Key takeaways
- Tariffs will make it harder for many small businesses to afford imports, especially Chinese imports.
- To help mitigate rising costs, keep your business finances separate from your personal finances, rethink your income streams and look for local community assistance.
When Mallory Hank-Johnson recently ordered ribbon as a supply for her alterations business, she was shocked to see the $10 ribbon she typically orders had gone up to anywhere from $60 to $80. It wasn’t the only item that had exploded in price, either. Depending on where she orders, Hank-Johnson has seen additional fees tacked on for other supplies she uses, such as thread, needles, zippers and more. Those extra costs are eating into her bottom line.
Hank-Johnson is the co-owner of Needle and Stitch Studio, an alterations and T-shirt printing shop in Las Vegas, just a short drive from the Nellis U.S. Air Force Base. Most of Hank-Johnson’s clients are members of the military — that ribbon she needs to buy is part of the Air Force uniform. She lies awake at night, terrified that she may need to cut her four employees’ hours or raise prices 10 percent to 20 percent. In addition, for a client base on a fixed income, raising prices as high as 20 percent can also be way out of their budget.
“It feels scary, because there’s been some customers who have already complained that our prices are too high,” Hank-Johnson says.
As tariffs begin to impact American households, many small businesses who order products and supplies directly from countries like Canada, Mexico and China are seeing a significant difference in their bottom line. These higher costs will affect many small businesses and can even be financially devastating, especially for businesses that already operate on slim margins.
With tariffs making many goods unsustainably expensive for small business owners, this leaves them with unappealing options — sacrifice profits to pay the tariffs, raise prices, switch to more expensive manufacturers elsewhere or close entirely. While raising prices may seem like the simplest option, amid a rising cost of living, there may be few customers even willing to pay those higher prices.
In today’s economic landscape — marked by market volatility, inflation concerns and tenuous job security — financial decisions have never felt more consequential. Our Navigating Now series cuts through the noise with expert guidance and targeted advice for diverse financial situations —whether you’re struggling to build savings amid rising costs, protecting retirement funds during market volatility or securing your income in an uncertain job landscape.
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Experts weigh in: Small business owners will need to think in new ways to tackle uncertainty
So long as tariffs impact imports, there aren’t a lot of options for business owners who rely on affordable overseas goods, says Bankrate Financial Analyst Stephen Kates, CFP. You could always change to a different supplier, but most major importers to the U.S. have experienced tariff hikes, and a change may still drive up costs. Not all businesses can afford that.
“Small businesses are going to be hit the hardest by supply chain disruptions and supplier cost increases,” Kates says. “Fortune 100 companies like Amazon, Walmart, and Costco have strong negotiating power to pressure suppliers to work with them on price and order size. Small businesses do not.”
The uncertainty around on-again, off-again tariff announcements provides another roadblock for business owners who want to know if they can continue to work with their suppliers and how much they should charge for their products.
“For the average small business owner, this is going to create a lot of uncertainty, and that uncertainty is going to be challenging,” says Christopher Eaglin, an assistant professor at the Fuqua School of Business at Duke University. “It’s going to make it so you have to be much more dynamic in the way you think about your business.”
For some business owners, tariffs today are reminiscent of COVID-19, when supply shortages and tariffs from Trump’s first term drove up prices, according to experts. But during COVID-19, businesses had access to Paycheck Protection Program (PPP) loans. As of June 2025, the Trump administration hasn’t offered that kind of lifeline to small businesses.
“I think the biggest misconception that I’ve heard is that this will blow over and things will go back to normal,” Eaglin says. “I think one ought to prepare oneself as if this uncertainty will persist, and try to plan as if that is the case.”
‘Navigating Now’: How to manage your small business expenses amid tariffs and uncertainty
Despite the challenges, there are still ways you can navigate this uncertain period and take back some control of your business. Bankrate spoke to several personal finance experts for creative solutions to protect not just your business, but also your personal finances.
1. Introduce other services
To make more money, Hank-Johnson introduced classes and community events to her store for the first time. When tariffs affect your primary source of revenue, introducing new, tariff-resistant services to your business could be a great way to diversify your income streams. Introducing classes and events hasn’t fully paid for higher-priced goods due to tariffs for Hank-Johnson, but she says it helps ease the pain a bit.
Here are some ideas of new revenue streams, based on your business type:
| Business | New income stream |
|---|---|
| Restaurants, bars and coffee shops | Catering, cooking classes, hosting community events |
| Retail brick-and-mortar | Offering subscriptions, creating an online store, subleasing space, hosting classes and community events |
| E-commerce | Partnering with other brands, offering digital products, offering subscriptions or memberships, attending trade shows or hosting your own events |
| Small farms | Starting a Community Supported Agriculture (CSA) program, hosting volunteers and events, renting out land |
| Auto and repair shops | Repairing and flipping cars, offering fleet management services |
2. Look for efficiencies
As you consider adding additional income streams to your business to create more sources of revenue, you can also save money by streamlining your business. If you run a business with several lines of income, and some are taking up more resources while not being as profitable, it may be time to consider cutting them, according to Eaglin. For example, if you run a retail store with an e-commerce site, but you make relatively few e-commerce sales, you can de-prioritize or discontinue the website to focus on your brick-and-mortar. Or, if you sell several kinds of products, you can streamline your business by discontinuing your more expensive products or the products that don’t sell as well.
