Trade War: What You Can Control

The economy is unpredictable, and headlines about trade wars, inflation, and market volatility can feel overwhelming. While these macroeconomic shifts are out of our control, what matters most is how we respond. Whether you're a salaried employee, a business owner, or someone considering succession, the key is focusing on what you can control. Here’s where your attention should be:

For Salaried Individuals: Focus on Financial Resilience

Market uncertainty can lead to job instability, rising costs, and fluctuations in investment portfolios. Instead of reacting to every economic headline, focus on:

• Building a Cash Reserve: Aim for three to six months of expenses in an easily accessible account. This provides security in case of job loss or unexpected costs.

• Reviewing Debt and Expenses: High-interest debt becomes more expensive as interest rates rise. Consider paying down high-cost loans and reassessing discretionary spending.

• Investing with a Long-Term View: Markets go through cycles. If you're contributing to an RRSP or TFSA, stay the course. Trying to time the market often does more harm than good.

• Upskilling and Career Agility: Job markets shift. Continuing education, professional certifications, and networking can improve job security and future prospects.

For Business Owners: Control Cash Flow and Adaptability

Trade tensions and market swings can impact revenue, supply chains, and customer confidence. To navigate uncertainty:

• Strengthen Cash Flow Management: Review accounts receivable, renegotiate payment terms, and ensure you're not over-leveraged.

• Diversify Revenue Streams: If your business relies heavily on a single market or client base, explore ways to expand. Can you offer new products, digital services, or enter different geographic markets?

• Evaluate Supply Chain Risks: If your business depends on imported goods, trade wars or tariffs can hit hard. Consider alternative suppliers or local sourcing where possible.

• Invest in Efficiency: Are there technology upgrades or process improvements that can reduce costs and improve profitability?

For Those Considering Succession: Plan for the Long Term

Market uncertainty can complicate transitions, whether you’re selling, passing the business to family, or stepping back. Now is the time to:

• Assess Business Valuation: Economic conditions affect valuation. Understanding your company’s worth under different scenarios helps set realistic expectations.

• Review Exit Options: If selling, ensure you have multiple exit strategies—whether through a third-party sale, family succession, or employee ownership.

• Optimize Tax and Estate Planning: Shifting tax policies can impact wealth transfer. Work with an advisor to structure your exit efficiently.

• Document and Systematize: A well-documented business with clear processes is more valuable and easier to transition to new leadership.

The Bottom Line: Focus on What You Can Control

The economy will always ebb and flow. The key is to be prepared, adaptable, and proactive. If you need help navigating your financial future, whether as an individual, a business owner, or someone planning succession, Strategos Group is here to help. Let’s create a strategy that works for your specific situation.

Note: This post does not address the real impact of tariffs if your customer base is predominantly U.S.-based. For severely impacted companies, there is a much more specific and unique approach that we would be happy to explore with you based on your company's specific needs.