Arewarding aspect of hosting a small business radio show and mentoring business owners in Northeast Wisconsin is learning about the incredible variety of businesses in this area. Most have growth plans and we enjoy learning of or helping with. However, there is an innovative and driven subset that is as interesting but has no intention of growing into larger businesses. Rather than growth, it is about balance, focus or personal choices.
That sounds contrary to the idea that a business can’t stand still or others will pass it by, or – to repeat a common refrain from multiple business seminars — keep growing or the business will die. Yet, during the last four years, we have mentored or interviewed small business owners who made a choice not to grow and are successfully building strong businesses.
Why and how does this work?
As background, these businesses represent a cross-section of products and services available in the region, although services are the predominant offering. In most cases, the owners had identified a niche based on their personal or professional experiences where they can offer real value. Whether it was a product or a service, they had found something customers really cared about. Feedback is consistently excellent and references or word of mouth were the primary driver of business.
Based on personal experience and thoughtful decisions for the future, they make a clear choice. Among other reasons, it may involve deciding to keep working on what they like doing rather than investing time into managing a growing business, working fewer hours so they can invest time elsewhere or maintaining quality and providing individual customer service rather than increasing staff to support growth.
Whatever the reason, deciding not to grow requires discipline, often more than one expects.
This decision to set a limit on growth or not grow at all has usually been made overtly and the strategic decisions are made with that goal in mind. Keeping the business model simple, finding the right technology and focusing on outstanding customer service all play a part. These entrepreneurs have a close relationship with their customers and are able to adjust their business models as needed to respond to customer needs. There is truth in the idea that a business can’t sit still and these business owners are not. Instead, they are putting clear boundaries in place to ensure the business does not grow larger than desired while they delight customers.
Another common trait is the willingness to get help in areas they either are not experts at or where they do not want to spend much time. Whether it be adopting productivity-enhancing software, building relationships with needed service providers or ensuring they have the mentoring and advisers needed to help them focus on their goal, they are well prepared to manage the future. Having a mentor is particularly important as the strategic intent of the business requires tough decisions that include saying no to opportunities other businesses would jump on.
In almost all cases, these owners have developed an understanding of cash flow and how to manage it, although very few are experts in finance or accounting. It is an area where they have learned enough to manage their business and to know when they need help.
Other traits that stand out include strong support from family or friends, a desire to build a community around their offerings, backup plans for customers they cannot serve and a willingness to experiment.
These entrepreneurs have developed many of the skills needed to grow such as networking, focusing on the important things, great customer relations, a learning mindset, and plans for managing demand they can’t meet. However, they made choices based on what works for them and decided not to grow their business, at least for now. That may change over time as circumstances change but based on their history, decisions will be made thoughtfully and with a clear plan for the future. Either way. they will run successful businesses that add value to the community.
While some of the characteristics I have described are similar to those of a successful growing business, there are two important differences. The first is that strategic initiatives cannot normally result in a net increase in activity that restricts choice. The second is a need to create and maintain a very disciplined, structured operation that can evolve with customer needs yet supports the owner’s criteria for balance and focus.
There are examples across our region of small businesses that have decided on a strategic direction other than growth. Through close contact with customers, understanding industry evolution and being disciplined about work practices, these entrepreneurs prove it is possible to develop a successful business even when they have ruled out growth as an option.
Terry Pinch is mentor with SCORE Fox Cities, a nonprofit association dedicated to helping small businesses.