Welcome to design to help your business grow. I'm your host, Randi Lynn Johnson. Each episode will bring tips and insight into how to make sure your interiors are working for you and growing your business.
www.pasleycommercialinteriors.com
In an increasingly competitive market, the merits of using interior design as a strategic growth tool can make all the difference in not just surviving, but thriving,
FEATURING: ROBIN PASLEY, NCIDQ Founder & Design Principal
PASLEY COMMERCIAL INTERIORS Design to help your business grow
In our third and final conversation with CPA Brian Werner, we look at how to stay optimistic amid uncertainty. This episode explores the effects of tariffs and inflation on small businesses, emphasizing adaptation and community resilience. Listeners gain insights into creative sourcing strategies, the psychological impacts of economic changes, and maintaining positive customer relationships.
• Discussion of tariffs and their implications for businesses • Exploring creative sourcing alternatives to reduce reliance on affected imports • The impact of inflation on profit margins and pricing strategies • Importance of transparency in communication with customers over price changes • Highlighting community support and collaboration among local businesses • Emphasis on maintaining a positive outlook during economic uncertainty
For expert financial advice, contact Brian at 719-358-2360 or email contactus@brwtax.com.
We welcome your questions! If you would like to learn more about us or connect for a conversation, please visit www.pasleycommercialinteriors.com.
Okay, so we've set up our year Now. Robin, I know that you had a question. Let's see.
Robin Pasley:
New old president, yes, and so we've already had some questions coming our way about the tariffs, because we have a The that yes have some that are coming what we call over the water, which means they're made in China mostly. We have a few vendors like that. Most of our vendors, though, are in Canada, and then the rest of them are here in America, but what we know is even the ones here they are getting some of their supplies, some of their components, are coming over the water, so tariffs are going to hit us, no matter where your products are made, or at least they're going to be considered, but I want to know, because there's already been a little alarm going off that I hear of people freaking out that this is going to be like seen as we're going to feel it like a tax. What do you think about that?
Brian Werner:
I mean I could be perceived as a tax, but fortunately we still live in a free country and all companies will have the choice on whether they continue to source from those countries that have a tariff imposed against them. Or companies may have to get creative. They may have to, you know, seek out new supply sources from, maybe, countries that are not being impacted by the tariff. So I think you're going to see number one, companies you're going to have to get creative and then number two, potentially looking for other sources of being able to source the products that they're going to need to continue operating their businesses so their margins are not impacted negatively.
Robin Pasley:
Yeah, like I know that TFL, which is thermal foil, laminates, many of them are made in China, but there are some that are made in Italy and that's a component that's used to build furniture, and so they can just source like you're saying. Maybe just go to Italy to source instead of from China.
Randi Lynn Johson:
I volunteer.
Brian Werner:
There may be a lot of business travel that results from some of these stairs with companies and people attempting to establish new relationships in other parts of the world.
Robin Pasley:
I do remember too, because you know, what I would say to a little bit of that fear is at least we're dealing with a president that has done something like this before. You know he did impose tariffs on his first presidency and I remember seeing the same kind of. You know we were all a little bit like what is that going to do? And I do remember on some of my invoices seeing it come in as a line item and you know I would we'd have to decide if we were going to pass that along to our clients or if we were going to absorb that. And I guess that you've, you've seen that too. You've talked about that a little bit, about margins and trying to decide what to do.
Brian Werner:
So you know I always say, well, number one, you know any potential like issue or, you know, call it a problem that you may be faced with, and especially once we don't have, we have zero control over. Essentially, there's always an opportunity, right, there's always potential solutions. There's always an opportunity, right, there's always potential solutions. It's a great way to see that. However, let's say that we're in the place where we have great vendor relationships and those tariffs do impact those suppliers in companies like I can't find anybody else right.
Brian Werner:
Then, at that juncture, they may be stuck with a tough decision to say, okay, now I'm having to pay whatever percentage that tariff is 10% or 20% higher on those goods that I was sourcing a couple months ago that were cheaper, right, well, at that point a company is probably going to be forced to pass that price increase along to their customers. To pass that price increase along to their customers. And of course, you're going to have some customers that are probably not going to be happy. But that customer might be in the same boat as well. They may have had to pay that tariff, pay the higher prices because they source from the same country. So there's going to be a lot of companies and just people that are going to be in similar situations.
