The economic landscape has been anything but predictable lately, and a significant contributing factor has been the ever-shifting terrain of tariffs. The sudden announcements and implementations have thrown a wrench in the planning processes of countless businesses, leaving many in a state of cautious waiting. Should they adjust prices? Re-evaluate inventory? Overhaul their supply chains? The path forward often remains shrouded in uncertainty.

In this dynamic environment, the ability to adapt swiftly is proving to be a critical determinant of success. The impact of tariffs isn’t uniform across industries, creating a complex tapestry of winners and losers, or at least those less affected.

Our recent survey of business owners paints a clear picture of the challenges. A significant 37% reported a direct increase in their costs due to tariffs. Supply chains have also felt the strain, with 17% experiencing disruptions. For those with international operations, 9% have seen a contraction in their global business.

The strategies for dealing with these rising costs are varied. While 57% of affected businesses are attempting to pass these costs onto their customers, a concerning 46% are already witnessing a decline in sales as a potential consequence. The overall impact on profitability is evident, with 26% of impacted owners reporting a reduction in their bottom line.

Ruben Valladares, owner of Adorgraf Corp in Florida, offers a grounded perspective: “So far, the tariff increases have mainly led to higher raw material costs, making the final product more expensive and impacting customers. However, I believe this dynamic may change over time as the market adjusts.”

The crux of the issue lies in the unpredictable nature of policy. With tariff rhetoric and implementation seemingly in constant flux, forecasting the long-term impact on business operations remains a significant challenge. In fact, 34% of our survey respondents believe it’s still too early to fully grasp the ultimate consequences of the tariffs.
Business owners are understandably vigilant, closely monitoring the situation and expressing concerns about potential long-term ripple effects on their cost structures, supply chain resilience, and consumer behavior. Interestingly, about one in five owners have yet to experience any direct impact from the tariffs. This mixed reality underscores the adaptability inherent in the small business sector, a group known for its resilience in the face of economic headwinds.

Ryan Hemmert of Washington Business Brokers aptly summarizes the sentiment of many: “The uncertainty about tariffs and policy is far worse than the actual impact of them. Owners are adaptable – but they need clarity so they can adapt.” The lack of clear direction can be more destabilizing than the tariffs themselves.

Amidst the Storm, Opportunities Emerge
While the tariff landscape presents undeniable challenges for business owners, the perspective from the buyer’s side reveals a different narrative. A significant 60% of buyers surveyed remain steadfast in their search for the right acquisition opportunity. In a surprising twist, 10% even reported that tariffs have accelerated their buying timelines.

This increased urgency among some buyers stems from a desire to capitalize on the very uncertainty that plagues business owners. Shifting valuations and potential distress among businesses heavily impacted by tariffs can create attractive acquisition opportunities, particularly for strong, well-managed companies that are positioned to thrive in any economic climate.

Robert Scott, an individual actively seeking opportunities in New York, articulates this viewpoint: “The time [to buy] is when there are headwinds coming that will be very unsettling for some businesses, so they will want to sell. A new approach to this new world will create opportunities that seasoned executives like myself will capitalize on.”

Navigating the Current Climate: A Dual Perspective
The era of tariffs presents a complex duality for the business market:

For Business Owners:
Adaptability is Key: The ability to quickly adjust strategies in response to tariff changes will be crucial for survival and growth.
Scenario Planning: Developing contingency plans for various tariff scenarios can help mitigate potential negative impacts.
Strong Relationships: Maintaining open communication with suppliers and customers is vital for navigating price fluctuations and supply chain disruptions.
Exploring Alternatives: Investigating domestic sourcing options and diversifying supply chains can reduce reliance on tariff-affected goods.

For Business Buyers:
Strategic Advantage: Uncertainty can create opportunities to acquire quality businesses at potentially more favorable valuations.
Targeted Acquisitions: Focusing on businesses that are resilient to tariff impacts or those in sectors poised for growth in the new economic landscape.
Long-Term Vision: Recognizing that short-term headwinds can create long-term opportunities for well-capitalized and strategically minded buyers.

The Takeaway
Tariffs have undoubtedly injected a significant dose of unpredictability into the market, creating genuine challenges for many business owners. However, within this uncertainty lies a window of opportunity for astute buyers. The ability to navigate this complex landscape, adapt to changing conditions, and identify strategic advantages will be paramount for both those looking to sell and those looking to buy in the evolving world of international trade.

“The time [to buy] is when there are headwinds coming that will be very unsettling for some businesses, so they will want to sell. A new approach to this new world will create opportunities that seasoned executives like myself will capitalize on,” said Robert Scott, who is searching for opportunities in New York.

At the John Diaz Group – KW Reserve Business Brokerage, we help business owners sell their companies smoothly while maximizing value and maintaining confidentiality.

Selling or buying a business is a complex process, but with the right guidance, it can be seamless and rewarding. At the John Diaz Group – KW Reserve Business Brokerage, we specialize in business sales across South Florida (Palm Beach, Broward, Miami-Dade & Saint Lucie), ensuring you receive the best price while safeguarding confidentiality.
From valuation to buyer screening and deal structuring, we manage every step of the process. Whether you’re selling a small business or a franchise, we provide expert support to help you close successfully. Contact us at 844-456-4647 or email us at john@kwbusinesssales.com.