While the goal of most companies is to expand as their profits grow, there are times when companies need to downsize.
Making the decision to downsize is tough, and we see it most often with large companies, although it's not exclusive to them.
When economic times turn tough, you’ll hear about big businesses laying off workers due to decreased profits and sales. And small companies can be hit as hard or even harder during those tough times.
We’ve had a couple of serious economic downturns recently with the recessions in 2008 and 2020 and while it looks like there’s finally a bright light at the end of this tunnel, we’re here to provide some tips to help you prepare for rough water in the future.
Self storage can help with your downsizing efforts and ensure you can grow it again later.
Downsizing often means laying off employees, and you’ll want to do this ethically. Talk to a lawyer and make sure you follow the law as you do so. You may need to prove that the lay-offs are necessary, provide severance packages, make sure your employees are offered COBRA benefits, and not challenge it when the employees apply for unemployment.
Your company may have specialized equipment for manufacturing goods, furniture for your employees’ cubicles, and so on.
You’ll need somewhere to put these items until you need them again, and business storage can help. You can store that equipment that you don’t need or can’t use now, but will need when your company grows again. Since storage space rents for less than commercial space, you’ll be able to save money while keeping these things safe.
Downsizing for Personal Reasons
This applies more to small businesses, such as e-commerce shops run by individuals. Perhaps you run an eBay or Etsy shop and you’ve been making a good living with your business, but life throws you a curveball. This could be something you see as positive or negative, but the upshot is that you need to downsize your store.
Perhaps you need to take care of an elderly relative. Maybe you’ve found a high-paying job that will take more of your time, but you still want to hold on to your personal business. In these cases, you may need to create fewer craft items, hit fewer estate sales, and in general sell fewer items.
A lot of online business owners use self storage units for their overstock. This saves space at home, protects your inventory, and costs less per square foot than residential or commercial space.
After making a sale, you simply stop by your storage unit, pick up the ordered item, and ship it to the buyer. Perhaps you’re renting a 10x10 space and find that just right for the amount of inventory you need.
When downsizing, you’ll likely want to sell overstock and keep fewer items. That 10x10 unit may be too large and now you only need a 5x10. Self storage makes it easy to move from one unit to another, whether you need a larger or a smaller unit. Most facilities allow you to make the switch online, then come in and move your stuff from your old unit to your new one.
If you choose to expand your business again later, you can always move back into a larger unit.
Whether you’re downsizing or growing your business, storing your manufacturing equipment or overstock, we highly recommend you rent a unit with climate control. This feature protects your stuff from excessive heat and humidity as well as cold temperatures and dry air.
Climate-controlled units remain sealed tight to prevent energy loss. The interior temperature is kept between 50 and 80 degrees and between 30% and 50% humidity to keep your stuff in the best condition possible over the long term. They rent for about 30% more than standard units, but it’s worth it to keep your business items in great shape.
No matter the reason for downsizing your business, we hope it has cleared up how self storage can help, and we wish you the best.