When the price of your supplies just jumped 50%, cash is the only argument that matters

The United States announced 50% tariffs on Canadian imports. If you source anything from Canada, lumber, steel, dairy inputs, packaging, auto parts, paper goods, your supplier's next invoice may not look like the last one. This is not a forecast. The policy is moving. The terrain changed.

A steady owner does not wait for the invoice to arrive before doing the math. You pull your last three months of orders from any Canadian supplier and you run the number at 50% higher. You look at that figure and you ask whether your current pricing absorbs it, passes it, or breaks under it. Reacting is calling your supplier in a panic. Responding is knowing your exposure before they call you.

Mike Michalowicz built a framework around one uncomfortable truth: revenue does not keep you open. Cash does.

Most small businesses that close are not short on sales when they go down. They are short on cash. The money came in, and it went right back out, to payroll, to suppliers, to overhead, and the owner never actually held any of it. When an external cost jumps suddenly, the way a tariff does, there is no buffer. The business is technically generating revenue and factually running out of room at the same time.

Michalowicz watched this pattern kill businesses that looked healthy on paper, and it led him to a single reorientation: take profit out first, before expenses get a chance to consume it, so the business is structurally forced to operate on what remains. Sales minus profit equals expenses, not the other way around. The owner who does this before a tariff hits has a number in hand. The owner who does not is negotiating with an empty account.

A 50% cost increase from a supplier is a stress test you did not schedule. What it reveals is whether your cash position is a fact or a hope.

Michalowicz makes the case directly in his talk on TEDxFultonStreet. Worth the twenty minutes before you open tomorrow.

Learn from someone who's done it: Mike Michalowicz — 'Profit First' is better for entrepreneurs than 'G.A.A.P.'