As everyone is aware, there is upward pressure on prices due to the recently enacted tariffs affecting imports coming into the United States. As a result, entrepreneurs must now determine how much of these price increases can be passed onto the customer without significant loss of business or, alternatively, absorbed without significant impact on operating cash flow.

We are challenging our clients and business leaders we work with to ask a different question: Are there other ways to protect yourself financially? Some companies may find it harder to pass higher prices onto their customers than others. So it’s important not to necessarily assume all prices must increase for your goods and services. Here are some further thoughts on the matter:

1. 1. 1. Consider Putting Contracts Out to Bid: We all like doing business with people we like and trust. However, in these times of rising prices and global trade wars, your primary vendors may make the decision to pass 100% of their rising prices to you. It’s not malicious; however, your silence can be perceived as acceptance. It is worth the effort to speak with all of your major vendors and find out if there are more economical ways to do business together. 
      2. Plug Up Leakages: Your bottom line may not be what it could or should be due to easy-to-forget-about leakages. For example, if you are a retail store owner, you could have shrinkage or lost inventory issues that you haven’t been able to address. In this example, purchasing an enhanced video system will translate to good equipment in your stores and save you money as well. As another example, you may have subscriptions for software packages that you don’t need and/or other services that you no longer require. You don’t want to waste any money; plugging up leaks is a good practice to have, in an inflationary environment or not.  
      3. Optimize Staffing Levels: Over the past 90 days, there have been numerous statistics published that would indicate a weakening job creation market. Articles on the increasing the amount of layoffs at big companies such as Spotify and The Washington Post and rising unemployment rates in general would indicate that employee costs are leveling off or decreasing after years of consistent growth. Now would be a great time to evaluate the performance of your staff and determine if you should replace underperforming staff or eliminate redundant positions. 
      4. Don’t Get Lazy: It’s easy to do what everybody else is doing. But true leadership will involve going against the grain and making unpopular or unconventional decisions. If you base your business strategies on what you see in the news and what you read in the papers, it makes you a follower, not a leader. If you look at your cost structure and can limit price increases for your product and/or service, you will differentiate yourself from your other competitors who may be too afraid to follow a similar strategy. You should only change your pricing if your specific circumstances warrant it. 

There are always going to be challenging times that business owners need to navigate. With tariffs and cost of foreign goods being the dominant issue of 2025 thus far, it is vital for all business owners that rely on foreign-sourced components or finished goods to assess alternative vendors or countries to do business with. 

Take-away: If you need assistance navigating this environment, reach out to Brian at info@acceleratingcfo.com.