Randi Lynn Johson:
That's a good way to see that We'll require pivoting, but what I'm hearing is we shouldn't panic. No, it's going to be okay. Right, we can be nimble yeah.
Brian Werner:
Life is too short to panic.
Randi Lynn Johson:
I agree, I like that. Thank you for that. All right, so we've got tariffs, but also it's sort of like inflation right. Inflation right, that was a big kind of to do this year. Last year it went up. I mean, I felt it. I think everybody felt it. Um, but we're still standing right. And okay, brian, I want to hear from you as a cpa, who you probably saw it in greater measure and you know talking with a lot of people what was that like?
Brian Werner:
so we did, because we actually sit down with our companies quarterly and we could see when inflation started to really pick up. We could see the impact on companies bottom line, so on their profit margins, and we, because we meet with our companies so frequently, we picked up on that right away. So we worked with a lot of our companies on saying, hey, your input prices are going up and you have zero control over that. You have to increase your pricing to your customers Because if you don't, then your margins are going to start to come down. And all of a sudden you're going to be a year in and you're going to say my revenues are the same and I work just as hard, but I made 20% less than I made last year, right, and that's usually not a great feeling for you know anybody to go through, especially as a business owner, right? So, um, so, yes, you, it's almost like it's I, it's almost like a necessary evil Like your. Your hands are tied behind your back and it's like what else do you do?
Brian Werner:
Big corporations do this all the time. Anytime they have price sorry, their input prices increase their insurance, their overhead, their rent, you know, you know whatever they're sourcing their material costs and such. They're going to go up every single year. So for a long time there, 2% was a very small blip on the radar. It was almost like unnoticeable. But once we started to ramp up into the you know, 6, 8%, maybe even 10% range, at that point it does have an impact because it's also compounding too. It's not, you know, people have talked about and they had the hope that we would go back down at some point. That's probably not going to happen. So at that point a company does have to adapt. If they want to survive, they have to pass that along to their customers. And then same thing if it's a B2B, that business is going through the same exact thing. They're probably having to do the same thing.
Robin Pasley:
You know, I like your positive approach to all of this, though, because we were talking offline. Your note was we're still here, we're all still doing business together. We're maybe getting pinched here, pinched there, but we're all still in it together. And I think that's a really positive way to see the things. Like you said, we can't control them, so why, you know, instead of living our lives in a ball of knots?
Brian Werner:
you know I like that, that's great. Focusing yeah, focusing energy on things we can't control, to me is just, it's not productive.
Randi Lynn Johson:
Yeah.
Brian Werner:
And it's not good for your health either. I mean they say that stress could be the silent killer right?
Robin Pasley:
Well, it's not productive and it's not good for your health either.
Brian Werner:
I mean they say that stress could be, could be the silent killer, right?
Randi Lynn Johson:
So well, that's good. I think this is a great conversation to have as we start 2025, and we just know we're going to handle the things that we can control what's in front of us, and we're going to keep stepping, keep moving forward, and we have great people Stay positive Come positive.
Brian Werner:
You need to boost your positivity.
Randi Lynn Johson:
Come find me and Robin, that's right If you need help with all your financial needs and taxes, because it makes my eyes cross, it literally makes my head hurt. I thank God every day that my husband is just like. He just handles the budget.
Brian Werner:
I'm like.
Randi Lynn Johson:
I don't want, I just I don't know. I'm good at so many things and that's not it. My wife's the same as well.
Brian Werner:
She's like sometimes I'm so thankful I married an accountant.
Randi Lynn Johson:
Well, if you're not married to an accountant, or even if you are, go talk to Brian and his team. They're going to help you out. Uh again, link to his where you can contact him's in the show notes. But we really, really appreciate you coming down and just chatting with us, reassuring us, reassuring our listeners, and just being such a great member of this Colorado Springs community.
Brian Werner:
Thank you, and thank you for having me and thank you for being such a wonderful community member as well. I mean, it does. It takes a village right, it takes a community and we all got to look out for each other and love on each other and best support each other. However that looks For sure.
