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The goal of any business owner is to see their enterprise thrive and grow, but what happens when success comes too quickly? While rapid growth can be exhilarating, it can also present challenges that new businesses aren’t prepared to handle. When operations can’t keep up with consumer demand, a company’s leaders may need to consider how to strategically scale down to ensure the business can survive and continue building its bottom line.
The idea of deliberately slowing down and taking a step back from exponentially increasing demand to ensure a sustainable future can be an uncomfortable prospect for business owners facing the double-edged sword of too-rapid growth. Fortunately, gaining insights from experts can make the process less daunting. Below, 14 Forbes Coaches Council members share strategies businesses can use to scale down quickly and strategically without jeopardizing the future of the enterprise.
1. Delegate Tasks
First, think about any tasks you are not enjoying and that you can delegate. Is there someone on your team to whom you can delegate? If not, are you open and able to consider hiring a contractor, freelancer or employee to help meet the demand? Also, look at your service model and identify areas where you can scale down (without compromising on quality) so that you can help more people in less time. - Lee Cristina Beaser, The Career Counter
2. Eliminate Products With Slim Profit Margins
The approach to scaling down depends on whether you provide products or services. Manufacturers should remember that growth does not always equal increased profits. Take a close look at your profit margins and eliminate products with slim margins. If you are a service provider, consider raising your fees. Simultaneously, begin strategizing how to expand operational capacity and cash flow with a measured approach. - Joanne Valli-Meredith, PhD, BeyondAdmissions, Inc.
3. Outsource Activities And Monitor Quality
Outsource activities that are less profitable but necessary, or activities that you are not particularly good at. Additionally, implement a system of quality assurance for the outsourced activities. When operations cannot keep up with consumer demand, the quality of the product usually suffers. Ensuring a system for quality assurance is crucial. - Karina Ochis, Prof. Dr. Karina Ochis
4. Create A Customer-Centric Solution
It’s a complex business question with no one right answer. Always start with possibility and the customer: How can we best serve our customers in a timely way? How can we scale up? Outsource? Partner? Update customers, and appreciate them for their demand—for those who wait, offer incentives; and for those who won’t, offer refunds. It’s a good problem to have, and you are not the first to have it! - Jodie Charlop, Exceleration Partners
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5. Focus On Efficiency, Effectiveness And Quality
The steps that need to be taken include evaluating the current situation of the business and the way it’s heading; setting up realistic, measurable objectives; evaluating the quality of products or services provided; exploring expansion opportunities; collaborating and embracing partnerships with businesses and individuals and adding more talents to your team. The key is to focus on efficiency, effectiveness and quality. - Alex Jones, National Leadership Association
6. Evaluate Your Product, Staffing Levels And Expenses
Scaling down can be a difficult but necessary decision for a business that has grown too quickly. By carefully evaluating their product or service mix, staffing levels, expenses, locations and production levels, the business owner can strategically and efficiently scale down their business operations. The goal is to evaluate their product mix, reduce staffing levels and/or cut unnecessary expenses. - Temitope Olukunle, Outnovately Africa
7. Stabilize Organizational Connection Points
Stabilize your organization at your connection points. Just like a growing teenager, business growth spurts hurt at the joints. The problem is that, as a company, you’ve likely already broken those joints, so just reducing revenue won’t fix it. You must focus on improving the connections throughout your organization. - Jamie Flinchbaugh, JFlinch
8. Identify Areas To Streamline And Focus On Revenue
First, identify the areas where the business can be streamlined. This may involve reducing the number of products or services offered, reducing marketing efforts or streamlining the operations to better manage demand. Second, focus on the areas that generate the most revenue or provide the most value to your customers. This may require reallocating resources or shifting priorities. - Anna Barnhill, Barnhill Group Consulting, Inc
9. Maintain Excellent Customer And Stakeholder Relations
Be humble; be clear; and be direct. Above all, maintain exceptional customer and stakeholder relations. Do not allow chaos to ruin your brand identity. Look through a damage control lens and provide excellent leadership to mitigate damage to your company foundation. Trim and prune as you would a plant so that your company can breathe for a moment, and then strengthen processes so that your company can scale with gusto. - Daphne Michaels, Daphne Michaels International
10. Increase Your Prices
If demand has outrun supply, lean on the good old laws of supply and demand and raise your prices. Higher prices will naturally dampen demand. Then, exhaust every avenue to contract or outsource the extra work while you level up your supply chain or production capacity. You might even find that the profit margin is greater with outsourcing than with producing the product or service in-house. - Asia Bribiesca-Hedin, Bridgewell LLC Professional Services
11. Consider How To Pivot
Instead of scaling down, think about how to pivot. Evaluate the resources available and determine if they can be reallocated to support customer demand. Beyond that, think creatively about how to bolster operations. You may have an opportunity to bring in interns or fractional support to keep things moving and not need to scale back. - Kristy Busija, Next Conversation Coaching, LLC
12. Get Leadership Involved In Systems Thinking
Get the leadership team together to conduct systems thinking on the business. The systems should be designed to integrate people, information, processes, innovation and technology to deliver the right customer experiences and drive the strategy sustainably. Map out the challenges and opportunities for change. Decide what strategy can best align customer values and results with the business vision. - Dennis Foo, Pu Xin ASPIRA Advisory Limited - Shanghai | Hong Kong
13. Take Both A Short- And A Long-Term View
Develop your strategy by taking both a short- and a long-term view. Consider which products and services are the most profitable and the most promising as you evaluate what changes to make. Get creative about alternative delivery methods to meet demand, whether that’s through partners, technology or outsourcing. Remember to bolster your customer service and to not say “yes” to every prospective client. - Neena Newberry, Newberry Solutions
14. Suspend Services That Are Not Selling Well
Eliminate or suspend products or services that are not selling well to improve operations. Sometimes, it helps to narrow the product lines or service offerings so that you are able to focus on the supply and demand of a few offers as opposed to a full line. Scaling down what you offer can also help to cut back on staff and allow you to outsource your workforce to save money on the bottom line. - Lori A. Manns, Quality Media Consultant Group LLC
