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Each yr brings recent challenges and opportunities for business owners. As 2025 begins, it’s a good idea to judge the past yr and stay up for the changes that may impact your industry.
Staying ahead of those changes is the best strategy to stay competitive and maintain long-term success. Here are five things that could impact your business in 2025:
1. Tariffs
President Trump promised this impose a duty of 10%. on most goods imported from abroad, with higher tariffs on goods from China and Mexico. Tariffs increase the cost of foreign products and encourage consumers to modify to buying domestic products.
The impact of tariffs on your business depends on your industry, supply chain and trade resilience. American firms that produce their products domestically will likely profit most from these tariffs. For example, steel mills and aluminum producers may see increased demand as prices for foreign products rise.
However, tariffs could hurt firms that depend on imported raw materials, similar to automotive, technology and retail firms. These firms may experience delays and increased costs that they will likely be forced to pass on to customers.
If you are concerned that tariffs will negatively impact your business, you can take proactive steps. Start by diversifying your supply chain so you are not completely dependent on one region that could also be impacted by tariffs. You can also wish to re-evaluate your production process and consider switching from imported products to domestically produced products.
2. Another port strike
The port strike ended on October 3, 2024, and the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) prolonged their contracts until January 15, 2025. However, there is the potential for one other longshoremen’s strike if the ILA and USMX cannot reach an agreement in January.
The port strike will have a direct impact on most businesses, causing supply chain disruptions, cost increases and inventory shortages. Companies that are unable to deliver their products on time may lose revenue and be forced to temporarily lay off employees.
If you are concerned about one other port strike, you might wish to build up a buffer of supplies now. You can also start developing contingency plans to answer supply chain disruptions, similar to rerouting shipments or using alternative ports.
3. Changes in rates
The Federal Reserve has cut the federal funds rate twice in 2024, but it’s unclear what is going to occur in the coming yr. If President Trump does impose tariffs and cut taxes, the Fed could also be more cautious in lowering rates of interest. President Jerome Powell was not wanting to invest on the policies the recent administration might adopt.
If the Federal Reserve lowers rates of interest, firms will profit from cheaper financing and increased consumer spending. However, if the Fed raises rates of interest, it could make it tougher for businesses to secure the financing they need.
If you anticipate needing a loan or line of credit this yr, it could be a good idea to use for financing now. This way, you will have access to the funds you wish no matter what happens to rates of interest.
4. Minimum wage increases
Efforts to extend the minimum wage proceed to achieve momentum and are expected to extend 23 different states this yr. Illinois, Delaware and Rhode Island will raise their minimum wage to $15 an hour, while California and New Jersey will raise it to as much as $17.
Minimum wages affect businesses of all sizes and will likely be particularly difficult for businesses operating in multiple regions. Look for a payroll system that mechanically checks for changes in minimum wage laws to make sure your company is compliant.
You can also have to update your budget and hiring decisions to reflect the minimum wage increase. You may consider adjusting prices, improving efficiency, or adjusting staffing levels to reflect these changes.
5. Provisions on pay transparency
Pay transparency laws require employers to reveal salary ranges in job postings and provide additional information about pay structures. Currently, 13 states and the District of Columbia have them pay transparency regulations in force, and five more have regulations that will come into force in 2025. Companies that do not comply with these regulations could face large fines or lawsuits.
Pay transparency laws can have many positive effects on your organization. Transparent compensation structures can help attract the best talent and increase trust among employees. Research shows that 70% of firms providing salary ranges saw an increase in the variety of job applications, and 66% saw an improvement in the quality of candidates.
However, it’s going to take time for firms to adapt their compensation strategies. If your company operates in several different states, it could be a good idea to implement the strictest requirements now.
You may have to re-evaluate your company’s salary range to make sure it is competitive. You must also be prepared to be held accountable for eliminating any pay disparities.