small and medium-sized businesses

As we move into 2025, U.S. businesses are bracing for potential trade wars and tariffs on imported goods. This unpredictable environment poses significant challenges, particularly for small and medium- sized businesses (SMEs) that often operate on tighter margins. Yet, amid navigating uncertainty, there’s a powerful strategy SMEs can adopt to not only weather these challenges but thrive. The strategy is collaboration. By fostering healthier department teams, cross-organizational collaboration, and external alliances, businesses can mitigate risks, reduce costs, and create opportunities for growth in a volatile marketplace.

The power of collaboration for small and medium-sized businesses when navigating times of uncertainty

Collaboration isn’t just a buzzword—it’s a proven strategy for improving efficiency, innovation, and resilience. Research consistently shows that collaborative organizations outperform their peers in both stable and challenging times. For small and medium-sized businesses, adopting a more collaborative approach can address key pain points, including rising costs, supply chain disruptions, and the need to innovate quickly to remain competitive.

Here’s how collaborative strategies at different levels of your organization can help you navigate the challenges posed by trade wars and tariffs:

Building Healthier Department Teams to Reduce Internal Costs

Internal team dynamics play a critical role in how efficiently your business operates. Miscommunication, silos, and unhealthy competition between employees and departments can lead to inefficiencies, wasted resources, and increased costs—all of which are magnified in a volatile economic environment.

Benefits of healthier department teams:

  • Improved Efficiency: Teams that communicate openly and work cohesively are better equipped to streamline workflows, identify cost-saving opportunities, and adapt to changing circumstances.
  • Employee Retention: High-performing teams foster a positive work environment, reducing costly turnover and the expense of hiring and training replacements.
  • Innovation: A collaborative work culture encourages employees to share ideas and solutions, driving innovation that can lead to cost reductions or new revenue streams.

Actionable steps:

  • Invest in team-building training programs, such as those based on the TIGERS 6 Principles™ (Trust, Interdependence, Genuineness, Empathy, Risk, and Success), to strengthen team cohesion and collaboration.
  • Establish clear communication channels and set up regular cross-departmental check-ins to ensure alignment on goals and priorities.

Leveraging Cross-Organizational Collaboration to Increase Agility

As tariffs increase costs and trade wars disrupt supply chains, small and medium-sized businesses need to be more agile than ever. Cross-organizational collaboration, which is working across departments or with other companies within your ecosystem, enables businesses to pool resources, share knowledge, and respond quickly to challenges.

Advantages of cross-organizational collaboration:

  • Resource Sharing: Departments or partner organizations can share tools, technology, or expertise, reducing the need for duplicate investments.
  • Faster Problem-Solving: Collaborative teams bring diverse perspectives to the table, enabling quicker and more effective decision-making.
  • Flexibility: Cross-functional partnerships allow businesses to pivot more easily, whether it’s finding alternative suppliers or adapting products to meet new market demands.

Actionable steps:

  • Form cross-departmental task forces to address specific challenges, such as optimizing supply chains or reducing waste.
  • Foster partnerships with other local SMEs or industry peers to share resources and insights.

Building External Alliance Partnerships to Diversify Supply Chains and Markets

In a marketplace disrupted by trade wars, relying on a single supplier or market is a recipe for vulnerability. External alliance partnerships can help SMEs diversify their operations and reduce their dependence on unstable sources.

How external alliances can help:

  • Supply Chain Resilience: By partnering with local or regional suppliers, businesses can reduce exposure to tariffs and global trade disruptions.
  • Shared Marketing Costs: Co-marketing initiatives with partners can help reduce advertising expenses while expanding reach.
  • Access to New Markets: Strategic alliances can open doors to new customer bases, reducing reliance on markets affected by trade restrictions.

Actionable steps:

  • Build relationships with domestic suppliers to reduce reliance on imports.
  • Partner with complementary businesses to create bundled offerings or co-host events that attract a wider audience.
  • Explore joint ventures with international partners in regions less affected by tariffs or trade restrictions.

Collaboration as a cost-containment strategy for small and medium-sized businesses

One of the most compelling reasons to adopt collaborative approaches is their ability to help businesses contain costs without sacrificing quality or performance. By pooling resources, sharing knowledge, and fostering teamwork, SMEs can achieve economies of scale that would be difficult to attain independently.

For example, a company that collaborates with a regional supplier might negotiate bulk purchasing discounts that reduce costs for both parties. Similarly, cross-departmental initiatives to streamline workflows can uncover inefficiencies that result in significant savings.

Future-proofing your small or medium-sized business with collaboration

Trade wars and tariffs are just one of many uncertainties businesses face in today’s global economy. By embedding collaboration into your company’s DNA, you’re not just preparing for the immediate challenges, you are also building a foundation for long-term resilience and success.

Key takeaways for SMEs:

  1. Start Internally: Strengthen your department teams by investing in training and fostering a culture of trust and openness.
  2. Expand Outward: Break down silos within your organization and look for opportunities to collaborate with peers and partners.
  3. Think Strategically: Use external alliances to diversify your supply chain, expand your market reach, and share costs.

The challenges ahead may seem daunting, but they also present an opportunity to innovate and grow. By embracing collaboration, your business can adapt to the evolving marketplace, contain costs, and stay competitive.

Take the first step today by exploring resources like the TIGERS 6 Principles™ training program, designed to help SMEs build collaborative, high-performing teams that thrive in any environment. Let’s turn uncertainty into opportunity—together.

Care to dig deeper into the topic of building resilient small and medium-size businesses?

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Copyright TIGERS Success Series, Inc. by Dianne Crampton

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