Mike Michalowicz outlines five actions for small business owners facing tariffs: diversify suppliers, stockpile inventory if cash allows, raise prices gradually, explore exemptions with your accountant, and join trade associations to influence policy. Move now to turn the threat into a competitive edge.
I just arrived in Miami and I'm going to head out and meet with some entrepreneurs. We're going to be talking about tariffs and the implications. So I wanted to create a quick video for you and explain strategies that you can use. Here's the thing about tariffs. They happen all the time. This has been around for thousands of years, so this is nothing new. The only difference between today and a long time ago is when tariffs hit, the retaliatory effect kicks in within milliseconds because news travels instantaneously. Tariffs are country versus country, government versus government, and often is used now for leverage to bring other topics to the table for negotiation. But no matter what, the threat of it can affect small business, and the implementation of it absolutely can affect small business. So here's what I want you to do. First of all, diversify your suppliers. And you should be doing this no matter what, tariffs or not. If you're dependent on one supplier and they go bye-bye, or their prices are no longer affordable for you, you go bye-bye. So let's find backups to your suppliers. You should always have that in place. Secondly, if you are in a position where you have some cash, maybe you implemented Profit First, now is the time to stockpile before tariffs come in. You can get supplies at the current price point where when tariffs come in, your competition is now paying the inflated fee. This gives you a price advantage for a period of time, therefore you may be able to take a swath of customers away from your competition. Next, I want you to increase prices in a tiered structure. You got surprised by tariffs, shouldn't surprise your customers with it if you can avoid it. So tell them, we're increasing prices incrementally as necessary to absorb this, so that your customers aren't blown away by the price changes. Your competition will likely move up in one big swath, and what this allows you to do is to have, again, a price advantage for a period of time, capturing customers. Next, so you've increased prices incrementally, you ratcheted it up, hopefully you've got supply to keep your prices down for a period of time, you got that advantage, that cost advantage, and you started to diversify. You can negotiate. Now, I'm not saying you can call up the government and say, "I'm not going to pay this. What are we going to do here?" But you could get an exemption. Speak with your bookkeeper or accountant, see who you should be contacting, and try to get an exemption. And make your voice loud. Go to the Chamber of Commerce, meet with different associations, and tell the government how this is affecting you. So take action now. That's the big key, and you just may have the advantage in this situation. I wish you the best of luck. Over now from Miami.
