An Entrepreneur's Guide to Surviving Chaos

What's Going On

The Trump Administration is pursuing an aggressive agenda that could have a profound and (potentially) negative impact on the U.S. economy. It's simultaneously (i) deporting unskilled laborers on which several key industries rely, (ii) cutting off billions of dollars in federal funding, and (iii) proposing steep tariffs on foreign goods. The collective economic impact of these policies could be substantial and small businesses would feel the effects.

One possible result is inflation. In industries like agriculture and construction that rely on migrant workers, labor costs will rise sharply leading to higher prices for consumers. Ventures that lose federal funding will also have to charge more. Businesses that import or export goods will raise prices; the former to pay the tariffs, the latter when targeted countries retaliate. In short, running your venture could soon become much more expensive.

Generally, when prices rise, demand for some goods and services falls. If you have to charge more to cover increased costs, users and customers may not be willing or able to pay. As demand drops, you have to spend less and maybe even lay off workers. Though grossly oversimplified, when this happens across the economy, a recession starts.

Predicting the economy is like guessing the weather: Even the experts are sometimes wrong. Still, the potential impact to small business owners from rising prices and decreasing demand cannot be understated. The time to pivot and plan for these disruptions is now.

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What To Do About It

This is not about politics. It's math. As an entrepreneur, you must understand your customers' economic realities. If the people who buy your goods and services can no longer afford them, you have to change how you operate or you'll be out of business. Here are some tips for surviving economic upheaval.

1. Know your customers. If 60% of your customers work at a federally funded research facility, you may have a problem. If you sell goods or services to farmers or home builders who can't find workers, you've also got a challenge. If you rely on parts imported from Mexico or Canada to build deliverables and your production costs shoot up, your venture will take a hit if you can't pass them on to end users. Knowing your customer base is key to assessing the risks these policies pose for your business.
2. Have a contingency plan. Think outside the box. Can you relocate to someplace with a customer base that doesn't rely heavily on federal funding? Are there other markets for your goods and services in less price-sensitive industries? Can you cut costs by outsourcing tasks like coding or bookkeeping? Create and implement plans now because things will only get more chaotic.
3. Tighten your belt. Pivoting quickly - because you had to raise wages, cut costs, change markets, etc. - costs money. Marketing and other efforts in which you've already invested may no longer produce significant returns. The more money you have to quickly adjust to sudden economic change, the more flexibility you have and options that will be available.
4. Get used to the chaos. Markets react negatively to uncertainty. A lot of these policies will be challenged in court even as new ones are abruptly rolled out. Stay on your toes and ahead of the chaos by keeping close tabs on how prospects, leads, and customers are impacted and responding. The faster you can change to meet their needs, the better your chances of surviving and thriving.
5. Beware the predators. When Beneficial Ownership Reporting began in 2024, law firms, registered agent providers, and other companies like LegalZoom charged customers up to hundreds of dollars for something anyone can do herself in five minutes. Some big law firms are already using the host of new presidential executive orders as a marketing tool. Make sure you need the services you're getting and that matters are being handled efficiently and effectively.