UPDATED: This post was originally published back in January 2018. As it was so well received when it was released, I thought it was about time I go back and update my thoughts.
When I meet new people and tell them that I run a one-man consulting business, I often get asked how I'm going to “scale” my business.
I usually respond by saying that I don’t want to scale. I explain that I’m making good money that supports my wife, son and I and that hiring employees would add a lot of stress and responsibility to the business. Keeping things smaller is a lot simpler and easier.
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It’s interesting that a lot of businesses feel they NEED to scale and grow month to month. And I can see why. Every day I see articles with click-bait headlines like this: “15 ways to scale your business and make more money”. Articles like this assume that “more money” is the answer.
Now every business and founder is different. Of course, a lot of businesses have an obligation to grow and pay dividends to shareholders. And there’s nothing wrong with scaling and growing bigger if your goal is to dominate a market or take over the world.
I'm making an argument against “growth just for the sake of it”.
If you’re a freelancer, one-man shop or run a small business then ask yourself whether you NEED to scale. Just because everyone else is so obsessed with growth, doesn’t mean you have to be as well.
And it's amazing how often this idea resonates with people. Since publishing my original article a few years ago, I've shared this idea with clients and members of my Slack group and often people tell me how relieved they are to hear that other people feel the same way.
Here's why you should think twice about growth:
Scale = Stress
In order to “scale” a business, you need more staff, more money, more office space and more customers. More, more, more…
But, there’s no guarantee that adding more inputs to the business will result in a proportionate amount of output. But you’ll almost definitely invite more stress and responsibility into the company. For example, hiring more staff often means:
- More conflict to resolve.
- Company cultures manage.
- KPI’s to measure and individual performance to track.
- Responsibility to pay salaries, sick leave, holidays, insurance and other benefits.
All this may be worth it if you hire the right person. But that in itself is a challenge that often ends up creating more issues than value for the business.
One of my favourite online people, Paul Jarvis, wrote a book called “Company of One” (affiliate link). In it, he shares something that perfectly captures this idea:
“Throughout the interviews I conducted in the last year, the general sentiment from folks with larger companies was that they pined for the days when they were smaller. When they had less employees and managing to do, they were better able to make decisions and more closely connect to their customers. Not a single person said they loved being much larger.”
So, before you scale, ask yourself. Is all the added (and highly likely) stress going to be worth it for a potentially bigger business?
Which leads me to my next point…
You can be happy with “enough”
One of the best reasons to scale is that you can make more money.
Sure, money is necessary to buy food and survive. But when you create a dependency on money or trick yourself into believing that “everything will be okay as soon as I make over $X per year” you’ll find that the more you have, the more you need to keep growing and make more.Because “more” is so vague, “more” is never enough.Click To Tweet
In our business, my wife, Hayley, and I have a goal to meet at least our “Target monthly income” (TMI) each month (this concept has been borrowed from The 4-Hour Workweek). When I started the business, our TMI was calculated by adding together our annual salaries from when we were working, plus adding a buffer for new business expenses and dividing by 12 to arrive at a monthly target.
This figure represents what is “enough” for you. And “enough” doesn't mean the bare minimum to get by. It can mean, enough to live comfortably, save for the future and take time off.
Each month we actually earn more than our TMI number but we keep the target the same and everything earned over and above this figure is a bonus.
Sure, we could try and scale, hire more staff and try to earn millions of dollars. But would we be any happier? Probably not. Right now it’s just the two of us, we have no staff or responsibility to other people. Hayley can work from home and look after our son and I get to leave early to go to CrossFit. What more could you ask for?
Scaling the business without sacrificing some of this freedom would be almost impossible.
How do you stay motivated?
So, if you're not trying to grow, how do you stay motivated?
My goal is to create a better business, not a bigger one. For me, better means a business that's more efficient, that helps me to serve more people (without sacrificing freedom).
This year I have a few goals to release new products and courses that should help me to do just this. If my income stays the same and I'm able to create more efficiency within the business, that would be great! If the business grows anyway, fine. But that's not the goal.
This keeps me highly motivated and means I can make changes to my business that I think will make things better or more efficient. And if growth is a byproduct of this (which is usually is), that's fine.
Now, this is just one man’s opinion. Like I said earlier, every business is different and people are motivated by different things. At the very least, I hope I can challenge a few people’s beliefs about whether scaling really is the right answer.
Let me know what you think in the comments below!