SIZE MATTERS? Keeping It Small Can Mean Big Business

Gunnar Berglund
 


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Everything these days, it seems, have embraced the catch phrase made popular by a movie that featured a gigantic green lizard. Size matters. The *** connotations of that phrase aside, size does seem to matter in every facet of human existence. The sight of a Big Mac is more appealing than a regular hamburger. Well-known companies want to establish offices in tall skyscrapers. A country’s prominence is determined by the depth of its economy’s pocket. Thick books are more respected than skinny publications.

This inclination to favor what is big has caused a universal desire for expansion. We may start small with an endeavor, but we nurture dreams of eventually making it grander. The fact that the internet provides a gateway to a global market further fuels these dreams into a frenzied state.

Lost in the hoopla of our collective fascination for catering to a larger market are the distinct advantages of keeping the business small. For all the fame and glory associated with a large scale business, the stability and reliability that small businesses enjoy are often missed. It would be prudent to consider the benefits of maintaining a small business before plans of expansion are pursued.

Let’s take a look at some reasons why small businesses are better kept small.

1. Smaller risks. Keeping the business small exposes it to less debilitating dangers. Small businesses don’t have to deal with customer complaints on a large scale, as any problem can easily be isolated. They don’t have to experience the issues that plague big businesses, and there is no need to hire $500 per hour lawyers to fix such headache-inducing tribulations. Keeping it small provides for a simpler setup that is more resistant against unwanted complications. Besides, those who play big lose big, and, assuming the worst, small businesses will only lose in proportion to their size.

2. Potentially higher profit ratio. It’s not the amount of profit that matters, rather, it’s the amount of profit vis-à-vis the costs of investment. Big businesses may rake in a larger amount of income, but they have to offset the equally enormous amount of expenses they have incurred. Small businesses spend less, and successful ones earn a higher profit ratio compared to their more illustrious counterparts.

3. Move faster with less. The owner directly controls the small business, and more often than not, does most of the dirty work. He needs little amount of help since most software make some processes fully automated. Small businesses don’t have to spend a fortune in advertisements, as well, as their client base is usually a dedicated lot, and in most cases, the latter does the marketing for the enterprise. Also, efficiency is better guaranteed as the operations are clearly delineated and centralized. The same thing cannot be said about big companies who often suffer from disordered distribution of roles caused by a cluttered bureaucratic setup.

4. Easier to corner specific markets. Since small businesses operate in a smaller scale, they could easily concentrate on a particular group of people who share an interest that a small business can provide for. In modern internet parlance, this is called nicheing. Getting the most out of a particular niche is a rewarding business strategy because this tactic makes good use of people’s unwavering passion for something which your venture’s products or services provide for. Big companies will have difficulty cornering specific markets because the latter are often overlooked and their concerns are seldom satisfied.

5. Clients relate to the small business in a more personal level. This is probably the best facet of small businesses: their ability to connect with their patrons in a manner that no big business could. Small businesses, given their gift for specialization, develop more intimate relationships with their clients. When answering e-mail queries, for example, small businesses take time to personally reply to each and every one of them whereas big businesses merely use a generic template for theirs. The client would feel more secure with a responsive small business, as he would be reassured that his concerns will be expediently considered.

6. Grow at your own pace. The small business owner does not have to keep up with the demands of his client base, because the latter is kept manageable. Hence, the small business owner can take his time to perfect the intricacies of his trade to be able to offer better service, and eventually grow at his own pace, in a manner of his own choosing.

There is a saying that goes “it is better to be the star player of a Minor League team than a bench warmer for a Major League squad. " If a business is kept small, it will be the king of its niche. Expanding may open up bigger markets, but it will also bring bigger perils and more difficult compromises. Expansion is not bad per se, but are you prepared to possibly be regarded as a peddler at the expense of your lofty throne?

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© 2005 Gunnar Berglund Gunnar Berglund has been a “internet- hardworker" for the last five years He publishes The meonit Gazette http://gazette.meonit.com and run http://www.meonit.com and http://www.grabinternetprofits.com/traffic

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