What can small businesses learn?

As in the natural cycle of all things, businesses are born and when the time comes, they die.

Safestyle UK is the latest major company to enter administration in the UK.

After nearly 31 years in business, the company collapsed last Friday due to factors including poor consumer confidence. Rick Harrison, Managing Director of Interpath’s Advisory, said: “Having enjoyed strong sales during the Covid lockdowns, many businesses are seeing their businesses impacted by the cost of living crisis and soaring costs. . »

While approximately 70 of the company’s 750 employees are retained in the short term to complete their closing duties, more than 600 employees are left without jobs.

What can companies do to avoid layoffs?

When faced with financial problems, there are a number of steps you can take before resorting to sudden layoffs.

Flexible working

To save on office space and utility costs, consider allowing employees to work flexible hours or entirely remotely. Continue to foster a team atmosphere through in-person and virtual team building activities and frequent good communication practices.

Cross training

To improve operational efficiency and reduce the need for new hires, you can train existing employees to multitask. Make sure your requests are reasonable, otherwise it won’t end up being an effective solution.

Comments and ratings

Identifying areas for improvement and promoting a learning culture can be easily achieved by regularly evaluating employee performance and giving them constructive feedback.

Government support

Research and consider using government programs, loans or grants that exist to support small businesses experiencing financial difficulties.

Raising funds privately

Applying for loans, grants, lines of credit, or launching a crowdfunding campaign could successfully reduce the need for layoffs.

Change focus

Within your business, some offerings are likely more profitable than others. Putting more emphasis on selling these products is one way to cut the fat and make more profit.

Improve your offer, your customer experience and your advertising

Take a deep look at existing policies and update or introduce new ones. Offering, customer experience and advertising are areas of your business that have huge potential to improve the bottom line.

Save where possible

Review your budgets. Are there areas where cost reduction will not sacrifice quality or productivity? If so, make the required cuts.

Sometimes there is no other choice. However, if layoffs are necessary, let workers know well in advance, arrange severance packages, and help them find new employment. In the case of Safestyle UK this did not happen, adding to the dissatisfaction of their now made redundant workforce.

Lee Parkinson, organizer for the GMB union, said: “More than 600 workers have been cruelly deprived of work, weeks before Christmas, with no guarantee that they will receive even last week’s pay cheque. »