Scale Up or Scale Down? The Two Plans Every Business Needs

Send us Fan MailShould you continue scaling your business when a recession might be approaching?Or should you stop investing and start protecting your cash?In this episode, Peter Boolkah explains why the answer is not an either-or decision.A growing business needs two plans:A scale-up strategy for pursuing an opportunity.And a scale-down strategy for responding quickly when conditions deteriorate.Peter shares the example of a company generating more than £10 million in revenue and growing at approximately 30% a year. Maintaining that growth would require substantial investment in machinery and people, but the owners were worried about committing that money before another downturn.You’ll discover:Why fear of a future downturn can cause businesses to abandon valuable growth prematurelyHow growth requires investment in people, machinery, marketing and salesWhy companies need to exploit current opportunities while preparing for future risksHow financially strong businesses can acquire competitors during a recessionWhy cash reserves create strategic optionsWhat happens when companies enter a downturn with high fixed costsWhy construction and other cyclical industries need rapid-response plansHow delaying difficult decisions can destroy capital reservesWhy every scale-up strategy needs a corresponding scale-down planHow planning allows leaders to act quickly rather than panicThe purpose of a scale-down strategy is not to become pessimistic.It is to decide before pressure arrives which costs could be reduced, which activities must be protected and how the company would preserve its cash.A resilient business can continue growing while conditions are favourable without assuming that favourable conditions will last forever.This episode was recorded in 2018. Its predictions about when the next recession might arrive were speculative and should not be treated as a reliable economic forecasting method. Recessions do not operate according to a dependable 10–15-year timetable.Learn more about Peter Boolkah and The Hamster Wheel Trap® at https://www.boolkah.comCONNECT WITH PETER BOOLKAHWebsite: https://www.boolkah.comLinkedIn: https://www.linkedin.com/in/boolkahInstagram: https://www.instagram.com/pboolkah/Facebook: https://www.facebook.com/BoolkahX: https://twitter.com/boolkahABOUT PETER BOOLKAHPeter Boolkah is a business coach, author and speaker who has spent more than 20 years helping business owners build stronger, more valuable businesses that do not depend on them for everything.He is the creator of The Hamster Wheel Trap® and author of Your Business Sucks: Build a Business That Works Without Destroying Your Life.Peter works with founders and leadership teams on the issues that ultimately determine whether a business creates freedom or becomes another job: leadership, founder dependency, people, profit, execution, scaling, exit readiness and enterprise value.His approach is direct, practical and built around one simple question:Do you own the business, or does the business own you?Learn more at https://www.boolkah.com