The idea of turning a small business into the next Fortune 500 corporation is certainly inviting, but exponential growth isn’t always the best thing for businesses trying to carve out a space in their market. In many cases, entrepreneurs benefit from maintaining their small business and staying the course rather than committing to massive growth too soon. Here are a few of the advantages that can come along with staying small.
Large businesses generate more revenue than small businesses, but they often net smaller profit margins. That’s because small businesses are likely to cut costs through smaller facilities, less equipment, lower utility costs, and so on. When you have less overhead to manage, the cost of doing business remains low as profits increase!
There may come a point when your company becomes situated to generate enough business to stay afloat even when times are tough. When you have carved out a niche in your market, there is nothing unreasonable about shifting your attention to maintaining your business rather than taking on potentially risky or unwanted endeavors like hiring more people, working longer, upgrading your space, and delegating more authority.
An underrated advantage of running a small business is that it gives you and your team the power to pivot more quickly than larger companies can manage. When large companies decide its time to make changes, plans must be reviewed with stakeholders to ensure key players share the same vision. Conversely, a smaller scale invites flexibility and the ability to try new ideas without drawn out approval processes. If a new process isn’t working out, its equally easy to tweak it or move onto something new altogether.
As a business scales up in size, their output should naturally grow at a corresponding rate. The difficulty many entrepreneurs grapple with when rapidly scaling up is matching their initial quality with increased output demands. Naturally, a decrease in product quality quickly nullifies any expected gains from increased output. Staying small gives entrepreneurs the advantage of maintaining their competitive advantage through their positive reputation and comfortably ensuring all customer needs are met.
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