Tariffs have long been a hidden undercurrent of global business. But lately, they’ve taken center stage—and many small business owners are feeling the pressure for the first time.

The truth is, tariffs aren’t new. They’re just newly visible.

And for business owners who aren’t intimately familiar with the real cost structure of their products, that visibility can feel overwhelming.

I remember the first time tariffs became personal. It was 2014, and I was just 26—still early in my career—running an ecommerce business featuring emerging luxury designers. Out of nowhere, I was hit with a several-thousand-dollar bill for import duties. It was a massive shock and a major wake-up call. I realized there were powerful, invisible forces impacting my margins that I hadn’t fully accounted for. And as the business grew, those forces only became more complex. That moment turned into one of the most expensive (and formative) lessons of my career.

In the fashion industry, this tension has always existed. It’s a global business by nature, yet many founders and teams lack formal education in the complexities of international trade, logistics, and financial modeling. It’s not for lack of intelligence; it’s simply not part of the traditional creative training. But when tariffs shift—or costs spike unexpectedly—business owners are left scrambling to protect margins they didn’t know were vulnerable.

Today, as new waves of tariff changes ripple through industries beyond fashion—impacting everyone from product makers to ecommerce retailers—the same core lesson applies:

You must understand the true cost of what you sell.

Tariffs Are a Surface Issue. The Deeper Challenge Is Financial Visibility.

When businesses panic over tariffs, it’s usually not because of the specific tax. It’s because they never fully understood their profit structure to begin with.

Most entrepreneurs build their early pricing models based on rough estimates: the cost to produce an item, a standard markup, a hope that margin will cover the rest.

But costs are rarely static. Vendor prices fluctuate. Shipping delays hit. Material costs rise. And tariffs, quietly layered onto imports for years, finally demand attention.

What tariffs really expose is a vulnerability: a business model built without enough margin for error.

And that’s why, while tariffs feel like an external event, they should prompt an internal reckoning.

A Smarter Way Forward

Rather than react to tariff headlines, small business owners should use this moment to shift into a more sophisticated way of managing their companies.

Financial resilience doesn’t come from avoiding external shocks. It comes from understanding your numbers so thoroughly that you can absorb shocks without losing stability.

This starts with deeply familiarizing yourself with your profit and loss statement—not just what you see, but what’s underneath each line item. It means recognizing that freight costs, import duties, and vendor surcharges are just as real as the manufacturing price—and just as crucial to your pricing strategy.

It also means treating pricing not as a one-time decision, but as an evolving strategy. Your pricing should reflect the full ecosystem of your costs, with enough flexibility built in to account for volatility.

For many small business owners, this moment is an invitation to graduate from instinctive entrepreneurship to strategic leadership.

To move from reacting to forecasting.

To stop hoping the margins work—and start knowing they do.

The Big Picture

Tariffs are just one example of how global complexity eventually touches even the smallest businesses. You may not import directly, but your vendors might. Your suppliers might. And those ripples—delayed shipping, rising costs, thinner margins—will eventually reach you.

The businesses that thrive in this next chapter will be the ones who don’t just hope the tides turn in their favor. They’ll be the ones who understand the tides—and steer skillfully through them.

Financial literacy isn’t a luxury for founders anymore.

It’s a survival skill.

And mastering it now will mean you’re ready not just for today’s tariffs, but for whatever tomorrow brings.

About the Author

Catherine Smith Licari is the founder of Cash Flow for Creatives and The Small Business Planner, a resource designed to help entrepreneurs bridge the gap between creativity and financial literacy. Her work has been featured in The Wall Street Journal, Harper’s Bazaar, Forbes, Women’s Wear Daily and by Nasdaq. She holds an MBA from Columbia Business School and lives in New York City.