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.


Like this article?

Share on Facebook
Share on Twitter
Share on Linkedin
Share on Pinterest
Send as Email
Print Content