Buttons Don’t Whip Inflation: How to Reduce Small Business Operating Costs in 2026

Law Smith

Founder & President, Tocobaga

Law Smith is the Founder and President of Tocobaga, a Tampa-based ROI-focused marketing agency and SMB advisory. He has strategically advised 1,000+ small and medium businesses, executed 600+ integrated marketing campaigns, and written 30+ business plans across industries ranging from professional services to e-commerce to B2B technology. Tocobaga is a Google Partner and Squarespace Gold Partner headquartered in Ybor City.

On October 8, 1974, Gerald Ford stood before a joint session of Congress with a button pinned to his lapel.* He had been president for about two months and had pardoned Richard Nixon about a month earlier.† Inflation was running at 12 percent.‡ Ford called it "our public enemy number one."*

The speech contained real policy: a one-year 5 percent surcharge on corporate and upper-level individual incomes, and a goal of cutting foreign oil imports by 1 million barrels a day by the end of 1975.* Nobody remembers that part. They remember the lapel. Ford told Congress the button bore "the single word WIN" and announced that enlistment forms would run in many of the next day's newspapers.* The White House boiled the program down to four verbs, "work better, buy smarter, invest more, and waste less," and soon the three letters were on buttons, baby bibs, playing cards and T-shirts.‡

Alan Greenspan, the newly installed chairman of the Council of Economic Advisers, was aghast.† He later recalled a White House meeting on the campaign, where he was the only economist present, in two sentences: "This is unbelievable stupidity. What am I doing here?"† The speechwriters, he recalled, had ordered up millions of buttons. Greenspan told the officials that small business owners could not be asked to voluntarily forgo price increases, and he later called the campaign "a low point of economic policymaking."†

The public got the joke faster than the policy. People wore the buttons upside down so they read NIM: No Immediate Miracles.† The New York Times reported that the program "soon became the butt of many jokes despite Ford's appearance on television with a red-and-white WIN button."† Sylvia Porter, the economics columnist who chaired the citizens' committee running it, later admitted, "We just got too much publicity at the beginning, and we just weren't ready to function."†

WIN had a slogan, a logo, merchandise, a pledge and a mailing list. It never had a mechanism. Not one line in one company's ledger moved because somebody pinned three letters to a lapel. Now inflation is back on Main Street. In September 2026, 20 percent of small business owners named it their single most important problem, nearly triple the 7 percent historical average.§ Inside a lot of companies, the response looks familiar: a belt-tightening email, a spending freeze nobody enforces, a sticky note by the light switch. Buttons. Buttons do not whip anything. Line items do.

At Tocobaga, the ROI-focused lead generation marketing agency and SMB advisory in Ybor City, Tampa, behind SolvingHow.com, founder Law Smith hears one question from owners more than any other this year. It usually arrives late in a meeting, after the marketing agenda is done, in nearly these words: What costs are hitting our margins hardest this year, and what has anybody actually cut or renegotiated? Tocobaga has advised more than 1,000 small and mid-sized businesses, and the honest answer is never a slogan. It is a list of line items, ranked by dollars, each with a mechanism attached and an order of attack. Here is that list, built on the newest data available in late October 2026.

How bad is small business inflation in 2026?

Small business inflation in 2026 is worse than the headline number, because the costs climbing fastest are the ones small firms buy most heavily: fuel, energy, health coverage and liability insurance. Consumer prices rose 3.7 percent in the 12 months through September 2026, but while core prices rose only 2.6 percent, energy jumped 20.4 percent, gasoline 34.2 percent and fuel oil 74.2 percent.‖

The National Federation of Independent Business survey for September 2026 reads like a mood ring. The Small Business Optimism Index slipped 0.8 points to 97.9, just under its 52-year average of 98.0, while the Uncertainty Index climbed to 90 against a historical average of 68.§ Only 7 percent of owners called it a good time to expand.§ A net 31 percent reported raising average selling prices, and a net 31 percent plan to raise them again, up 3 points in a month.¶ Earnings trends sat at a net negative 20 percent, and among owners whose profits fell, 24 percent blamed rising material costs, up 8 points.¶ NFIB's own summary said owners "continue to adjust to rising fuel, energy, and other inflationary costs."**

Money costs more too. The average rate on short-term loans reported by NFIB members reached 8.2 percent, and a net 8 percent of owners paid more on their most recent loan than on the one before it.§

On a single business, those percentages get specific fast. A company doing $2 million in revenue at a 10 percent operating margin spends $1.8 million to earn $200,000. Every 1 percent of cost inflation it cannot pass through costs $18,000, which is 9 percent of its profit. Three points of unrecovered inflation erase more than a quarter of the year's earnings, and nobody in the building will be able to point to the day it happened.

The most useful fact in the 2026 data is that the lines are not moving together. Fuel is up by a third.‖ Health premiums are up 5 percent.†† Commercial auto and umbrella insurance are still climbing, while commercial property insurance is falling.‡‡ A belt-tightening memo treats a falling line and a rising line exactly the same way, which means it treats neither. That is the WIN button problem in a sentence: a slogan applies the same pressure everywhere, so it applies real pressure nowhere.

Where 2026 operating costs are moving, what owners have cut or renegotiated, and when to attack each line.

