Make conscious decisions about growing your small business.

Article originally published in Succeeding in Small Business.

Entertainer Sophie Tucker (and others) famously said, “I’ve been rich and I’ve been poor. Rich is better.”

Some people would make a similar remark about owning a business, with larger being better. But is it always true?

As a small business owner, you may want to grow your company, and you may even have plans to do so. Before you put your foot on the accelerator, take the time to decide whether (and how much) you should grow your company.

What do you really want?

Do you very much want to scale a business? Have more employees to help carry the weight? Have the potential to make more money? Create something that is worth a great deal of money, or that changes the world? You have the entrepreneurial drive to build your small business into a large one.

Do you need to grow to appear competitive in your market? To have the budget to get the word out, make more sales, and become an industry leader?

Can you be successful as a boutique? In some industries, the Davids are giving the Goliaths a run for their money.

Do you want a business that comfortably supports you and also leaves time for you to be with family, pursue other interests or take vacations? You may want to grow but to control the growth so that you can enjoy what some people call a lifestyle business. While this term has been used condescendingly in entrepreneurial circles, there is also an increasing recognition that a solid lifestyle business can indeed be a great business to run. Check out 7 Reasons Most People Should Build Lifestyle Businesses, Not Startups.

Potential

What potential does your business have to grow? Some businesses are like finely tuned sports cars. They aren’t working at full capability unless they are on the track, racing forward. They are built to move fast and make things happen.

Other businesses are engineered for steady travel instead. Carpooling and family vacations, say.

How about your company? And are you happy with that Chevy or Lamborghini your company is today? Or do you want to reengineer your business for a different driving experience?

Responsibilities

In a very small business, you do nearly everything yourself. As your business grows, you will delegate some tasks.

As you grow even more, or scale the business (see a nice explanation of business scaling in Fortune), your responsibilities are likely to change from doing or a blend of doing-and-managing to higher level managing.

Before putting your dreams of growth into practical steps, consider whether you like doing or managing or some blend of the two, and also whether the satisfaction you get from business is from the rush of entrepreneurial growth or from the day-to-day running of the company you have today.

Money

Depending on how you grow and what type of business you have, you have the potential to make more money as the company gets bigger. Generally, this is one major motivation for growing a company.

It should be recognized that there are times when the larger business is not more lucrative for its owner. As you take on more employees, more infrastructure and more risk (see below) you also have more potential areas for poor performance and resulting reduced financial returns. Which brings us to risk.

Risk

Big leases, big loans, shared equity, a larger staff, and other potential demands of a growing business carry with them higher risk alongside  higher prospective reward.

A fast-growing business typically brings some loss of control as well as challenges maintaining quality, assuring profitability, and managing your (potentially also large) competition.

Be aware not only of your best-case scenario but also your worst. Are you ready to deal with risk?

This article from Inc., 5 Risks for a Growing Business, and How to Manage Them is a good primer for companies planning significant growth.

Salability of company

What will you do with your company when you are ready to retire or move on? Will your children run it? Will key employees buy it or take it over? Will you sell it? Will it end when you stop working?

Size is one consideration in this matter. Many small business advisors recommend that you fund your retirement while you are working, in the event that “you are the company” and that the business “dies with you.”

A business that is not overly dependent on you, and that can continue to make money after you move on, is typically a more saleable enterprise.

Unless you have a novel technology in hand, cash is king when it comes to selling a business, so if making a lot of money from the eventual sale of your company is a key consideration in your planning, you may indeed want to grow the business aggressively.

Small businesses that can run without you can be salable, too, since people frequently prefer to buy an existing business rather than starting their own. However, the proceeds are likely to be lower.

So…

As a business owner, you have a unique opportunity to make conscious decisions about growth, based on the market for your services or products, and on balancing pros and cons of large versus small, considering your own management style, and reviewing how you want to blend business and life goals.

Whatever you decide, you have the privilege and the pride that comes with running a business. So many people would like to do what you are doing every day!

After 30 years in business, I'm learning from startups.

We all understand the need for fresh thinking and continuous improvement.

Of course, continuing to generate new ideas and improvements demands that one also seeks sources for inspiration.

I am fortunate in this regard to have found a wellspring of new and original thinking in the principals of entrepreneurial start-ups. In recent years, I’ve become involved in organizations whose mission is to further entrepreneurial success. One great example is Valley Venture Mentors (VVM), a Western Massachusetts organization providing “support to the entrepreneurial ecosystem.”

At VVM and other groups, I have the privilege of hearing early-phase new business plans that entrepreneurs are pitching or submitting for review. Sometimes, I offer counsel on launching ideas, products and brands. Often, I learn at least as much from the process as I impart.

Much of what is true for startups is also important to longer-established businesses. Lessons in “what makes for a successful startup” that have made a lasting impression on me include the following:

Focus is important.

Daniel Goleman, author of Focus: The Hidden Driver of Excellence, claims that the ability to focus is the primary predictor of both professional and personal excellence and success. The entrepreneurs who most often succeed demonstrate this ability to both see and remain committed to the overarching goals they set.

Flexibility is important, too.

Yes, focus is great, but focus at the expense of the ability to regroup, redirect and (to use an overused phrase) pivot can go beyond persistence to become foolish stubbornness. When do you know a plan is not working? Thomas Edison famously said, “I have not failed. I’ve just found 10,000 ways that don’t work.” Sure, but more often, 10,000 failures indicate that it’s time to seriously tweak, pivot or discard.

The best entrepreneurs combine the ability to focus with the ability to continue generating ideas.

This is why we see so many serial entrepreneurs, who develop a company, sell it, and then develop another. And if an idea doesn’t quite work, they can often refashion it into one that does.

No entrepreneur should be an island.

During business plan reviews, many a seasoned businessperson will offer advice – on concept, phasing, financials, regulatory and testing matters, competitive scene, and more. Not only does the entrepreneur learn something, the rest of the review participants often do as well. There are a lot of really smart people out there, with a great deal to share if you have the willingness to hear it.

This is still a great world full of wonderful ideas.

Many of the business plans I hear are confidential, so just let me say… world health, the environment, education, communication, and a multitude of other burning needs give us the opportunity to improve the world. If indeed the world does improve, I bet it will be in large part thanks to the efforts of focused, flexible, imaginative, and well-mentored small and growing businesses and, of course, their fearless leaders.