‘A great man is always willing to be little’ – Ralph Waldo Emerson
In business, bigger is often perceived as better. But keeping your business small actually comes with several benefits, especially during times of crisis.
There’s a lot of peer pressure in the start-up community around “growth” and “scale”. It often leaves entrepreneurs without colossal scale and growth plans feeling like their businesses are unworthy. But in the world of eCommerce, there is no better place to enjoy the benefits of being a small business or even as Author Ben Jarvis puts it, a company of one.
In Jarvis’s book, Company of One, he gives permission to the solopreneur who prefers to remain small, nimble and with goals that don’t look like world domination but more like achievable balance. He’s by no means saying you can’t achieve 6-figure profit by staying small but he takes the unruly growth rates of start-ups (and their overheads) to task throughout the book.
Growing a business too quickly can create unexpected hurdles and challenges.
What many business owners also need to keep in mind is growing your company means more resources, more employees and often substantial investments in systems and processes. For a successful company of one, overheads = death.
Interestingly, research shows many small businesses actually want to stay small, and are happy that way, according to a study by University of Chicago professors Erik Hurst and Benjamin Pugsley.
Payflex outlines some reasons why it’s ok to keep your business small but powerful.
It’s easy to shift gears
Keeping your business small means you can remain nimble and agile. And in the post COVID-19 business landscape, remaining flexible has never been more important. There’s far less red tape and bureaucracy in smaller companies. This means smaller businesses have been able to react much quicker than larger corporates to rapidly evolving customer changes brought about by the pandemic. And if something doesn’t work, you can fix it just as quickly. Simply put – you can get things done far more efficiently. The result: faster decision-making, streamlined processes, and quick results.
Staying small means you’ll require far less resources to operate than a bigger entity. This will not only allow you to put more money back into your business, but means you won’t need to worry about spending money on major overheads like rent for a large workspace, expensive equipment, and paying the salaries tens or hundreds of employees.
Jarvis explains that the thing about growth is that every new “benefit to the company” you take on, comes with more costs attached to it. A project manager needs project management software. Project management software needs upgrades and then it breaks so you need to hire an expert to fix it. The point is that every benefit you add to scale the business, comes with more costs.
Having lower overhead costs means you can offer your services at a more competitive price than a bigger player.
It’s not as risky
There are risks associated with running a business of any size. But keeping your business small helps you manage the risk far more efficiently. And if certain ventures fail, it’s always easy to restart. You are not a big company bound by the decisions of shareholders and boards.
You can enjoy life more
Keeping your business small affords you with far more control over your business. As your own boss, you’ll be able to work the hours that suit you and your unique circumstances. Having control over your own schedule gives you the freedom to attend your child’s school event, see friends and family and work when and where it suits you.
You’ll have stronger client relationships
Small businesses are able to offer a level of service that bigger organisations can’t match. By keeping your business small, you’ll not only be able to forge strong client relationships, but able to quickly adjust your service offering to meet demand.
Keeping your business small comes with several benefits. You have the chance to achieve a more balanced lifestyle (isn’t that what most millennials are after?) , greater control, more freedom and potentially higher profits.
The biblical story of David and Goliath can teach small business owners a valuable lesson when weighing whether to remain small or spread their wings.
Small businesses are the Davids of the business world. Being the underdog actually gave David a distinct advantage to succeed as a smaller business ( and Malcolm Gladwell will tell you how David did this specifically – it’s worth the read). Ultimately, it’s about harnessing your unique strengths to outmaneuver your bigger competitors while you stay true to your values and goals.