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Understand ones own pricing

How small businesses should manage the changing market

Tariffs have indirect and unintended consequences throughout the economies they target. Even something as seemingly focused as an import tax on steel and aluminum can have a ripple effect, impacting businesses in other industries. As an entrepreneur, it is important to deftly manage your company as the market adjusts.

“When the elephants dance, everybody gets shaken up,” said Lyneir Richardson, executive director of the Center for Urban Entrepreneurship and Economic Development at Rutgers Business School. “In this instance, [small businesses are often] dealing with the supply chain asking for higher costs that cannot be quickly passed onto customers. It means more time thinking about pricing, renegotiating and managing cash flow.”

An example of unexpected consequences affecting small business could be a small bakery, for instance, that regularly purchases products like pie tins and whipped cream. While a bakery is far from other businesses in the steel or aluminum industry, products like these are essential to their operations. Odds are that companies that make pie tins or whipped cream (which comes in metal canisters) will adjust their prices to reflect the new costs or lay off their employees.