Stuck on how to make your business more efficient? Ask AI
AI platforms can be a great tool to expand, streamline or reinvigorate your business. You can use AI to help with your marketing efforts, customer service sales and more — Bankrate explains how.
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Bill Fink, the chief lending officer at Provident Bank in New Jersey and a guest lecturer at the University of Pennsylvania Wharton School, says that companies should find ways to cut overall costs, even if it means spending money on investing in something new, like a new piece of equipment.
“If you can make your business far more efficient and reduce your ongoing production costs and improve your ongoing cash flow profitability, that may be the right thing to do right now,” Fink says.
These changes can be temporary or permanent, depending on the needs of your business, but focusing your efforts now could lead to savings down the line.
3. Take this opportunity to upskill
As businesses look for new ways to innovate and refine their business plans, Eaglin also says now is a great time to upskill. If there’s an online course or business module that you’ve been meaning to take, take it, Eaglin says.
Coursera, the Small Business Administration (SBA), Google, EdX and certain universities like Harvard University all offer free online courses for small business owners looking to get a leg up. Through them, you can learn skills such as the following:
- Basic corporate finance
- Digital marketing strategy
- Data storytelling
- Basic human resource strategies
- Search engine optimization
- Leadership and management skills
4. Take advantage of federal resources
For more personalized assistance, the SBA has long been a great source for new and existing businesses alike, but it’s undergoing cuts under the Trump administration and many programs are in limbo, according to experts. However, it’s still in operation. If you’re interested in SBA programs for existing businesses, reach out to your local SBA office and see what programs are available to you for assistance.
The SBA isn’t your only resource, however. Check out other national grants and programs that may be offered near you — for example, some states like Minnesota and Illinois offer grants to local businesses. Other programs are available specifically for female, veteran, low-income or first-time business owners.
Small Business Development Centers (SBDCs) can also be a great resource for small businesses who are looking to get a leg up. SBDCs are federal programs affiliated with the SBA that offer free or low-cost training to small businesses. They’re usually held through your local university or community college, and they offer training workshops — such as introductions to entrepreneurship, introductions to financial literacy and small business borrowing, as well as training on marketing or compliance.
SBDCs also offer personalized training, which you typically need to apply for. You can find the closest SBDC to you by using the SBA website.
5. Lean into local assistance
Monika Hudson, a professor at the University of San Francisco and Director of the USF Gellert Family Business Center, says that universities and colleges are generally a great resource for local businesses who need assistance. Many universities partner students (particularly business, law or marketing students) with local businesses, so students can gain real-world experience and companies can receive free assistance with their business plan, marketing strategy or other needs. Check to see if your local university has a business incubator or accelerator program that can match you with volunteers, but if not, your local business school might still have resources you can use.
Additionally, Hudson recommends that small businesses consider seeking mentorship with larger, established family-owned businesses in their community.
“These individuals have knowledge and skills, and maybe they haven’t decided to volunteer at scale, but they may be a great source of information on how to pivot,” she says.
One mentorship option is SCORE, a national nonprofit in partnership with the SBA, which partners small businesses with volunteer business mentors. You can also find workshops and networking opportunities near you through online groups like Meetup to connect with other business owners who understand the difficulty of managing a small business right now.
Keep in mind:
If you aren’t seeking mentorship from other businesses, but are still interested in working with your neighbors, you can also consider forming partnerships to purchase products in bulk or renegotiate prices with suppliers.
6. Protect your personal income
If your income is derived entirely from your small business profit, the effects of tariffs on your business can impact your personal income. To keep higher business expenses from affecting your personal finances, it’s important to keep the two separate. That way, not only is it easier to keep your books straight, but you can avoid legal, tax and financial headaches down the road.
If you don’t already and if your business is mature enough for you to do so, pay yourself a salary from your business profits, just like any other employee, instead of pulling funds as needed. Set a schedule — such as every two weeks or every month — and pay yourself a regular salary to keep a clear boundary between your personal and business finances. Keep separate bank accounts and credit cards for your business for even further separation.
If you have some expenses that could be considered both a business and personal expense — like utilities and internet for your home office — estimate what percentage of your expense is used for your business. For example, if you have a 200-square-foot office in a 2,000-square-foot house, deduct 10 percent of your personal utilities and expenses as a business expense.
The bottom line
Running a business is hard. Running a business when your company needs to pay higher tariffs on imports is harder. But by introducing other services, finding ways to make your business more efficient, upskilling, looking for local assistance and separating your finances, you can help mitigate some of the worst effects of tariffs.
If you need more guidance on creating a budget for your business, check out Bankrate’s guide, which takes you through each step in creating a business budget, from reviewing past financial performance to setting profit goals.
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