What Will 2026 Mean for Small Businesses?
While there are reasons for optimism, plenty of challenges loom, including this one: “We are healthcare providers who cannot afford benefits. Oh, the irony.”
Welcome back! I hope you had a nice break.
Here are today’s highlights:
The ACA subsidies have ended, and more small business owners are being forced to drop health coverage.
One health benefits consulting firm pays for all of its employees’ healthcare and says that even businesses with as few as two employees can save big money.
Private equity firms are confronting both a business-model problem and a backlash.
President Trump is walking back some more tariffs.
THE ECONOMY
Gene Marks says 2026 will be a strong year for small businesses: “I think I understand why surveys from the National Federation of Independent Businesses, U.S. Chamber of Commerce, and Bank of America are showing a rising level of small-business optimism. What do these small-business owners know? Based on my firm’s hundreds of clients and the thousands of business owners I have spoken with over the past six months, here’s what they know:”
“For starters, they know that the most significant impacts of the One Big Beautiful Bill Act will be kicking in. Thanks to the legislation passed midyear in 2025, businesses now have the permanent ability to deduct their costs of buying capital equipment, building manufacturing plants, and doing more research and development.”
“U.S. small businesses are now enjoying a much changed — and diminished — regulatory environment. Agree with it or not, the Trump administration has been on a tear of rolling back federal regulations (more than 600 of them) since taking office. This means energy firms can get back to leveraging the country’s economic resources at lower costs to the consumer and businesses can operate without worrying about new rules around overtime, worker classifications, unions, discrimination, harassment, and the like.”
“Watch for interest and inflation to continue falling. The prime rate is now 6.75 percent after reaching a high of 8.5 percent just two years ago. Inflation was once close to 9 percent and is now below 3 percent. Falling inflation expectations mean lower bond yields, which will translate into lower mortgage rates, which are already down to about 5 percent to 6 percent, compared with 8 percent recently.”
“This will not be the year artificial intelligence takes over businesses. It will not be the year AI replaces zillions of workers and causes global unemployment. Perhaps sometime in the future. This year will be the one in which AI features and functionality in small-business accounting, customer relationship management, human resources, and other software become more readily available, accurate, and reliable.” READ MORE
