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To prepare for a recession, cost-cutting includes getting more bang for the buck, i.e., more value for your money. However, there’s more to assessing suppliers and vendors than just cost.
Once you’ve calculated your overheads and tax per employee will know the true average cost of labor. Some of the ways you can shrink your labor cost include the following:
All businesses must keep an eye on their expenses and cut costs during economic recessions.
You will also need to consider what else they do for your business, including:
- Key business partnerships
- High-quality service for your customers
- Consistency and convenience
- Social and environmental responsibility
Create a process that commits your business to a regular assessment of each supplier in the supply chain and vendors, including outsourcing providers.
Scorecards and KPIs
Use scorecards, questions, and key performance indicators. Consider engaging a third-party consultant or auditor to manage some of the review processes for your business. Their task could also include an assessment of competitors so your organization can negotiate better terms or take its business to a new vendor or supplier.
Revert to your business plan, and ensure you’ve got adequate working capital and access to funding so your business can seize the opportunities in recessions, including gaining market share.