{"id":32550,"date":"2025-07-02T12:25:09","date_gmt":"2025-07-02T12:25:09","guid":{"rendered":"https:\/\/www.europesays.com\/us\/32550\/"},"modified":"2025-07-02T12:25:09","modified_gmt":"2025-07-02T12:25:09","slug":"as-inflation-and-tariffs-bite-into-business-entrepreneurs-are-making-rapid-shifts-to-their-business-models","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/32550\/","title":{"rendered":"As inflation and tariffs bite into business, entrepreneurs are making rapid shifts to their business models"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Due to inflation and rising costs, Karen Danudjaja, chief executive officer and co-founder of Blume, which makes wellness drink supplements, says her company has had to absorb some higher costs \u2013 as have some of her suppliers \u2013 and she\u2019s working on backup plans to manage any future changes.SUPPLIED<\/p>\n

Inflation rates, tariffs and increasingly cash-strapped consumers have made recent months a particularly tough time to be an entrepreneur. <\/p>\n

Katerina Juskey, co-founder of LOHN, a Canadian business selling candles and home fragrances, says her company has made \u201cdramatic changes\u201d to its business to reduce operating expenses due to rising costs. <\/p>\n

\u201cIn March of 2024, we were manufacturing and shipping in-house from a 2,000 square foot warehouse in Mississauga. We had two staff members doing production, one doing shipping, and then we had marketing and social media help,\u201d she says. <\/p>\n

Today, the LOHN co-founders are running their business very differently. They\u2019ve let go of most of their staff, moved out of their warehouse, and they now outsource manufacturing and shipping. <\/p>\n

\u201cWe had no choice because of the changing landscape. It has really cleaned up our profit and loss statement because we don\u2019t have that overhead anymore, and we can focus more on marketing and sales.\u201d <\/p>\n

While Canada\u2019s inflation rate is now below the Bank of Canada\u2019s 2 per cent target, it soared during the pandemic to as high as 8 per cent \u2013 the highest level in decades. That\u2019s meant rising costs for a range of ingredients or products businesses use. Add rising tariffs for imported goods \u2013 particularly from the U.S., and businesses across the country have had to face new challenges. <\/p>\n

For Mariane Oliveira, chocolate artisan and founder of Mary\u2019s Brigadeiro, based in Toronto, inflation has sparked a similar need for innovation. After huge, worldwide increases in the cost of her business\u2019s most used material, chocolate, Ms. Oliveira switched to local suppliers. <\/p>\n

\u201cIt\u2019s normal to have some price increases each year in January and in August, but before January of this year I was paying $150 for 10 kilograms of chocolate,\u201d she explains. \u201cRight now, we\u2019re paying $232 for the exact same product.\u201d <\/p>\n

The increase caused Ms. Oliviera to begin working with bean-to-bar chocolate makers in Toronto, which she says had always been a dream. The process behind this chocolate making method is meticulous, and therefore expensive. Still, Mary\u2019s Brigadeiro made the switch. <\/p>\n

\u201cNow, with the raise in [general chocolate] prices, it\u2019s pretty much the same price to work with them.\u201d <\/p>\n

For Karen Danudjaja, chief executive officer and co-founder of Blume, finding new suppliers while maintaining the integrity of the ingredients in her company\u2019s wellness drink supplements isn\u2019t a simple task. <\/p>\n

\u201cIt may look on paper like one mango is similar to the next,\u201d she says, in reference to an ingredient in one of the company\u2019s offerings. \u201cBut depending on the supplier, they could have different flavour profiles, acidity, origins, certifications \u2013 so finding backup suppliers is a pretty long process for us.\u201d <\/p>\n

Ms. Danudjaja says many of her suppliers are keen to find ways to continue to work together. Although Blume has had to absorb some extra costs, Ms. Danudjaja says some of her suppliers have done the same. Her big priority now is crafting a set of comprehensive strategies to future-proof the business in an unpredictable landscape. <\/p>\n

\u201cSo much of the work right now is about waiting, optimizing, and putting backup plans in place without turning the key just yet, because we just can\u2019t know where things will land,\u201d she says. <\/p>\n

\u201cOne thing we\u2019re doing is holding less inventory, when typically we\u2019d hold more so we can seize on opportunities that can come up. We also discontinued lower performing [products] and just focus on higher performing ones. The goal is to reduce risk and make sure there\u2019s cash available to us.\u201d <\/p>\n

All three entrepreneurs notice their customers are adopting similarly protective strategies when it comes to their own finances. <\/p>\n

\u201cWe\u2019ve noticed over the last three years there\u2019s been a decline in buyers placing orders on the spot,\u201d says Ms. Juskey, who frequents B2B (business-to-business) trade shows in New York City to sell to wholesalers. \u201cThey\u2019re more conservative with their spending and are taking their time.\u201d <\/p>\n

LOHN dropped its minimum purchase amount to $350 from $500 to keep inventory flowing. <\/p>\n

For Ms. Oliviera\u2019s direct-to-consumer business, the key to catering to a recession-wary customer is to increase the number of small-batch offerings for sale. <\/p>\n

\u201cIn the past someone might have been able to spend $80 on a custom-made chocolate Easter egg, and now they want to continue that tradition at a lower price. As an entrepreneur, we need to adapt, so we created different lines with the same quality of products but with smaller chocolate boxes at a fraction of the price.\u201d <\/p>\n

Blume uses surveys to track why people cancel their subscriptions. Respondents are recently listing tariffs as a reason for leaving. <\/p>\n

\u201cConsumers are prioritizing their dollars,\u201d Ms. Danudjaja says. Though in some instances this has been to Blum\u2019s benefit. <\/p>\n

\u201cWe saw a big lift from customers wanting to support Canadian owned and operated businesses recently. There\u2019s two competing dynamics at play there. The big question is about how long [local] Canadian support will last, or whether it will eventually be trumped by economic pressure.\u201d <\/p>\n

From a funding perspective, the new era of increased economic pressure is already here. <\/p>\n

\u201cThe most important thing to investors right now is making sure the business is not just spending money to grow, but to be profitable,\u201d says Ms. Juresky, whose operation is currently independent. <\/p>\n

\u201cWe\u2019re doing fine, but it feels like we\u2019re constantly adapting,\u201d says Ms. Juresky. Both her and her business partner have become new mothers amid the roller-coaster ride of changing so many facets of LOHN\u2019s operations. <\/p>\n

\u201cEveryone is making fast decisions. If something isn\u2019t working, we make sure we cut it immediately.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Due to inflation and rising costs, Karen Danudjaja, chief executive officer and co-founder…\n","protected":false},"author":3,"featured_media":32551,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[64,607,19617,27335,67,132,68],"class_list":{"0":"post-32550","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-business","9":"tag-entrepreneurship","10":"tag-noastack","11":"tag-ordid3766241683ce","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114783631780758729","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/32550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=32550"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/32550\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/32551"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=32550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=32550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=32550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}