Through my journey of working with more than 800 small business owners, I’ve come across quite a few entrepreneurs who were struggling. But that’s not surprising, right?
After all, he who shall start a business must go through an inflection point.
This inflection point is the decision of whether or not to continue to grow your small business. Having said that, is there a definite path that leads a small business to becoming a unicorn or becoming one of the many?
No, there isn’t.
If you ask me, I’d say there is a lot in between those two extremes that don’t get enough credit. Small businesses can choose to not to grow in some situations.
What if I told you that compulsory growth of 10% year over year is just an option?
Let’s take a look at a few compelling reasons I found that make it sensible to keep your small business where it is.
Small Business Growth Isn’t Linear
Let’s begin with the basics!
To understand whether there is merit in letting your small business grow, it is important to understand the growth stages that a small business must go through before it can become a big business.
Small businesses are inherently different from larger businesses and corporations. As such, their growth is charted a little differently.
There are five distinct stages that are identifiable for a large corporation. These phases are:
However, for a smaller business, there is more to consider than just the bottom line or shareholder value, or, for that matter, annual sales.
For a small business, I found that other aspects held a big sway. These aspects include:
- Managerial style
- Organizational structure
- Extent of formal systems
- Owner involvement
- Strategic goals
Here’s a business growth chart that depicted the journey of a small venture and highlighted the hurdles it must pass through on its growth journey
Stage I
This stage highlights the existential challenges for a small business. It involves the owner thinking about how to get more customers, how to get funding, how to broaden the sales base, etc.
This is the stage where the owner is playing the role of a one-person army.
Stage II
A small business in this stage has already taken care of getting customers. It has demonstrated that the business idea is workable.
The challenge in this stage, therefore, is to strategize for achieving breakeven and improving the cash flow.
Stage III
Small businesses reaching Stage III have become successful in their niche. This is the stage where the owner must decide between 2 options:
- Whether they want to establish the business as a platform and continue to operate at this level of success indefinitely (Success-Disengagement)
- To gather up the company’s resources and plunge into a gamble for further growth (Success-Growth).
(It is this conundrum that I will attempt to untangle through this article)
Stage IV
The successful business owner has decided to grow, and the new challenges that face the business are how to delegate responsibility and how to arrange for sustained funding.
Stage V
A small business that reaches Stage V has now become a big business. It must now decide how to control, manage, and allocate its resources.
It must also now strategize on how to hire better and more hands on deck to do the jobs.
So, when should a small business decide that it need not grow?
So your small business is now in Stage III, you have found success in your niche and now you have to choose the next steps. You must reach this stage to even consider a pause to growth.
Reflecting over all the insights I gathered from my own journey and learnings from other business owners, I found a few factors that you can consider at this stage:
Reaching a regulatory threshold
Small businesses don’t typically have a formal employment structure. There aren’t formally skilled or professional employees either – they are either vocationally trained or the owner manages most of the tasks.
Things being so, small businesses do not fall under the ambit of regulatory mandates put in place by the government and local authorities.
An example is the FMLA – the Family Medical Leave Act. It is applicable to all businesses that have 50 or more employees. There are countless other acts, mandates, and regulations (like CCPA, ERISA, FUTA, etc.) that would apply to a company that has grown beyond the size of a “small business.”
This means you would need to collect, maintain, and manage all those employee records, have a working capital ready to dispense towards applicable employee benefits, and more which will become a financial burden on your business, something that you haven’t faced so far.
If you are not ready for that yet, it is prudent to disengage from growth until you are.
You are unable to let go of some control
The owners who have enjoyed total control over their small businesses sometimes find it difficult to delegate the decision-making to their employees – whether or not they are capable.
It is important to understand that a growing business cannot survive on a single person doing everything. If you wish for your small business to grow, it is important to delegate responsibility.
If you are not ready for it, then your business can do well with a pause in growth for the time being.
Satisfaction
This elusive sentiment is extremely personal and may be a hard nut to crack, but if you have already brought your business to where it gives you satisfaction and you have a deep sense of achievement, you don’t have to grow.
Remember, small business growth doesn’t have to be a necessity. If you are satisfied with the profits and the lifestyle you and your family can enjoy. You can call it a day and settle down.
When you personally suffer from burnout
Running a business can be hard. On top of that, a small business owner does all the legwork all by themselves. This can take a toll on you.
If you feel that the strain of running your business is causing you to burn out before your time, it is best to keep things where they are.
You can take this opportunity to recompose yourself and discover newer perspectives before approaching the subject of growth again.
Obstacles to growth still linger without a clear direction
Every business has its own case, objectives, and purpose. It is essential for any small business to retain its founding concepts while exploring new avenues to grow.
If you feel like your business lacks the clarity of ideas and purpose in growth, it is best to take a moment and think. You may want to double down on the small business obstacles before you forge ahead.
For example, your business idea may not be financially feasible on a larger scale. You may require better strategies and preparedness, a better corpus to forge ahead.
In this situation, it is best to decide not to grow for the time being and prepare to go deep to solve the problems.
However, you must always be sure that the business will grow from here on once you have found solutions.
Businesses Can Still Thrive – Big or Small
I’d say that the success of a business doesn’t depend on its size.
If your small business has hit a wall in the path of growth and you don’t know what to do, think about your readiness. There is a helpful article here on some of the initiatives some of my business owner friends have taken to keep their business growing.
Are you ready for another big challenge?
Or would you rather settle down with the riches you’ve made?
I’d also ask you to get into a discussion with your family. After all, your business may keep you away from them should you decide to grow it further. They can tell you things that others (like me) can’t!
I hope this article helped. I wish you all the best.