How to Grow (or Not Grow) Your Small Business
Many small businesses want to and always will remain small. Other businesses start small with the dream of growing big — sometimes very big. Take Starbucks, which began as a local Seattle coffee shop, and Apple Computers, which was launched in a garage. When small businesses grow into giant corporations, it’s not by accident.
Behind that growth is a well-thought-out business plan along with the drive and the resources to get there. But becoming a big business isn’t for everybody.
An entrepreneur who started a stereo shop in a small Illinois college town created just the kind of friendly, cluttered, slightly disorganized atmosphere you’d expect to see in such a place. But the salespeople who worked there really knew and loved audio equipment, and the business was stocked with great components at very competitive prices, thanks to the fact that overhead was so low.
The unbeatable combination of quality, service, and price soon made the store a huge success — and the owner began to dream about expanding into a chain of stores throughout the Midwest.
We’d like to say that this idea sounded good on paper, but the owner never even put his business plan in writing. He launched right into action, building inventory and leasing storefronts without once thinking about how he would find knowledgeable sales teams, promote the new stores, or create an organization that could manage the jump from one shop to half a dozen.
The laid-back, disorganized style worked fine for a single store with a garage-worth of inventory, but it turned out to be a disaster for the small chain. The losses from the new outlets soon eroded the original store’s profits. Six months later, the owner closed up and went back to school, even though he’d already been through the school of hard knocks.
A well-crafted business plan may have helped avoid disaster. But even before the planning, the owner should have asked one simple question: Do I really want to grow my business?
Some small businesses are meant to remain small, and some business owners are meant to run small companies. In this case, an entrepreneur loved audio equipment, worked well with his sales team, and had a great rapport with the customers who came through his door. But he wasn’t particularly well organized or good at delegating — the two main characteristics he needed to run a larger operation.
Whether you’re growing your business or planning to stay small, holding on to your valued employees will be critical to your success.
Before you make plans to grow your own small business into something bigger, take time to ask yourself whether you really want to manage a larger company:
How will the day-to-day operations of the company have to change?
How will my own duties and responsibilities be different?
What additional skills will I need to make the growing business work?
What weak points or limitations do I have that may get in the way?
Don’t be discouraged if your answers make you think twice about growing your business into something bigger. Not every business is suited to expansion — and not every small-business owner really wants to manage a big organization. Many business owners are perfectly happy and successful staying small.
If your answers give you confidence that growth is a smart move, buckle down and really start planning.