What is a restructure and when might it be needed in a small business?

What is a restructure

Restructuring is something that needs to happen in most businesses at some point, large or small, so whether your small business is contemplating change at the moment or not, it’s useful to understand what is meant by a ‘restructure’ and when you might need to consider it.

What is a restructure?

A restructure is the process of changing how all or part of an organisation is arranged in terms of job roles, reporting lines, job content or similar. In a large organisation a restructure could be a very involved process with project plans, long consultation exercises and redundancies or contract changes.

However a restructure doesn’t necessarily have to be a long drawn-out process and is sometimes necessary in any size of business in order to ensuring the structure of the organisation meets its needs effectively.

When might a restructure be necessary in a small business?

A restructure might be necessary as a result of external factors. These could include responding to a change in the marketplace you are operating in, increased or reduced demand for the products and services you are offering, new technology or planned growth. You may wish to operate in a new location, or may be taking over all or part of another small business, adding to your portfolio, broadening your offer or becoming a larger entity.

Internal facts can also lead to a requirement to restructure. Perhaps you need more space and adjusting roles might help you achieve this, or perhaps you are losing key staff members and can see an opportunity to review how things are working in the light of their departure.

Organic growth problems

A restructure in a small business is also commonly a response to previous organic growth leading to a structure that is no longer suitable, or containing roles (or individuals in those roles) which no longer meet requirements.

When a small business is growing, there is a tendency to develop a structure around the staff you already have, and also when recruiting, to do so from underneath, rather than at a higher level, as this feels ‘safer’.

The result can often be that a business has either no clear structure, or has one that simply doesn’t meet requirements, or has individuals who have ended up in roles that no longer make sense or do not suit their skills and experience.

 

Whatever the reason for your restructure, it’s important to consider it carefully, take time to ensure the new structure will meet your business needs for the foreseeable future, and ensure it is managed carefully and fairly for your staff.

If you’d like some assistance with a restructure in your small business do get in touch.