Strategic Planning in the Face of Tariff-Driven IT Price Volatility

Tariff changes are front and center in the news cycle, with small and medium-sized businesses deeply concerned over their impact on prices and the cost of doing business. The trade landscape has changed drastically in a few short weeks. Budgets set a year ago by businesses, based on the current economic conditions, will no longer suffice for the same equipment. However, with the right planning strategies and an acceptance that this is the new normal, it is possible to navigate this economic turbulence. Let’s break down some strategic planning and actionable steps to guide your small or medium-sized business through this tariff turmoil.

Assess and Adapt Your IT Budget

As with most things in life, it’s a good idea to take a deep breath and assess the current conditions before taking any action. One of the first things that SMBs should do is review the current IT budget and consider how the tariffs may affect their bottom line. For instance, they should identify planned purchases and determine how they may be negatively impacted by the current state of the tariffs. One of Spectra’s vendors, Carbon Systems, is an exceptional example of taking an assessment and being transparent in the face of the potential impact on pricing or availability. To keep their customers apprised of what is happening, Carbon Systems released a statement that explained how they would hold prices steady while the tariffs were evaluated, strategically use inventory, communicate actively with suppliers, and make partner-centric decisions going forward. These statements from your particular vendors will help you make a well-informed assessment of where your business stands as it relates to your budget.

Dynamic Forecasting

Due to the ever-evolving nature of these tariffs, it is a smart plan to adopt rolling forecasts rather than set-and-forget annual budgets. Review the budget(s) quarterly for as long as the situation is fluid. This dynamic method allows your business to respond rapidly to the changing tariff environment (New York Times ). The more agile your business is, the more it will be able to adjust as the tariffs change.

C-Suite Collaboration

If ever there was a time to encourage deeper collaboration between the leaders at your C-level, now is the time. Use cross-functional planning between the CFO and CIO to determine best—and worst-case scenarios and where to allot funds in each case.

Avoid Panic Buying

Experts caution against taking drastic action without the required information. Panic buying is a common issue and can be negative all on its own by tying up capital that should be used for other purchases. If the tariffs are rescinded, it could leave you holding costly stock. Rather than leading through panic, try targeting your buying to keep your business agile.

Negotiate with Distributors

Keep an open line of communication with your distributors. Discuss locking in pricing for a certain time period and negotiating prices that can have you on solid footing for at least a few months until the tariffs are sorted out.

Diversify Your Supply Sources

It is common practice to use familiar vendors and suppliers who you have worked with previously. However, in these circumstances, it is best to diversify to avoid being dependent on a single source that could put your business at risk if that source is exposed to a tariff. In other words, look to countries excluded from retaliatory tariffs or those with lower tariffs. Additionally, if a vendor or supplier knows you have other options, they may strive to keep your business and offer competitive discounts or price lock-ins.

Stay Informed

A lack of information or misinformation is an organization’s enemy. Keep close tabs on the tariff calendar and news breaks regarding which tariffs have exemptions or have been discontinued. By doing this, your SMB can either accelerate purchases or work to extend the lifecycle of company assets, depending on the future of the tariffs.

Industry and Cross-Industry Networking

Local, regional, and national networking groups within and across industries can help you stay informed about how other organizations are handling this crisis. Collective insight can help you find experts to monitor the economy, vendors, suppliers, and distributors to keep your budget on target.

Key Takeaways

Tariff-driven volatility needs a proactive, diversified approach paired with a steady head in the face of uncertainties. While business owners can not control the ups and downs of tariffs, the idea is to simply control what you can. Be flexible with budgets, diversify your suppliers, vendors and distributors, strategize with other C-level executives both in your organization and with like-minded owners, and don’t react with panic before learning the facts and how they may impact your business. Contact us at Spectra Networks, as we are here to help your small business navigate this tumultuous time.