February 5, 2025 • 9 mins
In our third and final conversation with CPA Brian Werner, we look at how to stay optimistic amid uncertainty. This episode explores the effects of tariffs and inflation on small businesses, emphasizing adaptation and community resilience. Listeners gain insights into creative sourcing strategies, the psychological impacts of economic changes, and maintaining positive customer relationships.
• Discussion of tariffs and their implications for businesses
• Exploring creative sourcing alternatives to reduce reliance on affected imports
• The impact of inflation on profit margins and pricing strategies
• Importance of transparency in communication with customers over price changes
• Highlighting community support and collaboration among local businesses
• Emphasis on maintaining a positive outlook during economic uncertainty
For expert financial advice, contact Brian at 719-358-2360 or email contactus@brwtax.com.
We welcome your questions! If you would like to learn more about us or connect for a conversation, please visit www.pasleycommercialinteriors.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Randi Lynn Johson (00:00):
Okay, so we've set up our year Now.
Robin, I know that you had aquestion.
Let's see.
Robin Pasley (00:18):
New old president, yes, and so we've already had
some questions coming our wayabout the tariffs, because we
have a The that yes have somethat are coming what we call
over the water, which meansthey're made in China mostly.
We have a few vendors like that.
Most of our vendors, though,are in Canada, and then the rest
(00:42):
of them are here in America,but what we know is even the
ones here they are getting someof their supplies, some of their
components, are coming over thewater, so tariffs are going to
hit us, no matter where yourproducts are made, or at least
they're going to be considered,but I want to know, because
there's already been a littlealarm going off that I hear of
people freaking out that this isgoing to be like seen as we're
(01:05):
going to feel it like a tax.
What do you think about that?
Brian Werner (01:08):
I mean I could be perceived as a tax, but
fortunately we still live in afree country and all companies
will have the choice on whetherthey continue to source from
those countries that have atariff imposed against them.
Or companies may have to getcreative.
They may have to, you know,seek out new supply sources from
(01:32):
, maybe, countries that are notbeing impacted by the tariff.
So I think you're going to seenumber one, companies you're
going to have to get creativeand then number two, potentially
looking for other sources ofbeing able to source the
products that they're going toneed to continue operating their
businesses so their margins arenot impacted negatively.
Robin Pasley (01:53):
Yeah, like I know that TFL, which is thermal foil,
laminates, many of them aremade in China, but there are
some that are made in Italy andthat's a component that's used
to build furniture, and so theycan just source like you're
saying.
Maybe just go to Italy tosource instead of from China.
Randi Lynn Johson (02:09):
I volunteer.
Brian Werner (02:14):
There may be a lot of business travel that results
from some of these stairs withcompanies and people attempting
to establish new relationshipsin other parts of the world.
Robin Pasley (02:27):
I do remember too, because you know, what I would
say to a little bit of that fearis at least we're dealing with
a president that has donesomething like this before.
You know he did impose tariffson his first presidency and I
remember seeing the same kind of.
You know we were all a littlebit like what is that going to
do?
And I do remember on some of myinvoices seeing it come in as a
(02:51):
line item and you know I wouldwe'd have to decide if we were
going to pass that along to ourclients or if we were going to
absorb that.
And I guess that you've, you'veseen that too.
You've talked about that alittle bit, about margins and
trying to decide what to do.
Brian Werner (03:05):
So you know I always say, well, number one,
you know any potential likeissue or, you know, call it a
problem that you may be facedwith, and especially once we
don't have, we have zero controlover.
Essentially, there's always anopportunity, right, there's
always potential solutions.
There's always an opportunity,right, there's always potential
(03:26):
solutions.
It's a great way to see that.
However, let's say that we'rein the place where we have great
vendor relationships and thosetariffs do impact those
suppliers in companies like Ican't find anybody else right.
Then, at that juncture, they maybe stuck with a tough decision
to say, okay, now I'm having topay whatever percentage that
tariff is 10% or 20% higher onthose goods that I was sourcing
(03:51):
a couple months ago that werecheaper, right, well, at that
point a company is probablygoing to be forced to pass that
price increase along to theircustomers.
To pass that price increasealong to their customers.
And of course, you're going tohave some customers that are
probably not going to be happy.
But that customer might be inthe same boat as well.
They may have had to pay thattariff, pay the higher prices
(04:13):
because they source from thesame country.
