Mid-Year Outlook: Seize the Volatility

The first half of 2025 has had more than its share of volatility, from tariffs and trade wars to interest rate questions and stock market swings. On our recent webinar, Oak Street Funding’s CEO and founder, Rick Dennen, and president, Alicia Chandler, broke down what’s been happening, what’s on the horizon, and what companies can do to make the most of this environment. In this blog post, we’ll hit on the high points from the webinar.

→ Watch Now: Mid-Year Outlook Webinar

Volatility isn’t new

Ups and downs in the economy are part of doing business. Cyclical changes of expansion and contraction (the business cycle) happen with regularity, and business leaders have to learn to work within those changes. Some of the issues we’re hearing about now, including large tariffs, feel new because they haven’t been used as trade negotiating tools to such a great extent for some time. But, they’ve been used before, and they likely will be used again.

Just how much tariffs will impact different businesses isn’t crystal clear, but they may have less of an effect than some people fear. While a headline may read, “25% TARIFFS ON CAR PARTS,” the fine print may indicate that only certain components are subject to the levy. Rather than panic about tariffs that may have little or no effect, business owners would be wise to remain aware and nimble, ready to respond with contingency plans when the details of tariff effects on their business become clear.

Keep making decisions

In sports and in business, preparation is important, but it’s execution – making decisions and carrying them through – that wins the day. A competitive swimmer trains every day and puts together a plan, but during a race, they have to make lots of decisions about that plan in the moment. When should they conserve energy and when should they go all out? Should they stick with their race strategy if their top competitor seems to be changing theirs? Success comes to those who are well-prepared but also able to pivot to a new strategy when circumstances call for it.

There’s a reason top business leaders are called executives. Their job is to execute, to get things done, and that means making decisions. A successful executive stays informed about their industry so they know what their options are. They are ready to make decisions quickly when an opportunity arises. It may be tempting to hold off on making big decisions while waiting for the tariff situation to become less murky or for the future of interest rates to come into focus, but doing nothing is a decision in and of itself. Doing nothing is a recipe for getting passed by the competition.

Stay focused on growth

No matter what the economy is doing, business owners are wise to keep driving growth. Organic growth: increasing revenues by adding new clients or services, is the foundation of business success. It’s also the primary factor buyers look for when targeting businesses for acquisition. So, focusing on organic growth pays off now and in the future when the business is ready for sale.

How can a services firm drive organic growth? Here are three tips:

1. 1. Get more one-on-one face time with clients and prospects – Get team members out in the field with clients by providing tech tools that free them from tedious administrative tasks. Consider upgrading computer systems or investing in AI tools, financed with a working capital loan.
   2. Offer new services – Identify team members with specialized skills, certifications, or interest in ancillary services. Support them getting the credentials they need to be able to provide additional services to clients.
   3. Update marketing efforts – Communication with clients and prospects is key. Consider hosting events and focus groups to identify clients’ interests and the best ways to communicate with them. Create new marketing tools using findings from the events.

Keep people at the center of business

People – whether they be the firm’s team members or their clients and prospects – are the heart of every business. How can the workplace better serve team members? Are there ways to make them more engaged with the company’s overall goals and objectives? Would new technology or different working arrangements allow them to be more productive and satisfied?

For clients, stay connected. Congratulatory notes for a client’s business success or their family member’s achievement can make them feel seen and appreciated. Inquiring about what other services they would be interested in could open up new lines of business. Simply sending occasional thank you notes for their business (without any call to action) is a no-cost way of building loyalty and trust.

Disruptions can bring opportunities

Times like these can offer chances to grow inorganically, too, through mergers and acquisitions (M&A). Some business owners may feel like the current economic waters are too choppy to navigate and will be ready to sell. Moreover, there are always businesses on the market because of retirements or career changes. And because some people are put off by the current market situation, there may be fewer potential buyers to bid against. Taking advantage of these opportunities can allow a business to increase its client base, bring on new (potentially specialized) talent through acqui-hiring, offer new services, or expand its geographic footprint.

Some potential buyers may hesitate to get into the market because they’re waiting for interest rates to fall to pre-pandemic levels. Many experts predict, however, that rates are unlikely to fall back to those levels anytime soon. Historically, even when they do lower the target Federal Funds Rate, the Fed only does so by 25 or 50 basis points at a time. If an acquisition offers potential for strong growth and the fundamentals are good, is it wise to pass on the acquisition while waiting for a negligible drop in interest rates?

Be prepared and nimble

No one can predict where all the variables in the current economy are going to shake out. Wise business leaders will focus on their fundamental plans for growth and continue to execute those plans. If or when circumstances arise that call for a change in those plans, they need to be nimble enough to pivot to new strategies, while always being on the lookout for new opportunities.

Ready to take the next step? Contact us or book a call today!