Cost line	What changed in 2026	What owners have cut or renegotiated	Attack order
Health benefits	Family premiums up 5% to $28,303 (KFF, 2026)	Full rebids, level-funded plans, ICHRA quotes, deliberate contribution splits	First wave: renews yearly and compounds
Commercial auto and umbrella	Auto up 4.5%, umbrella up 5.3% (CIAB, Q2 2026)	Driver record checks, telematics, higher physical-damage deductibles	First wave: still rising
Florida property and wind	Property down 6.3% nationally; Citizens nonresidential wind-only down 5.0%	Independent broker re-shops, documented wind mitigation, updated values	First wave: savings go to shoppers
Fuel and energy	Gasoline up 34.2%, electricity up 4.4% (BLS, September 2026)	Zone routing, idle tracking, fuel surcharges, demand-charge management	Second wave: fastest-rising line
Turnover and overtime	Net 28% raised pay; 87% of hiring owners see few qualified applicants (NFIB)	Stay interviews, skills-based pay ladders, overtime audits	Second wave: largest hidden cost
Rent	Office vacancy 19.8% (Cushman & Wakefield, Q3 2026)	Early renewals, blend-and-extend deals, pass-through audits	Next lease window: 12 to 18 months out
Card processing	Visa and Mastercard credit fees $118.8 billion in 2025 (MPC)	Interchange-plus pricing, ACH for B2B invoices, junk-fee removal	Third wave: one phone call
Software	Only 54% of licenses used (Zylo, 2026)	Quarterly seat audits, named owners, 60-day idle rule	Third wave: small but easy
Marketing	Budgets average 7.8% of revenue (Gartner, 2026)	Cost per booked job by channel, cutting unmeasured spend, fees not tied to spend	Ongoing: measure, then cut

How can a small business lower employer health insurance costs in 2026?

A small business lowers employer health insurance costs by changing the plan's structure and the way it is bought, not by asking employees to get healthier: rebid the coverage every renewal, price a level-funded plan and an individual coverage HRA alongside the incumbent, and set contributions on purpose. The pressure is real, because KFF's 2026 Employer Health Benefits Survey found average family premiums rose 5 percent to $28,303, with single coverage at $9,804.††

KFF surveyed 1,937 employers, and the details are worse than the headline.†† Family premiums are up 28 percent in five years. Workers' own share of family coverage rose 9 percent in a single year, to $7,471, while wages rose 3.7 percent and inflation 2.7 percent.†† Small firms, which KFF defines as 10 to 199 workers, paid an average family premium of $27,288; their workers contributed $9,687 a year toward family coverage; and the average single deductible at small firms was $2,624, against $1,955 across all firms.†† Small employers pay nearly big-company premiums and push more of the bill onto their people, which is a strange way to compete for talent in a year when labor quality is the top problem on Main Street.

The math on one firm is blunt. A two-partner estate planning firm in Clearwater that covers 10 families at the small-firm average carries $272,880 a year in premiums. A 5 percent renewal adds $13,644 before anyone in the office has seen a doctor, and next year's increase is charged on this year's higher base. Health insurance is not just a cost. It is a compounding cost, which is the kind that deserves the owner's personal attention first.

Level-funded plans are the most common structural change, and KFF found 38 percent of covered workers at smaller firms are already in one.†† The employer pays a fixed monthly amount that covers expected claims, administration and stop-loss insurance, and if the group's claims come in under budget, part of the surplus can come back. The catch is underwriting: a healthy group wins, and one bad claims year shows up at the next renewal. An individual coverage health reimbursement arrangement, or ICHRA, goes the other direction. The employer sets a fixed monthly allowance, employees buy their own individual-market coverage, and the company's health cost becomes a budget line instead of a renewal surprise. Individual-market networks vary by county, so the math has to be run on real local plans, not a brochure.

The renewal itself is where most of the money leaks. A broker who has not taken a plan to market in three years is a WIN button with a commission. The firms that hold increases below the average tend to get three things right: they start the rebid 120 days before renewal, they insist on at least one alternative funding quote, and they set contribution percentages deliberately, so the company and the employee each know exactly what a dollar of premium increase costs them.

Why are Florida commercial insurance costs so high?

Florida commercial insurance costs are high because the state concentrates hurricane wind exposure, expensive coastal property and years of heavy claims litigation in a market that depends on costly reinsurance. The 2026 twist is that commercial property pricing has turned down, but the savings are flowing to businesses that shop their renewals, not to the ones that wait for the notice in the mail.

The national numbers show the split. In the Council of Insurance Agents and Brokers survey for the second quarter of 2026, average commercial premiums fell 2 percent, with commercial property down 6.3 percent and workers compensation down 3.2 percent.‡‡ Commercial auto rose 4.5 percent, and umbrella rose 5.3 percent, its 35th consecutive quarterly increase.‡‡ The size split is the part to tape to the office wall: large accounts saw premiums fall 3.7 percent, while small accounts fell just 0.5 percent.‡‡

Florida's insurer of last resort moved the same direction for businesses. For policies effective on or after July 1, 2026, Citizens Property Insurance Corporation cut average rates 1.8 percent for commercial nonresidential multiperil coverage and 5.0 percent for commercial nonresidential wind-only coverage, while condominium and other commercial residential lines rose 7.2 to 14.4 percent.§§ Citizens caps most class-rated changes between a 5 percent decrease and a 15 percent increase, so an individual building can land far from the average.§§

On one company, the size gap looks like this. A Tampa 3PL paying $60,000 a year to insure a warehouse would save about $3,780 at the national property decline of 6.3 percent. At the small-account average of 0.5 percent, it saves $300. The gap between those two numbers is not weather or luck. It is whether anyone put the account in front of more than one market.

