When it’s time to downsize your business, it may be due to various factors. Sometimes, it’s to make up for reduced revenues, and in an attempt to survive in fierce competition; other times, downsizing can be a strategic decision which makes your business smaller and brilliant rather than medium and average. Regardless of which end you find yourself in, the process of becoming smaller can be both painful and difficult.
This guide is here to make the task a bit easier, giving you the edge of streamlined efficiency, and reducing it to a leaner and meaner company to compete against.
How can downsizing be good for my business?
Sure, most people associate downsizing with businesses in distress; they’re forced to shrink in order not to go bankrupt, and it’s all going to be on the cost of the employees. Luckily, this isn’t always the case – many successful businesses have realized that trimming off the excess expenses and are using their resources on becoming better rather than bigger. When you know where to cut down on costs, you’ll make your business operate efficiently.
Consider if a layoff is necessary
If you need to increase your profits, it’s not always necessary to get rid of your employees. They are the most valuable resource your company has, and you need to give it careful consideration before you reach this conclusion.
Try to increase your revenue by finding more cost-effective solutions to some of your current processes, consider doing some of the tasks you’re outsourcing in-house to save expenses or upgrade some of your software to take care of this tasks. There are a lot of new technologies that small businesses can make use of and avoid spending money on outsourcing. Pay skyresponse.com a visit, to begin with, and have a look at this article for fantastic business software of 2017.
Think about your employees
Sometimes, trimming off some of the expenses you have on human resources means that they can work part-time, become a temporary worker, or even be rehired when you’re back on track again. However, if this isn’t likely, you need to make it clear that some of them are going to lose their jobs permanently.
Whenever a company needs to shrink, employees are usually the first to go. They know this very well – and as a compassionate leader, you’d want to communicate these changes as early on as possible. Be honest about your plans to downsize and explain that the future has in store for them. Read some more advice on forbes.com to be fully prepared.
One of the biggest risks you face in the midst of all of this is a loss of morale within the company; your team feels like it’s going downhill in high speed and they’re not willing to commit themselves emotionally anymore.
Explain that this is out of anyone’s control, avoid pointing fingers, and make it clear that you have a successful plan up your sleeve. They will follow your lead, and if you say that everything will be fine, they’ll trust your judgement.