company.

How Big Do You Need To Be?

Should you remain a one-person business? Could you offer better services more profitably if you were larger? These are issues that just about everyone who starts a business faces, and because business conditions change over time, they never really go away.

You can’t make a plant grow by pulling on it. So says an ancient Chinese proverb, one that I think applies to us entrepreneurs. In most cases, our businesses need to be well-rooted―with steady customers, a track record, expanding prospects and sufficient capital reserves―before we should even think about growing.

There are obviously some exceptions. In the Internet and online businesses during the last decade, the basic idea seems to have been the most valuable, and vulnerable, part of a business. People with good ideas need to rush to make their businesses attractive enough to support an initial public offering, or to be sold to a larger company.

But most entrepreneurs aren’t involved in this sort of mania. We need to be assured that our businesses have sustainable natural growth before we take on the additional overhead and labor costs that come with expansion. We have seen in earlier chapters how rapid expansion can add to the stress you feel, and how the normal ups and downs of business can make an overextended business fail.

It is important, too, for you to consider whether you are expanding because your business justifies it and you find it fulfilling, or whether by becoming bigger you are merely trying to prove that you are successful. Think twice before you buy into the cliché that bigger is better. Creating a larger firm will most likely require you to spend more of your time managing others than doing what you set out to do.

Moreover, you might find yourself growing into a company that is large enough to be slow and bureaucratic, but not large enough to be a strong player. There is much to be said for being small and agile, and for sticking to the area where your talents lie. If your core talent and passion is managing, your goal should be to expand. All the rest of us should think twice.

Obviously, this book has a bias toward those who have decided to stay small, because if they have grown larger they are no longer entrepreneurs. We like the flexibility of being able to create and recreate our own businesses. Many of us have employees and many more take on staff and independent contractors to help us deal with particular projects. This has become known as the “virtual” company, though I think its great virtue is that it is a versatile company, one poised to take advantage of a wide range of opportunities.

We entrepreneurs are at the cutting edge. Our small size gives us the freedom to be creative and experimental. Perhaps the Intels, Daimler-Chryslers and Time-Warners of the world have a similar freedom, but not the smallish and middle-sized firms we would likely become if we were to expand.

While I was researching the book Spare Room Tycoon, I met a young woman whom I sought to interview. She works in a creative support capacity in the film, television and advertising industries. She has some important ongoing clients, including a long-running television program. She is the only full-time member of her company, but she employs a stable of more than a dozen people on a project basis. But she didn’t want to be in the book because she doesn’t consider that she has a business. She just believes that she is working as an individual, trying to get by. If she had a business, she told me, then she could sell it and make some money from it. She would like to have a business some day, she said, but couldn’t claim to have one now.

I don’t know what her plans might be, but I think an attitude like hers can be dangerous. She is apparently prosperous, she does extremely interesting things, she appears overall to be happy, but she seems somehow convinced that what she is doing isn’t a real business. If you feel that way, you might easily be tempted to expand the business in conventional and counterproductive directions. The business might appear more corporate and “serious,” but the expansion could divert your energies from the things you do well toward other chores at which you are, at best, mediocre.

Not everything that grows on the earth is destined to be an oak tree. Besides, most plants would be grotesque if they could grow as large. And they can’t because they don’t have the proper structure; gravity would bring them down.

What’s important isn’t simply to grow but to flourish. And many of us―more all the time―have learned to flourish while staying small.

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Author:. James Chan, Ph.D., is president of Asia Marketing and Management (AMM), a Philadelphia-based consultancy specialized in advising U.S. firms on exporting American-made products and services to China and forging business relationships there. Since he founded his practice in 1983, James Chan has advised more than 100 U.S. companies in expanding their businesses in Asia. To view his background online, go to AsiaMarketingManagement.com.&n... Go Deeper | Website


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