So there's going to be a lot ofcompanies and just people that
are going to be in similarsituations.
Randi Lynn Johson (04:22):
That's a good way to see that We'll require
pivoting, but what I'm hearingis we shouldn't panic.
No, it's going to be okay.
Right, we can be nimble yeah.
Brian Werner (04:31):
Life is too short to panic.
Randi Lynn Johson (04:33):
I agree, I like that.
Thank you for that.
All right, so we've got tariffs, but also it's sort of like
inflation right.
Inflation right, that was a bigkind of to do this year.
Last year it went up.
I mean, I felt it.
I think everybody felt it.
Um, but we're still standingright.
And okay, brian, I want to hearfrom you as a cpa, who you
probably saw it in greatermeasure and you know talking
(04:57):
with a lot of people what wasthat like?
Brian Werner (04:58):
so we did, because we actually sit down with our
companies quarterly and we couldsee when inflation started to
really pick up.
We could see the impact oncompanies bottom line, so on
their profit margins, and we,because we meet with our
companies so frequently, wepicked up on that right away.
So we worked with a lot of ourcompanies on saying, hey, your
(05:22):
input prices are going up andyou have zero control over that.
You have to increase yourpricing to your customers
Because if you don't, then yourmargins are going to start to
come down.
And all of a sudden you'regoing to be a year in and you're
going to say my revenues arethe same and I work just as hard
(05:43):
, but I made 20% less than Imade last year, right, and
that's usually not a greatfeeling for you know anybody to
go through, especially as abusiness owner, right?
So, um, so, yes, you, it'salmost like it's I, it's almost
like a necessary evil Like your.
Your hands are tied behind yourback and it's like what else do
(06:03):
you do?
Big corporations do this all thetime.
Anytime they have price sorry,their input prices increase
their insurance, their overhead,their rent, you know, you know
whatever they're sourcing theirmaterial costs and such.
They're going to go up everysingle year.
So for a long time there, 2%was a very small blip on the
(06:25):
radar.
It was almost like unnoticeable.
But once we started to ramp upinto the you know, 6, 8%, maybe
even 10% range, at that point itdoes have an impact because
it's also compounding too.
It's not, you know, people havetalked about and they had the
hope that we would go back downat some point.
That's probably not going tohappen.
So at that point a company doeshave to adapt.
(06:48):
If they want to survive, theyhave to pass that along to their
customers.
And then same thing if it's aB2B, that business is going
through the same exact thing.
They're probably having to dothe same thing.
Robin Pasley (07:01):
You know, I like your positive approach to all of
this, though, because we weretalking offline.
Your note was we're still here,we're all still doing business
together.
We're maybe getting pinchedhere, pinched there, but we're
all still in it together.
And I think that's a reallypositive way to see the things.
(07:22):
Like you said, we can't controlthem, so why, you know, instead
of living our lives in a ballof knots?
Brian Werner (07:29):
you know I like that, that's great.
Focusing yeah, focusing energyon things we can't control, to
me is just, it's not productive.
Randi Lynn Johson (07:40):
Yeah.
Brian Werner (07:40):
And it's not good for your health either.
I mean they say that stresscould be the silent killer right
?
Robin Pasley (07:42):
Well, it's not productive and it's not good for
your health either.
Brian Werner (07:43):
I mean they say that stress could be, could be
the silent killer, right?
Randi Lynn Johson (07:46):
So well, that's good.
I think this is a greatconversation to have as we start
2025, and we just know we'regoing to handle the things that
we can control what's in frontof us, and we're going to keep
stepping, keep moving forward,and we have great people Stay
positive Come positive.
Brian Werner (08:02):
You need to boost your positivity.
Randi Lynn Johson (08:03):
Come find me and Robin, that's right If you
need help with all yourfinancial needs and taxes,
because it makes my eyes cross,it literally makes my head hurt.
I thank God every day that myhusband is just like.
He just handles the budget.
Brian Werner (08:16):
I'm like.
Randi Lynn Johson (08:16):
I don't want, I just I don't know.
I'm good at so many things andthat's not it.
My wife's the same as well.
Brian Werner (08:28):
She's like sometimes I'm so thankful I
married an accountant.
Randi Lynn Johson (08:29):
Well, if you're not married to an
accountant, or even if you are,go talk to Brian and his team.
They're going to help you out.
Uh again, link to his where youcan contact him's in the show
notes.
