Financial News

We are small business owners. We complain about uncertainty. We don't like surprises. Well, we can stop complaining.
Because here are 10 things you can be absolutely certain about in 2014.

1. Washington gridlock will continue. The Republicans are working to win back the Senate in this year's
Congressional elections. It’s a long shot. If they control both houses of Congress then they can create a lot of headaches
for the President. In an election year, they'll be sure to draw the lines of battle. And, given the recent comments by the
President's latest senior advisor whose job it is to work with the Republicans, it looks like another year of little action by
the government. No big compromises. No significant legislation. No big worries for you here.

2. Health-care reform will not be repealed. Even if the Republicans upset the pollsters and win both houses in
November, they'll never get the two-thirds majority in each house needed to overturn the Affordable Care Act legislation.
They can defund it and chip away at it. But it's not going away. It's the law. So plan accordingly this year because the
employer mandate will happen on Jan. 1, 2015.

3. U.S. national debt will continue to rise to unprecedented levels. Yes, our annual deficits are coming down
from over a trillion dollars a year to only. . . half a billion dollars annually! And the Congressional Budget Office 
still predicts increasing deficits the next few decades due to soaring entitlement costs. Our national debt of $17 trillion,
which is larger than our Gross Domestic Product for the first time in recent history, will continue to rise toward Greek
levels. This will continue to be a major election-year issue and may result in more sequestration or tax increases.

4. Interest rates will stay low, then slightly rise. The federal funds rate, which is the rate the Federal Reserve uses
to influence interest rates and the economy, is at .25%, an historic low. The Fed is beginning to taper its easing as the
economy begins to heat up. They have promised no rate increases while the U.S. unemployment rate remains above
6.5% (it's currently at 7%). The economy will grow this year which means that rates will not go down. To minimize
inflation, the only effective way for the Fed to try to control the flow of money leaving its $4 trillion balance sheet is using
interest rates. So let's hope it manages this effectively. Otherwise interest rates could go up sooner. I doubt this will be
significant. Still, it could be costly to those business owners who don’t lock in rates soon.

5. There will be no significant tax increases. OK, I'm still a little confused whether the $95 that uninsured U.S.
adults have to pay in 2014 if they don’t get health insurance is a fine, penalty or tax. But other than that, there are no
significant tax increases on the table this year. In 2013 we absorbed increases to capital gains and individual rates (now
at 39.6% for top earners), decreases in deductions and added taxes for Medicare and unearned income. And we'll
keep paying those in 2014. But there’s nothing significantly new on the horizon. So maybe Congressional gridlock isn't
such a bad thing?

6. It will be easier to get financing. The banking industry has recovered from the last crisis. The economy has
moderately improved. Rates are low. Banks' balance sheets look better. Your balance sheet looks better. The
venture-capital industry is flush and looking for more opportunities. There were many initial public offerings in 2013 and
many more scheduled for 2014. And even if you care not to go the traditional route of the public stock markets, the U.S.
Securities and Exchange Commission will ultimately pass new legislation that will allow you to legally raise funds for your
business through the many crowdfunding options available too. This will be a good year to look for cash.

7. You will pay your employees more. The U.S. unemployment rate is down. Economic activity is moderately rising.
Wages have been depressed for years. But in 2014 the competition for good people will continue to heat up. Skilled
workers will go at a premium. Others will ask, and receive, better increases than in prior years. It's quickly becoming a
seller's market for employees and that means business owners will pay a premium this year. Wage increases will also put
inflationary pressure on the Fed Reserve to raise interest rates too, by the way. (See interest rates above).

8. Your cost of doing business in the cloud will continue to decrease. Research firm Gartner forecasts that the
market for software as a service applications will top $22 billion through 2015, up from more than $14 billion in 2012.
Cloud-based applications are proliferating. Companies that offer cloud-based managed services are increasing in number.
And so are the small companies who are embracing these technologies. Companies like Amazon Web Services
are cutting their monthly fees for services that will be popular to small businesses. Costs are declining and will continue to
go down in 2014. This year you move more to the cloud.

9. You will not receive packages delivered by drones, create new parts on a 3D printer or be chauffeured
to work in a driverless car. But you will. Sooner than you think.

10. Smaug dies in Part 3 of "The Hobbit." Oh c'mon, you haven't read the book?