If you ask a number of small businesses what their ambitions are, it’s rare to hear any of them suggest they’d like to “stay small.” That’s not to say it doesn’t happen – or there aren’t valid reasons for wanting such a thing – it’s just that most would probably tell you they’d like to grow. And not just by a little bit – most would say they’d want to grow A LOT.   

But the question is, if that’s the case, why do some businesses still stay small? It’s not an easy answer, but over the years we’ve observed a few things that allow businesses to get from being mainly a founder-led company or family business to going on to employing tens or hundreds of employees.

What’s the secret? Here are a few differentiators that we’ve seen.

No. 1: The Role of Funding, Capital, and Risk

Let’s face it. If you have access to a pool of available capital, you can take more time to grow the business and even absorb losses as you grow the brand. A famous (and extreme) example – Amazon didn’t turn a profit for 9 years, pricing some items even at a loss to run competitors out of business. You may not have access to that kind capital for a long-term play, but it illustrates the power of what money and patience can do.

The hard part, of course, is the risk involved. Whether you seek external investors, such as venture capitalists, angel investors, or crowdfunding platforms, or you take a small business loan from a bank, what you’re really doing is making a bet on the long-term viability of the business – one that can also end up meaning you owe more money, or lose a share of ownership over your company.  

The other aspect that’s key here: If you want to grow more quickly, one way or another you’ll probably have to spend money on advertising or other forms of promotion, in most cases, to do it. That’s because, by definition, broader audiences aren’t really aware of your products and services as a small business. You have to get more audiences to notice you. And that means putting your brand out there without any guarantee that you’ll get an immediate return.

It’s not for everyone. Indeed, many small business owners we know are more inherently risk-averse. They prioritize stability and are hesitant to take on the uncertainties associated with growth. While this approach minimizes the chances of catastrophic failures, it can also limit a business’s growth potential. These businesses instead may opt to take a more “bootstrap,” using revenue from operations to reinvest back in the business. That’s fine too, but may just be a slower route to bigger growth.  

No. 2: Effective Resource Scaling

As small businesses get more mature, some are able to smartly figure out ways to scale their operations – in other words, spread production costs over a larger output. In marketing and general business operations, for example, there are lots of ways to scale:

• • Content development: At Marketing Nice Guys, we often recommend businesses start to think about ways they can produce more content while exerting only minimal incremental effort. One way to do this is to think about ways they can produce different content types on the same topic. So, if a blog resonates with the audience, why not also do a video or an infographic if you already know the content? It won’t take as long to produce.
  • Advertising: In some cases, this may mean spending more money to make sure your ads are shown to the maximum number of people, as we state in our blog on scaling marketing operations linked above. It can also involve tactically narrowing your campaigns so that you focus on the ones that provide the best-performing ROI. In other cases, it can mean expanding your targeting to incrementally include new geographic areas, and audience types with limited additional marginal costs compared to the original ads you did.
  • Networking and Partnerships: Building strategic partnerships can help small businesses access additional resources without taking on excessive risk. Collaboration with complementary businesses, influencers, or industry experts can open doors to new opportunities, customers, and resources.
  • The Establishment of Repeatable Processes: This step is critical for ensuring consistent growth and maintaining quality as operations expand. For example, when a business starts out, it often is still feeling its way around how to do things, such as servicing customers, presenting products, setting up sales processes, and even marketing operations. Eventually, though, businesses that grow eventually figure this piece out and become more efficient, particularly in the following areas:
    • Process Standardization: Think about successful fast-food restaurants. Those businesses take the time to document and standardize their key processes, ensuring that tasks are performed consistently. This not only improves efficiency but also facilitates training when new employees come on board.
    • Automation: Leveraging technology and automation tools is a hallmark of scalable businesses. Repetitive and time-consuming tasks can be automated, freeing up human resources for higher-value activities. This might include using customer relationship management (CRM) systems, accounting software, or inventory management tools.
    • Training and Development: Small business owners who plan for growth invest in training and developing their employees. This investment helps ensure that team members are well-equipped to handle increased responsibilities and maintain quality standards.
  • Scalable Technology: Selecting technology solutions that can scale with the business is crucial. This prevents the need for frequent system replacements as the business grows. Scalable technology accommodates increased transaction volumes, user counts, and data storage requirements without major disruptions.

No. 3: Delegation and Effective Management

We can certainly relate to this one. A lot of small business owners find it challenging to let go of control and allow others to work for them, even if they may get a bit overloaded themselves. Some of that involves their own particular expertise, whether that’s in sales, service, marketing, or actual product development. “I can’t find anyone who can do it like me” is a common refrain. Or, this do-it-all-myself mentality could simply be the best way to avoid additional headcount costs. However, those who recognize the value of delegation often find their businesses growing at a faster pace, especially if they can:

• • Find and hire skilled talent
  • Trust employees to make decisions and innovate
  • Better manage their own time to focus on high-impact tasks such as strategy, planning, and business development.

Bottom line: At some point, if a small business truly does want to keep growing, the owners will eventually have to step out of the way of operations. That’s not a question of “if,” it’s really a question of “when.”

No. 4: Adaptation to New Technologies and Circumstances

We live in a time like no other, especially as it pertains to the advancements in technologies such as AI and automation. Businesses that don’t embrace these, in particular, put themselves at a big disadvantage for growth, especially as it involves productivity and output (something critical for marketing in particular.) Consider a few areas in marketing alone that have been radically changed in the last several years:  

• • Content production. You can create a lot more content that can be distributed more widely than ever before. All for free because of generative AI.
  • Email. Whether it’s crafting better subject lines, developing email copy, or using a more effective sender name, AI can certainly boost performance. And, if you consider employing automation, it allows for more responsive and consistent customer touches in response to direct actions or other behavior.
  • Advertising. Today, most ads are delivered programmatically, which means a machine is basically matching audiences with criteria you set as an advertiser. And ongoing optimizations? Once “the machine” learns more about what you’re looking for audiences to do (clicks, acquisition, conversions) it will also adjust the targeting for you (on your behalf) if you allow it to.
  • Video. Many small businesses may not realize that professional voiceovers can be done using a machine by only inputting a script. More and more, these voiceovers are getting more realistic too, at a very low cost.  

The point is, 10 years ago, very little of the above could be done, much less done well, by any business. Yet, if those same businesses are around and still not taking advantage of at least some of these, they could risk falling behind the competition that does employ such technologies, and, in doing so, keep their costs lower and their output far greater.

The Choice to Stay Small

One thing we don’t want to suggest is that all businesses have to grow. Sometimes the founder/owner makes a choice to stay small. We can certainly understand that sentiment too. After all, the smaller the enterprise, the more such owners can:

• • Exert Control: Many small business owners enjoy being closely involved in every aspect of the business and are not willing to compromise that for the sake of growth.
  • Enjoy a Work-Life Balance: Growing a business can be incredibly demanding, often requiring long hours and significant personal sacrifices. Some small business owners prioritize work-life balance and are content with the size of their business as long as it allows them to maintain that balance.
  • Avoid Risk: As mentioned above, growth often involves taking on additional risks, such as securing loans, hiring more employees, or advertising to new audiences or new markets. Those who are risk-averse may prefer the stability that comes with staying small.

Conclusion

We hope this has been helpful. Don’t hesitate to connect with us if you need help figuring out a path that meets the vision you have for your company. We’ll be happy to schedule a free consultation to discuss any of your marketing or business strategy needs.