How Much does the Big Picture Count?

It is currently difficult to have a business conversation without discussing the Big Picture. The 24-hour news cycle creates plenty of fodder to attract eyeballs. It almost seems like the media is picking and choosing what will create the most anxiety and stress.

Big Picture Issues

Wars in Ukraine, Israel, and Iran. Attacks on shipping. Russian hackers. The battle between the executive and activist judges. Tariffs, sanctions, inflation, interest rates, ICE.

It almost makes a business owner pine for the days when “mundane” issues like employee retention and customer satisfaction were the primary concerns.

How much weight should a business owner place on Big Picture issues? If you are a tomato grower in Mexico who ships 100% of your crop to the U.S. and just got hit with a 17% tariff, maybe a lot. But if you are a consumer in the grocery store who just saw Roma tomatoes go from $0.23 each to $0.27 each, perhaps not so much. If you are an Italian restaurant that consumes 400 pounds of those tomatoes a week, the increase in cost from $0.79 to $0.92 a pound is about $52. Perhaps not enough to change menu prices, but enough to be discussed at the restaurant association meeting.

But Does it Matter?

Even when the Big Picture seems to matter, the actual impact may be far smaller than it first appears. If you are a greenhouse tomato grower in Arizona, you probably applaud the tariff. If your gross margin on each pound of tomatoes sold is $0.05, you just narrowed the gap by about one-tenth of a cent. Does that really tip the scales?

Has the Mexican grower truly lost the inherent advantages of lower water and labor costs? Or were those already eroded by the Arizona grower’s automation, climate controls, and proximity to market?

In the final analysis, the biggest impact of the tomato tariff may be the concern it creates—the distraction from focusing on other issues—and the fodder for another news cycle. Then the Mexican grower and the Arizona grower return to what they were doing. The restaurateur also goes back to their tasks. The supermarket buyer resumes their activities. Finally, the consumer returns to their routine. They simply have a slightly different set of numbers to work with.

The Advisor’s Role

As advisors to business owners, my job is to help you focus on what really matters. I have an obligation to help separate the wheat from the chaff. When it comes to running a successful business, tariffs, sanctions, inflation, and interest rates are often just chaff.

I can help by guiding you to ask the right questions:

?         How much will this really affect my business?

?         Have you run the numbers?

?         Does it require a change in what you do, or how you do it?

?         If a change is called for, will taking immediate action have a substantially greater impact than simply including it in your next planning cycle?

Of course, sometimes the answer to those questions may be yes. More frequently, it will be no. Then we are free to discuss the Big Picture—but without the false urgency that television, social media, and newspapers are trying to foist upon us.