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Size Matters
Keeping It Small Can Mean Big Business
There is an
inclination to favor what is big and that has caused a universal desire for
expansion. We may start small with an endeavor, but we nurture dreams of
eventually making it grander. The fact that the internet provides a gateway to
a global market further fuels these dreams into a frenzied state.
Lost in our collective fascination for catering to a larger market are the
distinct advantages of keeping the business small. For all the fame and
glory associated with a large scale business, the stability and reliability
that small businesses enjoy are often missed. It would be prudent to consider
the benefits of maintaining a small business before plans of expansion are
pursued.
Let’s take a look at some reasons why small
businesses are better kept small.
1. Smaller risks.
Keeping the business small exposes it to less debilitating dangers. Small
businesses don’t have to deal with customer complaints on a large scale,
as any problem can easily be isolated. They don’t have to experience the
issues that plague big businesses, and there is no need to hire $500 per hour
lawyers to fix such headache-inducing tribulations. Keeping it small provides
for a simpler setup that is more resistant against unwanted complications.
Besides, those who play big lose big, and, assuming the worst, small businesses
will only lose in proportion to their size.
2. Potentially higher
profit ratio. It’s not the amount of profit that matters, rather,
it’s the amount of profit vis-à-vis the costs of investment. Big
businesses may rake in a larger amount of income, but they have to offset the
equally enormous amount of expenses they have incurred. Small businesses spend
less, and successful ones earn a higher profit ratio compared to their more
illustrious counterparts.
3. Move faster with less. The owner
directly controls the small business, and more often than not, does most of the
dirty work. He needs little amount of help since most software make some
processes fully automated. Small businesses don’t have to spend a fortune
in advertisements, as well, as their client base is usually a dedicated lot,
and in most cases, the latter does the marketing for the enterprise. Also,
efficiency is better guaranteed as the operations are clearly delineated and
centralized. The same thing cannot be said about big companies who often suffer
from disordered distribution of roles caused by a cluttered bureaucratic
setup.
4. Easier to corner specific markets. Since small
businesses operate in a smaller scale, they could easily concentrate on a
particular group of people who share an interest that a small business can
provide for. In modern internet parlance, this is called nicheing. Getting the
most out of a particular niche is a rewarding business strategy because this
tactic makes good use of people’s unwavering passion for something which
your venture’s products or services provide for. Big companies will have
difficulty cornering specific markets because the latter are often overlooked
and their concerns are seldom satisfied.
5. Clients relate to the
small business in a more personal level. This is probably the best facet of
small businesses: their ability to connect with their patrons in a manner that
no big business could. Small businesses, given their gift for specialization,
develop more intimate relationships with their clients. When answering e-mail
queries, for example, small businesses take time to personally reply to each
and every one of them whereas big businesses merely use a generic template for
theirs. The client would feel more secure with a responsive small business, as
he would be reassured that his concerns will be expediently considered.
6. Grow at your own pace. The small business owner does not have to
keep up with the demands of his client base, because the latter is kept
manageable. Hence, the small business owner can take his time to perfect the
intricacies of his trade to be able to offer better service, and eventually
grow at his own pace, in a manner of his own choosing.
There is a
saying that goes “it is better to be the star player of a Minor League
team than a bench warmer for a Major League squad.” If a business is
kept small, it will be the king of its niche. Expanding may open up bigger
markets, but it will also bring bigger perils and more difficult compromises.
Expansion is not bad per se, but are you prepared to possibly be regarded as a
peddler at the expense of your lofty throne?
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This article is
written to provide accurate and authoritative information with regard to the
subject matter covered in it. It is provided with the understanding that the
author and publisher is not engaged in rendering legal, or other professional
services. If legal advice or other expert assistance is required, the services
of a competent professional person should be sought.
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