Is rapid business growth the absolute indicator of success? Many companies would say yes, but an increasing number of small businesses would disagree. Traditionally, small businesses have been encouraged to grow; chase new business, hire more staff and expand their premises. But bigger is not always better and staying small and nimble can be just as, if not more, rewarding.
In a recent report by Emergent Research and Infusionsoft, success is defined as the achievement of broader, non-financial goals – rather than ‘empire-building’. Less interested in growth for growth’s sake, many small business owners are choosing instead to enjoy all the advantages of a lifestyle business: doing work they enjoy with people they like and respect, being their own boss, having greater freedom and flexibility and making a positive impact on their community.
Of course, enjoying this lifestyle does require some measure of financial success. Encouragingly, 94% of small businesses surveyed in Xero’s State of South African Small Business report are profitable. In fact, 75% of small business owners believe they make more money running their own business than they would in a job. Instead of pushing for never-ending growth, these businesses can define success as reaching a financial level that allows them to enjoy all the work-life benefits of staying small. Such as:
1. You stress less
Nothing is more stressful than a cash flow crunch. The manic pursuit of fast growth requires regular reinvestment in your business. This often results in money going out faster than it’s coming in. When the books don’t balance, stress levels increase. Businesses that favour stability over growth are less likely to have to deal with such periods of high stress.
2. Your finances are easier to forecast
A smaller, financially stable lifestyle business has simpler revenue and expenses to manage. Rapid growth can result in unbudgeted costs to cover recruitment, office equipment and customer acquisition campaigns. Again, less time worrying about financials means more time for you to enjoy life in and out of the office.
3. You deliver better work
When small business owners are focused on making more money and growing as quickly as possible, the quality of work they deliver can suffer. Satisfying your customers’ needs has to remain your number one priority – otherwise there will be no business to grow. Small businesses have more time to prioritise their customers and can pay consistent attention to the standard of work they deliver.
4. You adapt faster to the market
A small, stable business can be much more flexible in the face of fluctuating market conditions. To chase growth, businesses often trap themselves in long-term, fixed strategies that can’t shift in the face of change. If you can stay nimble, you can shift direction at a moment’s notice and embrace new opportunities successfully.
5. You feel happier and healthier
With less to worry about at work, you’ll have less stress to deal with. It’s impossible to relax under the constant pressure of meeting bigger and better targets, growing exponentially and taking on more responsibilities. High growth may look good for your bank balance but what’s the point if you don’t have any time to enjoy the fruits of your labour? A small business that spends more time on non-financial goals such as delighting customers, creating a good workplace and being the best at what it does, builds goodwill, loyalty and will give you more time to enjoy your success.
There is no denying that running any small business can be hard work and very stressful, regardless of how big your growth plans are. Given South Africa’s current economic uncertainty, some steady growth is necessary to mitigate risk. You can take it slow and stay small, but don’t stand still or your competitors will take vital market share away from you. Small business owners will always have to keep a close eye on their company finances, but with new technologies, such as mobile friendly cloud accounting software, this can be done at anytime, anywhere.
Becoming a big business and spending long hours in the office is not the only definition of success. The emphasis for many small business owners is on low stress, loyal customers and a strong sense of satisfaction at the end of each day.
About the author: Gary Turner is managing director EMEA, Xero – cloud accounting software for SMEs that recently launched in SA.