Running a small business requires making decisions about money, employees, customers, and growth. Government policy is another factor that belongs in that decision-making process. Tax legislation, healthcare requirements, trade policy, and access to financing can all affect a company’s operating expenses and long-term plans.

On Nov. 3, Americans will vote in the midterm elections. All 435 voting seats in the U.S. House of Representatives and 35 Senate seats will be contested. The results will determine Congress’s composition for the next two years. Depending on their location, voters will also decide state and local races and ballot measures.

For business owners, understanding these elections means examining the policies that affect their companies, recognizing which level of government makes particular decisions, and preparing for possible changes. Here are eight business issues worth understanding ahead of the election.

1. Tax Policy and the Cost of Doing Business

Taxes affect profitability, cash flow, investment, and the amount of money available for expansion.

In July 2025, Congress enacted major federal tax legislation commonly called the One Big Beautiful Bill Act. The law changed business deductions, depreciation, interest deductions, and reporting requirements. Some provisions were made permanent, while others have specific eligibility requirements or effective dates.

The next Congress will have the authority to propose further tax legislation, amend existing provisions, and determine federal spending priorities.

Business owners should understand how current tax provisions apply to their companies. A sole proprietor, an S corporation shareholder, and a C corporation may experience different tax consequences from the same legislation.

Tax planning also involves state and local government. Depending on the jurisdiction, state officials and legislatures influence income taxes, sales taxes, property taxes, and business incentives.

A useful starting point is an annual conversation with a CPA about the company’s effective tax rate, anticipated tax payments, investment plans, and applicable deductions.

2. Healthcare Costs and Employee Benefits

Healthcare remains an important operating expense for employers that provide coverage. It also affects entrepreneurs who purchase their own insurance. Federal and state policies influence insurance markets, eligibility requirements, employer responsibilities, and healthcare-related tax provisions.

For example, eligible small employers purchasing qualifying coverage through the Small Business Health Options Program may qualify for a federal tax credit. The maximum credit is 50% of qualifying employer-paid premiums, subject to eligibility rules and other limitations.

Healthcare legislation can affect businesses differently. Companies offering employee benefits may be concerned about premiums and administrative requirements, while self-employed entrepreneurs may focus on individual insurance costs and coverage options. Business owners evaluating healthcare proposals should examine their potential effects on employer contributions, employee expenses, coverage availability, and administrative obligations. Healthcare costs also belong in workforce planning. Before expanding payroll, founders need to calculate the complete cost of employing someone, including any benefits they intend to provide.

3. Labor Laws, Wages, and Workforce Development

Employees are essential to many small businesses, and labor-related policies affect the cost and administration of maintaining a workforce. Federal and state governments have different responsibilities concerning minimum wages, workplace safety, overtime, paid leave, unemployment insurance, and employment classifications. Changes to these policies can influence payroll expenses and hiring decisions.

Public investment in community colleges, technical education, apprenticeships, and employment training can affect the availability of qualified workers. These programs may be particularly relevant to businesses struggling to recruit employees with specialized skills.

When reviewing labor proposals, entrepreneurs can consider both the direct cost of compliance and the potential effects on recruitment, retention, employee productivity, and workforce availability.

4. Tariffs, International Trade, and Supply Chains

International trade affects more small businesses than many entrepreneurs realize.

A retailer purchasing imported merchandise, a restaurant buying internationally sourced ingredients, or a manufacturer using imported components may all be exposed to changes in trade policy. Tariffs can increase the cost of imported products, although their effects depend on supplier arrangements, exchange rates, pricing decisions, and other market conditions.

Trade agreements and customs regulations can also influence how easily tU.S good and services sell internationally. Importantly, presidents have substantial authority over certain trade actions under existing law. Congress also has constitutional responsibilities involving tariffs and international commerce. Consequently, congressional election results do not automatically determine tariff rates or reverse existing trade policies.

