During the pandemic, many businesses have been faced with new challenges not before seen. From the sudden lack of available employees to governmental shutdowns of businesses, the pandemic has weighed heavily upon business owners. And while there has been a slight alleviation from the burdens of the pandemic in recent months, businesses have still had to adjust to stay opened. If your business is struggling, downsize your business, it will help during the pandemic.
Identify low yield areas
When downsizing your business, the first thing which needs to be considered are any areas which have a low yield. This does not necessarily mean areas which are not showing a high financial profit but could include areas where the amount of labor and supporting tasks to obtain the yield are too much. It could also include any areas which cause a mental and emotional strain on employers and employees. Once identified, run an analysis on how eliminating or scaling down that operation would affect the overall business’s profits, branding, and sustainability.
How low can you go?
If you have minimized the services and scaled back the businesses the further it can go and still gain capital, the next step is to downsize any processes which can be conducted remotely. Many companies are directing their services away from the physical locations they traditionally operated and are migrating to a more online providing of their goods, products, and services. Take food delivery for example, some businesses are eliminating dinning in opting to have delivery to door services instead. This minimizes the exposure which individuals have to each other (helps to maintain the curve) while at the same time keeps the business running by downsizing the overhead for the operations. Doctors are implementing virtual visits for certain patients, eliminating the necessity for maintenance workers, receptionists, and other personnel which ad to their overhead.
Struggling businesses who transition to a digital workplace, even if temporarily, may find that they can keep their client base and build their profits. Those businesses will find that when the pandemic shifts to allow for full operations of their facility, that they will have more opportunities for qualified individuals to work as you will not wish to neglect the online services.
Combine Departments and physically downsize your operations
Minimize your physical space if you can. Combining departments, getting rid of superfluous storage areas, and downsizing the physical location can help you to save money and survive during the pandemic. Buildings are generally leased based upon the overall square footage. If you can minimize the physical space by combining departments or through a partnership with another company to split the space, you can greatly reduce the monthly financial burden of your business.
Businesses which do not lease but own the space used for operations may consider leasing part of the building to another business. Multi-level buildings, depending upon the local zoning, may even be able to lease or rent the above space for residential tenants. The point is that if there is unused space, or space which can be allocated for other uses, that businesses should use that space or get rid of it.
What to do with the clutter?
Should you choose to find a location which is smaller than your current business, you may have extra chairs, tables, display cases, etc. which need to be stored. Instead of getting rid of these items, as your business may again be able to grow and expand back after the pandemic, you may wish to store the items. Storage units are relatively cheap and can usually be acquired on a monthly, quarterly, or yearly basis depending upon your needs. Businesses which require the storage of wooden or other temperature sensitive materials should do so in a climate-controlled storage unit.
Large businesses requiring storage may find that multiple units work better. By separating storage units into different departments or the different areas of services offered (for example having a unit for your conference room and then having another for downsized office areas) may help later on when re-opening your business to full capacity.
Downsizing over closing
Struggling businesses may wonder if there is an advantage to downsizing over temporarily closing. There are several but here are a few of the top reasons. First, when you close temporarily you still must pay the lease and the utilities on a building. If you own the building, you still must have the electricity and the water turned on which costs money. Secondly, if you temporarily close you may lose your client base. Clients may not understand that the close is temporary and imagine that the business has gone bankrupt and closed. When this happens, the business must re-establish new client connections when they re-open. Thirdly, businesses which close and are not properly monitored, can fall victim to vandalism and theft. This is especially true in larger cities where boarding up the windows of a business if often deemed an invitation of such activities by criminals.
Downsizing does not abandon the business and therefore your branding stays intact. True, your business becomes smaller, and you might have a smaller client base, but you are still operational. Secondly, if your business is open, there may be grants and other aid available during the pandemic to help you. A closed business cannot get this help. Thirdly, when a business downsizes and remains open, that business continues to contribute to the community. This not only helps the community but helps you. The less businesses that close in an area, the less prices will rise to accommodate for the loss of revenue.
Determine what is right for you
Every business is different and has different needs. As the pandemic has affected different areas in different ways, it is strongly recommended that you evaluate your profits and losses, look at the local economy, talk to a financial advisor, and then make the best decision concerning your business’s future. Downsizing is just one option which is available to business owners, but it is a strong option for small businesses wishing to remain open during the pandemic.