Small business owners are constantly navigating change. And while the post-holiday slump typically offers a respite from the fast and furious December shopping rush, in 2025, more changes are coming.

Donald Trump seems to be following through on threats to enact big tariff hikes in the early days of his new administration, along with dismantling the de minimis exemption for lower-value imported goods. However it plays out, businesses large and small are beginning to think about how they can prepare for higher prices and restrictions on imported goods.

Data from Katana Cloud Inventory showed that businesses began to front-load commodity imports immediately after the 2024 election results were called, with a 50% increase in median stock value from the week of October 28 to the week of November 4. However, that was only a temporary solution. Going forward, it will be critically important, especially for small and medium-sized businesses (SMBs), to have systems in place that can help them meticulously manage their inventory and holistically manage operations — from planning and demand forecasting to supplier management and more.

Goods Today Vs. Goods Tomorrow

According to the U.S. Census Bureau, textile, apparel, toys, games and sporting goods, furniture, jewelry and cosmetics were among the top consumer goods imported into the U.S. in 2024. Automotive parts and accessories and electronics ranked among the top 10 imported goods overall during the year. The National Retail Federation (NRF) studied the impact of increased tariffs on these top imports and found that business and consumer spending increased significantly in the years that tariffs went in effect. For example, they found that apparel alone could see up to a $24 billion increase, with the total tariff proposal costing Americans $78 billion in annual spending power. 

For SMBs that operate on slimmer margins than large retailers, these higher costs could be detrimental to their businesses. Going forward, it’s essential that they find technological solutions that can help them streamline operations, optimize inventory planning and keep costs as low as possible, while navigating any market volatility or future supply chain disruptions.

Onboarding New Technology 

Adopting a new system, especially if you’re making the transition from pen and paper to digital, can be daunting, but taking a phased approach to onboarding can help make the process smooth and efficient. First, choose a software provider that’s right for your business needs. Today, there are cloud-based systems that cater to SMBs, so you aren’t locked into choosing an enterprise resource planning (ERP) application that’s designed for much larger operations. SMBs often opt for inventory-management software because inventory is at the heart of many small operations.

Having selected a software provider, you’ll need to upload your business data into the new system. The trick here is preparing your data to get the maximum output once it’s running through your new system, so take the time to clean up and organize your data. There are data-cleaning providers who can help you through the process of fixing or removing incorrect, duplicate or corrupted data. While this may seem like an unnecessary or overly time-consuming step, this process is essential. Your new software system will only be as good as the data you put in.

While you’re preparing your data, you can simultaneously learn how to use or train staff on the new system. For example, if you choose inventory-management software, learn how to connect your existing tech stack — from customer-facing applications such as Shopify to backend applications such as Intuit QuickBooks — so that you have a holistic view of your business.

Benefits of a Connected System

Going through a digital transformation gives you the benefit of a connected system, which can help navigate business challenges that lie ahead. And today, with the introduction of next-generation technologies such as artificial intelligence and machine learning, software systems are getting smarter, too. Some software providers have introduced features, such as using AI to automatically transfer orders from a customer’s e-mail to a sales order, that can save business owners valuable time and resources. There are also features that offer demand planning and forecasting, which will be essential for inventory management should there be supply chain disruptions due to tariff hikes.

In the future, AI will likely play an even larger role in streamlining business operations, and onboarding a new system now will contribute to your business’s AI readiness. It has the potential to connect the dots throughout operations and along the entire sales funnel, from managing the staff schedule to automated re-ordering when inventory runs low and personalized interactions with customers for unique shopping experiences. Regardless of what lies ahead, turning to technology now can help SMBs future-proof their businesses, stay nimble when faced with adversity, and flourish when the odds are in their favor.

Ben Hussey is co-chief executive officer of Katana Cloud Inventory.