It's a new year.

There's a new presidential administration.

Technology is rapidly advancing and consumer behavior is changing.

So what will it all mean for small businesses in 2025?

And how will it impact African-American entrepreneurs?

I checked in with Mark Lee, who is the president and CEO of the lead group.

Talk about the trends, the challenges and the opportunities for businesses this year.

We have this conversation every year, you and I, first of all, here on American Black Journal, but I feel like this year's a little different.

Things seem a little more volatile than they normally do.

In January, a lot of that has to do with the presidential election, of course.

But there are some other things going on that make this a little bit different.

So let's start with just your assessment of what we're facing and what we're likely, I guess, to be facing, especially from a business perspective, small business perspective here at least in the first quarter or so of this year?

Absolutely.

You know, it's never a dull moment when we think things.

They don't.

Great question.

I think expectations as we begin to think about the first quarter.

Exactly.

Just be the volatility.

And I think one of the challenges as we begin to think about moving into the new year is we have a new administration, obviously, just to just succeed recently and the other challenge as you think about a new administration and it means uncertainty.

And so from a business perspective, there's always been the old adage, if the Democrats are elected, you can expect fix.

If a Republican is elected, you can expect Y.

And so we think about the expecting Y now that you had the Republican administration.

Historically, they have been known to be relatively business friendly, business friendly, you know, but the taxes that the cost of if you do that, that gives you the opportunity to spend more money and make more profit at the bottom line.

That's a strong guarantee that's going to take place beginning this particular administration.

So I think to answer your question, the expectation of short term is volatility, with no one knows what the future holds.

So the the strategy then, if you're someone who owns a small business where, you know, every decision, of course, has tremendous potential impact on the business itself, do you do you hunker down for this for this period and just kind of protect what you have?

Or do you maybe lean in to the possibility of something big happening?

I know a lot of people, for instance, who think that the stock market is going to go pretty crazy in the first quarter of this year.

If you're a small business owner, can you afford to to sort of take advantage of that and try your luck, I guess, and hope that this volatility, at least for the short term, ends up in an upswing.

Recommendation to small businesses is to is to make yourself aware and pay attention.

Make sure you understand the policies that will be coming out of Washington, D.C., as well as, quite frankly, on the West Wing, because those have a major impact.

You think about the stock market, for example, only 50% of the American people are invested in the stock market and a lot of those people are invested in the consumer who are invested in the stock market, but probably a little bit more well-off than those certainly considering starting a business again.

You and I chatted about this before, so average small business has less than $10,000 in the bank.

So can you afford to put that, for example, invest in stock markets?

What I tell businesses from a business perspective certainly is to make sure you pause, make your short self aware of the policies.

Every decision coming out of D.C. is going to impact your bottom line.

Do not rush in.

Certainly make any rash decisions.

Be patient and hope for you.

Hope that things fall.

Your place will return.

Yeah.

Yeah.

So what are some of the other things that businesses are facing?

Aside from the political environment that they ought to be thinking about in 2025, as they said up front, it's not just it's not just the election.

There's a lot of uncertainty, it seems.

And the change, the change in consumer basis, the change in technology and its effect on on your business and on consumers.

It seems like that's that's picking up, too.

You know, one of the biggest challenges that moving forward still will be inflation.

You know, the economy stabilized somewhat last year.

Inflation of bread came down.

It came down more than half to 100% over the course of the last 12 months.

Don't don't get too comfortable.

I mean, we're seeing what's happening with food prices again.

Now, all of a sudden, eggs, for example, are going through the roof.

And so inflation is still going to be an issue as we move forward this year.

Again, with the volatility, the Fed is considering cutting interest rates again.

You're still you're still trying to battle with those those decisions.

Looking at Washington, D.C., inflation is not going to go away.

I think a recession on the horizon.

I think they're still minimal at this point, but that's never out of the question.

So it depends on how consumer spending is just spot on.

Consumers will continue to evolve and change your overall behavioral patterns.

Will prices go up?

What do they do?

They pull back and that's going to have a major impact on your business because you may have a you may have a service tickler, you may be part of a service industry.

Restaurants, for example.

So if prices go up, you know, consumers will pull back.