The tactics that work in Florida are unglamorous. An independent broker who can quote several carriers should start 90 to 120 days before renewal. Every wind-mitigation feature on the building, from roof-to-wall connections to opening protection, should be documented, because underwriters price what they can verify. Insured values should match a current replacement-cost estimate rather than a number carried forward for years. And the hurricane deductible should be modeled against cash reserves, since a higher deductible only saves money if the business could actually write that check in October.

Commercial auto and umbrella need their own playbook because they are still rising. Underwriters price fleets on drivers and evidence, so the owners who hold rates flat run motor vehicle record checks at hire and every year, put telematics or dash cameras in the vans, remove occasional drivers who do not need to be on the policy, and raise physical-damage deductibles on older vehicles. A break-room complaint that insurance is crazy in Florida is a button. A driver scorecard reviewed every month is a line item.

How do small businesses cut labor costs without layoffs?

Small businesses cut labor costs without layoffs by attacking turnover, overtime and wasted skilled hours before touching headcount or pay. Turnover is the expensive one: Gallup has estimated that replacing a single employee costs one-half to two times that employee's annual salary.‖‖

Wage pressure is easing a little. The talent problem is not. In September 2026, a net 28 percent of owners reported raising compensation, down 3 points, and a net 20 percent plan raises in the next three months.¶ Only 6 percent named labor costs their top problem, the lowest share since December 2020.¶ But labor quality was the top problem for 26 percent of owners, and of the 51 percent hiring or trying to hire, 87 percent reported few or no qualified applicants.§ The real cost is not the wage. It is the empty seat, the overtime the empty seat creates and the rookie who takes most of a year to become profitable.

The math on a Tampa plumbing company is sobering: it has eight technicians earning about $62,000 each and loses two of them a year. Gallup's range puts each replacement at $31,000 to $124,000, so the churn costs somewhere between $62,000 and $248,000 a year in recruiting, training, callbacks and missed jobs. Keeping one more technician is worth more than the company's entire 2026 fuel increase.

Gallup's 2019 research also found that 52 percent of employees who quit said their manager or organization could have done something to keep them.‖‖ That is the cheapest labor cost cut in the economy, and almost nobody budgets for it. The mechanisms are specific: a 15-minute stay interview with every key employee twice a year, a pay ladder tied to skills so good people can see the next raise without quitting to get it, and a schedule built to demand instead of habit. Overtime deserves its own audit. Time-and-a-half on a recurring Saturday is a raise nobody approved.

Wasted skilled hours are the third leak. A licensed technician driving across town twice in one day, a paralegal retyping intake forms, a project manager chasing approvals through email: each one is a premium wage spent on low-value work. Zone routing, online intake forms and a single home for approvals fix all three. None of it requires cutting a person. All of it lowers labor cost per job.

Can a small business renegotiate its commercial lease?

Yes, and 2026 favors many tenants, especially office tenants: Cushman & Wakefield put the national office vacancy rate at 19.8 percent in the third quarter of 2026, which means roughly one office in five is sitting empty.¶¶ The strongest moves are an early renewal traded for concessions, a blend-and-extend, a right-size, and an audit of the pass-through charges landlords bill on top of base rent.

The window is narrowing, which is the argument for moving now rather than at expiration. Vacancy was down 30 basis points from a year earlier, sublease availability has fallen for 10 consecutive quarters to below 89 million square feet for the first time since 2020, and average office rents reached $38.65 per square foot.¶¶ Landlords with empty floors still want to keep a paying tenant, but they will want it a little less each quarter the market tightens. Industrial and retail space run on their own supply and demand, so a warehouse or storefront tenant should pull local numbers before assuming the same bargaining position.

Here is the math on a modest office. A professional services firm in 3,000 square feet at the national average of $38.65 pays $115,950 a year. A blend-and-extend that adds two years to the lease in exchange for 10 percent off the rate saves $11,595 a year, and three months of free rent adds roughly $29,000 more. That is a real raise for the profit line, and it costs a few letters and one uncomfortable meeting.

The pass-through audit is the overlooked half. Common area maintenance, property taxes and the landlord's own insurance often flow to tenants through an annual reconciliation that few tenants read. With commercial property insurance falling in 2026, a Florida tenant has every reason to expect the insurance line in that reconciliation to fall with it.‡‡ If it does not, the question belongs in writing. A lease is a line item with a five-year memory, and the time to negotiate is 12 to 18 months before it expires, not 60 days before.

How can a small business reduce energy and fuel costs?

A small business reduces energy and fuel costs by cutting miles and idle time first, recovering the fuel cost it cannot cut through a visible surcharge or trip charge second, and fixing its electric account's rate class and demand charges third. Fuel is the urgent line: gasoline prices rose 34.2 percent and fuel oil 74.2 percent in the 12 months through September 2026, while electricity rose 4.4 percent.‖

Electricity is the slower burn. The U.S. Energy Information Administration expects the average commercial electricity price to rise from 13.37 cents per kilowatthour in 2025 to 14.01 cents in 2026 and 14.26 cents in 2027.*** In the South Atlantic region, which includes Florida, the commercial price is forecast to climb from 11.39 cents to 12.20 cents, a 7.1 percent jump in one year.*** Owners in the Upper Midwest and Mountain West are getting off easier, with West North Central rates moving from 10.43 to 10.80 cents and Mountain rates from 11.24 to 11.41 cents.***

A Tampa 3PL running dock lights, conveyors and forklift chargers on a $180,000 annual electric bill absorbs about $12,800 of extra cost at that South Atlantic rate. Its yard trucks, and the service vans of every home services company on the same street, take the bigger hit at the pump. A plumbing company that spent $45,000 on fuel last year faces roughly $15,400 more at a 34.2 percent increase if it drives the same miles.

