Last week, I caught up with a founder friend over coffee. We hadn’t seen each other in a while, but it didn’t take long to get into the real stuff – supply chain headaches, cash flow stress, and how she’s managing to keep her head above water in the middle of all the tariff madness.
She looked at me, shrugged, and said:
“I don’t have room for guessing anymore. I had to build a system that absorbs shock or I’m toast.”
She didn’t say it like a victim. She said it like someone who’s been through the fire, built her own fire extinguisher, and now knows exactly where to hang it.
I want to tell you what she’s doing – because a lot of operators are still waiting for the government to “figure it out” or for suppliers to “come back to the table.”
Spoiler: No one’s coming. You’re on your own.
The moment she knew it was real
Her margins used to be predictable. Landed cost, labor, COGS – she had them dialed in. Until the tariff hikes hit, and suddenly her top three products were bleeding 12–18% per unit.
She waited a month. Then two. Then she saw one of her biggest competitors pull back entirely from the category. That’s when she knew: this wasn’t a blip – it was the new normal.
So she made a decision.
“My margins don’t die on someone else’s timeline.”
The playbook she built
Here’s how she rebuilt the business – without throwing away everything she’d spent years building.
1. She didn’t pass the cost – she passed the value
A lot of founders just jack up prices and hope customers stick around. Not her. She made her product feel more premium first.
- Bundled value-adds that cost almost nothing to include
- Repackaged the offer to highlight outcomes, not features
- Trained her team to tell a better story around the “why now”
Result? She raised prices after increasing perceived value. Retention held steady. Reviews even went up.
2. She created Tier B products
Same brand, different bill of materials. Her ops team sourced components from domestic partners, even if they didn’t fully match the original spec.
- Lower margin, but protected from tariffs
- Built for subscription customers and price-sensitive channels
- Let her hold price points without bleeding cash
Think of it like the iPhone SE strategy. You don’t have to cannibalize the flagship. You just need options.
3. She made finance the co-pilot
Margins are easy to track. But margin decay over time due to policy shifts? Not so much.
So she brought in a fractional CFO to build dynamic models that accounted for:
- Tariff triggers by country
- Impact per SKU
- Forecasted penalty exposure
Now, she sees threats months out and can react before they hit the P&L.
What most founders are missing
When tariffs hit, most people do this:
- Panic
- Complain
- Blame suppliers
- Delay decisions
- Watch cash evaporate
But the smart ones build systems, not guesses.
They realize their job isn’t to just operate the business – it’s to protect the business model. Even if that means breaking your own rules.
My friend didn’t wait for perfect information. She used what she had, made calculated moves, and protected her margin like her life depended on it.
Because in a founder’s world? It kind of does.
If your business is feeling the squeeze, don’t just raise prices and hope. Ask yourself:
- What product assumptions are I clinging to that the market doesn’t care about anymore?
- Where can I deliver more value for less cost?
- How can I turn policy risk into planning power?
Margins are the oxygen of your business. Protect them like it.
That’s all for this week.
See you next Saturday.