Looking at today's developments and global trends, we see that everything is changing rapidly. The reflection of the phenomenon we call "change" on business profitability and efficiency is an indisputable fact. Starting from the saying "The only constant is change itself", it is clear that change is permanent for a business too, and that it is not very possible for companies that cannot manage it to survive.

So, while managing change, what kind of strategy are we following to increase our effectiveness and efficiency? Wherever there is change, effectiveness and efficiency will need to be questioned constantly: Am I doing the right work? Am I doing the work right?

Today, in order to survive, businesses have to manage change on the one hand and manage their losses and ensure sustainable profitability on the other. Yes, we are talking about sustainable profitability in the long term. Even if a business is profitable in the long term, in mathematical terms it can sometimes make a loss just as it makes a profit. As we see in the proverb "profit and loss are siblings", it is not always possible to make a profit in commerce. Businesses should not assume they will only make profits; they must also know how to manage their losses well, and if they want to survive, they should not neglect their corporate check-ups even in profitable periods. We are making a profit — but how? We are making a loss — but where from? Have we identified the risks that could affect profit? What will our strategies be to avoid losses in difficult times? They need to ask themselves such questions and work intelligently.

After all, making a short-term loss does not always mean we are heading for bankruptcy. What matters is determining the right strategies for the business and doing what needs to be done so that the business can survive and get through difficult periods as lightly as possible. Being able to take the most accurate decisions, making sure the work being done is the right work, using all resources efficiently, giving human resources the value they deserve, obtaining employees' support and managing capital in the most effective way are very important for the business in this process.

Downsizing: "Growing by shrinking is also a strategy!"
The act of downsizing should be not an end for your business but a strategy for managing our profit or loss. So, following this strategy, where should one start in order to reach the final goal?

First of all,

◉ Know the sector/market you are in very well
◉ Analyze your customer profile and your working conditions well
◉ Have an original corporate identity
◉ Design your organizational structure to be flexible
◉ Always have an alternative plan for your operations
◉ Laying off employees is one of the easiest ways to cut costs, but its consequences can be quite destructive. So before quibbling over pennies, focus on matters such as logistics, service quality and optimal stock balance
◉ Analyze customer feedback well and use the results of the analysis to increase your service quality

Alongside these, the mathematical dimensions of the business and its accounting matters must also be applied well: keeping cash flows under control, balancing payments and collections, following economic indicators and, when necessary, assessing the interest and inflation markets well.

Temporary practices aimed at operational efficiency, temporary layoffs and pressure on the sales team may increase profitability for a certain period, but they negatively affect the customer and employee experience. Profitability can have a destructive or a constructive effect. In destructive profitability, the business focuses on short-term gains; in constructive profitability, the business focuses on creating sustainable results. For this reason, the decision to downsize in order to carry out the priority actions mentioned above must be taken with high awareness and deliberately. Otherwise, destructive results can follow.

"Crises must be turned into opportunities!"
Every crisis can cause companies and institutions to lose financial value. So how can we turn these crises into opportunities? For example, do we carry out a SWOT analysis of our business at regular intervals? Every business should use this analysis to set out its strengths and weaknesses, its opportunities and its threats — so that it can take the most accurate decisions for the business as a whole, turn crises into opportunities, use its strengths, become aware of its weaknesses and remedy them.

In conclusion, the way to be a profitable business in the long term is to run all the systems in the business effectively and efficiently. Moreover, our choices — and especially every decision we take in these difficult times — are critical. And the way to make the right decision is first to know yourself (the business) and the market.

Author: Sait Sağlam