Who ever said that all businesses must grow exponentially to be considered healthy? No one, that’s who.
And yet, there is still the popular notion that every startup should aim to be the next Starbucks or Facebook.
Entrepreneurs who dare walk in to the Shark Tank with modest growth ambitions are often deemed heretics. Investors and the marketplace overall have a shared thirst for growth. It’s what governments want, and it’s what capitalism needs.
If you start a cafe or a bike shop that’s doing well, it won’t be long before someone asks about your plans to expand. No one will ask about your plans to stay small and preserve your success – which, I think, is a shame. I can think of several business I stopped patronizing after they expanded and lost the identity that attracted me to them in the first place.
We expect small business to aim for expansion, but many people go into business for reasons other than world domination. Fast-growth entrepreneurs who put wealth above all else are a minority. Your typical lifestyle entrepreneur has more modest expectations.
For example, a worldwide poll conducted by MasterCard found that most small business owners have motivations other than rapid expansion, including:
- the desire to make enough money to cover living expenses (70 percent);
- the desire to be their own boss (67 percent);
- and the desire to have more control over the future (64 percent).
Lifestyle entrepreneurs – those who start businesses because they want fulfillment, rather than wealth – needn’t be burdened by our social expectations of rapid growth. If you, as a lifestyle entrepreneur, wish to remain free to steer your own course, you should try to maintain full control of your business. Don’t sell part of your business to shareholders – these are the people who often demand growth.
This brings us to one of the big advantages of keeping your business small: You probably won’t need much, if anything, in the way of investment – after all, investment usually fuels expansion. This means you can remain in total control of your business. You can focus on building a business that aligns with your vision and values. You won’t be forced to sell out, which – let’s face it – often happens when a business expands.
Another advantage of keeping your business small is that you can spend more time doing what you love. As a business gets bigger, you have to spend more time doing management tasks, like hiring, financial planning, marketing, administration, etc. As a result, you’ll be further removed from the passion that drove you to start the business in the first place.
Staying small also means you can take advantage of the positive sentiments that consumers have toward small businesses. Many consumers see small businesses as more valuable for their communities than large businesses. If you stay small, you can benefit from consumers’ thoughts on the importance of shopping at local businesses.
Now, I don’t mean to suggest that your business should never grow at all. Rather, I simply mean to say that you don’t have to aim for market domination. There is a more moderate alternative, and that alternative might better suit your vision and values.
Grow to meet your own personal needs and targets; don’t chase the explosive growth rates demanded by the aggressive entrepreneurial zeitgeist by which we are all surrounded.
If you take this approach, growth will occur slowly but steady as you move toward your targets – and it may not even be necessary at all if you find you can boost profitability through efficiency gains or superior business tactics. Once you’ve reached your personal profitability target, there is no need for you to grow your business further (unless you want to, of course).
If you’re more of a lifestyle entrepreneur than a world-domination type, don’t worry: There’s no rule that says you have to drive aggressive growth in order for your business to survive. In fact, you may be much happier – and your business may be much healthier – if you keep things small.