Tariffs Drives Need for Change
One of today's articles in the WSJ caught my eye and my attention. It speaks of the impact that current tariffs are having on small businesses. Now, this article is being written to to advocate for or against tariffs. I'll leave that to the political pundits. What this article is about is what will small businesses to to deal with the issue.
Several typical paths are possible as described in the article:
Put your head in the sand and wish it to go away and deal with the consequences as they come.
Increase your prices accordingly and deal with the potential consequences from your customers.
Continue to drive to lower your costs to absorb the impact of the tariffs to your bottom line.
Hope that the tariffs go away in the near future and absorb the impact for a period of time to not rattle your customer base.
But may I suggest another, better alternative. All the options above are what I would call zero-sum games. Someone loses, someone wins. However, I suggest an alternative: Drive to create more value for your customer so that you may charge more to your customer while working to lower your costs at the same time. Change your business model. Change how you interact. Change how you do business. Change your organization to deal with the current and future realities of today's situation.
I have a few clients that will likely be affected by these tariffs. Some positively, some negatively. They can't control the tariffs. However, one thing they can control is their business operations and how they manage their customers. Some are increasing efforts to reach out and touch customers on a personal level. Some are reaching out to sell value versus just a product. Some are expanding into markets where price is not the sole driver for sales success. Some are creating products and services that are not commodities where price becomes a race to the bottom. They are not standing still "waiting".
If you need help changing to deal with the effects of tariffs on your business, give TIER321 a call. We are happy to help you in making strategic decisions that can combat the effects both in the short-term and long-term.