We’re a thousand miles from comfort
Adaptive Strategies for Small and Mid-Sized Businesses Amid Economic Shifts
This topic was previously covered in one of my weekly newsletters. To get other timely tips, make sure you’re on the list: www.thejilljames.com/newsletter
Thank you for indulging my recent political economy nerding. When we enter inflection periods, I throw out our content plan. And right now, uncertainty is spiking. Consumer sentiment is down 22% from December to February. Sales at restaurants and bars are down 13%.
While government policies and macroeconomic readings will continue to be a big deal, we continue the work of building strong, purpose-driven companies. For this week, anyway, it’s back to our regularly-scheduled programming.
Happy Women’s History Month! It’s the time of year I call Peak Hard Pants, when lunches, panels, and conferences encourage us to network relentlessly and refer to ourselves as “girlies.” (Who’s with me on this trend giving the icks?)
I’ve recently ventured into rooms of small and mid-sized business owners, bankers, and wealth managers. Some takeaways:
Insights from Business Owners, Bankers and Wealth Managers on Economic Strategy
Business owners
Product businesses are already getting hurt by compounded tariffs and consumer boycotts. One woman highlighted a $57,000 tariff payment she had to make to fulfill an order where the deal terms were set months ago. She couldn’t pass on the cost. On top of that, it’s an order for Target. She spoke up after a few other women encouraged sustained boycotts. Her brand’s centering principle of affordable clean skincare made Target a good fit. It’s complicated, my friends.
Beyond buyer sentiments, business owners said it’s gotten easier to hire good people. And the higher-cost environment is accelerating their experimentation with automation and AI tools. They’re hiring for curiosity and problem-solving over name-brand experience. They may be considering whether to grow faster, take equity investment, or sell now and let a larger company do the work of capturing the upside.
Bankers
The collective headsmack was audible from the money people, both investment and commercial bankers. Why are we pursuing these loser economic strategies? Who’s going to want to invest in a business? What kind of deals are on the table? Where will we find growth? While the commercial bankers still seemed eager to initiate loans and lines of credit, the investment bankers will be fighting for activity. My takeaway was that more public companies will go private, and going public is a last-resort exit path. But private roll-ups mean healthy small businesses will be more desirable acquisition targets.
Wealth managers
Not shocking to hear wealth managers sticking with foundational strategies. Stay invested. Use dollar-cost averaging. Be on top of tax-preferred strategies and manage your risks with insurance.
One tidbit from the wealth session: women spend $195,000 more than men over their lifetime on healthcare costs. While a good chunk comes from living longer and giving birth, there’s about 40% that hits from chronic health issues in middle age. Preventative care in your 30s, 40s, and 50s can have very real long-term savings both financially and in your quality of life. Don’t skip it.
In an environment with this much uncertainty, it’s hard to look for opportunities.
I cannot un-stupid this market correction. But I can say that uncertain environments are full of opportunities for problem-solving. Small businesses lead recoveries because we are nimble. Start with joining some new conversations, even if you can’t see an immediate payoff.
As much as women look down on failing forward, it’s the reality of these conditions. We’re stepping to the next stone so we don’t get swept down the rapids. We have to keep our businesses going, pay our mortgages, feed our families, and sustain our teams. And we’re not going to get it exactly right, but we have to try.
Pick your battles. Where is a best practice—an 80% solution—good enough? Where is that not going to cut it? Where is it worth taking a risk with an investment, an innovation, or a new path? How can you make space to engage with problem solvers?
As much as it feels safe to do the same thing, stay small, and hide in your house, it’s time to listen for pivots and opportunities. Even if they require hard pants.
