The Benefits of Staying Small

The goal of any entrepreneur is to make it big. You start out humbly and then keep growing your company until it’s employing thousands of people, branching out nationwide or even globally, and producing seven to ten figures in annual revenue. Only then are you truly living the dream.

Or so you’ve been told.

A company doesn’t have to conquer the world like Facebook, Amazon, or NVIDIA to have a huge impact on its customers, employees, community, and founder. In fact, according to the US Small Business Administration, small businesses (those with fewer than five hundred employees) make up 99.99 percent of all American companies—almost thirty-five million in total—and these entities largely drive our nation’s economy. When you understand the many perks of keeping your business relatively pint-sized, you may reconsider whether striving to supersize is worth it.

Personal

One of the reasons entrepreneurs start their ventures in the first place is to be their own boss. However, as their businesses grow, many ironically find themselves back where they started—beholden to another. Instead of a department head, though, they are being controlled by their business’s needs. As a result, they often work long days and weeks, likely even more so than when they had a nine-to-five job, leading their work-life balance to get out of whack, their relationships to suffer, and their health to take a hit.

In other words, there’s often a direct correlation between how large an organization is and how much stress its owner experiences: the bigger it is, the bigger the headaches it brings. Conversely, you can retain more control, including over the amount of time you are available for work matters, by keeping your company small, which can free you up to pursue other interests and lead a more fulfilling life.

Professional

Likewise, having a smaller business tends to offer some key advantages on a professional level, such as those that follow.

Control
Yes, it’s an advantage on the business side of the coin as well. Without so many moving parts, you can more easily put your fingerprints on virtually every critical decision, including what’s in your mission statement, who you bring onto your team, which companies you work with, and which customers you market to and how.

Relationships
People over profits isn’t just a cliché; it can also be financially wise, especially with today’s consumers heavily favoring companies that make them feel valued. If you and your team are on a first-name basis with your suppliers, vendors, and customers, it often creates better trust and establishes more deep-rooted connections—and, in the end, more business.

Quality
The iconic Ford slogan “Quality is Job 1” still holds true today, and what better way to guarantee that you deliver top-notch products or services than by staying small? After all, the process is likely to be simpler and you’ll have more control over quality assurance, making it easier to prevent problems from arising in the first place.

Adaptability
Every industry experiences ebbs and flows, but when there are fewer people making decisions and giving approvals, it’s much easier to be nimble when need be, like when rebranding or updating messaging to align with shifting trends or consumer sentiment.

Efficiency
Smaller businesses are often considered to be more cost-effective thanks largely to lower overhead costs like infrastructure and expenses, which can potentially lead to greater profits. (More on financials below.) Another big efficiency plus: it’s much easier for both customers and team members to get the answers or help they need without the cumbersome red tape that tends to be associated with large companies.

Financial

Of course, you must make sure that maintaining the status quo size aligns with your short- and long-term goals, especially financial ones. Given that money is the number one reason small businesses fail, it stands to reason that scaling may be a good solution for ensuring viability. However, it’s not always essential. According to a study by Experian, it’s estimated that small-business owners make over 20 percent more on average than the general population, creating a sweet spot for both profitability and work-life balance.

It’s also important to note that your cash flow can get burned up in the grind of scaling a business, and it may be a long path ahead before you see any ROI. In addition, when it comes to growth, too much of it too soon can easily become the death knell of a business, causing it to peak prematurely and never recover.

Maintaining your business’s small size doesn’t mean you won’t ever expand via growing your team or your profits to find greater success. You just need to consider what your definition of success is and whether scaling is the path to take you there. When you do, you might just find that your current manageable and close-knit situation is exactly what you need to not only achieve your vision but also experience long-term professional contentment.

TAKE ACTION:
Weigh the perks of your company’s current situation versus the potential of growing it larger to determine which will likely result in a more fulfilling outcome.