A few months ago I attended a networking event here at BizDojo, the co-working space I work from here in New Zealand. At the event, we went around the room one-by-one and introduced ourselves and our businesses.
I introduced myself in the normal way:
“Hi, I’m Paul. I’m a productivity blogger and consultant. I help people with productivity and consult with companies to make them more productive using tools like Asana, Pipedrive and MailChimp.”
A fellow resident asked me a common question that gets asked a lot in the startup and business sphere:
“How are you going to scale your business?”
And my answer was simple:
“I don’t really want to scale. Right now I’m making good money that supports my wife and I. Hiring employees and renting a big office space seems to add a lot of stress and responsibility to a business. I’m pretty happy working with just my wife from a cool co-working space right off Takapuna beach.”
(or words to that effect)
It’s interesting that a lot of businesses feel this requirement 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 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.
But 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.
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 machine 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 writers, Paul Jarvis, is currently working on a new book called “Company of One”. In a recent newsletter he shared 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 less
One of the best reasons to scale is that you can make more money. Awesome, because we all know that more money is the answer to our problems, right? (*Sarcastic tone)
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 $XXX,XXX per year” you’ll find that the more you have, the more you need to keep growing and make more.[clickToTweet tweet=”Because “more” is so vague, “more” is never enough.” quote=”Because “more” is so vague, “more” is never enough.”]
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). 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.
In other words, if we reach out TMI each month then we’re making at least the equivalent of our old salaries expect now we have the freedom of being self-employed.
We actually earn more than this each month but we keep the target the same and everything earned over and above our TMI 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. We work in a nice co-working space overlooking the ocean and 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.
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 around whether scaling really is the right answer.
Let me know what you think in the comments below!