Downsizing Your Creative Small Business
Downsizing is not a word most people want to hear when it comes to their small business. After all, our modern day consumer culture prioritises shiny and new, bigger and better, with the result that businesses large and small feel the pressure to be always growing.
Scaling back and doing less sounds like an admission of failure, one that runs counter to the image of success we’re supposed to project on social media.
I know this because I spent most of 2022 trying to do just that- scaling back and cutting costs while projecting an image of positivity and success. But as external circumstances deteriorated, with rising inflation and increased cost of living having a knock on effect on sales, so did my internal circumstances. I was burnt out, extremely stressed and exhausted, Eventually I decided it was time to be honest- and to take dramatic steps to make a change.
Last month I announced that I will be downsizing my studio from our current 1200sq ft space in East London to a much smaller space nearby. I’m also making changes to the way I run my online courses, and reducing the range of products I offer.
I’ve talked about the emotional journey of this decision on my personal blog , which you can read here. But for Balfour & Co I wanted to write about the practical side of downsizing and share some thoughts, tips and advice for other creative business owners who might be in the same boat.
Because while it feels scary to go against conventional wisdom about what success looks like, it can ultimately lead to growth in other ways. And it can be the crucial thing that helps you progress towards the life you really want to be living.
When to Downsize?
The first step in downsizing your business is to know when to start the process of scaling back. All businesses go through bumpy periods, where cash flow is down, costs are up and profits are slim. The important thing to decide is if it’s just a rough patch that you can ride out, or if it’s a sign you need to make bigger changes.
When making that decision for myself, I looked at three things- the financial situation of the business, the wider state of the economy and my own feelings. How much of a safety margin did the business have if sales stayed slow? How likely was it that the state of the economy would impact my business further? And finally, how motivated did I feel to keep going with the way things were?
Ultimately the thing that swung it for me was how I felt in myself. I’ve pushed through crises before, both of a personal nature and in the form of a global pandemic. The difference was that back then, I had energy. I had ideas for solving things and I wanted to put them into practice. I still had ideas, but I was exhausted. Instead of wanting to get up and go, I wanted to go back to sleep.
So even though the business was not yet at a crisis point, I decided it was time to make a change.
All too often, we keep going and keep going until we crash and burn completely. The best thing you can do for your own wellbeing and the wellbeing of your business is to start making changes before the wheels start coming off. Pay attention to your finances and your wider circumstances, but most importantly, listen to yourself.
Why Downsize?
The next question I worked through, once I knew it was time to downsize, was why I wanted to downsize.
Often for a small creative business, the answer to that question is more complex than “to save money”. Most of us didn’t get into this game to make the big bucks, but rather to make a living doing what we love. Our reasons for scaling back need to take that into account.
It may be that you need to cut costs, and save money, but unless you have a bigger goal in mind, it will be dispiriting and painful to make changes to the business you love so much.
For me, my motivation in downsizing was of course, to be less tired. But also because I could see that the demands of the business at its current size left me with no time or space for creative exploration. When I came to shrink down the business, I focused on what changes I wanted to make in order to free up my time and headspace for creative work.
I recommend taking some time to think about what you want your downsized business to look like and feel like. If you have a clear sense of “why” you are scaling back, it makes it easier to make decisions about the things that do (and don’t) align with that vision.
It’s also the best way to avoid cutting off of parts of the business that bring you joy, simply because they’re not the biggest money-makers. Remember a creative business is never going to be run with machine-like efficiency and that’s not why we do it! So think carefully and avoid scaling back too much.
What To Downsize
Once you’re really clear on your reasons for doing it, you need to decide what to actually downsize.
This is why starting to downsize early, before things get to crisis point, is so helpful. If you move slowly, you can try out letting go of some things and keeping others, so you can gradually get a sense of what parts of the business are creating the most value.
Above all, it’s important to remember that reducing costs in one area will sometimes reduce income in another. The goal of downsizing is to save money, not to lose money!
For example, at the beginning of 2022, my assistant scaled back her hours due to other commitments. Instead of replacing her, I tried to “save money” and do her job myself. Surprise surprise, my business made LESS money in those months! I was saving money, but my time & focus was consumed by admin that I should have outsourced.
My general rule of thumb is that you should be careful of cutting things that save you time or bring in income. Paying for advertising, or software to automate admin tasks might look expensive on the business balance sheet, but if they are freeing up your time and bringing in income, they are necessary outgoings. You can still cut them, but do so with caution.
The best examples of things to cut or change are products that unprofitable, and monthly payments with no clear financial or time-saving outcome. When I went through my products and my monthly expenditures with a fine tooth comb, I was able to spot the money sinks, and the biggest one was my studio space. It was expensive, time-consuming to manage, and ultimately, not bringing in enough income. So I made the difficult decision to let it go.
The End Goal
While it’s so important to keep the parts of your business that bring you joy, if something really isn’t working, you may have to make a tough call.
I loved this studio space, and I know I will really miss it. But ultimately, the goal of downsizing is to strip things back to see what’s actually working for you to create the life you want.
There is no shame in letting go of what doesn’t work for you, just because you think that’s how a business “should” be, or that’s what other people are doing. You can always make your business bigger again in the future, or you can make it even smaller to fit in amongst the other parts of your life.
The most important thing is that you’re building something that brings you joy. Running my own business has been one of the most challenging and rewarding experiences of my life and I plan to do it for a long time to come.
Ultimately what downsizing will show you is that yes, you get to choose! You get to wake up each day, sit down at your desk and decide what comes next.
This blog post has been a slight departure for me from my usual subject matter of weaving, weaving, weaving! Let me know in the comments what you thought. And if you would like to see more small business insights from me, let me know. Thanks for reading!