Are you considering downsizing your business but are afraid it may lead to poor results, slower growth, or other negative consequences? You shouldn’t worry – it may actually be a better idea than you had imagined. Here are just a few of the reasons why downsizing isn’t always a bad option.
Bad management and poor decisions are not the only causes of business debt. Sometimes it’s just plain old bad luck, and sometimes it’s the result of trying to grow too fast. When the debts are getting a little out of control and beginning to have a major impact on the business operations, downsizing can be the key to helping you get the finances back in order.
Remove Weak Links
Sometimes when companies grow too quickly, they must take on a large amount of staff without taking as much care and consideration in the hiring process, ensuring they can keep production in line with demand. If something happens in the marketplace, in your area, or within the company, and there is a dip in business as a result, you may find yourself over-staffed with underperforming, low-quality employees. Downsizing during this time can help you remove the weakest links within your teams and provide better opportunities for the ones who are dedicated and add real value.
Another advantage of downsizing is that you can rebalance your resources. There will often come a time when certain departments may be receiving more resources than they need, putting a damper on your bottom line. It can be hard to notice when this is happening amongst the chaos of your everyday operations. Downsizing can assist you in this scenario by providing you with a good opportunity to re-evaluate and re-allocate resources to where they are most needed.
When you downsize, you will likely end up with equipment, supplies, and assets that you will no longer need. You can sell these within your industry and generate money that you can reinvest into the business to help grow your company into the direction you desire.
Improve Work-Life Balance
It’s a misconception that businesses need to be large to be successful. Sometimes bigger is more difficult to manage; it’s chaotic and more exhaustive on resources and employees than smaller businesses are. This is particularly true if you and all your managers are working non-stop to manage your large-scale operations. What’s the point if you can’t enjoy your life? Downsizing can help create a better work-life balance and keep your business structure in check as well.
Downsizing is not always a bad option. In many ways, it can end up being the best option for your business to get back on track and succeed the way you planned. To find out if your business could benefit from downsizing, talk to one of our advisors today. We offer advice and guide you through the process when you’re ready to make a change.