To Upscale or Downscale Your Business?
The post-Covid, globalized economy 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.
Looking at the ongoing needs of your business
Our experiences of the pandemic have demonstrated one very clear lesson – you never know exactly what lies around the corner for your business. But the more prepared you are, the better you can respond, as and when new threats and opportunities do appear.
With this in mind, forecasting and scenario planning can be exceptionally important tools.
Rather than crossing your fingers and hoping for the best, you can plan for two, three, or more different outcomes – with different strategies and tactics for each separate scenario. You can’t bullet-proof your business, but you CAN make sure that you at least have a Plan B (or C).
Scaling up, or scaling down?
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.
Some key questions to ask during your decision-making may include:
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 yo