Downsizing a business may seem counterintuitive, but if done properly, it can actually help your business earn more success than uncontrolled growth. That said, downsizing must be done strategically and carefully if you want the task to be a success.
When downsizing a business, there are always some risks that you’ll be facing. It’s best to know what these risks are so that you can cover them and reduce the chances that things will go wrong. Keep reading to learn more.
Be Aware of Alternatives
If you’re facing financial challenges, downsizing is not your only option. Consider speaking to your executives about voluntary pay cuts for a short period of time. This will cut down the bill you have to pay every month, reduce the need to lay off people, and allow your business time to recover.
If you’re confident the financial downturn you’re facing is only temporary, this is an option that you should always consider. It ensures that when the market rebounds, you don’t have to worry about your business suddenly being too small to take advantage of the opportunity.
Don’t Lose Things During the Move
One of the risks of downsizing is losing things. Downsizing doesn’t just involve cutting staff – it often means moving to a new office. To reduce the risk of losing important documents during the move, make sure that you find a place that allows self storage where you can store all your materials. In this way, when it does come time to sort through the paperwork, you won’t find yourself scrambling to find essential documents at the last moment.
This should also apply to personal items. Once you’ve moved out of your office, consider hiring a service to do a once-over of the property to ensure that nothing is left behind. If you did, store those items in your self-storage unit as well until they can be categorized and returned to their owners.
Don’t be Caught Legally Off-Guard
If downsizing is the only option, you will have to lay off some of your staff. Make sure you legally do this and follow all the guidelines set out in the law. Additionally, consider offering longer notice periods or larger severance packages if at all possible – this will help the laying off be on as positive terms as possible.
Keeping things legal is an essential part of protecting yourself and your business. If you illegally terminate someone’s employment, they could take you to court, and you could face steeper fines than your business can afford. For this reason, it’s always best to get a lawyer or other legal professional to consult you about the procedure when you’re carrying out layoffs.
As you can see, downsizing a business can be a complex task. However, it can also represent the only path to continued survival for businesses facing financial challenges. If you’re downsizing your business, the most important thing is to stay open to possibilities. You’ll be back on the upswing before you know it – but just make sure you take the right steps during your downsize to protect both yourself and your employees.
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