Are rising costs squeezing your business margins? You’re not alone. 75% of small businesses cite rising costs as their top financial challenge, according to the Federal Reserve’s 2024 Small Business Credit Survey released in March 2025. The key to protecting your margins: understanding which specific costs are hitting YOUR industry hardest and having a targeted strategy to address them.
Three Industries Under the Most Pressure
While cost pressures affect all small businesses, three industries are navigating particularly severe challenges:
Construction faces a dual cost crisis. Material costs jumped 9.7% in Q1 2025, while 49% of firms report unfilled job openings. The combination of scarce workers and volatile material prices is squeezing margins from both sides.
Food and beverage operators are caught in a perfect bind. Beef prices are up 21% and coffee jumped 33%, while labor challenges and retention issues persist across all segments. Passing these costs to increasingly value-conscious customers has become nearly impossible.
Manufacturers are navigating tariff turbulence. Tariff payments for importing firms surged 170% since January 2025, compounding freight cost increases and extended lead times that tie up working capital.
How to Address Your Specific Cost Pressures
Understanding where margins are under pressure is only half the battle. The key is knowing exactly what to do about it.
We’ve developed two complementary matrices that translate complex cost pressures into clear, actionable strategies tailored to your industry. The Core Margin Pressure Matrix breaks down specific cost drivers by industry (manufacturing, construction, retail, food & beverage, service providers, and general SMBs). The matrix is developed using data published by sources such as the Federal Reserve, NFIB, and Bank of America, matched with actionable mitigation strategies.
Beyond tactical responses, the Advanced Strategies Matrix reveals innovative approaches, such as strategic pricing optimization, value chain collaboration, portfolio rationalization, and data analytics, that extend beyond the obvious. These strategies help you future-proof your business through increased resilience and sustainable competitive advantage.
Do you know which cost drivers hit your margins hardest? Are you leveraging both immediate actions and strategic initiatives to protect profitability?
Get Your Industry-Specific Action Plan
Download both matrices to gain expert insights and start building your margin protection plan today. Each matrix includes specific implementation steps, source citations, and proven strategies from businesses successfully navigating these challenges.
Download Your Free Industry Matrices
📊 Core Matrix: Industry Margin Pressures and Mitigation Actions Detailed breakdown of cost drivers and proven solutions for Manufacturing, Construction, Retail, Food & Beverage, Service Providers, and General SMBs.
🚀 Advanced Matrix: Margin Protection Strategies Seven strategic initiatives including value chain collaboration, dynamic pricing, portfolio rationalization, data analytics, and more.
Data Sources
Research compiled from: Federal Reserve Small Business Credit Survey (2024), NFIB Small Business Optimism Index, U.S. Chamber of Commerce Small Business Index, Bank of America Institute Small Business Checkpoint, National Restaurant Association State of the Industry 2025, Associated Builders and Contractors, Bureau of Labor Statistics, Deloitte Manufacturing Outlook, and National Association of Manufacturers.