Here’s the thing with entrepreneurship. It’s a wonderful thing, and it should be encouraged. There’s simply no argument there. Indeed, it’s both satisfying and edifying to see a bright and talented individual think laterally after years of banging their heads against a glass ceiling and take a step sideways into the world of entrepreneurship. But as great as this is, let’s say they make it against all odds and achieve success. Well, first off we have to take into account that the parameters of success are defined by the entrepreneur, not us, but let’s say that they become wealthy, and prosperous and their business grows. Does the formerly ardent small business person become a victim of his or her own success? Do they, inadvertently, become the profit driven leviathan that they started their own business to rail against? Possibly… But not necessarily. Here we’ll look at the arguments why you might want to keep your business diminutive, as well as some knowing when it’s time for growth and how you can do so manageably, organically and sustainably.  

Size isn’t everything: The argument for keeping it small

We live in a distressingly size obsessed cultural milieu. Everywhere we look, whether we want to buy a sweater, a latte or a car the default choice is medium, the sizes go up to Extra Extra Large and the word small is practically a profanity. Why? It’s an unfortunate misconception that small business always remain small because they lack the knowhow, capital or self-belief and fortitude to expand.

Of course, this is not always the case.

There are many reasons why a small business owner might want to keep their operation manageably small. It enables them to focus on what they do best, which is running their business. After years they’ve worked out a reasonable work / life balance and while they’re devoted to their enterprises they’re just as devoted to their significant others and their families. They’ve hit their stride and while they may not be opposed to growth, they certainly don’t feel the need to approach it head on.

Keep in mind that small doesn’t necessarily mean poor. There are many small businesses out there with healthy turnovers (indeed, some of them may even make healthy turnovers). Smaller businesses tend to have smaller overheads, and if they take steps to ensure that they have a consistent revenue stream and manage the fine balance between retaining and satisfying existing customers while still making an effort to attract new ones, more power to them. Who wants to pay ludicrous office rental when you can make just as much money from your spare room with virtual services like a receptionist service or virtual office? Many successful small business owners are too busy enjoying more disposable income (as they keep a larger proportion of the equity for themselves), less stress, a closer working relationship with their team and more sense of ownership of their business.

Know when to grow

There’s certainly an argument for keeping your small business small until such time as you feel personally invested in the prospect of more growth. When that time comes, however, it’s important to know how to act on it. It’s also useful to know when growth is the best strategic move for your SME. The following are all sure fire signs that your business should grow or collapse under its own weight;

*  A new market opportunity - You notice a particular service or product within your industry has gathered momentum and you want to get in on the boom.

*  Industry change - You foresee a change in your industry and you want to expand to get ahead of it (nobody wants to be another Blockbuster Video).

*  You’re in danger of stagnating - You’ve achieved all that you can in your current iteration and you can either grow or stagnate.

But when you’ve made the decision to expand your operations, this usually means a paradigm shift. Suddenly you’re likelier to be standing shoulder to shoulder with multinational corporate titans who have access to capital and resources you can only dream of. Here are some tips on helping you work your way to sustainable growth…

You can’t compete with the big boys on price… So don’t!

It can be all too tempting to drop your prices to match those of the big corporations, but this will eat into your profit margins in ways you can ill afford. Keep your prices where they are. What you should do instead is build value in your business in ways that the giants can’t match. Make a big deal out of the fact that your employees are paid a decent wage and enjoy decent working conditions unlike those poor devils sprinting around Amazon warehouses. Give your customers a level of customer service and individual focus that the big boys can’t match. It takes 10 minutes for your customers to get through to the bigger businesses, but you pick up your phone within five rings. Use superior parts or ingredients to make your products and show that you don’t compromise or cut corners for the sake of a fast buck.

As you grow, you still won’t be able to compete with the big brands on their terms, but you can absolutely slay them on yours!

Keep up that cash flow

Cash flow proves to be the undoing of over 80% of small businesses, and in your growth you’ll likely be making a lot of capital investments. While it’s great that you’re investing in the areas that will facilitate sustainable growth, you still need to maintain a healthy cash flow. The moment that you have more going out than you have coming in, that’s going to be a problem, especially if expansion requires you to cease or limit your trading through the transitional period.

Ensure that you prioritise your spending, categorising it in terms of importance and the time frame within you can expect a return on your investment. Keep an eye on those overheads, too. One of the finest lines you’ll walk is between investing enough to boost your chances of a sizeable and timely return and keeping the amount you invest manageable enough that it doesn’t eat into your cash flow.

This is exactly why, while growth should be encouraged, it should not be entered into lightly.

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