The other thing that's critical this year I want people to pay close attention to is diversity equity and inclusion.

That certainly there was a lot of pull back from corporations last year.

That's certainly not going to change this year.

I mean, some organizations have become very explicit in the need not to have the programs for their business that could affect your expenditure levels because some programs were investing in black businesses to help them elevate their bottom lines.

So the bottom line there is that don't get too comfortable.

Well, let me rephrase that.

Be concerned about the future of the AI programs for Mayor.

What about access to capital because of inflation?

Of course, you know, interest rates have not been great for for businesses as well as individuals.

But all businesses need operating capital.

They need investment capital for infrastructure and things like that.

What is what is the advice, I guess, for for for maintaining your access to that capital and making sure that that capital doesn't cost you too much?

Access to capital is always the number one issue for small businesses, whether or not the economy is strong, whether or not the economy is not strong, access to capital always rises to the top.

My advice for small businesses is to diversify your income stream from a business perspective.

Look at all your financing options.

Historically, as you know, people who traditionally at banks to get a loan, you want to you want to be careful there.

I mean, it's still a viable option, but don't forget to look at things or programs such as grants, grants.

Those are the types of programs where you can get access to capital or capital.

You don't have to pay the money back, but you simply have to prove what you're going to deliver on that investment.

Also called a grant.

So we'll look at your traditional financing sources, look at your nontraditional financing sources.

I still discourage people.

Don't use your credit cards to finance your business.

Ultimately, that's going to break your that's going to break your bank, you know, based on interest rates.

So be very frugal, be very methodical, very strategic and do your research.

Look at both traditional and traditional retail financing for your business.

Yeah.

Yeah.

So this is also a huge year for political change in the city of Detroit.

Know, and it was really the first time in many years that there's a, I guess, more uncertainty about what will happen.

Mayor Mike Duggan, who served for three terms, says he's done so somebody else will will win that election this year.

City council has a new map to run on and that could lead to some changes.

There are a lot of things that that are up in the air.

If you're a local business here in Detroit, if you're an African-American owned business in Detroit, how much how much attention should you be paying to those changes and what should you be doing inside your business to get ready for them?

You should pay a lot of attention to what's going on and here's why.

So, yes, the mayor, we all know as announcers in terms of the run for governor, this will bring in a new administration later this year towards the election.

And so, you know, Detroit is relatively the last four years.

We've kind a very good relationship to Mayor Duggan with Washington, D.C. And as a result of that, you've seen dollars come into the city.

Now, what's happening, just as we discussed earlier, there's going to be volatility and uncertainty.

Obviously, we got the new administration in D.C.

So what's the relationship would it be between Detroit in Washington, D.C.?

So if I'm a small business, again, pay attention.

Don't don't pull the blanket over your eyes.

Understand what the opportunities may be, what the challenges are going to be.

Because I know some people argue that the new administration is not going to be as as free flowing with resources as with the previous administrations.

So clearly pay attention, understand?

Again, you can insulate yourself, industrial resources and make smart, strategic decisions for your business.

Don't make those rash decisions.

Always have a plan moving forward.

What about the idea of starting a business?

You know, lots of people are always saying thinking, Well, when I get the chance, I'm going to start a business.

And then they don't always act on it.

Is this a good time if you're absolutely the is this a good time to do that?

Again, you know, starting a business, you have to ask yourself whenever it's a good time for you.

If you feel like you have the passion, if we have the resources, if you understand what the customers are looking for is always a good time to start a business.

The challenge that people always jump into doing that without having that plan so we don't have that plan.

What happens to increase?

You have a higher increase or a higher probability that your business going to be successful.

So actually, look, in 2024 students, the SBA actually increased its lending efforts to small businesses, particularly black owned businesses.

And so what they're saying is, we still believe in you and we trust in you.

So my recommendation is be frugal, be strategic, is always a good time to start a business, but don't do it based on impulse.

Just make sure you have that plan.

And I would encourage you get a desire and a passion.

You know, go for.

That'll do it for us.

This week, you can find out more about our guests at American Life Journal dot org and you can connect with us any time on social media.

Take care and we'll see you next time.