Tariffs And Their Impact On Local Business
Tariffs are never an imposition that any business owner wants to face. Much less, a local business owner who is simply trying to follow their passion as an entrepreneur. Tariffs are taxes that are placed on specific imports and exports. They are used to improve national revenue and prevent foreign entities from taking over a market.
While tariffs may have good intentions, they can put a significant dent in a locally owned business’ bottom line. This past May, President Donald Trump imposed a new set of tariffs that heavily targeted China, Canada, Mexico, and EU nations. With inevitable retaliation against tariffs from these nations, many local business owners fear for the future of their shopfronts engulfed in the shadow of a rising international trade war.
How Tariffs Impact the Average Small Business Owner
Even though recent tariffs are being implemented at an international level, it’s the average man who will pay the ultimate price. Every action has a consequence and even the most indirect consequences can lead to devastating results for a business owner. Here are some of the ways tariffs can impact Dallas businesses in an unfortunate chain reaction.
Increased Prices for Materials
With current steel and lumber tariffs in place, even something as trivial as pie tin orders can become harmful for a local bakery. Even if your materials are sourced from a local manufacturer, if their resources stem from international sources, the prices for what you need will significantly increase. Costs to manufacture products will add up and lead to a further domino effect that harms your success.
Reduced Fund Availability
Putting all of your funds towards making ends meet on the production end prevents you from using funds for other important efforts like:
- Rolling out a new product
- Hosting community events
- Expanding your services and locations
In short, if you don’t already have funds to focus on increased good prices and your other goals, you’ll find yourself at a crossroad that leads to mediocrity.
With funds tied to extremely tight production budgets, many small business owners find themselves unable to pay the people that make the magic happen. Unfortunately, layoffs within small businesses are a common result of tariffs. Even larger corporations like auto manufacturers are impacted by these actions. How will a business of your size hold up?
Let Goodman Capital Finance Help Keep Your Local Business Thriving
Fortunately, there are alternative funding options available to business owners that can help mitigate the impact of tariffs on their organization. One of the more popular initiatives business owners are taking is invoice factoring.
By selling their accounts receivable at a discount to businesses like Goodman Capital Finance they are creating cash-flow that prevents their world from hitting a standstill. If your business is in need of funding due to tariffs squeezing the budget, we can help. Contact us today to find out more about invoice factoring and other alternative funding options.