As we approach the end of the year, it's a perfect time to reflect on your business and consider if it's time to make some changes in 2024. I work with solopreneurs and small business owners in a holistic way,  so one of my key strategies is right sizing, because it helps not only the business, but the business owner thrive.  

What is rightsizing? It's the process of restructuring your business to meet new objectives and goals, increase owner and employee satisfaction, improve efficiency, and boost profits. It can involve reducing or increasing the size of your team, reorganizing your operations, or reconfiguring your offers. The main goal is to eliminate anything that's holding your business or you, as the business owner, back from both success and satisfaction.

If your business objectives have changed, your current model no longer aligns with your goals, you have skill gaps and need to bring in additional talent or hire a consultant to support your team, or personal circumstances such as burnout, illness, or increased family responsibilities are affecting your ability to run the business effectively, it’s time to consider rightsizing. 

Here are 5 key takeaways you'll learn from this episode:

🔎 The meaning of rightsizing and why it's crucial to consider it for your business.

🔎Signs that indicate your business could benefit from rightsizing.

🔎The difference between rightsizing and downsizing.

🔎The advantages and drawbacks of rightsizing your business.

🔎The 4-step process to successfully right size your business.

Mic Drop Moment 🎙️

"It's about being self aware and having a business that feels aligned with your values, your bandwidth, your stage of life, your other obligations and priorities, and giving yourself permission to make changes that will have a significant impact on the health and well-being of both your business and yourself as a business owner."

My signature program, The Boss Up Breakthrough 🔥 can help you right-size your business so that you can avoid burnout, establish sustainable boundaries, and uncover the profit potential in your coaching or consulting business. 

I work in 3 month engagements and help you clarify what’s working (and why), what isn’t and what your options are for bringing the joy back to your business. It’s hard to identify and implement what’s truly necessary on your own, so if you’ve been thinking about making these changes for a while, let me help you actually move the needle.

At this time, I am only accepting 1:1 clients and the first step is to schedule a free 30-minute consultation right here:  https://bit.ly/3qrJ9YQ 🌟

Want to put Insight from this episode into action?

• Can you identify any signs that your business may benefit from rightsizing? 
• Why is it important to consider both the business owner and the business itself when rightsizing? How can the well-being of the business owner impact the sustainability of the business?
• What do you think about rightsizing as an ongoing process, instead of a one-time event? 

Not quite ready to work together, but want to know a little bit more what it would be like to?  Grab my private podcast, “Show Up Like a Boss”, 10 episodes that are short clips from actual coaching sessions with me (my voice only) and notes for how to implement the wisdom shared.  Listen in the same podcast player where you hear The Driven Woman Entrepreneur.  https://bit.ly/3ZOD3CK

Well, hey there, driven woman entrepreneur, this is your host, Diann Wingert and today, we are here to talk about rightsizing. Now I love thinking about rightsizing at the end of each year, anticipating going into the next year. Do I change my business model every year? I do not. Do I think about whether I should? You betcha. And I want to introduce this practice to you because it might be time for you to think about rightsizing your business as well. Whether you do or whether you don't, you should know why you aren't. And it's based on the fact that your current business model, size of your team, revenue goals, profit margin suits your personal bandwidth, your values, your financial goals, and the other things you have going on in your life. I talk about rightsizing a lot with all of my clients. Some of them might even say a bit too much but let's start with definitions, because if you don't know what it means, it doesn't make any sense for me to keep talking about it.

Rightsizing is the process of restructuring a business in order to meet new objectives or goals to increase the satisfaction of the business owner, more on that later, to increase the ease and efficiency of the operations and the profits. Now in most cases, it does involve reducing the size of some or more of your operations, but not necessarily. Rightsizing might involve increasing the size of your team, decreasing the size of your team, or reorganizing your existing team and hiring new talent. Sometimes rightsizing is downsizing, but not always because rightsizing can also mean leveling up. What rightsizing always does is helps to ensure the long term visibility and viability of the business by eliminating things that are holding the business or the business owner back from both satisfaction and success. Rightsizing might be a necessary step for you to take in order to help your small business survive.

If there have been changes in your industry that have affected your market share, or made it harder or impossible for you to maintain business as usual. Even though the decision to right size can be difficult, it doesn't have to be. In fact, it might be exactly what you need in order to rid your business of redundancies and help it move forward. There are a number of telltale signs that might indicate that your business could benefit from rightsizing. But one of the greatest things about being a small business owner is that you get to decide. It's not up to me to determine whether your business needs to be right sized. I'm merely suggesting that what I'm about to share with you is something you consider as a possibility based on what I'm about to share.