But we really, reallyappreciate you coming down and
just chatting with us,reassuring us, reassuring our
listeners, and just being such agreat member of this Colorado
Springs community.
Brian Werner (08:51):
Thank you, and thank you for having me and
thank you for being such awonderful community member as
well.
I mean, it does.
It takes a village right, ittakes a community and we all got
to look out for each other andlove on each other and best
support each other.
However that looks For sure.
Robin Pasley (09:08):
I'm glad we're all in it together.
Brian Werner (09:09):
Yep.
Okay, so we've set up our year Now.
Robin, I know that you had aquestion.
Let's see.
Robin Pasley (00:18):
New old president, yes, and so we've already had
some questions coming our wayabout the tariffs, because we
have a The that yes have somethat are coming what we call
over the water, which meansthey're made in China mostly.
We have a few vendors like that.
Most of our vendors, though,are in Canada, and then the rest
(00:42):
of them are here in America,but what we know is even the
ones here they are getting someof their supplies, some of their
components, are coming over thewater, so tariffs are going to
hit us, no matter where yourproducts are made, or at least
they're going to be considered,but I want to know, because
there's already been a littlealarm going off that I hear of
people freaking out that this isgoing to be like seen as we're
(01:05):
going to feel it like a tax.
What do you think about that?
Brian Werner (01:08):
I mean I could be perceived as a tax, but
fortunately we still live in afree country and all companies
will have the choice on whetherthey continue to source from
those countries that have atariff imposed against them.
Or companies may have to getcreative.
They may have to, you know,seek out new supply sources from
(01:32):
, maybe, countries that are notbeing impacted by the tariff.
So I think you're going to seenumber one, companies you're
going to have to get creativeand then number two, potentially
looking for other sources ofbeing able to source the
products that they're going toneed to continue operating their
businesses so their margins arenot impacted negatively.
Robin Pasley (01:53):
Yeah, like I know that TFL, which is thermal foil,
laminates, many of them aremade in China, but there are
some that are made in Italy andthat's a component that's used
to build furniture, and so theycan just source like you're
saying.
Maybe just go to Italy tosource instead of from China.
Randi Lynn Johson (02:09):
I volunteer.
Brian Werner (02:14):
There may be a lot of business travel that results
from some of these stairs withcompanies and people attempting
to establish new relationshipsin other parts of the world.
Robin Pasley (02:27):
I do remember too, because you know, what I would
say to a little bit of that fearis at least we're dealing with
a president that has donesomething like this before.
You know he did impose tariffson his first presidency and I
remember seeing the same kind of.
You know we were all a littlebit like what is that going to
do?
And I do remember on some of myinvoices seeing it come in as a
(02:51):
line item and you know I wouldwe'd have to decide if we were
going to pass that along to ourclients or if we were going to
absorb that.
And I guess that you've, you'veseen that too.
You've talked about that alittle bit, about margins and
trying to decide what to do.
Brian Werner (03:05):
So you know I always say, well, number one,
you know any potential likeissue or, you know, call it a
problem that you may be facedwith, and especially once we
don't have, we have zero controlover.
Essentially, there's always anopportunity, right, there's
always potential solutions.
There's always an opportunity,right, there's always potential
(03:26):
solutions.
It's a great way to see that.
However, let's say that we'rein the place where we have great
vendor relationships and thosetariffs do impact those
suppliers in companies like Ican't find anybody else right.
Then, at that juncture, they maybe stuck with a tough decision
to say, okay, now I'm having topay whatever percentage that
tariff is 10% or 20% higher onthose goods that I was sourcing
(03:51):
a couple months ago that werecheaper, right, well, at that
point a company is probablygoing to be forced to pass that
price increase along to theircustomers.
To pass that price increasealong to their customers.
And of course, you're going tohave some customers that are
probably not going to be happy.
But that customer might be inthe same boat as well.
They may have had to pay thattariff, pay the higher prices
(04:13):
because they source from thesame country.
So there's going to be a lot ofcompanies and just people that
are going to be in similarsituations.
Randi Lynn Johson (04:22):
That's a good way to see that We'll require
pivoting, but what I'm hearingis we shouldn't panic.
No, it's going to be okay.
Right, we can be nimble yeah.
Brian Werner (04:31):
Life is too short to panic.
Randi Lynn Johson (04:33):
I agree, I like that.
Thank you for that.
All right, so we've got tariffs, but also it's sort of like
inflation right.
