Tips for upsizing or downsizing your business
The Lombard Accountants team realise that the post-Covid economy in Ireland has created a number of challenges for the average business. Depending on your business purpose and strategy, you may need to either upsize or downsize, to secure the long-term future of your company.
But what are the implications of scaling up, or scaling down, your operations? And how do you refine your business so it’s fit for purpose and ready to take on your new aims and goals?
The answer is to look carefully at your forecasting and your future decision-making.
By making constructive use of forecasting, you’ll be able to see the most viable path for your business. From here, you can make a decision on whether scaling up or scaling down, is the most appropriate action for the long-term health of the company.
We here at Lombard Accountants have put together Some key questions to ask during your decision-making process:
- Do you have enough funding to grow, or do you need to downsize? – Knowing how much working capital you have available in the business is a vital piece of information. If you have a healthy balance sheet, a workable funding strategy and access to lenders, you’ll be able to fund your growth. If your cash reserves are depleted and access to finance is limited, now may be the time to shrink the business and consolidate things down – helping you to survive to fight another day, even if it is at a reduced scale.
- Do you need more, or fewer, employees? – If your market share has dropped, you may need to downsize your team. And if you’ve hit a winning streak of sales, you may need to upsize your workforce to meet demand. Look at what resourcing you need and the types of skills, capabilities and long-term knowledge you need from your team in order to meet your new goals and targets.
- Do you need to train your existing people? – If your business purpose has evolved, or you’re moving more into the online or digital arena, you may need to train up your staff. Upskilling your people helps to bring them more in line with modern digital business practices, software and online customer interactions, all of which helps to increase your operational capabilities and your customer service levels as a business.
- Do you need new equipment, machinery or vehicles? – Knowing what tangible assets you need in the business is an important part of your new business plan. If you’re expanding your operations, new equipment and/or vehicles will be needed to meet the new demand. This is likely to mean taking out third-party finance or digging deep into your cash reserves. If you’re downsizing, there’s potential to sell off existing equipment and assets and to free up this equity for other projects in the business.
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