If, like me, you’re running a small business, you probably had a decent year. The economy has been strong and demand has been good. Every year, however, presents its challenges and 2019 will be no different. As we head into the new year, these are the three biggest challenges that will likely impact both my business and many of the business owners I know.

An economic slowdown

Will there be a recession in 2019? Regardless of all the predictions, no one really knows for sure. But anyone (like me) who’s been running a business for more than 10 or 20 years will agree on this: a recession will come, eventually. It always does and – big picture – we’re kind of due for one. The good news is that the fundamentals – production, output, confidence – remain strong. But there are some signs that a downturn is imminent.

International trade has slowed, reflecting both tariff disputes with the US and an overall drop in demand. Oil prices are declining, mostly due to the effects of the trade slowdown. Financial markets have wiped out their gains for 2018, which could cause a pullback in consumer confidence and spending in the new year. Builder and small business confidence have recently fallen and our national debt, budget deficits and interest rates are rising. All of these factors are reasons why nearly half (48.6%) of US CFOs believe that the country will be in recession by the end of 2019, and 82% believe that a recession will have begun by the end of 2020, according to a new Duke University/CFO Global Business Outlook study.

Economic volatility

Fans or not, most business owners I know admit that the Trump administration has overseen a tremendous reduction in taxes and regulations and that’s been a good thing for the business community. But will the president’s continued erratic behavior offset these positives? As a result of the midterm elections, there’s now a Democratic-controlled House and its members are openly sharpening their knives in advance of a two-year battle with the White House that will certainly include investigations, accusations and potential impeachment hearings.

The president has seen the recent departures of his chief of staff and secretary of defense and the people who he chooses to replace them will impact his longer term decisions. Will they reign him in? Regardless, many of us are bracing for more online rants and continued attacks on allies, trading partners, business, government and financial leaders. All of this means more surprises and uncertainties, which will encourage continued volatility in the financial markets and the economy. Most of my clients will be keeping an eye on the president’s antics, especially as to how his decisions could affect their business. Those concerns will no doubt cause them to be more conservative with their cash if there’s continued volatility.

Rising labor costs

It’s no secret that the labor market is tight and good employees are finding themselves in high demand. Like any market, this is starting to reflect in the costs of labor. Regardless of whether a recession occurs sometimes in the next two years, most business owners I know are still planning for continued economic growth at least in the first half of 2019, which means more pressure on the costs of their most important asset: their people. Wage rates are expected to rise well above inflation next year and many small companies are being forced to meet their larger competitors and provide additional benefits such as more paid time off, family leave, childcare and bonuses in order to attract and retain talent. Add to that continued increases in healthcare costs and the rise of workplace protections and the typical small employer will find it even more expensive to not only recruit but pay their existing people in 2019 – assuming they can find people to do the work they need.

A few other things will challenge business owners in 2019. As mentioned above, interest rates will continue their rise. Inflation will creep up as the economy grows. Investments in certain technologies will be vital in order to keep up with the competition and changing customer demands. Finally, as today’s baby-boomer business owners continue to age towards retirement, deciding on the right exit strategy could be the difference between days spent playing golf or working part-time at the local Home Depot.

All of these issues will weigh heavily on the US small business owner this year. How we tackle these issues will impact the long term sustainability of our companies. It sounds like a lot of pressure and it is. But we’re used to that. It’s part of the job.