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How to restructure your business

  • Blog
  • 03 October 2017

Making major changes to a business can take a variety of forms, which can be carried out for a number of reasons.

You might need to downsize due to a changing market, relocate to save money, or restructure to reflect changes in the way your business operates. Whatever the reason, there are things to consider when restructuring. To help, this blog explains how to restructure your business.

How to restructure your business

Why are you restructuring?

There are several reasons why you might restructure your business, which come with different issues to consider.


You might be reducing the size of your business. This could be due to changes in the market, a lack of demand, or making the business easier to manage.

Downsizing might involve removing specific services from your business to streamline your offering. Or it might mean reducing your workforce to save on wage bills in the face of decreasing demand.

Part of this might mean that you decide to reassign staff to other departments, or sell unused equipment. Or you might even have to consider the possibility of making redundancies. These things can help to ease a financial burden on a business. But when considering downsizing, it’s important to consider if this is the right move for you, as it might be that your business has peaks and troughs in terms of the amount of work coming in. Downsizing during a quiet period might also result in you being unable to fulfil demand for your services when business picks back up.


Part of your restructuring might involve moving an element of your business to a new location. This could be new premises which accommodates new services, or it could be that you move a production process overseas.  As with downsizing, your employees should become a major consideration at this point: Do you offer them the option to potentially relocate as an alternative to redundancy, for instance?

Changing management

Your management team might be changing. For instance, a director could be retiring or leaving the business.

In this case, you should assess how their duties are going to continue. Are they amalgamated into other roles or will that staff member be replaced, for instance?

What process should I follow for restructuring?

Regardless of the reason, there are key aspects to focus on when restructuring your company.

Clear purpose – You should be certain that restructuring is the only option available to you. It can be hard on a business and its staff to undergo drastic changes, so ensure that you’re positive restructuring is for the best.

Clear communication – Restructuring can be confusing. So it’s important that you make sure you staff, suppliers and anyone else who stands to be affected by the changes is kept informed of what is going on. This is especially important in the event that staff are going to be made redundant. Failure to communicate properly during this time can lead to staff taking your business to an employment tribunal, with a significantly higher chance of winning a claim against you.

Consider your options – Any restructuring should require a degree of planning and legal documentation. For example, if a director leaves your company, and they originally had some degree of ownership of the business, this might need to be changed. This could change the degree of ownership for a business, especially if this was a partnership. This might also mean you need to change the way your business is taxed, for instance, if the person leaving is your nominated partner responsible for filing tax information.

How can FSB help with business restructuring?

Looking at the options available to you and finding the right way to restructure your business, without running afoul of the law, isn’t always easy.

At FSB, we aim to help businesses and their owners, going through business changes that can involve legal proceedings, by providing access to our employment protection and law advice service. This service gives you access to:

Our FSB Employment Protection service is included as standard with our FSB Business Essentials package. To find out more about how we could help your business, please visit our FSB Employment Protection page. Or to see how else we could help your business, take a look at our package comparison page.

FSB Employment Protection from FSB

A wealth of important information and advice, available online in-case you face dismissal or discrimination claims and employment tribunals.

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