Tag Archives: small business

Top 5 Benefits of Keeping Your Business Small

Although the thought of turning a small startup into the next billion dollar enterprise may seem alluring, bigger isn’t always better. In fact, growing a business too quickly can often bring about unexpected obstacles and challenges you may not be prepared for. In many cases, keeping your business small makes the most sense and comes with several distinct benefits.

 

1. Fewer HR Headaches

The more employees you have, the more laws and regulations you have to contend with. Whether it’s ensuring that your business is keeping up with OSHA standards or you’re fulfilling your tax obligations, things can get ugly in a hurry from an HR standpoint.

Think of it like this. Would you be better able to stay on top of HR if you had five full-time employees or 20? Keeping your business lean means you can keep it running smoothly while minimizing any HR nightmares.

 

2. Less Overhead

Small businesses have fewer moving parts than larger companies. They’re likely to have less equipment, smaller facilities, lower utilities, less maintenance and so on. This is beneficial for two main reasons.

First, there’s much less you have to deal with to simply keep your business running. This translates into fewer extraneous tasks, so you can focus more on core functions. Second, it’s significantly easier to manage, and you’re less likely to find yourself in over your head.

 

3. More Flexibility

Agility and adaptability are two characteristics of most successful businesses in the 21st century. With change occurring at such a rapid rate, it’s arguably never been more important to react swiftly to market developments and tweak your business accordingly.

If you’ve got a large company with numerous stakeholders, it can be difficult to get everyone on the same page and react to shifting conditions. But by keeping your business small, it’s fairly easy to switch gears and implement the necessary changes.

 

4. Quality Control

One of the most common problems that businesses who grow too quickly encounter is upholding quality standards. Often when there’s too much of an emphasis placed on output, quality can ultimately suffer. This is problematic for obvious reasons and will often negate the impact of any growth that has occurred.

“Staying in the shallows” can be advantageous because you can keep a closer eye on quality levels and ensure that you’re consistently meeting consumer expectations. In turn, this should help you remain competitive, while at the same time reducing your stress.

 

5. Higher Profit Margins

While a small business is unlikely to generate as much revenue as a larger one, many times it will actually have higher profit margins. This goes back to our second point about having lower overhead costs and fewer operating expenses in general. By keeping things small-scale, you can keep your company profitable and increase its sustainability.

 

While a small, tightly ran business may not be as glamorous as building a megalithic corporation featured on Forbes 500, it does have some convincing advantages. That’s why keeping your business small may in fact be your best option.

 

hobby into business

Do What You Love: How to Turn a Hobby into a Business

A hobby can be a fun leisure activity, serving as a way to relax and unwind. But under the right circumstances, it can be profitable and even become a thriving small business.

If you’re finding that your skill is in demand and people are already buying from you, you will definitely want to consider turning your hobby into a business. Following the right sequence of steps can help turn your vision into a reality.

 

Do Some Preliminary Research

You never want to jump in head first to any business venture without first performing a significant amount of research. Some specific areas you’ll want to examine include:

  • Your industry
  • Current demand
  • Predicted demand over the next five to ten years
  • Competition
  • Legalities
  • Necessary capital to get started

 

Develop a Business Plan

Once you’ve figured out the basic logistics and feel confident that you can make your business a success, you’ll want to develop a formal business plan. This will serve as roadmap to guide you along the way and ensure that you stay organized. If you’re not sure of how to go about this process, you can get some helpful guidance by checking out this resource from the SBA.

 

Acquire Resources

Even if you plan on keeping things relatively small scale, you’re likely to need some type of funding to get things off the ground and keep you afloat. Fortunately, you probably won’t need as much capital as a typical small business, and you may already have the majority of the necessary equipment and tools to operate.

In many cases, $10,000 or less may suffice. You can look at one of our previous posts, Best Ways to Find Investors for Your Start-up Company for ideas.

 

Create a Marketing Plan

If you’ve been working at your hobby for awhile, you may already have a built-in customer base. But if you want to ramp it up and turn this venture into a viable business, you’re going to need a legitimate marketing plan to ensure that it grows and that you can consistently bring in new customers. Some questions you’ll want to ask yourself include:

  • How can I reach my demographic?
  • What is my marketing budget?
  • How much of my resources will I spend on marketing?

From there, you’ll need to decide which specific mediums you’ll want to experiment with. Some ideas include:

  • Social media
  • Video marketing via YouTube
  • Blogging
  • Content marketing
  • Paid ads

If you’ve already got a network in place, you can leverage it and potentially pull in new customers that way. For instance, you might ask existing customers to spread the word that you’re expanding your hobby into an actual business.

 

Start as a “Side Hustle”

Because you’re going into uncharted territories, you may simply want to start your business out as a “side hustle” and treat it as something to do in your spare time. If it isn’t successful, it won’t adversely impact your income and cause you any unnecessary stress.

This will allow you to test the waters so that you don’t wind up in over your head. If things do work out, then you can amp it up and turn it into a full-time endeavor.

With the right approach and preparation, there’s no reason you can’t turn a hobby into a business. However, it’s important to take it seriously and do your homework beforehand. This way, you’ll put yourself in the best position to succeed.