Small can be beautiful
Growth is not, as many believe, the only criterion of success in business. Indeed, it is perfectly possible to remain a small business and still be successful.
Equally, it is possible to experience growth in your business and to fail - or at least to be so beset with problems as to have little opportunity to enjoy the fruits of your 'success'.
This is especially true if you take personal as well as business matters into consideration.
- Cash flow problems: - Often for rapidly growing businesses a steep increase in sales leads not to more cash in hand, but to less. If this process remains unchecked eventually the reduced cash flow will undermine profitability and in extreme cases lead to insolvency and business failure.
- Increased borrowings: - Cash flow problems can be further exacerbated if the growth requires extra short-term funding to pay for more office-space, extra computers, more stock, and so on.
- More people skills: - As you start to take on more and more employees you will need to develop a whole range of people skills. You will have to learn how to hire and how to fire, how to motivate and how to delegate, how to reward and how to discipline - and you will need to find the time to do all this!
- More bureaucracy. - As the business grows, so does the paperwork, compliance requirements, etc. You might need to invest even more of your scarce cash in bigger and better systems to deal with it - and find the time and expertise to master the new systems!
- No free time: - Rapidly expanding businesses make great demands on your time, and you might find yourself working much longer hours than you want to.
- More stress: - Add to all of this the problems associated with personnel issues, poorly paying customers, crashing computers, etc. and it all adds up to a lot more stress.
When you weigh your personal ambitions and lifestyle objectives against the added challenges of expanding your business, you might decide that the old saying, 'Small is beautiful,' has more than a grain of truth in it!