If the uncertainty brought on by tariffs has you worried, Swoop has 5 practical steps you can take to protect your business.
Tariffs are a growing factor in the North American business landscape, ushering an uncertainty that can have a major impact on your business. You may be anticipating squeezed margins, worried about your bottom line and feeling helpless.
When the big picture changes, so should your strategy. By taking a proactive stance, you can not only help your business survive but actually position it for growth in these evolving times. Let’s look at five practical steps you can take right now:
1. Get to grips with your profit margins
Tariffs might hike your cost of goods, but that doesn’t mean your profits have to suffer. It’s time to get laser-focused on maximizing every dollar:
- Smarter discounting: Ditch the blanket discounts that eat into your earnings. Instead, price based on the true value you deliver, reserve discounts for strategic purposes (such as high-margin products or bundles), and reward loyal customers in ways that protect your profitability.
- Use employees’ insights: Your team sees the day-to-day inefficiencies you might miss. Encourage them to identify waste, suggest cost-saving alternatives for materials and logistics, and even consider a reward program for the best ideas.
- Trim costs: When was the last time you audited your insurance costs, foreign exchange spend and banking fees? A quick review could uncover significant savings by negotiating better rates, eliminating unused services, or exploring more cost-effective platforms. Swoop makes it easy for you to compare costs and switch on a range of financial products. Click here to get started.
- Strategic outsourcing: Don’t carry the full weight of specialized roles such as accounting and IT on your payroll. Outsourcing to experts gives you top-tier talent at a fraction of the cost, allowing you to scale services as needed without the overhead of full-time hires.
2. Focus on your Most Valuable Players
Not every customer or product line contributes equally to your success. Remember the 80:20 rule (aka Pareto Principle) – 80% of your profits will come from 20% of your customers and products. Make sure you know who those 20% are – they might have changed since the last time you checked – and treat them accordingly.
- Analyze your financials: Look for customers who are costing you more than they should: look for customers who demand too much support or negotiate too aggressively. If you can, adjust prices for customers who are more of a liability than an asset and focus your energy on those who truly drive your bottom line. In some cases, politely ending unprofitable relationships can free up valuable resources.
- Cut the Underperformers: Evaluate your product and service offerings. Are there low-margin items with high return rates or excessive support needs? Redirect your focus to high-margin winners that align with your financial goals and don’t be afraid to discontinue the rest. Think of how Apple makes once-loved products redundant. You can be ruthless!
3. Sales and marketing should be your growth engine
One answer to lower margins is higher volume. As tariffs increase your costs, aim to capture more market share. An aggressive overhaul of your sales and marketing strategy that shows confidence in your business during challenging times can be a compelling attraction for customers.
- Get direct and personal: Successful marketing speaks directly to your target customers’ pain points and needs. Switch messaging from general to specific and clearly articulate your unique differentiators. What are the tangible benefits of choosing your business over the others? Make sure your customer knows why you are outstanding.
- Review your assets: Your sales and marketing content should work as hard as you do. Be distinctive, have a clear and unique voice, back away from the bland. Address your customer’s concerns and showcase your unique value proposition.
- Fuel your efforts with funding: If you need funding to support your marketing effort, Swoop can help. View your working capital options today.
4. Leverage your biggest assets
A powerful market position starts with a clear message, but it’s your entire team that brings it to life:
- Be consistent: Make sure every customer-facing employee is on the same page. Sales teams should focus on value, customer service should reinforce your differentiators, and all communications should consistently highlight your unique selling points.
- Empower your staff: Train employees to confidently communicate your company’s strengths, explain pricing in terms of value, and recognize opportunities to reinforce key selling points in every interaction.
- Invest in quality equipment: Customers value fast, effective solutions, and the right equipment is key to delivering that. By investing in top-tier tools, you ensure your business runs smoothly and delivers results. With Swoop’s equipment financing options, we’ll help you equip your business with the best, maximizing efficiency and performance. Explore your equipment finance options today.
5. Manage your debt
You can free up cash for growth by managing your existing debt more effectively. Instead of passing on increased supplier costs through price hikes, explore strategic ways to reduce your current financial obligations and free up capital for the improvements we’ve discussed:
- Consolidate debt: If your business has multiple outstanding loans or lines of credit, consider debt consolidation with a new loan on more favorable terms. This can simplify your payments, reduce your overall interest costs and improve your cash flow.
- Renegotiate existing loan terms: Your current loan agreements may be more flexible than you think. Reach out to your lenders and explore the possibility of renegotiating the terms to ease pressure on your finances. Clearly articulate the impact of tariffs on your business and how more favorable terms would enable you to invest in growth strategies. Explore your refinance options with Swoop.
The bottom line: You can thrive in the face of tariffs
Navigating tariffs requires a proactive and strategic approach. By focusing on your profitability, streamlining your offerings, sharpening your marketing, aligning your team and making smart pricing decisions, your SMB can not only weather the tariff storm but also position itself for sustained growth and success.
Are you ready to take control of your financial future and fuel your business growth? Navigate these changing times with Swoop as your partner. We’ll help you explore funding options to reduce your borrowing costs and secure better deals on your current financial products. Get started here.