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  • Writer's pictureRoger Pierce

Why a smaller business is better than a big one

Updated: Sep 7, 2018

You may be happier and wealthier by keeping your new business small

We hear terms like ‘scaling’ and ‘venture capital’ and ‘management layer’ and begin to think that bigger must be better.

Contrary to the popular expression, a smaller size business may actually be advantageous.

Small businesses are nimble

Bureaucracy can take over bigger businesses. And that slows down an organization’s marketplace responsiveness.

In a big business, decisions are formed by department or committee – and can take forever and a day. Without a cumbersome management layer, a small business owner can move quickly to take advantage of opportunities. And, when one strategy isn’t working, it’s easy for a small business to pivot to try a new one.

Reacting quickly to change is a tremendous advantage for a small business – and often necessary for survival.

Small businesses owners have fewer headaches

There are simply less moving parts to a small business than a big one.

Budgets are smaller and less complicated. Customers are more likely to be nearby than faraway. And there’s probably only one shareholder to please – you!

Once a business gets past 10 employees, you must add in management layers and better systems. That often complicates life for the founder and takes the fun out of the business.

Achieving ‘scale’ usually involves a lot more people, a lot more money and major commitments. A business owner may prefer to keep things as simple as possible by keeping their company operations small.

And there’s nothing wrong with that.

Small businesses can specialise

Being all things to all customers is better suited for large companies with the resources and the brand recognition to diversify successfully – like Walmart.

As a result, there’s pressure on big companies to get good at doing a number of things.

With fewer overheads and financial burdens, small businesses can choose to focus on a particular type of customer or a particular type of product or service. The owner of a small business can thrive by doing one thing very well – and hopefully that one thing is a passion.

Plenty of small and micro businesses in Canada

Despite the attention big businesses seem to capture, it’s important to know that most businesses in Canada are small.

A staggering 98% of all businesses in Canada are considered to be small businesses, with 1 to 99 employees. And approximately 1.6 million businesses in Canada are companies of one person with no employees at all.

If you’re running a business that fits into the definition of a small business – congratulations! You’re likely enjoying the advantages that are unique to smaller enterprises.

Don’t succumb to the pressure to get bigger. You have every right to be perfectly happy with the current size of your business.

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