck. Amanda said we will see a resurgence in longer videos, news articles, and even social media posts.
Public Policy Preview
Public Sector Consulting’s Chief Executive Officer Jeff Williams gave a deeper dive into upcoming public policy changes. This year, watch for major changes to come out of Washington. In the last several decades, he explained, we have seen the executive branch of government take more power; expect the legislative and judicial branches to respond with a push for a more equal division.
Next year, he believes the biggest changes for Michigan business owners will happen at the state and local levels. The state will elect a new governor, lieutenant governor, attorney general, and many new legislators, while Lansing will elect a new mayor. No matter where on the political spectrum you fall, Jeff said, it’s going to be a wild two years for all of us.
Technology: Protection is Key
Changes in technology have historically driven the evolution of business. Personal computers and the internet have forced most companies to move online, to change marketing and business strategies, and more. Now, according to Matt Scott of Dewpoint, business will begin driving changes in technology. As companies face the need to get more work done faster, more accurately, and at a lower cost, we can expect to see the tech sector working to create the products needed to make that possible.
Companies are also evolving the way they seek to solve problems. Matt believes that in 2017, more companies will look to outside tech experts to tell them how to develop new strategies, and to demonstrate what tech tools are needed to accomplish new goals. In that same vein, more businesses are looking to outsource complicated IT problems to technology specialists, instead of relying on in-house IT employees. All of these changes in technology will require small business owners to become more and more invested in technology.
Optimistic Economic Outlook
Fifth Third Bank Vice President Tom Ruis says there is a lot to be optimistic about with our current economy. Consumer confidence is up, as are retail sales and the stock market. What about big box stores closing locations? That’s all a part of the growth in online sales instead of the traditional storefront, he said, so don’t let it trick you into thinking that retails sales are down.
Tax reform that would reduce income taxes could help consumer spending increase even more, Tom said. Interest rates will probably increase slightly over the next year, and loans will get a little more expensive, he said, but he doesn’t think it will have a dramatic impact on small businesses.
One exciting innovation that’s closer to your driveway than you might think – self-driving cars.
“If you just bought a car, your next car will be almost fully automated in terms of parking and other features,” Tom said. He says virtual reality is making it much easier for automotive companies to test self-driving technology, and that will make road-ready versions available sooner than you might think. “Overall, this is a very positive, exciting time.”
Fraser Trebilcock is proud to co-sponsor the Business Education Series, along with Fifth-Third Bank. Programs are free for members of the Lansing Regional Chamber of Commerce. Click HERE to view upcoming events.
Attorney Mark E. Kellogg has devoted his nearly 30 years of practice to the needs of family and closely-held businesses and enterprises, business succession, and estate planning. In addition, Mark is a certified public accountant. Contact Mark at 517.377.0890 or firstname.lastname@example.org.