A Realistic Outlook: Can Small Businesses Survive the Trade War?

The US-China trade war is old news. However, this topic doesn’t get any less relevant. Many a business owner is slowly panicking due to the fears of whether their company will be able to survive if that situation gets any worse. It’s definitely true that some leading US businesses are truly at risk, says the Fortune. But there’s a bright side to some companies as well. It seems that the instability threatening top corporations prompted a rush of investment into small business. Therefore, a savvy entrepreneur today can use this precarious situation to boost their startup and climb to the top. The success of this plan will largely depend on whether the company in question has a plan to deal with the complications of the trade war if it erupts in earnest.

Investment into the Small-Cap Stocks: Trade War Situation Isn’t All That Bleak for Some

It’s true that the business world is turbulent right now because the trade war is a thing that will affect everyone. It remains an unknown whether it is going to be a two-way struggle between the US and China or if the EU will get dragged into it directly. There are too many unknowns in this matter still. And that’s one of the main reasons why it’s so dangerous.

However, none of this seems to deter investors who are still pouring funding in many US businesses. The only notable change about this is that that money is now mostly going to smaller businesses, which aren’t as at risk. In fact, due to the potential complete loss of many imported goods, many local companies now get a chance to make more business.

These businesses aren’t as exposed to the global market. Therefore, they aren’t as likely to suffer much due to the trade war. However, they aren’t completely safe either. This means that a smart business owner should take some steps to protect their company from the possible fallout.

How to Protect a Small Business from the Trade War: 3 Tips to Try

1. Raise prices and drop costs wherever you can

The raising of prices is impossible to avoid when the economic situation becomes unstable. For a small business, that’s a struggle by default because low prices are often its number one attraction to customers.

To minimize the damage, the raise should be gradual. Communicating with the customers and warning them well in advance is essential at this point. It would also be helpful to create an information package to send out to the most loyal customers. Explaining the situation to some extent will help retain their loyalty and make people more accepting of the change.

However, it will help even more to cut the business costs. One should look for any ways to save money in order to retain as competitive a price as possible. Possible options include cutting delivery costs (Ikea offers a great example) or finding cheap hosting. The latter will be a good choice for small businesses that rely mainly on their own websites. Finding a cheap deal from a leading hosting provider can make a huge difference because this will improve the quality of the website. Therefore, the entire business should go up while the cost is actually going down.

The best news is that all small businesses are in the same position. This means that the competitors will have to raise prices as well, so the situation won’t change that much on the whole. That’s why focusing on retaining customer loyalty first is important.

1. Start offering complementary services

Branching out is one of the best ways to survive the trade war for any business. Small companies should focus on services/products that complement their current specialty first. For example, if it’s selling electronics, starting a maintenance and repair service is the way.

One should also consider complementary partnerships. For example, building contractors can partner up with building materials’ suppliers to negotiate discounts. The options are limitless but to choose the best one the business owner must research their target audience thoroughly.

1. Expand to other markets

With the trade war brewing, going global might not be the best choice. However, many small businesses are locked to one location or even one small group of clients. As the economic situation grows worse, it’s time to try out new opportunities.

If one looks on it from the right angle, the uncertain situation can become an opportunity. With many businesses failing or panicking and raising prices way too high, many other businesses lose suppliers. This is where a clever small business owner from the neighboring region can come in.

The idea is to research who else within easy reach will be interested in the company’s products or services. Making a few adjustments to reach further away from the business’s regular comfort zone is a worthy investment.

The trick to succeeding with this plan, and with surviving through the trade war in general, is to take risks and catch opportunities fast. Yet one has to stay level-headed and only take reasonable risks.