DOWNSIZING, RIGHTSIZING…. THEN UPSIZING

Posted on: February 6th, 2012 by
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By Bill Kaufmann, President, My Greener Future

Keeping a small or mid-sized business in balance and profitable is not an easy task in these economic times.   The following are some guidelines that may be helpful as you review the past, manage the present and prepare the strategies for the future.

DOWNSIZING –The goal when downsizing is “hang on”.  You want to create a business model that will endure the buffeting of the marketplace in times of chaos or uncertainty.  Survival will depend upon understanding and managing the core elements of your business that will keep you above the marginal lines of profitability.  You will need to identify the key functions that must be performed to keep the business running at a minimal cost level.  Next is to define the skills and experiences required to keep those functions operational at a high level.  Staff will need to be sorted to those who meet those requirements then refocused and trained.  Others will need to be separated, but provided the skills and strategy to find another job.  These steps should be a smooth and planned strategy to maintain the dignity and integrity of the business and all its employees.

RIGHTSIZING – The goal when rightsizing is to stabilize and balance the business.  The model is to meet the needs of the current business, while maintaining its equilibrium as results may shift higher or lower than expected or planned.  Rightsizing will then focus on the functions that are needed to maintain business while you set the stage for planned incremental growth.  Staff may need to expand their responsibilities but not to expand in numbers unless it’s imperative.  Adding staff at the wrong time can undercut your efforts, add to cost but not return a great deal to the investment. Use overtime, part-time or family members if needed.  If staff is to be added, it should be those functions that increase revenue and not those that only add to cost. 

UPSIZING – The goal of upsizing is to accelerate a growth momentum while maintaining the cost control that you have already established through your downsizing and rightsizing efforts.  Staff additions should continue to be a last resort unless and until you are able to expand revenue through new products/services and new customers.  These new products/services and new customers will always be the drivers for added revenue and profit.  It is very difficult to grow without it unless there is a great demand from your current customer base.  Upsizing should also be funded “from behind”.  This means that costs should only be expended once it’s demonstrated that the cost to benefit value is heavily in your favor.  Avoid funding cost items from the front-end, if possible, as your costs will always outstrip your benefits and may not reach your expectations.

My Greener Future – Business has experts to assist your business move from Downsizing into Rightsizing and then Upsizing for a growth strategy.  Email for more information at mygreenerfuture1@cox.net, or call our President, Bill Kaufmann at 757-220-0774.  More information on the website:  www.mygreenerfuture.com


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