Small Business on the Brink: Creating a Contingency Plan in a Tariff-Era Economy

Many small businesses are built to bend and flex. We pivot, we iterate, we adjust to what the market tells us. Sometimes, those shifts come from within: new product ideas, customer feedback, or evolving goals. But occasionally, change crashes down from the outside. And for many small business owners today, that outside force is a single word: tariff.

If you’re feeling the effects of rising costs, supplier disruptions, or confusing trade policies, you're not alone. These shifts aren’t just line items, they’re strategy-shakers. And whether or not you plan to shut down, contingency planning can be the difference between surviving the storm or scrambling in its wake.

This isn’t about panic. It’s about power. Here's how to take control and why planning is the most resilient move you can make right now.

Why Tariff Volatility Is Forcing the Conversation

Before we dive into the checklist, it’s important to understand how tariffs work and why they matter so much to small businesses.

A tariff is a government-imposed tax on imported goods. The idea is to encourage domestic production by making foreign products more expensive. But for the 97% of U.S. importers that are small businesses, this can translate to unpredictable pricing, delayed inventory, and tightened margins.

And it’s not just theoretical. Many businesses are already facing decisions about whether to raise prices, renegotiate supplier contracts, or pause production entirely. Knowing what tariffs are in effect, especially in sectors like apparel, electronics, and food products, can help you determine where tariffs will hit the hardest — and whether your business might be next.

Your Tariff Contingency Planning Checklist

We’ve broken this into three clear categories: Financial, Operational, and Strategic. You can approach your planning with clarity and confidence.

Financial Readiness

• Can your margins absorb a 20–30% increase in COGS? Or will a tariffed input force price hikes that your customers can’t bear?
• Do you have a 6–12 month runway under new cost assumptions? Budget with worst-case inputs, not past-year averages.
• Are your key inputs or suppliers exposed to tariff policies? Countries like China, Vietnam, and Mexico are common origins and are often targeted.

Operational Flexibility

• Do you have backup suppliers in non-tariffed regions? Diversifying now means less scrambling later.
• Can your logistics partners adapt quickly if routes change? Tariffs can lead to port delays, rerouting, and unexpected fees.
• Have you mapped your full supply chain exposure? Sometimes, a part you don’t directly import still raises your costs.

Strategic Clarity

• Have you defined thresholds for major changes? Know in advance when you’d pause production, pivot business models, or consider shutting down.
• Have you discussed this openly with co-founders or advisors? Making tough decisions gets harder without alignment.
• Do you know your options if winding down becomes necessary? Knowing what a smooth shutdown looks like now gives you more control later.

Planning Is A Sign Of Strength

If you’re asking hard questions about your business right now, that doesn’t make you pessimistic — it makes you prepared. Especially when economic forces feel unpredictable, contingency planning offers a rare and essential form of clarity.

And if you conclude that it’s time to shut things down, Starcycle is here to take it from there.

We help small business owners save time, money, and stress by managing the most overwhelming parts of closure — from government filings and license cancellations to tax forms, final distributions, and vendor notifications. We streamline the entire shutdown process so you don’t have to chase paperwork or decipher complex legal and financial requirements.

Ready to Get Clear on Your Next Steps?

If tariffs are pushing your business to the brink, you deserve more than just stress. You deserve a plan.

Starcycle offers personalized shutdown and strategy support starting at $299. No hidden fees. Just clarity for what comes next.