One, if your business objectives have changed, you may not be able to meet your new objectives with your existing business model, pricing structure and team. You might have skill gaps. You might need to bring in additional talent, or you might need to hire a consultant to bolster you and your existing team with things that you do not currently know how to do. Whether you decide to employ support or not, you will want to explore the prospect of doing so before you make that decision that you don't need it. Other reasons for rightsizing can take time for us to acknowledge and accept, but they are no less valid. I am referring to the uncomfortable truths of a business model that is no longer serving the business owner. The business owner may be burning out, may have experienced illness, or is simply preoccupied with other areas of their life that are currently demanding more time and attention than their current business allows.

This can create all kinds of stress and conflict within a family, and also highlights what kind of business will actually serve you better in the future when more of your time and attention might be needed by your family or elsewhere. Sometimes you need to make your business bigger, sometimes smaller, and sometimes you need to reconfigure what you have by releasing things that are no longer serving you and freeing up your time and attention. Now something I want to acknowledge right away, and that is rightsizing and downsizing are not the same thing. Contrary to popular belief, rightsizing is not just an easier on the ears way of talking about downsizing. Downsizing almost always occurs in response to economic hardship and happens when businesses need to cut their workforce to reduce cost, maintain profitability and in some cases, stay in business.

But rightsizing, rightsizing is more nuanced, it focuses on improving the business's performance and the performance of those within the business. Yes, there may be cost reduction. Yes, there may be increased profits. But it's not about making the business smaller. It's about honing in on what the right size structure, pricing, and profitability the business requires. You might not need to cut expenses at all. Now downsizing tends to be a one time event. It's like a bailout but rightsizing, in my opinion, can be continuous. It can even happen on a regular our periodic basis. And when it does happen, it's usually not a last ditch effort to reduce costs and maintain the businesses viability. Right sizing can be a process of continuous improvement, honing and refining. It can take months or even years. Now I have my own opinions and my own criteria for rightsizing. And it tends to go beyond what you're gonna hear from most other business strategist and coaches.

Why? Well, because I'm taking the business owner into consideration and not just the business. A business can be profitable, it can be meeting the income projections, but in my opinion, if it is no longer satisfying, it is not sustainable. And I'm talking about satisfying to the owner, at least not in its current status with its current resources. Now whether the change, whether the need for rightsizing or even the consideration of whether rightsizing is in order. It could be the loss of a parent or the changing needs of aging parents. It could be a sick child. It could be adopting a child. It could be wanting to spend more time with teenagers before they leave home for college. It could be the retirement of a spouse or a sense of impending burnout. Simply the loss of enjoyment in maintaining all of the energy and effort that the business currently requires.

Now some business owners, believe it or not, realize well into the game, they no longer enjoy managing people. What about that? So for them, rightsizing might mean reconfiguring the business and outsourcing key aspects of the business, so they're no longer managing a team. It might mean hiring a CEO, like one of the clients I worked with last year. Still others simply wanna convert their business model and create passive income streams so they have more time to themselves. Any and all of these are worthwhile considerations, bottom line is, your mental health and your physical health for that matter depend on you being able to show up for your business on a regular basis for as long as you decide to be running it. And if your well-being is compromised in any way, but you do not want to let the business go either by hiring your replacement or selling the whole thing. Right sizing can give both the business and the business owner a new lease on life.

Now, there are a few benefits of rightsizing that almost all businesses who go through this are going to acquire. And there are some downsides as well because I do believe in telling the truth, the whole truth, and nothing but the truth. So here we go, advantages. Most businesses who go through rightsizing tend to become more profitable. This is kind of a no brainer because when we go through the rightsizing process, we eliminate expenditures that interfere with growth and eliminate redundancy. So obviously, less expense, higher profit. You become a more efficient and streamlined organization, which usually creates an energetic boost for everyone on the team as well. By eliminating redundancies, some of your procedures go by the wayside.

Let's face it, most businesses have all kinds of procedures that are just redundant. They're no longer moving the business forward, and nobody's saying, why are we still doing this? Going through the process of rightsizing allows you to finally take the trash out when it comes to outdated procedures you're no longer using. Rightsizing helps you eliminate them, streamline your workflow, increase your profitability, but also create more ease in the business. You will be making some hiring decisions and some firing decisions. This is the part that most people will resist and avoid as long as possible and sometimes rightsizing becomes a dire need when we put it off too long. But rightsizing can mean not always, but it can mean releasing team members who no longer fit the direction of the business.

So many small business owners hang on to the people they initially hired when they were just getting started. Even though it's abundantly clear that those team members have reached their capacity and are not able to grow into the new roles and responsibilities that the business would require of them. Going through the process of rightsizing encourages you as a business owner to think more objectively about the needs of the business instead of maintaining the status quo or clinging to the past. Now there is a chance that when you go through rightsizing, you will stand out more from the competition because most of the business owners I have taken through this process, are able to let go of parts of the business that they don't really wanna do anymore. They may have been product lines, service lines, offerings of a variety of sorts that they felt they had to do in the beginning, but they don't really wanna do anymore.

