Small companies face a 'tornado' of challenges: cuts, freeze and now tariffs
It was a bad week for Ben Coryell who heads a wilderness control company in Golden, Colo.
He received several calls from customers who wanted to cancel their climbing courses and mountaineering expeditions in summer, and often quoted large purchases after the second thoughts, since the Trump government rejected the economy in turmoil with eye huts.
At the same time, Mr. Coryell wonders how long his business Golden Mountain Guides can continue to offer these trips, since the staff cuts in the National Park Service will maintain the processing of the permits he needs to operate on high inquiries. And since these cuts leave fewer rangers on patrol, he fears that not licensed operators could run Amok.
So far he has not deducted anyone, but it seems increasingly likely that he may have to.
“It really feels like many of the operations we depend on have to be encountered for the next few years until we can find a healthy status quo,” he said.
Thousands of entrepreneurs are in similar positions, since they confront the snow storm of changes from Washington in the last two and a half months. Funding frames, recruits in federal authorities and an action of immigration – of course together with the tariffs – many in turbulence, with little certainty about how to proceed.
“It's like a tornado for small business owners,” said Natalie Madeira Cofield, Managing Director of the Association for Enterprise Opportunity, which supports initiatives to help companies with fewer than 10 employees. “This is an unprecedented moment.”
The past few years have been a hurricane for this part of the private sector, which is of crucial importance for feeding the American economy with new ideas and competitive power. The Pandemy of Covid-19 initiated a boom in company education, and many of these start-ups continued to thrive in new niches with modern practices.
Then an increase in inflation, followed by an increase in interest rates, extended many small companies to their border. According to the salary billing platform, small companies are on average fewer employees than before pandemic. The attitude decreased by 1.6 percent in the first quarter of 2025 compared to the previous year. And data from the bookkeeping software company QuickBooks show that the group of companies quickly shrink with fewer than 10 employees in March 2024.
The economist, which compiled these numbers, UFUK Akcigit from the University of Chicago, also found in a working paper that small companies increased their credit card invoices in 2021 and corresponded to severe interest payments. When the interest rates rose in 2022, the income decreased and more companies became criminal.
“Small companies have no internal capital that you can rely on,” said Dr. Akcigit. “As a result, if there are financial difficulties, you are the first group to be left out of the credit market.”
According to a long -term survey by the National Federation of Independent Business, which represents small and medium -sized companies, the optimism rose after Donald J. Trump's election after a long -term survey by the National Federation of Independent Business.
Holly Wade, managing director of the organization research center, said that the exuberance came to the expectations of its members of favorable tax policy and relaxed regulations. Although this optimism reading faded in February, congress and the white house follow so far that they go through their promises. As an example, Ms. Wade quoted the announcement by the finance department that a new law would not enforce, after the company company to disclose its true owners, with fines for non -compliance.
“These are some very early victories of small businessmakers on a topic that most of them acted with the supervisory paper load,” said Ms. Wade.
The administration agreed. “President Trump quickly cleans up the chaos of bidges by rolling up 10 regulations for every new regulation, unleashing American energy, reducing taxes and evaluating the competitive area for American companies,” said Taylor Rogers, a deputy press spokesman for the White House.
But not every step was so welcome.
The first blow was freezing for grants and contracts, especially for companies owned by veterans who often do the most or their entire business with the federal government. According to Nancy Langer, which is headed by a consulting company who specializes in mergers and acquisitions for state contractors, some are already bankrupt.
“I don't think you have found that it would have such an evaluating effect on veteran transactions, but it has it,” said Ms. Langer. “The entire small company community on the federal market recognizes that this is a completely different paradigm.”
Now new possibilities are evaporating.
On his first day of the office, Mr. Trump granted an executive regulation that significantly reduces the share of the federal purchase of dollars, which has a significant impact on small and disadvantaged companies. (The Biden administration had the goal of 15 percent, the triple legal minimum increasing and achieving record levels of procurement with small companies.)
The production company of Rachel Klein, Fire Starter Studios, has been dependent on these contracts in recent years when the film industry in Los Angeles was lost. As a small business owned by women, Fire Starter had a light competitive advantage when he offered for short documentaries, announcements of the public service and advertising videos for federal customers.
But these inquiries have dried out in the past few months. A contract for $ 200 million for promoting the immigration authority of the Department of Homeland Security skipped competitive commandments and went to two Republican advertising makers. Without improvement on the horizon, Ms. Klein made the difficult decision to sell the sound level she built.
“It is more than just:” Do you still earn money? “, Said Ms. Klein,” it is the absolute steephunger that is now hanging around my neck, hitting me on the head and leaving. 'You understand! You don't understand! You are broken! You are not bankrupt! '”
In addition to trying to raise small companies through procurement, the federal government supported it with loans, technical support and networking. Parts of this supporting ecosystem are now also at risk.
For example, the small business administration has announced plans to reduce its workforce by 43 percent. While the agency had significantly expanded its head count in the past five years in order to manage aid programs from the time of pandemic, the flagship loan program of the agency part was able to burden the agency's flagship program by voluntary Buyout-DAS.
The Small Business Administration has also become increasingly important when submitting funds according to natural disasters. However, the main agency responsible for the relief is the federal administrative authority of the federal government, which Mr. Trump proposed. This annoys Janice Jucker, a co -owner of the three brothers bakeries in Houston, who needs federal support to recover from several important storms.
“For me, the Fema is only about getting my community up and running so that they can shop in my shop,” said Ms. Jucker. It urges Texan legislators to absorb the gap.
Some federal authorities were geared towards almost eliminating excretions.
In mid -March, the White House granted an executive order that aimed to remove the financial institutional fund of the Community Development, an office of the financial department that supports lending to disadvantaged people, companies and places. The office and its financing had long had non -partisan support, and senators of both parties gathered to save it.
But Mark Pinsky, who has been working in the community of development banking for decades and is now heading a company that leads financing with low interest -bearing financing to under -sector areas, sees the political environment as the willingness of the banks to take part in the steady growth.
“The changes are like a receded glacier,” said Pinsky. “It's not a tsunami. But it is difficult to reverse the direction.”
The White House was more effective in all institutions mentioned in this executive regulation: the minority operating development agency, which had revived the bidges administration by the American Rescue Plan Act from 2021 with new funds. It is now on three employees, with several dozen others on administrative leave.
The small office had mainly acted about its regional partners, in which conferences organized and advised small disadvantaged companies. Jesse Villarreal, who owns Trooperus, a caretaker company in Mesa, Arizona, said he had met the agency's events, lender and partner for joint ventures.
“I am lucky enough to be successful because of their support,” said Villarreal. “Now the federal government is making the program. We are very concerned because we need humans to help each other.”
The latest hurdle for small companies are the steep tariffs of the Trump government, which are imposed on almost every country for imports.
Although small companies export less likely than larger ones, they are dependent on imports and tend to have less flexibility in changing their suppliers. Sudden new editions can force you to shorten in other areas or even fall back on invoices.
Fort Hamilton, a Distillery by Rye and Gin in Brooklyn, has relatively happy – she receives his grain from the state of New York. But its glass bottles come from India, its elaborate labels from a special printer in Great Britain and its corks from Mexico or Argentina. Switching one of these would require expensive new forms and designs, even if a domestic supplier could be found.
Instead, Alex Clark, a co-founder, decided as much as he could keep in front of the tariffs -Twa for four months bottle offers and labels worth one year. However, expenses of this money meant that he could not add a seller to his eleven -member employees he had planned.
“We believe that there are many opportunities for further growth, but it will need more bodies,” said Clark. “And it is difficult to enter the body if you don't know what the future looks like.”
