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Is Downsizing the Best Way to Grow Your Business?

April 24, 2012  
Businesses grow in a number of ways. You might expand your product line, hire new employees, or attract new customers. "Growth in any of those areas can result in bottom-line growth as well," writes Drew McLellan at MarketingProfs Daily Fix blog. "All good, so far. But bigger isn't always better."

This might sound counterintuitive during an unsteady economic recovery. But before you jump  up and object, please take a moment and listen to McLellan as he makes the case for shrinking your business in 2012. Consider, if you will, the following:
  • Finding your sweet spot—and staying there—protects your company's stability during downturns. "Knowing what you do best (in terms both of profitability for you and results for the customer) allows you to hunker down and wait out an economic storm," he notes. But this philosophy will also serve you well as your business expands during an upturn.
  • The more you chase dollars to maintain your size, the further you stray from what you do well. Whether your business is on its way up or its way down, taking on customers who aren't necessarily profitable, or whose needs you can't really meet, usually costs you time and money you can't spare. "It takes a savvy businessperson to be disciplined enough to not stray outside of his core competency," argues McLellan. "How can you differentiate yourself, or be seen as an expert, if you do everything?"

A failure to acknowledge these realities probably hurt many companies that might have stood a better chance if they had gone back to basics.

The Po!nt: The best way to grow your business in 2012 might be to shrink your business.

Source: Daily Fix.

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  • by Vishal Wed Apr 25, 2012 via web

    Main issue is HOW you downsizie. Downsizing is a reality in a hypercompetitive modern workplace; how it is handled is a major area of concern. The normal tendency is to cut costs and people without any proper plan; second, to treat excess staff like "costs". Staff arent costs- they were your assets not quite so long ago; more importantly they are people with lives and families. A shoddy implementation of your downsizing strategy can impact current productivity levels as well as leave long term scars; it can also long term ramifications. What is needed is a more human and planned approach !

  • by Valen Smith Tue May 29, 2012 via web

    This approach works for me and keeps the costs of running the business to a minimum. I have a feeling that some people start up their businesses without first exploring the level of monthly running costs that they will need to cover before they start making anything for themselves. And for many people that figure is quite high, which means they end up in the same position
    Valen from

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