Miles are the lever. Zone scheduling, routing software and same-day job clustering cut miles per job, and telematics turns idle time from a guess into a number per driver per day. On the electric side, LED retrofits and HVAC maintenance are the familiar moves, but the bigger savings for warehouses and light manufacturers often sit in demand charges, which are billed on the highest short spike of usage in the month. Staggering forklift charging and equipment start-ups can flatten that spike. A call to the utility to confirm the account sits on the best available rate class takes an hour, and almost nobody makes it.

Whatever cannot be cut should be recovered. A fuel surcharge or trip charge that is visible, explained and tied to a public fuel index tells customers the truth: the cost moved, and the price moved with it. In 1974, Ford asked Americans to write a list of 10 ways to save energy and mail it to the White House.* A list without a meter is a button. Miles per job and kilowatts at peak are line items.

How much do small businesses waste on unused software?

Small businesses typically pay for far more software than they use: Zylo's 2026 SaaS Management Index found the average organization uses only 54 percent of the software licenses it pays for, leaving 46 percent idle.††† The fix is a quarterly seat audit, one named owner for every subscription and a standing rule that any tool nobody has opened in 60 days gets canceled.

Zylo's data skews toward larger organizations, so its dollar figures do not translate to a 20-person firm, but the ratio does. A 25-person consulting firm might pay $9,000 a month across practice management, a CRM, e-signature, scheduling, a project tool, two file-sharing services, a texting app and an AI writing assistant. At 54 percent utilization, roughly $4,140 a month, or about $49,700 a year, is paying for seats nobody uses.

The leaks follow a pattern. Departed employees keep their seats because nobody owns offboarding. Two tools do the same job because two partners each picked one. An annual plan bought for a discount auto-renews for a team that shrank. A free trial converted to paid in a month when nobody was watching. In professional services firms, the most common duplicate is the ring of add-ons around a practice management system that already includes the e-signature, intake forms and scheduling the firm is paying for separately.

The audit takes an afternoon. Someone pulls 12 months of card and bank statements, lists every recurring charge, assigns each one an owner, checks last-login data and puts every renewal date on a calendar 45 days ahead. Then the firm cancels, downgrades or consolidates. Software sprawl is the purest form of the WIN problem: every subscription was bought for a good reason, and nobody ever goes back to check whether the reason is still true.

How can a small business lower credit card processing fees?

A small business lowers credit card processing fees by moving from flat-rate or tiered pricing to interchange-plus pricing, steering large business-to-business invoices to ACH, and auditing monthly statements for downgrades and junk fees. The bill keeps growing: Visa and Mastercard credit card fees paid by U.S. merchants rose to $118.8 billion in 2025 from $111.2 billion in 2024, according to figures cited by the Merchants Payments Coalition.‡‡‡

The coalition is a merchant lobbying group with an obvious point of view, and it puts total swipe fees at a record $198.25 billion; The Nilson Report counted $187.2 billion for 2024, up 5.9 percent in a year.‡‡‡ Whatever the exact total, card fees behave like a tax on revenue that rises automatically with every price increase. When a business raises prices 5 percent to cover fuel, its processing bill rises 5 percent too.

A Shopify brand doing $4 million a year shows the scale. At an all-in effective rate near 3 percent, it pays about $120,000 a year to accept cards. Shaving 30 basis points through better pricing saves $12,000 a year with no change in what customers experience. A Tampa 3PL billing $250,000 a month to business customers by card pays roughly $7,500 a month at the same rate, while an ACH transfer for the same invoice usually costs a small flat fee.

The moves come in order. First, the owner calculates the effective rate, total fees divided by total volume, for the last three months. Second, at least two competing processors quote interchange-plus pricing. Third, someone hunts down monthly minimums, PCI noncompliance fees and statement fees that disappear with one phone call. Fourth, large B2B invoices get an ACH option or an early-payment discount. Surcharging and cash discount programs are governed by card network rules and state law, so a business should confirm both before adding a line to the invoice. Processing is the rare cost that mails a monthly statement documenting exactly what it charges. Few owners read it.

Should a small business cut marketing when costs rise?

A small business should cut unmeasured marketing when costs rise, not marketing itself. Every marketing dollar should trace to a call, a form, a booked job or a signed client, and any dollar that cannot is a WIN button with a monthly invoice.

Marketing is a big line. Gartner's 2026 CMO Spend Survey of 401 marketing leaders found budgets averaging 7.8 percent of company revenue, effectively flat from 7.7 percent in 2025, with 15.3 percent of marketing budgets now going to AI.§§§ Those are mostly larger companies, but the proportion is a useful yardstick: a $3 million business spending at that rate carries a $234,000 marketing line, often its largest discretionary cost.

Tocobaga sees three kinds of marketing waste again and again. The first is a fee structure that pays the vendor more when the client spends more. An agency paid 15 percent of ad spend earns $3,000 more for every extra $20,000 the client spends, whether that $20,000 produces 40 calls or none. That is not a moral failing. It is an incentive, and incentives win. The second is unused tools: a marketing automation platform used as a newsletter sender, a social scheduler for an account that posts twice a month, a call tracking subscription nobody reviews. The third is unmeasured channels: sponsorships, directory listings, billboards and brand campaigns bought on a feeling and renewed on habit.

The fix is measurement before cuts: call tracking on every channel, a source field in the CRM that a human actually fills in, and a monthly cost per lead and cost per booked job by channel. Then the bottom quarter gets cut and the money moves to the top. Tocobaga's earlier pieces, The Map Is Not the Pump on proving marketing ROI and The Planes That Didn't Come Back on budget allocation, walk through both halves. The worst move in an inflationary year is the blanket cut, because a price increase only works if the phone keeps ringing.

