The Hard Truth About Restructuring: What SME Owners Need to Know

More and more SME owners are finding themselves in a position they never expected. Instead of asking how do we grow? They are asking themselves how do we survive? After decades of working with business owners, Business Coach Peter Boolkah says, this shift in mindset is one of the hardest to navigate. Growth feels positive, energising even but restructuring feels uncomfortable, emotional and often misunderstood. Yet he says it’s becoming unavoidable. Peter explores what is happening out there at the moment and what SMEs can do to survive.

“With around 5.7 million SMEs in the UK making up 99.9% of all businesses and employing roughly 60% of the private sector workforce, the decisions being made in small boardrooms across the country are not small at all. Rising labour costs, increased regulation, and taxation pressures are forcing owners to take a long, hard look at their numbers and for many, the reality is that the business is no longer as efficient, or as profitable, as it needs to be. What is happening is that SMEs are reassessing team structures. They are cutting non-productive roles and streamlining operations. However, most don’t actually know how to do it properly.

Unlike larger corporates, most SMEs don’t have an in-house HR department or legal team guiding them through redundancy processes or organisational restructuring. They’re learning on the fly, often under immense pressure. And that’s where things can go wrong, both legally and morally. We’ve seen high-profile examples recently where business leaders have faced public scrutiny over how they’ve handled restructuring decisions. It’s a reminder that how you do this matters just as much as what you do.

In my work with SME owners, I’m seeing a clear pattern. Businesses are letting go of roles that no longer add value and doubling down on what truly drives performance. On paper, that sounds simple. In reality, it’s anything but. Restructuring isn’t just about cutting costs. It’s about clarity. Clarity on what your business actually does well. Clarity on which roles genuinely contribute to that. And clarity on what needs to change, even if it’s uncomfortable. One client I worked with recently had a team of 18 people. On the surface, things looked fine, revenue was steady, and the team was busy. But when we dug deeper, we discovered that nearly a third of the roles were either duplicated, misaligned, or simply not delivering value. The owner knew something wasn’t right, but didn’t have the confidence or framework to act. Together, we restructured the business. We clarified roles, removed inefficiencies, and — yes — made some difficult decisions around redundancies. It wasn’t easy. But within six months, the business was not only more profitable, but it was less stressful to run and far more resilient.

That’s the difference between reactive cuts and strategic restructuring. And this is where many business owners get stuck, they wait too long. They hold on to roles out of loyalty. They avoid difficult conversations. They hope things will improve. But hope is not a strategy. And delay often makes the situation worse.

Another layer to this conversation is the rise of AI. Artificial intelligence is here to stay, and it’s already reshaping how businesses operate. Tasks that once required full-time roles can now be automated or significantly streamlined. For SMEs, this presents both an opportunity and a challenge. The opportunity is obvious: increased efficiency, reduced costs, and the ability to do more with less. The challenge? Knowing how to integrate AI into your business without creating chaos and understanding what that means for your team structure. I’m working with several clients right now who are using AI to replace or reshape certain functions within their business. But the key is that you must redesign your business around it, and that requires strategic thinking. Just adopting the technology is not enough. And again, most SME owners haven’t been taught how to do that.

This is why having the right support during times like these is critical. SME leaders need to be able to see clearly. They need a structure for what can be a very messy and emotional process. They need help to act decisively and responsibly. Because the reality is that restructuring done well can save a business. Done badly, it can break it.

We are in a period where resilience matters more than ever. Leaner, more focused businesses are positioning themselves to thrive when the market shifts again. If you’re an SME owner currently facing these decisions, don’t bury your head in the sand. Take a step back. Get clear on what your business truly needs. And don’t be afraid to seek guidance.

You don’t have to navigate this alone. In fact, in times like these, you probably shouldn’t.”