Can a small business ever get too big?
Bigger is better, surely? Well, for many of us who run small businesses, this can actually be quite a difficult question to answer. There are clear advantages to running a smaller operation – fewer overheads, a more flexible structure, a shorter distance between the people who own the company and its customers.
But small companies (if things go well) have a tendency to grow into bigger ones over time. The question is whether this is always a good thing – and if there is a point when a small business can get too big. With this in mind, here are just a few of our ideas on how to think about the right size for your company as it grows.
Why are you really doing this?
As your new business grows, it is well worth taking the time to occasionally remind yourself why you set it up in the first place. Going through this process on a regular basis can be hugely beneficial because it is a great way to get some perspective on the journey you are on and to think about whether the company you are creating is the one that you originally set out to build.
So, why did you start the company in the first place? Was it because you saw a gap in the market, or a customer need that wasn’t being fulfilled? If so, how well does your company, in its current state, meet this need?
A typical founding story might be this. You used to work for a big, multinational company. You began to feel that the business, because of its huge scale, was no longer able to meet the needs of its customers. Or, perhaps its size meant that it was no longer quick on its feet, and agile enough to innovate. Disillusioned, you left to set up your own business – one that could respond in the way you want it to.
So, where are you at now? What effect is the growing size of your own business having on the service you provide? By bringing in more team members, adding organisational structure and new layers of management, are you losing sight of your original vision? Or is it just helping you to deliver that original dream to even more people?
Quality vs the commercial realities
Clearly, the key here is to make sure that you are effectively balancing the commercial necessities of any business (the need to make a profit, to pay its employees, to have a constant and sustainable flow of new business) – with the quality of the product or service you want to provide.
If either one of these falls too far, your business will suffer. Forget the commercial realities of running a business to simply pursue a dream and you will get so far – but the financials will begin to bite if you aren’t putting enough focus on actually making money and growing commercially too. But then, on the other hand, if you throw yourself wholly into only making money and growing your business as quickly as possible then there is a good chance that you will grow to a size that is no longer able to deliver the quality of product or service you want to deliver.
It is well worth, then, thinking hard about two important things as you grow. Going through that regular process of reflection about why you originally founded the company is a great start, but it also needs to lead to a concrete sense of what your vision is.
So, solidifying that enthusiasm you felt for founding the business in the first place into a company vision is key – but you also need to think honestly about what the optimal size is for delivering that vision successfully. It might not always be a case of ‘bigger is better’ – but equally it could well be the case that if you grow gradually, always with the delivery of your clear vision in mind – that you can expand in a meaningful, sustainable way.
Keep the original dream you had for the business clear in your mind, and make it an active factor in every decision that you make about increasing the size of your business. That way, everything you do, structurally and strategically, should contribute to delivering on that vision you had for your small business.