How can a business raise prices without losing customers?

A business raises prices without losing customers by raising them on new customers and new quotes first, giving existing customers notice and a specific reason, and doing the math before flinching. The math is lopsided: in a Harvard Business Review analysis of 2,463 companies, a 1 percent price increase with no loss of volume raised operating profit by 11.1 percent, while a 1 percent increase in volume raised it only 3.3 percent.‖‖‖

Greenspan's warning from 1974 still holds: small business owners cannot be asked to voluntarily forgo price increases.† The ones who try usually end up forgoing payroll instead. Owners have figured that out. A net 31 percent of NFIB members raised prices in September 2026, and a net 31 percent plan to do it again.¶ Among firms paying more for imported inputs, the Federal Reserve's Small Business Credit Survey found 76 percent passed at least some of the increase to customers and 60 percent absorbed at least some of it.¶¶¶ Most did both, which is the honest answer: share the pain, but do not swallow all of it.

Here is the worked example. A Tampa plumbing company runs eight trucks and completes 2,000 jobs a year at an average ticket of $1,200, for $2.4 million in revenue. Variable costs per job, meaning parts, technician time and fuel, run 55 percent, or $660, which leaves $540 of contribution per job and $1,080,000 a year. Fixed overhead, meaning the office, dispatch, rent, insurance, software and marketing, is $840,000. Operating profit is $240,000, a 10 percent margin.

Now the company raises prices 5 percent, to $1,260. If no customer leaves, contribution per job rises to $600 and profit jumps to $360,000, up 50 percent. Suppose the owner's worst fear comes true and the company loses 5 percent of its jobs, 100 calls a year. It completes 1,900 jobs at $600 of contribution, or $1,140,000, and profit lands at $300,000. That is still 25 percent more profit than before the increase, with 100 fewer jobs to staff, drive to and warranty.

The break-even point is the number to remember. At a 5 percent increase and a 45 percent contribution margin, the company can lose 10 percent of its volume, 200 jobs, and still earn the same $240,000. The math runs brutally the other way for discounts. A 5 percent price cut drops contribution to $480 a job, and the company needs 2,250 jobs, 12.5 percent more volume, just to stand still. Meanwhile, the extra $120,000 from the increase covers the company's roughly $15,400 fuel increase nearly eight times over.

Sequence matters more than size. New customers and new quotes go first, because a new customer has no old price to be offended by. One-time customers get the new price at their next visit. Maintenance-plan members and long-time accounts get 30 to 60 days of notice, a plain-English reason tied to named costs such as fuel and insurance, and, where it makes sense, a chance to lock the old rate by prepaying a year. A good-better-best menu gives price-sensitive customers somewhere to trade down instead of somewhere else to go. Tocobaga's earlier piece on retention math, Norm's Stool Pays the Rent, explains why the existing base gets the most care: a loyal customer is worth far more than any single invoice suggests.

What is the strongest case for not cutting costs at all?

The strongest case for not cutting costs is that cost-cutting is the weakest profit lever and the easiest one to get wrong. In the same Harvard Business Review analysis, a 1 percent cut in fixed costs raised operating profit by only 2.3 percent, about a fifth of the 11.1 percent produced by a 1 percent price increase.‖‖‖

The case gets stronger with detail. Michael Marn and Robert Rosiello found that improvements in price typically had three to four times the effect on profitability of proportionate increases in volume.‖‖‖ An owner's attention is the scarcest resource in the company, and a month spent canceling $40 software seats is a month not spent on pricing, sales or the next hire. Cuts also destroy capacity. The business that trims its dispatcher to save $45,000 and then misses 300 calls has bought a very expensive savings. Switching benefit plans in a year when labor quality is the top problem can push out the exact people the company can least afford to replace. And history offers a warning: by early 1975, the country's worry had flipped from inflation to recession, so any company that spent the fall of 1974 cutting capacity met the downturn with less of it.†

The steelman is right about the order and wrong about the conclusion. The same research shows a 1 percent cut in variable costs raised operating profit by 7.8 percent, nearly as much as price.‖‖‖ Variable costs are fuel, materials, card fees and the hours wasted between jobs, which is most of the 2026 list. Several 2026 lines also behave like annuities: health insurance, liability insurance and rent renew on a higher base every year, so a 5 percent increase left alone becomes a permanent raise for the vendor. And a cost audit makes the price conversation easier, because an owner who can name the fuel and insurance increases in a price letter sounds like a professional, not a profiteer. The answer is both: a one-time sprint on costs and a permanent discipline on price.

How do PE-backed companies expand margins when costs rise?

PE-backed companies expand margins in an inflationary year by buying as one company while still operating as several brands: one insurance program, one benefits plan, one software stack, one processing contract and one pricing policy across every acquisition. Scale shows up in the data, because in the second quarter of 2026 large commercial insurance accounts saw premiums fall 3.7 percent while small accounts fell only 0.5 percent.‡‡

A PE-backed HVAC platform in its second add-on makes the point. It has three brands and $30 million in combined revenue. Each brand arrived with its own insurance broker, benefits plan, field service software, card processor, phone system and price book. Each is still buying as a small account. Consolidated, the platform buys as a medium or large one. Two points of EBITDA margin from procurement and pricing harmonization is $600,000 a year, and at an illustrative 7x exit multiple that is $4.2 million of enterprise value created without selling one additional maintenance agreement.

