President Donald Trump’s policies represent a perfect storm for Ashley, who owns a global humanitarian consulting firm in San Francisco.
When she called into The Ramsey Show, she said those policies are the main reason she’s drowning in more than $230,000 debt on her business.
Co-hosts Ken Coleman and George Kamel agreed that she is in a storm of debt.
“You’ve got to batten down the hatches,” Coleman said (1).
Ashley’s consulting firm connects corporations, colleges and school districts with charities around the world to repurpose furniture and fixed assets. Last year she grossed $2.5 million.
But she said Trump’s tariffs and his defunding of Diversity, Equity and Inclusion (DEI) initiatives — along with defunding universities and public schools — have wreaked havoc on her woman-led business.
Ashley told Coleman and Kamel that as a result of these changes last year, she had to restructure and lay off all her employees. She’s the only one left.
Then, last summer, her husband, who is also her business partner, fell ill and was hospitalized, unable to work.
She said she’s lined up some contracts for the spring, but isn’t sure how to survive until then.
Ashley outlined the sources of her $230,000 debt — including $90,000 in leases for two business vans, $80,000 in credit card debt and $60,000 she owes a vendor. She also has ongoing commitments on her office lease and insurance.
Coleman asked why there was such a large unpaid debt to a vendor hanging over her head.
“Did you get paid and then you kept it and didn’t pay the vendor?”
Ashley explained that when she laid off her employees, she had to pay out on medical expenses, insurance and vacation time. There was no money left to pay the vendor.
She added that she didn’t want to get a loan.
“We’re never going to suggest you get a loan,” Kamel said. “What I’m saying is maybe this business needs to pause right now.”
He suggested Ashley and her husband pivot and both get full-time jobs. Ashley said that her husband was still in rehabilitation.
“Then it’s just you,” he said. “Use your skills to go do something else right now to float you until those contracts come in. Then we can right this ship.”
Coleman recommended she tell the truth to the vendor she owes $60,000 to — and set up a repayment plan. He agreed with Kamel that she needs to get a full-time job.
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Ashley isn’t the only small business owner struggling as a result of tariffs and economic uncertainty.
Doug Scheffel, who owns a sheet metal fabrication company in Massachusetts, told CBS WUSA-9 that he had to lay off 25% of his employees last April when Trump launched tariffs that impacted demand for his products (2).
“It just has become almost impossible to plan and be thoughtful about our workforce, be thoughtful about how we pay those people, how we employ them,” he said.
Economist Aaron Terrazas said small businesses are also facing a tougher time accessing financing.
“Credit conditions — bank lending conditions — for small businesses have tightened now for 13 consecutive quarters. I think that’s probably going to continue,” Terrazas said.
Things are tough for small business owners at the best of times. According to U.S. Bureau of Labor Statistics, 20.4% of businesses fail in their first year after opening (3).
First there’s startup costs, which range from hundreds of dollars to tens of thousands depending on what type of business you have. That includes incorporation fees, anywhere from $480 to $1,180.
Then there are ongoing costs, including:
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general liability insurance (about $500/year)
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personal income tax (10 to 37%, depending on income)
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business taxes (21% corporation tax, plus 7.65% for Social Security and Medicare for employees)
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real estate leases (about $21.85 per square foot)
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and the cost of your inventory
According to the Fed Small Business 2024 Report on Startup Firms, 77% of startups without employees used personal funds to address challenges (4).
If you’re a business owner in Ashley’s situation, you may be struggling with the idea of shutting down.
The Ramsey Show hosts recommended that she prioritize her family’s survival. This yardstick could be a way to make the tough decision to close, or sell, your small business.
The U.S. Small Business Administration (SBA) has an online tool to connect small business owners with local support at Small Business Development Centers.
It also offers links to mentors and Women’s Business Centers that offer counseling and resources to women-owned businesses like Ashley’s.
The site also provides tips on everything from market research and writing a business plan to information on how to apply for funding.
Whether you’re already in business or planning one, the SBA also offers advice on conducting a competitive analysis, which it says “is key to defining a competitive edge that creates sustainable revenue.” (5)
And sustainable revenue is exactly what someone in Ashley’s position needs.
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The Ramsey Show (1); CBS WUSA-9 (2); Commerce Institute (3); Fed Small Business (4, 5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
