As I write this, we are down to the wire in one of the most publicized and controversial election cycles our country has ever experienced. With the 21st-century world of social media, real-time Twitterverse and 24-hour news cycle, it’s been hard to process all the political information (and misinformation) we received this year. By the time you read this, though, the presidential election will have been decided. So what now? Regardless of the outcome, as a business owner or executive, you should have a financial plan on how to assimilate the political changes and prepare for legislation that could affect your industry.
On the national financial front, Wall Street typically reacts with some short-term volatility to any new administration, but as unique as this election cycle has been, no one can predict the new president’s long-term impact on the stock market. In addition, many experts predict a small increase in interest rates, leading to a ripple effect on all areas of finance and banking.
Here in Nevada, the 2017-18 Legislature will discuss the new state budget, education savings accounts, business taxation and more. The outcome of the five ballot questions also could affect your bottom line. For example, if Fuel Revenue Indexing (Clark County Question 5) passed, expenses for transportation, fuel and shipping could increase. If it didn’t pass, you may be concerned about financing future infrastructure projects.
With so many balls in the air, it’s hard to know where to focus your attention. As a bank, we continuously monitor the business and consumer sentiment in the community. In the 2016 Nevada State Bank Small Business Survey, nearly 72 percent of business owners and executives surveyed said their CPA or accountant was important to their business, 50.6 percent said their banker was important, and more than 44 percent said their attorney was important. Set up a meeting with these key advisers as soon as possible to assess the potential impact of the elections on your company.
For example, if the Fed does raise interest rates, you and your banker should discuss the effect this will have on your interest-bearing accounts, adjustable-rate loans and other financial arrangements. Your financial adviser can help you understand and react to short- and long-term fluctuations in the stock market, and your CPA can advise you on potential changes to the tax code. These advisers can help you design a roadmap for your business.
On Nov. 17, Nevada State Bank is hosting “Election 2016: The Results” for clients and community leaders, featuring economist Jeremy Aguero of Applied Analysis. Aguero will share his insights following the election, as well as economic indicators and where businesspeople should focus their attention.
Terry Shirey is president and chief operating officer of Nevada State Bank.