Inflation right, that was a bigkind of to do this year.
Last year it went up.
I mean, I felt it.
I think everybody felt it.
Um, but we're still standingright.
And okay, brian, I want to hearfrom you as a cpa, who you
probably saw it in greatermeasure and you know talking
(04:57):
with a lot of people what wasthat like?
Brian Werner (04:58):
so we did, because we actually sit down with our
companies quarterly and we couldsee when inflation started to
really pick up.
We could see the impact oncompanies bottom line, so on
their profit margins, and we,because we meet with our
companies so frequently, wepicked up on that right away.
So we worked with a lot of ourcompanies on saying, hey, your
(05:22):
input prices are going up andyou have zero control over that.
You have to increase yourpricing to your customers
Because if you don't, then yourmargins are going to start to
come down.
And all of a sudden you'regoing to be a year in and you're
going to say my revenues arethe same and I work just as hard
(05:43):
, but I made 20% less than Imade last year, right, and
that's usually not a greatfeeling for you know anybody to
go through, especially as abusiness owner, right?
So, um, so, yes, you, it'salmost like it's I, it's almost
like a necessary evil Like your.
Your hands are tied behind yourback and it's like what else do
(06:03):
you do?
Big corporations do this all thetime.
Anytime they have price sorry,their input prices increase
their insurance, their overhead,their rent, you know, you know
whatever they're sourcing theirmaterial costs and such.
They're going to go up everysingle year.
So for a long time there, 2%was a very small blip on the
(06:25):
radar.
It was almost like unnoticeable.
But once we started to ramp upinto the you know, 6, 8%, maybe
even 10% range, at that point itdoes have an impact because
it's also compounding too.
It's not, you know, people havetalked about and they had the
hope that we would go back downat some point.
That's probably not going tohappen.
So at that point a company doeshave to adapt.
(06:48):
If they want to survive, theyhave to pass that along to their
customers.
And then same thing if it's aB2B, that business is going
through the same exact thing.
They're probably having to dothe same thing.
Robin Pasley (07:01):
You know, I like your positive approach to all of
this, though, because we weretalking offline.
Your note was we're still here,we're all still doing business
together.
We're maybe getting pinchedhere, pinched there, but we're
all still in it together.
And I think that's a reallypositive way to see the things.
(07:22):
Like you said, we can't controlthem, so why, you know, instead
of living our lives in a ballof knots?
Brian Werner (07:29):
you know I like that, that's great.
Focusing yeah, focusing energyon things we can't control, to
me is just, it's not productive.
Randi Lynn Johson (07:40):
Yeah.
Brian Werner (07:40):
And it's not good for your health either.
I mean they say that stresscould be the silent killer right
?
Robin Pasley (07:42):
Well, it's not productive and it's not good for
your health either.
Brian Werner (07:43):
I mean they say that stress could be, could be
the silent killer, right?
Randi Lynn Johson (07:46):
So well, that's good.
I think this is a greatconversation to have as we start
2025, and we just know we'regoing to handle the things that
we can control what's in frontof us, and we're going to keep
stepping, keep moving forward,and we have great people Stay
positive Come positive.
Brian Werner (08:02):
You need to boost your positivity.
Randi Lynn Johson (08:03):
Come find me and Robin, that's right If you
need help with all yourfinancial needs and taxes,
because it makes my eyes cross,it literally makes my head hurt.
I thank God every day that myhusband is just like.
He just handles the budget.
Brian Werner (08:16):
I'm like.
Randi Lynn Johson (08:16):
I don't want, I just I don't know.
I'm good at so many things andthat's not it.
My wife's the same as well.
Brian Werner (08:28):
She's like sometimes I'm so thankful I
married an accountant.
Randi Lynn Johson (08:29):
Well, if you're not married to an
accountant, or even if you are,go talk to Brian and his team.
They're going to help you out.
Uh again, link to his where youcan contact him's in the show
notes.
But we really, reallyappreciate you coming down and
just chatting with us,reassuring us, reassuring our
listeners, and just being such agreat member of this Colorado
Springs community.
Brian Werner (08:51):
Thank you, and thank you for having me and
thank you for being such awonderful community member as
well.
I mean, it does.
It takes a village right, ittakes a community and we all got
to look out for each other andlove on each other and best
support each other.
However that looks For sure.
Robin Pasley (09:08):
I'm glad we're all in it together.
Brian Werner (09:09):
Yep.
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