Does Size Matter?
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Does Size Matter?
What determines how big things should be? As Americans, we tend to think that bigger is better in most cases.
By: Steve Smith
What determines how big things should be? As Americans, we tend to think that bigger is better in most cases.
By: Steve Smith
Until recently, the SUV market was based on this principle. In contact sports, bigger certainly has its advantages. And don’t forget about all the restaurants who serve more food that most people can eat in one sitting.
On the other end of the size continuum is the idea that smaller is where it’s at. This has certainly been the case for cell phones, computers and cameras. In fact, technology seeks to shrink just about everything soon after it’s developed to enhance portability and create a sense of obsolescence.
Many products available to us have a ‘size’ benefit attached to them. But, what about a small business? How big should a business be to do the best job for the owner who conceived it? As a small business advisor, I frequently hear from business owners who want results from their businesses without regard to whether the size of the business is capable of delivering it.
Businesses, like other living entities, have a way of letting you know when their size is inadequate for your performance expectations. If you believe that the business has the potential to generate $1 million annually, but you do not develop the facilities and personnel to handle this level of volume, you could be looking at around the clock demands and the possibility of turning away business you can’t handle. Likewise, a business that is highly developed with staff, inventory and logistical support but lacks the sales volume to keep it running efficiently may end up squeezing cash flow and gobbling up profits.
Sizing a business starts with fully understanding the potential of the market to be served and clearly defining what the owners expect from the business. During my professional business coaching sessions, I frequently encounter entrepreneurs that have not completely evaluated the market potential nor established definable goals such as revenue goals, client profiles, lifestyle considerations or an exist plan when its time to get out. All of these considerations can weigh heavily on the size and scope needed to deliver the desired results.
Before you spend time investing in your business or become enslaved to its demands, you need to plan with the end result in mind. If you want to build a business that supports your ultimate revenue, profit, philanthropic and lifestyle goals, here are some things to consider:
·Is your growth being hampered by the number of hours in your day? If you have a growing business but can’t attend to all of it by yourself, get help hiring the right people to work for you. Expanding your business means finding people who can take on work that allows you to increase your revenue without working around the clock. Expanding your business by hiring help requires the blending of increased employee costs with anticipated revenue gains from more efforts applied to marketing your business.
·Is your infrastructure the right size for your current business and any potential growth over the next 18 months? If you’ve suffered declines over the last several years, you maybe paying for things you don’t need; i.e. warehouse space, office space, equipment, employee count, excess inventory, etc. Re-evaluate your needs to bring your costs in line with the business you have. The money you save can be used to market your business more effectively.
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On the other end of the size continuum is the idea that smaller is where it’s at. This has certainly been the case for cell phones, computers and cameras. In fact, technology seeks to shrink just about everything soon after it’s developed to enhance portability and create a sense of obsolescence.
Many products available to us have a ‘size’ benefit attached to them. But, what about a small business? How big should a business be to do the best job for the owner who conceived it? As a small business advisor, I frequently hear from business owners who want results from their businesses without regard to whether the size of the business is capable of delivering it.
Businesses, like other living entities, have a way of letting you know when their size is inadequate for your performance expectations. If you believe that the business has the potential to generate $1 million annually, but you do not develop the facilities and personnel to handle this level of volume, you could be looking at around the clock demands and the possibility of turning away business you can’t handle. Likewise, a business that is highly developed with staff, inventory and logistical support but lacks the sales volume to keep it running efficiently may end up squeezing cash flow and gobbling up profits.
Sizing a business starts with fully understanding the potential of the market to be served and clearly defining what the owners expect from the business. During my professional business coaching sessions, I frequently encounter entrepreneurs that have not completely evaluated the market potential nor established definable goals such as revenue goals, client profiles, lifestyle considerations or an exist plan when its time to get out. All of these considerations can weigh heavily on the size and scope needed to deliver the desired results.
Before you spend time investing in your business or become enslaved to its demands, you need to plan with the end result in mind. If you want to build a business that supports your ultimate revenue, profit, philanthropic and lifestyle goals, here are some things to consider:
·Is your growth being hampered by the number of hours in your day? If you have a growing business but can’t attend to all of it by yourself, get help hiring the right people to work for you. Expanding your business means finding people who can take on work that allows you to increase your revenue without working around the clock. Expanding your business by hiring help requires the blending of increased employee costs with anticipated revenue gains from more efforts applied to marketing your business.
·Is your infrastructure the right size for your current business and any potential growth over the next 18 months? If you’ve suffered declines over the last several years, you maybe paying for things you don’t need; i.e. warehouse space, office space, equipment, employee count, excess inventory, etc. Re-evaluate your needs to bring your costs in line with the business you have. The money you save can be used to market your business more effectively.
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Steve Smith is the OneCoach Business Partner for Saddleback Valley-CA, where he now coaches and mentors small-business owners and entrepreneurs, helping them get the answers they need to grow the businesses they want.
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