Pricing harmonization deserves care. Acquired brands are often priced below the platform because their founders rarely raised prices, which makes them the most obvious margin lever in the portfolio. Customers bought from the name on the truck, though, and a clumsy increase plus a rebrand can lose both at once. Tocobaga's earlier piece, Same Name on the Truck, covers the customer side of private equity roll-ups. The margin side is simpler: harmonize the price book over two or three renewal cycles, start with new customers, and keep the local brand promise intact.

The same logic applies to a professional services firm with several offices or a management consultancy whose partners each run their own practice. A platform memo asking every general manager to watch costs is a WIN button with a portfolio company's logo on it. A consolidated renewal calendar, owned by one person at the platform level, is a line item.

What is the right order to reduce small business operating costs?

The right order to reduce small business operating costs is biggest renewable dollars first: rank every cost line by annual spend, put every renewal date on one calendar, and attack the lines that renew soonest and cost most, usually health benefits, insurance, fuel and turnover, before chasing small subscriptions. Pricing runs in parallel, because a price change is the only lever that grows revenue while costs are being trimmed.

In 1974, Ford asked Americans to write a list of 10 ways to fight inflation and save energy and mail it to the White House.* Here is a list of 10 that comes with mechanisms instead of postage:

• Pull 12 months of bank and card statements and rank every cost line by annual dollars, largest first.

• Mark each line as fixed, renewing this year or variable, and put every renewal date on one calendar.

• Rebid health benefits 120 days out, with at least one level-funded quote and one ICHRA quote beside the incumbent.

• Re-shop property, auto and umbrella insurance through an independent broker 90 to 120 days before renewal.

• Measure turnover and overtime by role, and hold a stay interview with every key employee this quarter.

• Cut miles per job with zone scheduling and routing, then add a visible fuel surcharge for what remains.

• Request an interchange-plus processing quote and move large B2B invoices to ACH.

• Audit every software subscription, assign each an owner and cancel anything idle for 60 days.

• Tie every marketing dollar to a call, form or booked job, and cut the bottom quarter of channels.

• Raise prices on new quotes first, then on existing customers at renewal with notice and a reason.

Each item has an owner, a date and a dollar figure attached. That is the difference between a list and a button. Ford's list asked people to feel differently about inflation. This one asks a bookkeeper to export a spreadsheet.

When should an owner bring in outside help on costs and pricing?

An owner should bring in outside help when the cost audit keeps sliding to next month, when prices have not changed in more than a year, or when marketing spend cannot be tied to booked revenue. Those three situations are where a second set of eyes pays for itself fastest, and where most owners wait longest.

Tocobaga works on the second and third: pricing strategy, business planning and marketing spend that has to prove itself in calls, forms and booked jobs. The team in Ybor City has advised more than 1,000 small and mid-sized businesses and written more than 30 business plans, with senior people doing the work from the first meeting. Fees are flat and never a percentage of ad spend, contracts never auto-renew, and the client owns every account and asset. For insurance and benefits, the right partner is a good independent broker, and Tocobaga will say so. Tocobaga is not for everyone, and when it is not the right fit, it will point to someone who is. An intro call starts at (813) 534-1261 or at hello@solvinghow.com through SolvingHow.com.

Did Whip Inflation Now work?

No. Whip Inflation Now was officially halted in March 1975, only a few months after it launched, and inflation averaged about 9 percent across Ford's roughly two and a half years in office.‡,†

Public support faded once people noticed the promised results were not arriving.‡ Officials had privately told The New York Times that the plan would be "neutral" in its effect on inflation, and Hobart Taylor, an economist on the campaign's own committee, called the buttons a "gimmick."† By early 1975, worries about recession had replaced worries about inflation, and Sylvia Porter described her committee's predicament in a phrase every owner who has launched anything will recognize: "we were left with the job of building the airplane in the air."† What finally broke American inflation, years later, was not a slogan. It was a mechanism with teeth: a Federal Reserve under Paul Volcker willing to push interest rates high enough to hurt.

The best footnote in the whole saga came in December 1974. Former Beatle George Harrison visited the White House at the invitation of Ford's son Jack, and the president wanted to give him a WIN button. He could not find one.† About two months after a speech to Congress and millions of buttons, the man who launched the campaign could not lay his hands on its only product.

That is the lesson for 2026. Buttons get lost in a drawer. Line items show up on the first of every month, on time, asking to be paid: the fuel card, the premium, the rent, the seats, the swipe fees, the agency invoice. Each one has a number, a renewal date and a person who can change it. Nobody ever whipped inflation with a button. Plenty of owners have whipped it one line item at a time.

What is the fastest way for a small business to cut costs?

The fastest savings usually come from three calls rather than a spending freeze: an independent insurance broker to re-shop property, auto and umbrella coverage, a competing payment processor to quote interchange-plus pricing, and a review of every recurring software charge. Each can be finished within a month. Larger savings, such as rebidding health benefits or renegotiating a lease, depend on renewal dates, so the first step is putting every renewal on one calendar.

Is it better to raise prices or cut costs during inflation?

Both, but price is the stronger lever. A Harvard Business Review analysis of 2,463 companies by Michael Marn and Robert Rosiello found a 1 percent price increase lifted operating profit 11.1 percent, versus 7.8 percent for a 1 percent cut in variable costs and 2.3 percent for a 1 percent cut in fixed costs. The practical answer is a one-time sprint on the largest renewable costs and a habit of reviewing prices at least once a year.

How much are small businesses raising prices in 2026?