So by sort of lopping off those old dead branches of the tree, a right sized business can sometimes be a rebranded business, a repositioned business, a repriced business that allows them to specialize and stand out from the competition. This is some of the most exciting work I get to do because rightsizing sometimes means sort of reconfiguring and reinventing the business at the same time. This is especially true when we really do need to let go of products and services that we no longer enjoy delivering and we don't wanna be known for because we don't wanna attract more people who wants to do those things. So we niche down and only keep what brings us joy.

Okay, I mentioned that there are drawbacks. There are a few, one is while you're going through the process of right sizing you may experience decreased morale. And when I say you, I mean you as the business owner. This may also be true of the remaining members of the team, even if other people are let go. Sometimes people feel guilt when they still have a job, when their coworker no longer does. This may be more true of in person businesses, but I've seen it happen in virtual businesses as well. So while you're going through the growing pains of rightsizing, which is one of the reasons why I think it's so helpful to hire someone to take you through this process and not just try to muscle through it on your own. Most of us go through a lot of emotional upheaval when we're making these kind of changes, even if we're not letting people go.

So if you have gone through a right sizing process or may even be in the midst of going through one now. You could anticipate that you have experienced some decreased morale and that might have caused you to feel doubt about whether you were doing the right thing. It's simply the brain's response to change into loss even if what we're letting go of is something that's no longer serving us. I have seen it happen in a few cases with clients of mine where there were potential legal issues that arise. Because sometimes when we right size a business, there are employees that really need to go. And they will often be the very employees that will threaten legal action when we encourage them to go.

So I've helped a few clients, I am not an attorney nor do I play one on TV. So I've worked with clients who needed to reconfigure their team, including hiring and firing, and we consulted with their legal counsel to make sure they stayed on the right side of the law regardless of what those employees may have threatened, but that can also have an effect on your morale while you're going through the process and why I think it's so important to have support. The last risk of, rightsizing is that while you're going through the process, and again, it's while you're going through the process. I cannot emphasize that enough, there are growing pains. There simply are’and sometimes those growing pains include a temporary negative perception of your brand by existing clients. There are people who don't want things to change, period. Even if they complain about the way things are.

It's just one of those weird quirks of human nature. So there are going to be some clients who are not gonna be happy with you for making these changes even when those clients receive benefits from your rightsizing efforts. And you simply have to tolerate that process knowing that if some of them take their business elsewhere because you are doing what's best for you and your small business, so be it, think of it as taken out the trash if you will. Now, if you decide that right sizing is something that you wanna consider. And I think at the end of each year, it's really helpful to just think about the year we've had, what we expected, what we got, what we want the next year to be like, and whether it isn't time to make some changes. Whether our business and our life still work together and fit together as well as they did in the previous year. The process of rightsizing may be complex depending on the size of your organization or how deep the changes you want to make are in order to right size it, but it's actually just 4 steps.

So I'm gonna walk you through those steps. Now starting with number one, analysis. Anytime we are going to change anything in our business and frankly, in our life as well, we need to analyze what we've got. I mean, how do you know what to change if you don't really know what you're already dealing with? So analyzing your business structure and systems is always, always, always the first step to rightsizing. We evaluate the company's current structure, its programs, its products, its services, its tech stack, its team makeup, its earnings, its profit. By understanding where you stand, you have a much better idea of what changes you will need to make in order to right size. It's also the time if you're working with me, for example, that we talk about your core values, your goals, your personality, quite frankly, and what you want to get out of running this business in this season of your life. You might find as a result of the analysis that you need to increase, reduce, or restructure your team. Or your team may be just fine, about what you need to do is reconfigure your products, programs, and services, and possibly your pricing, or maybe all of the above. It just depends on what rightsizing looks like for you.

Step two, identifying the essential roles and responsibilities. Now during this step, we going to do a deep dive to all the different facets of your company, and the roles and responsibilities that are required. Not necessarily by the existing team members. You also will need to include yourself in the analysis and identification of roles and responsibilities. Because chances are, you're still wearing quite a few hats yourself. We hone in on what each person in your organization does, whether they are freelancers, contractors, part timers, gig workers or full time employees, so that we can pinpoint gaps and overlaps. Gaps are where things need to be done and aren't being done because they don't seem to be assigned to anyone, or they're assigned to someone that's not doing them, or overlaps. And actually, this is more common.

