Why should I have a bigger business?

Dear Aunty,

Thank you for your kind words over the years. I have a new question. Why should I get bigger? Why not stay the size we are now? We are not really growing but profits are okay. I look at ramping the whole thing up and wonder why I would bother.

Although, at the same time, I feel very frustrated because I have not been able to pursue some very obvious opportunities.

Sort me out please Aunty!
Perth

Dear Sort me out,

Oh, I ask myself this every day. Why the mad pursuit of growth? Why are we chasing revenue like headless chooks? Why not fatten the business up with luscious profits and sit back on our bums planning our next trip to Bali? But my friend, we don’t because we are entrepreneurs! It’s in our genes. We get off on growth. You know why?

Here are eight reasons:

Sleep at night: A larger company means greater resilience to set backs.
Attract better people: highly skilled people can feel more comfortable working in a larger organization.
Specialisation: staff can specialise in specific tasks. While this leads to more costs it also means greater productivity as staff.
Run at opportunities: Once you are bigger, you are no longer head rat on the wheel pushing it every day to make it go around. You have the time to lift your head up, look at the horizon and see which opportunities to pursue. You also have the people to do the groundwork on the new projects.
More money: if you are bigger, you can spread your minimum fixed costs over more transactions which means more profit.
Big is better: Some companies are nervous dealing with start-ups.
Can get more money: investors feel more at ease putting money into larger companies where there is less risk. Ditto bankers.

See? That’s why you want to get bigger.

Be smart,
Your Aunty B

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