NFIB's September 2026 survey found a net 31 percent of small business owners raised average selling prices and a net 31 percent planned further increases, up 3 points from August. The Federal Reserve's Small Business Credit Survey found that among firms paying more for imported inputs, 76 percent passed some of the increase to customers and 60 percent absorbed some of it. Most businesses split the difference rather than passing on everything.

What is a level-funded health plan?

A level-funded health plan is a partially self-funded arrangement in which an employer pays a fixed monthly amount covering expected claims, administrative costs and stop-loss insurance. If claims come in below budget, part of the surplus may be returned or credited. KFF's 2026 Employer Health Benefits Survey found 38 percent of covered workers at smaller firms are in level-funded plans. They tend to favor healthier groups, and a bad claims year can raise the next renewal.

What is an ICHRA and can a small business offer one?

An individual coverage health reimbursement arrangement, or ICHRA, lets an employer give employees a fixed monthly allowance, tax-free when the rules are met, to buy their own individual health insurance instead of joining a group plan. Employers of any size can offer one, and allowances can vary by employee class, such as full-time or part-time. The appeal is a predictable budget line. The tradeoff is that individual-market networks and prices vary by county.

Are Florida commercial insurance rates going down in 2026?

For many commercial property owners, yes. The Council of Insurance Agents and Brokers reported commercial property premiums fell 6.3 percent nationally in the second quarter of 2026, and Citizens Property Insurance cut average commercial nonresidential wind-only rates 5.0 percent for policies effective on or after July 1, 2026. Commercial auto and umbrella premiums are still rising, and small accounts saw far smaller decreases than large ones, so shopping the renewal matters.

How can a service business lower fuel costs?

Service businesses lower fuel costs mostly by cutting miles: zone scheduling, routing software, clustering jobs by neighborhood and using telematics to measure idle time per driver. Right-sized vehicles and fuel cards with purchase controls help at the margin. With gasoline prices up 34.2 percent in the year through September 2026, according to the Bureau of Labor Statistics, many contractors also add a visible fuel surcharge or trip charge tied to a public fuel index.

How often should a small business re-shop its insurance?

A sensible rhythm is a coverage and values review at every renewal, starting 90 to 120 days ahead, and a full market comparison at least every two to three years. In a softening market, such as commercial property in 2026, shopping every year can pay, because the Council of Insurance Agents and Brokers found small accounts captured far smaller price decreases than large accounts. Loyalty to one carrier is worth something only when it is priced into the renewal.

Sources

*

Ford, Gerald R. "Address to a Joint Session of the Congress on the Economy." The American Presidency Project, University of California, Santa Barbara, October 8, 1974. Ford called inflation "our public enemy number one," wore a button bearing "the single word WIN," announced newspaper enlistment forms, recalled asking Americans for lists of 10 ways to fight inflation and save energy, and proposed a one-year 5 percent surcharge and a 1 million barrel per day cut in oil imports by the end of 1975. https://www.presidency.ucsb.edu/documents/address-joint-session-the-congress-the-economy

†

Frommer, Fred. "How Gerald Ford Tried to Fight Inflation." HISTORY, September 21, 2022, updated May 28, 2025. Source for Greenspan's reaction and quotes, the millions of buttons, the NIM joke, The New York Times "neutral" and "butt of many jokes" reports, Hobart Taylor's "gimmick," Sylvia Porter's quotes, the George Harrison visit, the March 1975 end, the shift to recession worries and 9 percent average inflation under Ford. https://www.history.com/articles/ford-inflation-win-program

‡

Gerald R. Ford Presidential Library and Museum. "Whip Inflation Now (WIN) Campaign." Topic guide, accessed October 26, 2026. Describes inflation at 12 percent when Ford took office, the slogan "work better, buy smarter, invest more, and waste less," WIN buttons, bibs, playing cards and T-shirts, support that faded when results did not appear, and the official halt in March 1975. https://www.fordlibrarymuseum.gov/digital-research-room/topic-guides/whip-inflation-now-win-campaign

§

National Federation of Independent Business. "New NFIB Survey: Uncertainty Grows and Optimism Fades Slightly on Main Street in September." October 13, 2026. Optimism Index 97.9 against a 52-year average of 98.0, Uncertainty Index 90 against 68, inflation the top problem for 20 percent (historical average 7 percent), labor quality 26 percent, 7 percent calling it a good time to expand, 87 percent of hiring owners seeing few or no qualified applicants, a net 8 percent paying higher loan rates and an 8.2 percent average short-term rate. https://www.nfib.com/news/press-release/new-nfib-survey-uncertainty-grows-and-optimism-fades-slightly-on-main-street-in-september/

‖

U.S. Bureau of Labor Statistics. "Consumer Price Index: September 2026." News release, October 14, 2026. All-items CPI up 3.7 percent over 12 months, core up 2.6 percent, energy up 20.4 percent, gasoline up 34.2 percent, fuel oil up 74.2 percent and electricity up 4.4 percent. https://www.bls.gov/news.release/archives/cpi_10142026.htm

¶

National Federation of Independent Business. "NFIB Small Business Economic Trends: September 2026." October 2026. A net 31 percent raised selling prices and a net 31 percent plan increases (up 3 points), a net 28 percent raised compensation and a net 20 percent plan raises, labor costs the top problem for 6 percent (lowest since December 2020), earnings trends at a net negative 20 percent, and 24 percent of owners with lower profits citing material costs. https://www.nfib.com/wp-content/uploads/2026/10/NFIB-SBET-Report-September-2026.pdf

