Why some businesses choose to stay small

While the idea of overnight success sounds appealing, for many businesses growing too quickly or too much may have serious downsides.

If you decide to ‘go big’ in business, there will be always some things about your company that have to change, simply because large organisations can’t work in the same way that smaller ones do.

There are many things to consider before you decide to size up your business, and after a careful look at your specific circumstances, you might find that staying small will work best for you in the long run.


Lifestyle


One of the first things to consider before scaling up is the change this may have on your lifestyle.

Smaller companies can take a lot of your time, you’re actually far more in control of the organisation as a whole and can often structure the business model to suit your lifestyle.

When you start adding employees or business partners, you will have to sacrifice some of that personalisation.

Your responsibility broadens to include what works best for the company, and not just your own needs.

Scaling up your business might call for a change in the flexibility of your own work hours, restriction of your ability to work remotely, and even an increase in commute time or travel expenses to get to newly located premises.


Team and Culture


Companies that grow quickly are often under threat of taking a damaging culture dive.

It’s no secret to anyone in HR or business management that building a productive, cohesive team can take a lot time and requires a sustained effort.

When you’re in a hurry to fill positions, or when there is a staff shortage, the focus on culture-building can often go out the window.

This results in a patchwork team that may not actually work as well as you had hoped.


Management


As your company grows and you have to allocate more of your time to tasks such as company management and business strategy, you will find that you have less time to spend on the day-to-day work.

If doing the work yourself is one of the core reasons you started the business or the task that you enjoy the most, you might find that handing over certain aspects of those tasks is a lot harder than you imagined.

Hiring staff takes an incredible amount of time and effort, as does managing their weekly tasks, making sure they’re working, auditing any processes or procedures and ensuring that clients remain happy throughout the whole process.

It’s a lot of work, and quickly becomes too much to manage on your own, meaning you need to hire other managers, who then add another layer of separation between you and the work your company provides.

High growth or large companies rarely have the owners of the company involved in the day to day project work and if you’re not prepared to give up some of that control, staying small might be the best option for you.


Staying niche


Staying small can often allow for you to offer greater expertise in a very specific part of your industry and therefore gain a much stronger reputation in your chosen niche.

The saying ‘Jack of all trades, master of none’ applies very well in business and is often forgotten when companies size up and start employing lots of different people, with lots of different skills.

Unfortunately, the quality of work is often the most vulnerable asset when companies undergo rapid expansion.

Larger companies often have higher running costs, which means that sometimes you’ll have to give up some of your profits to work with a high value partner or client who furthers your company’s image.

When you stay smaller, these issues are much easier to avoid and your profit margins may be more comfortable.

You also have the increased ability to ‘pick and choose’ who you work with rather than taking most jobs that come your way for the sake of breaking even and keeping your staff employed.

It’s essential to plan ahead and to write solid business plans, anticipating as many ‘growth issues’ as you can.

If you do decide to scale up, remember that the growing pains of transition may be acute.

There’s a whole lot of new skills you’ll either need to learn, or hire someone to do for you, and a calculated approach is always better than a rushed one.