Best Tips for Downsizing Your Small Business
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Often, when we think about major changes in a business, we think about expansion. But sometimes, downsizing is the best option to make things more successful. Both expanding and downsizing shouldn’t be taken lightly. Follow the best tips for downsizing your small business to avoid missing a step or overlooking a detail.
Best Tips for Downsizing Your Small Business
Understand Why You’re Downsizing
Investigate the different problems your business is facing. Downsizing may not fix the problem depending on the root of it. Likewise, downsizing doesn’t mean the company is failing; it’s just a new way of moving forward. A company may struggle because of its public image or poor brand awareness. Take the time you need to identify the problems and their causes to make certain your decision is the appropriate one.
Pro Tip:
Downsize at the right time. You don’t want to wait too long, especially if one of your reasons for downsizing is monetary. By waiting, you could risk losing more money. But you don’t want to make a fast decision, either. You may have to revise your current business model and try out new strategies for success.
Have a Plan
Once you know this is the best decision, create a plan. This should include:
How many employees you'll layoff.
Any legality issues you may face downsizing.
How your smaller business will operate.
By thoroughly planning your answers to the above points, you prevent any surprises. Now that your business is smaller, you’ll have fewer employees to carry out daily tasks. With that in mind, you should decide how to properly delegate the work, especially if you’re moving to a new location. For instance, you may have old IT equipment, and recycling or selling it is very beneficial.
Think About Your Employees
One of the best tips for downsizing your small business is to consider all your employees—those you’ll lay off and those you’ll keep. Layoffs are stressful to everyone involved, but by promptly notifying employees, you give them time to start searching for new work.
Likewise, you need to support the staff members you keep. Layoffs can lead to decreased employee morale among the remaining staff. Make time to schedule team building activities and meetings after you downsize to boost team spirit.
Pro Tip:
If you already have a small staff, then consider cutting back on work hours. Think about days or times your business may not be as profitable and close during that time. This helps you cut back on both expenses and wages.
Regardless of what you decide, keep communication open and honest with your workforce, so they’re as prepared as you are.