**

National Federation of Independent Business. "Small Business Optimism Fades Slightly in September." October 14, 2026. NFIB attributes the decline to owners who "continue to adjust to rising fuel, energy, and other inflationary costs." https://www.nfib.com/news/analysis/small-business-optimism-fades-slightly-in-september/

††

KFF. "2026 Employer Health Benefits Survey." October 22, 2026. Family premiums up 5 percent to $28,303, single coverage $9,804, family premiums up 28 percent in five years, worker family contributions up 9 percent to $7,471, wages up 3.7 percent and inflation 2.7 percent, small-firm family premium $27,288 and worker contribution $9,687, small-firm single deductible $2,624 versus $1,955 overall, 38 percent of covered workers at smaller firms in level-funded plans, 1,937 employers surveyed. https://www.kff.org/health-costs/2026-employer-health-benefits-survey/

‡‡

Hemenway, Chad. "CIAB Survey: Overall Soft Market Conditions Continue in Q2." Insurance Journal, August 20, 2026. Average commercial premiums down 2 percent in Q2 2026, property down 6.3 percent, workers compensation down 3.2 percent, commercial auto up 4.5 percent, umbrella up 5.3 percent for a 35th straight quarter, large accounts down 3.7 percent and small accounts down 0.5 percent. https://insurancejournal.com/news/national/2026/08/20/882240.htm

§§

Citizens Property Insurance Corporation. "2026 Rate and Rule Changes." Commercial Lines Bulletin, April 30, 2026. For policies effective on or after July 1, 2026, commercial nonresidential multiperil rates down 1.8 percent, nonresidential wind-only down 5.0 percent, commercial residential lines up 7.2 to 14.4 percent, with class-rated changes capped between minus 5 and plus 15 percent. https://www.citizensfla.com/-/20260430-2026-rate-and-rule-changes

‖‖

McFeely, Shane, and Ben Wigert. "This Fixable Problem Costs U.S. Businesses $1 Trillion." Gallup, March 13, 2019. Replacing an employee can cost one-half to two times the employee's annual salary, and 52 percent of voluntarily departing employees said their manager or organization could have done something to keep them. https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx

¶¶

Bond, Jeff. "Office Sector Hits 'Inflection Point,' Continues Recovery in the Third Quarter." Scotsman Guide, October 20, 2026. Citing Cushman & Wakefield, national office vacancy at 19.8 percent in Q3 2026, down 30 basis points year over year, average rents of $38.65 per square foot, and sublease availability down for 10 straight quarters to below 89 million square feet. https://www.scotsmanguide.com/?p=128207

***

U.S. Energy Information Administration. "Short-Term Energy Outlook, Table 7c: U.S. Regional Electricity Prices." November 2026, accessed November 11, 2026. Commercial sector average 13.37 cents per kilowatthour in 2025, forecast 14.01 cents in 2026 and 14.26 cents in 2027; South Atlantic 11.39 to 12.20 cents; West North Central 10.43 to 10.80 cents; Mountain 11.24 to 11.41 cents. https://www.eia.gov/outlooks/steo/tables/pdf/7ctab.pdf

†††

Wood, Nicole. "How Much Is Wasted on SaaS Spend?" Zylo, updated March 19, 2026. Citing Zylo's 2026 SaaS Management Index, the average organization uses 54 percent of its SaaS licenses, leaving 46 percent unused. https://zylo.com/blog/how-much-wasted-on-saas-spend

‡‡‡

Retail Customer Experience. "Swipe Fees Hit Record-Setting $198.25B." March 31, 2026. Merchants Payments Coalition figures put Visa and Mastercard credit card fees at $118.8 billion in 2025, up from $111.2 billion in 2024, and total swipe fees at a record $198.25 billion; The Nilson Report counted $187.2 billion for 2024, up 5.9 percent. https://www.retailcustomerexperience.com/news/swipe-fees-hit-record-setting-19825b/

§§§

Gartner. "Gartner 2026 CMO Spend Survey Finds CMOs Allocate 15.3% of Marketing Budgets to AI but Only 30% Are Ready to Scale AI Capabilities." Press release, May 11, 2026. Marketing budgets average 7.8 percent of company revenue in 2026 versus 7.7 percent in 2025, with 15.3 percent allocated to AI, from a survey of 401 marketing leaders. https://gartner.com/en/newsroom/press-releases/2026-05-11-gartner-2026-cmo-spend-survey-finds-cmos-allocate-15-point-3-percent-of-marketing-budgets-to-ai-but-only-30-percent-are-ready-to-scale-ai-capabilities

‖‖‖

Marn, Michael V., and Robert L. Rosiello. "Managing Price, Gaining Profit." Harvard Business Review, September-October 1992. Using the average economics of 2,463 Compustat companies, a 1 percent price improvement raised operating profit 11.1 percent, versus 7.8 percent for variable costs, 3.3 percent for volume and 2.3 percent for fixed costs; price improvements had three to four times the effect of volume. https://pages.charlotte.edu/wp-content/uploads/sites/868/2014/12/ManagingPrice.pdf

¶¶¶

Federal Reserve Bank of Cleveland. "Fed Survey: Small Business Optimism Wanes as Performance Metrics Hold Steady." Press release, March 3, 2026. From the 2026 Small Business Credit Survey of 6,525 firms, among firms whose imported inputs cost more, 76 percent passed at least some increases to customers and 60 percent absorbed some; rising costs were the top financial challenge. https://www.clevelandfed.org/collections/press-releases/2026/pr-20260303-fed-survey-small-business-optimism-wanes-as-performance-metrics-hold-steady