David is a speaker, writer, and consultant in the expertise marketplace, having worked with 900+ firms and in-house departments under the umbrella of his firm, ReCourses. His work has been discussed in the Wall Street Journal, USA Today, Fast Company. Inc. Magazine, MarketingProfs, Forbes, and BusinessWeek.
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28/03/2018
Growth is not always a panacea
Three-fourths of you don’t want to grow – Congratulations
We live in a world where growth is worshipped… even above profit. There’s an Inc Magazine “Fastest Growing” award, but nothing for well-run companies who consistently make money. Our expectations of publicly traded companies – where market share and revenue growth are gods – have somehow twisted how we think about smaller, privately held businesses like our own. David Heinemeier Hansson puts it well in this article about how growth can devour and corrupt. Jason Cohen’s thoughts on this are worth reading, too.
I love growth if it’s for the right reasons. Unfortunately, the primary driver of growth at agencies like yours isn’t healthy growth spread across your client base, but rather the growth of one client who is too big already. Because of that, I’d like to suggest two lenses through which you view your own growth.
1) Growth is primarily about the role you want
It doesn’t make any difference how big you are. I’ve worked with businesses with 40 employees whose sole principal is making $120,000. I’ve worked with even more businesses of less than 4 employees where the principal is making $600,000 consistently. It just doesn’t matter.
There are some advantages of being a large agency and different advantages of being a small agency, but the primary distinction between the two sizes is how you shape your role. And if you don’t frame the growth question this way, you’re just going to end up letting growth happen to you.
When you let growth happen to you, rather than making that choice for yourself, you’ll end up being dragged into a role that your business needs but which doesn’t feel comfortable for you. Do you enjoy being on the front lines and interacting directly with clients? Don’t get too large. Do you enjoy running your agency, landing new business, and shaping the careers of others? Think about growing your agency to take some things off your plate.
It’s really that simple and you’ve got to make the business your bitch rather than getting dragged around by this monster that you’ve created.
This part is pretty easy, but there’s a second element to this decision that forces you to live within the realities of the marketplace. That’s next.
2) Right size = Smaller than your opportunity
It’s not quite as simple as deciding what size business you’d like to run, based on what role you want to play. The marketplace has some say in the matter, too, and so once you decide what size is comfortable, your primary mission becomes finding more work (from qualified clients) than you can handle.
Yes, that’s not a mistake. You always need more opportunity than capacity. Otherwise you’re feeding a machine and any misalignment between your capacity and your opportunity will leave you scrambling to fill that gap. And that, my friends, is exactly when you’re most tempted to compromise on your standards for a qualified client. Your thinking goes something like this: “Yeah, I know that we aren’t going to make much money on this engagement. But we’ll make a lot more money than if my people were just sitting around.”
That sort of thinking means you are no longer in charge. You’re feeding a machine, and financial pressure is the primary cause of all business decision compromises.
If you lose your ability to say no because you have to say yes all the time in order to stay busy, you’re just along for the ride.
Life’s too short to be running someone else’s business. Apparently some of you feel that way, too. I asked 414 of you how you felt about growth as a principal, and here’s what you said:
I’d be happier if we had fewer people like before: 43%
I’d be happier if we stayed this size forever: 30%
I’d be happier if we got significantly bigger: 27%
Choose to be a Small Giant.
Here at the DBA, we champion greatness in small businesses like yours that think big. Our focus is to shine a light on the unique characteristics that drive you, with a carefully curated programme of training, events and resources that will help you shape your business. Read more here.
Image credit: John Salzarulo | Unsplash