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How Big Will Your Business Be?

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There are very few business owners who haven’t dreamed about owning the next multi-billion dollar corporation. However, reality shows that this dream usually remains just that, a “dream.” Is this because there is only enough room in the economy for a limited number of these large firms? Is it possible there are some other reasons why businesses do not grow to the multi-national size? The short answer to both questions is yes. While the global economy favors a limited number of large multi-national firms, there is room for a few more of these corporations. However, sometimes there are other reasons why a business doesn’t grow to the next level. 

If your business has less than twenty-five employees and has sales of less than five million dollar, you are part of the majority of businesses that make up the small and medium enterprise market (SME). Most of these businesses never make it to the next level, and there are a number of reasons for this.
Too often businesses fail to become larger for reasons other than external issues. Instead there are internal obstacles that get in the way. Regrettably, most business owners are unable to identify those obstacles or refuse to acknowledge that they exist. If you want to move your business to the next level you must be prepared to not only analyze what is happening in the business world, but also what is happening inside your own business. 

Unfortunately most business owners either neglect to, or more often don’t want to, take a look at the internal workings of their business. Why is it that business owners refuse to analyze the internal workings of their business? In most cases the reason can be traced back to the business owner. While most business owners will tell you they want to keep growing their company, often they are the ones who are responsible for the lack of growth.
 
Specifically, this lack of growth can be attributed to the management approach of the business owner. A significant number of business owners do not want to give up control of the business that they built from the ground up. This business is his or her “baby,” and no one is going to “mess with it.” These owners tend to micro-manage almost all aspects of the business and believe they are the only ones who can make any important and correct decisions. 

Usually these owners have expertise in the actual product of the business. For example; they are a highly regarded computer programmer. However, a number of these business owners do not actually know how to run a business or take the time to learn. Thus the business never moves to the next level because there is no one to ensure the business continues to grow and prosper. 

Another significant reason why SOME businesses remain stagnant is because the owner actually doesn’t want the business to grow. These businesses are labeled “lifestyle” companies. The owner operates the business because it supplies them with the necessary perks which they feel or believe are important to them. If their business were to grow, the owner may find that they will have to change their lifestyle due to the controls that a large business needs to institute, such as managing partners or a company controller.
 
Some clues that you are operating a “lifestyle” business may include the following. You attend frequent trade shows, conventions or take stress relief holidays, all paid for by the business. The vehicle you drive wouldn’t stand up to a cost/benefit analysis; neither would the fancy parking spot you keep it in. Your lunches, dinners and golf fees are paid for by the business because they are used to entertain customers, who are also close friends. Lifestyle business owners tend to put themselves ahead of the business.

If after reading this article you note some similarities to your business, give yourself a pat on the back. You’ve just made the first step in moving your business up to the next level. If on the other hand you don’t see yourself mentioned above, have some of your employees read this article and see if they see some similarities. For those who don’t qualify for either of the above comments, congratulations, you are already on your way to building a better business.

-Myron Gordon
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