5 Ways Businesses Can Save Money During Tough Economic Conditions

5 Ways Businesses Can Save Money During Tough Economic Conditions

Posted by Team Recompute on 20th Oct 2020

The pandemic is not just a threat to human health, but to the global economy. The International Monetary Fund (IMF) claims the global economy will shrink by 3% in 2020, which is the worst the world has seen since the Great Depression.

In these difficult and uncertain times, it's crucial that businesses make smart fiscal decisions. Government mandates limiting business activity are negatively impacting revenue to a critical level. With a few smart choices, businesses can save money and avoid closing down for good. 

For some simple, money-saving ideas, check out the list below.

1. Look for Competitive Prices

In a bad economy, it is likely that suppliers are also suffering. Some suppliers are likely to offer better deals to drum up business. The purchaser in your company should be searching for the best deals, even for basic services. 

Necessary expenditures, like phone services, can be shopped around and compared. You can even score a better contract with your original vendor if they want to retain your business. 

2. Purchase Refurbished Tech

Refurbished tech is a smart decision for all businesses, even in the best economic conditions. Who wants to buy a new car, only to lose thousands of its value as soon as it leaves the lot? The same concept applies to refurbished electronics. 

Not only does purchasing refurbished items save money, but it helps save the environment. Reusing electronics helps keep raw materials like plastic and copper out of the landfills. 

3. Reconfigure Benefits and Salary

This may sound like a blow to your employees, but sometimes it is necessary. If the salary and benefit cuts are reasonable, employees will understand that the company is doing all it can to avoid layoffs. 

When cutting benefits, stick with retirement benefits if you can. Avoid drawing on these unless it is absolutely necessary. 

When cutting salaries, make sure to work from the top down and try to avoid cutting the salaries of the employees at the bottom of the pay scale. 

4. Negotiate with Vendors

Do not be afraid to approach vendors with your financial woes. They are likely aware of the economic downturn and willing to renegotiate. If the situation is dire, you may even be about to pay a buyout fee. Vendors are usually happy to accept a partial payment than receive nothing at all.

5. Cut Working Hours

Cutting the workweek is a way to avoid layoffs. Although employees will see their paycheck shrink, it is better than unemployment. 

Even cutting half a day of work can make a huge impact without hurting your employees' earnings or your company's productivity too much. 

More Ways to Save Money

Of course, these five options are not the only ways to save money. Businesses can also consider hiring unpaid interns, outsource departments, and regularly scrutinize their spending with a professional financial advisor. 

If you have questions about purchasing refurbished tech for your business, do not hesitate to contact us.