Know how the tariffs could impact your future company sale
Tariffs are now a hot topic for many business owners/CEOs. For some businesses, tariffs will be a tactical headache or opportunity and for others they will be a strategic headache or opportunity. Regardless, it’s time for productive strategic dialog. Here are some good questions to discuss with your team:
- Do tariffs put us at a disadvantage or advantage versus our competition?
- If we have an advantage, how can we fully exploit it? If a disadvantage, are there steps we cold take to minimize the impact?
- Could a competitor take advantage of the tariffs at our expense?
- Have we conducted a cash flow projection to understand the impact of paying the import tariff and the float between paying this tariff and passing it along for ultimate payment from our customer - how will this cash flow timing impact our business?
- Would our customers consider moving to an alternative product where they could avoid the tariff expense? If yes, could we begin to offer such a product?
- Can we speak to any customers and hear their inputs on what the tariffs could mean or already mean for them – having this input might give us ideas of how to manage it?
- Should we raise our unit price to cover the cost of a tariff or should we add a new line to the invoice so customers see we are holding our original price and only adding a new tariff expense line while it’s being incurred?
- Could we offer a sales program that if the customer begins purchasing an additional product from our portfolio, we will reward this new incremental revenue by not passing along the tariff cost on the original product they have been buying from us?
- Could we do a quick product redesign to eliminate or reduce the part/product that is incurring the tariff?
- Could we offset the tariff cost with an internal efficiency or productivity improvement initiative that could lower our cost of goods sold, therefore allowing us to absorb the tariff cost and possible hold or even improve our gross margin?
Asking good strategic questions is the job of any owner/CEO and this new tariff challenge is such a time that requires good strategic thinking. Don’t let the tariff challenge negatively impact your company worth. Have a healthy dialog with your team now to set your course for managing the tariff environment and possibly protect or build your company worth.
