While you may have a large-scale idea for a new business, sometimes it’s better to take just a small segment of your plan and focus on starting your business on a small level. If this is your first business, you may want to target an endeavor that will help you build skills without wiping out your nest egg.
A business that can succeed on a small level gives you great training wheels for building the experience, knowledge, and competency you’ll need to take your company to the next level. Below are several reasons why it might be your best bet to start small for business success.
1. You’ll Save Money
Starting with a narrow scope of business means you can run it out of your extra bedroom or den. You won’t have to rent office space or furnish a suite. There are even tax incentives or deductions you can take to save money as you build your business on the small side. If you do need specialized space for your endeavor, you can investigate subleasing space from other entrepreneurs, which reduces costs.
2. You’ll Need Less Capital to Get Started
Bootstrapping is an effective strategy that allows you to grow into your business and keep initial financial outlays on the low end. Instead of stressing over technology requirements and phone systems, you can concentrate on creating your sales funnel or refining your product. The fancy phone system can come later (if at all). A lean business structure keeps you flexible and focused.
3. Learn as You Go
When you base your business on a hobby, you can start by making a handful of products, selling them, then growing when you’re ready. As your business takes off, you can educate yourself in other areas of running a business, creating a formal business structure, managing employees, and meeting regulatory requirements.
4. You Can Start Today
If you set your sights on a small enterprise, the barriers are lower and you can get going more quickly. You don’t need a huge infrastructure, massive staff, or complete line of products to get started. You have no excuse for not starting your business today.
5. Your Sweat Equity is Valuable
By doing everything yourself, you learn all that’s needed to keep your company going. Of course, it’s great to hire out those things that you are not able to do, but if you have direct know-how those experiences inform your executive decisions down the road. It will also help you make better decisions that impact your customers. While financial investment is necessary to building a business, your sweat equity is just as necessary to growing your endeavor.
6. It’s Simpler to Run
Smaller companies are lean machines and often have higher profit margins because they are simpler to run. There are fewer costs associated with overhead and administrative requirements with a small-scale business, and you can reassess market changes frequently and pivot when necessary. When big jobs come through, you can team with other small companies or hire contractors to deal with the workflow if it’s more than you can handle.
Slow and steady wins the race. Start small. Test the market. Grow with intention. Sample the cheese before you bet the farm on your idea. When it comes to small business success, the truth is: scaled-down, slower growth companies do just as well as their big sisters.
Republished by permission. Original here.