For entrepreneurs, the practical question is how different trade policies could affect purchasing costs, supplier availability, profit margins, and customer prices. Businesses dependent on international supply chains can reduce uncertainty by evaluating alternative suppliers, reviewing contracts, and monitoring their exposure to changes in import costs.

5. Access to Capital and Small Business Financing

Access to affordable capital influences whether entrepreneurs can purchase equipment, hire employees, acquire property, or expand operations. The federal government supports small business financing through programs administered by the Small Business Administration. Congress influences these programs through legislation, oversight, and funding decisions. The definition of a small business can also affect eligibility for certain federal programs.

In September 2026, proposed changes to SBA size standards became the subject of congressional debate. Senator Edward Markey and other Democratic senators raised concerns that expanding eligibility could increase competition for resources and contracting opportunities. The SBA extended the proposal’s public comment period to November 20. These discussions illustrate how administrative decisions and congressional oversight can affect small businesses.

However, financing conditions also depend on factors outside congressional control. The Federal Reserve’s monetary policy, bank lending standards, business creditworthiness, and economic conditions all influence borrowing costs and loan availability. Entrepreneurs should distinguish between proposed changes to federal financing programs and broader interest-rate changes.

6. Government Contracts and Infrastructure Spending

The government spent $793 billion on suppliers in 2025. This provides revenue for businesses in construction, technology, professional services, manufacturing, and many other industries; many of these are small businesses.

Congress influences federal procurement through legislation, appropriations, and oversight. Infrastructure spending can also generate business opportunities. Public investment in transportation, utilities, broadband, public facilities, and other infrastructure can create demand for contractors, suppliers, consultants, and supporting businesses.

This term also includes 36 governor races, including California, Georgia, Maine, Ohio, Pennsylvania, New York, and Tennessee. Governors influence state tax policy, workforce development, infrastructure spending, and economic development programs. These elections therefore directly affect each state’s business environment. Entrepreneurs interested in government contracting should understand the difference between an announced funding proposal, an enacted appropriation, and an actual contracting opportunity.

7. Technology, Artificial Intelligence, and Energy Costs

Artificial intelligence is becoming increasingly relevant to small business operations. Entrepreneurs use AI tools for marketing, customer service, administration, research, and sales. At the same time, policymakers are examining issues involving data privacy, intellectual property, technology infrastructure, and energy consumption.

Technology policy can shape the costs and responsibilities of adopting AI. One emerging issue in the 2026 election cycle involves the construction of large data centers. According to Reuters, data center development has become a political issue in several communities. Discussions include electricity demand, water consumption, tax incentives, and how infrastructure costs are sometimes allocated to residential customers. These issues matter to entrepreneurs because electricity prices and infrastructure updates can affect operating expenses.

8. The Relationship Between Congress and Business Policy

The 2026 elections will determine which lawmakers serve in the next Congress and which party controls each chamber. That composition matters because most federal legislation must pass both the House and Senate before reaching the president. Different election outcomes can therefore produce different legislative conditions. Some business-related policies can change through executive action, agency rulemaking, judicial decisions, or state legislation without new federal legislation.

Understanding these distinctions helps business owners interpret campaign proposals without assuming that every proposal will become government policy.

Preparing Your Business for the Next Congress

Regardless of the election results, entrepreneurs can prepare their companies for possible policy changes. Start by reviewing your business’s exposure to taxes, labor expenses, healthcare costs, financing, and supply-chain disruptions. Identify which expenses are most sensitive to government policy and which decisions depend primarily on broader economic conditions.

Next, develop financial scenarios. Consider how your business would respond to higher operating costs, changes in tax obligations, reduced demand, or new opportunities.

Professional advisors can also help. Accountants, attorneys, insurance specialists, and financial professionals can help you understand how enacted policies apply to your particular business. Finally, use reliable sources to distinguish campaign proposals from existing law. Official government publications, legislative records, and agency announcements provide useful starting points.

With the midterm elections a week away, it’s best to understand the issues, evaluate potential business implications, and maintain the financial flexibility to respond when policies change.