This is so common that more than one person is doing the same thing in a business, but they don't really realize that someone else is doing it as well. This is a very easy way to eliminate redundancy is by identifying roles and responsibilities. Now once we clarify each individual, their contributions, then we ask ourselves, how critical is this role to the success of the reconfigured business? And would it be hard or easy to fill that role if we needed to with someone else, and whether we can do without that role in the newly reconfigured business model. It can be really hard for most small business owners to separate the roles and responsibilities from the team member currently fulfilling them, but this is a really necessary step. It's one of the reasons why I strongly recommend that small business owners hire some sort of help and support when going through this process. Because things tend to get a little bit murky when we do this on our own instead of with someone who brings objectivity to the table.

Most small business owners think of the person instead of the position after a while. And this happens regardless of how poorly or how well that person is performing. We simply lose our objectivity over time because in a small business, the people working with us become family. So we stop being as objective as we really need to be about how well they are performing in their role, and whether their role is actually necessary or should be reconfigured. This can be really hard for people to acknowledge, and many small business owners tend to be conflict avoiders because they don't wanna have uncomfortable conversations with people who worked for them, especially when the people working for them have been with them since the beginning. I worked with a business owner a couple of years ago, who had grown her team from the beginning. And a number of the individuals we're still with her because she felt she needed to maintain their employment out of a sense of loyalty, but they were clearly not able to grow into the roles and responsibilities that her scaled business required of them.

And it was some of the most important work that I helped her do was not only reconfigure her business, but to look at the roles and responsibilities that the business needed to have filled that were not being adequately filled by her current team. I have helped a number of female business owners go through the uncomfortable process of reconfiguring their team, which can mean letting people go, bringing new people on, or changing the roles and responsibilities of existing team members. Sometimes they're really eager for that, and sometimes they're not. This can be a great time to get support because most of us will just keep kicking the can down the road instead of having those uncomfortable conversations.

Okay, back to the four steps. We are now up to number three, identifying what your business actually requires. I mean, you need to know how much your team is costing you, whether they're freelancers, gig workers, contractors, or employees. You need to stay on top of these costs as you contemplate how rightsizing will look so that you can predict what changes are going to impact your bottom line. During this step, it's really helpful again to have an outside objective party that can help you truly understand what your operational requirements are. Now what sometimes happens is I work with a business owner to right size their business. And then when it comes time for implementation, I hand them off to work with a fractional COO for a period of time.

Especially, if the business owner has been both CEO and COO up into the rightsizing. A fractional COO, chief operations officer, will help you implement the plan that you and I create together, eliminate the blind spots that might hinder the benefits of rightsizing, and you probably won't even realize them until down the road, and also help you work through the experimentation and analysis that's involved when you actually start to put things into play that you have committed to in theory.

Step four, making changes and adapting as necessary. I wish that I could tell you all you have to do is hire me and work with me to right size your business, and then maybe work with a COO, maybe work with a fractional COO to implement all these changes and everything's gonna be just peachy, but I don't have a crystal ball. A fractional COO does not have a crystal ball. And the only way we know whether the changes we make are actually serving us is to implement them and adapt as necessary. As you do so, you will notice that some of your team members might be become anxious.

They might question things that they never questioned before. You might find that you need to implement these changes a little more slowly than you thought because the growing pains are destabilizing your team. This can be true whether people are gung ho about the changes or not, because let's face it, changes hard for most people, even when they know objectively it's for the better. Your job during step 4 is to keep the lines of communication open and make sure everyone working with you knows what you're doing and why you're doing it. It can be really helpful to hear yourself repeating the rationale to your team members to reinforce why you decided to do with this to begin with. Because let's face it, change is hard for all of us even when we know it's necessary. Your rightsizing strategy is not only not set in cement, it does not need to proceed at any particular pace. You might take weeks, months, or even years to fully implement it.

So don't be afraid to speed up, slow down, or make changes as you see fit. The version of rightsizing that is going to be perfect for your health, mental and physical, your family, your financial situation now may very well need to evolve and change over time. So I like people to think of rightsizing as a dynamic process that can be reviewed and renewed or revised as often as every year. The bottom line, if you are ready to revitalize your business, your passion for being in business and have a desire to bring new energy and a fresh perspective to the work that you do, rightsizing is definitely an option. If your business feels more effortful and less satisfying, if you're spending more time, energy, effort, and dollars to reach the same level that you've reached more easily in the past, or if you simply think the market has changed in a direction that you are not currently keeping up with.

These are all good reasons to take a look at resizing. It's not just about reducing your overhead and increasing your profits, you can do that all on your own. It's about being self aware and having a business that feels aligned with your values, your bandwidth, your stage of life, your other obligations and priorities, and giving yourself permission to make changes that will have a significant impact on the health and well-being of both your business and yourself as a business owner.