MBA1284 Why You Would Want to Keep Your Business Small

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Visit Dell.com deals. Hey oh. Welcome to the $100 MBA Show. Whether your business is big or small, we got your back every day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online. And in today's lesson you will learn. Why would you want to keep your business small? Not every business needs to scale. Not every business needs to be on the New York Stock Exchange one day or have a billion dollar valuation. There are many entrepreneurs out there that create businesses that are small and stay small. Some of these businesses make half a million dollars a year, a million $2 million a year running with just themselves and maybe a few freelancers or part time workers. Scaling a business is not for everybody. It may just not fit with your lifestyle and that's what we're going to be talking about today. What are some of the things that may be appealing to you in making that decision to keep your business small? Because it's a conscious decision if you want it to be. Just like what Paul Jarvis, the author of Company of One, spoke about in his guest lesson earlier this year. This is totally doable, but it's all about what you want out of your business and out of your life. Maybe you're willing to stay small, maybe you're willing to deal with those trade offs because hey, the benefits could be great for you. In today's lesson, we're going to paint that picture what a small business looks like, what the potential is and what are some of the downsides. So let's get into it. Let's get down to business. Let me clarify as I start today's lesson, what I mean by small business. In the US the definition of a small business is 500 employees or less. So obviously I'm not talking about that. I'm talking about you being a solopreneur, being somebody who's running your business on your own, or, or maybe with a couple staff members, whether they're freelancers or part time members, or even a couple of full time members. This could be online or offline. Some people are just not attracted to the idea of scaling on mass, taking their business to the next level, to hundreds, to thousands of employees. It's just not the work environment they want or the life they want. Now obviously, having a small business where you really are running everything along with maybe some help from some freelancers or part time workers, has a totally different feel. And there are some big advantages. Number one, this is a great model. If you are someone who doesn't like to lead a team. If, if you're not a leader by nature or you don't want to develop that skill, then this is a good way for you to run a business without necessarily being good leader. Maybe you're very good and very focused with your work, you're good with your craft, but you like to work alone. You may not enjoy motivating and managing a staff. So one way to avoid that is to have no staff at all. Minimal staff members. Now there's no doubt as you grow your team, as you grow your business, as you start pumping money into your business to start growing it through marketing and other channels, this is going to get costly. And many people just don't like a high cost business. They don't like businesses where they're spending so much money, even if they're making more than they're spending. They, they don't like the feeling of spending 30, 40, 50, 100,000, 200,000, a million dollars a month on expenses. They prefer lower expenses or low expenses as long as they have higher revenue and keeping their profitability there. Another advantage of having a small team or even being a solopreneur is that you're responsible for less. You're not responsible for a Lot of people. You are responsible for keeping track of what's going on, of hiring and firing. You're doing most of the work. So you just need to worry about yourself. This also means that you're in total control. You don't need to give up control to anybody. You don't have to give up and delegate any tasks. Everything is approved by you, everything goes by you because you're doing it. You make all the decisions and you don't need to cross reference any of them with anybody else. Now I want to say that there are businesses out there, especially online businesses out there, that they make a good healthy living. Even without a big team, even with a couple employees, people sell coaching or masterminds or courses or content or even small software companies. There are software companies that make a million dollar revenue with just one employee, just the developer and the designer and the person is doing it all. They're also doing support tickets, as you can see. You could see how this can get really tough. If you're doing everything and you're responsible for everything, that means you need to be on all the time. You can't have any off time. You can't take a month off, you can't take two weeks off. You can, but you'll have to work during that time. You have to take some time to answer some emails or answer some support tickets. You can't totally shut off. You can't delegate and say, hey, I'm taking two weeks off. Business partner, manager, team, take care of the business while I'm gone. Another disadvantage is when you build a business, you're really building an asset. You're building something that has intrinsic value and you should be able to sell assets. But if you go to sell your business and it's that small and you're doing everything, the business really doesn't have much value without you. So you'd have to be included in the business, meaning you'd have to work for the person. You can't just sell the business scot free and just, you know, kind of start something new. It's really hard to sell that kind of business even with a software business. If you're the only person involved here, they need somebody to run it at the start, even a couple years, versus if you have a company with a team of people. You could sell the business and maybe do some carryover for a few months, but for the most part the team will go with the business. No one's going to leave the business. They're buying the business with the employees attached to them. So having a small business means you're running something and you're building an asset for yourself. But it's not very easy to sell. And that's totally fine for some people who are not looking to sell in the future. They just want to continue to build courses or continue to build content or coaching, or maybe they're in a service business, like they're a photographer, a designer. But in my opinion, the biggest disadvantage, and this is not a knock on somebody who chooses to have a small business. I think it's a viable choice. It's a good choice if it's for you, if something that you enjoy. But one disadvantage you need to know, which I think is the biggest one, is that you have the ability to create something much more significant, something of much more value, something that can really make a difference or really even make a lot of profit. Your chances are more likely when you can compound talent. You have a set number of skills. You could be great at many things. Even if you are an absolute genius at many things, you are only one person. There's only so much you can do. There's only so much work you can do. There's only so much you can contribute to the business. Great businesses. You look at any business you admire, look at the people that work there. Look at the people that contribute to that business. They're all very talented people. And when you compound so much talent, the end result is better products, better services, a better implementation of those products and services, and therefore the company just is valued higher. Let me give you an example. What if we had two teams? One team had one master carpenter and builder and they had a set of supplies and they were told to build a house. On the other team, we have five master carpenters and builders and they're told to build a house. They have their own, their own supplies. They have just as much time. Because in the world of business, we all have the same amount of time, 24 hours a day. Who's going to build a better house? My money is on the team. With five master carpenters. They're going to come up with better ideas, better ways to implement things, better ways to increase the quality of the product. They're going to get more done. Now, notice I said a house, right? Something that's complex, something that is not easy to build alone, not impossible. You can do it alone, but it's not easy. I'm not asking to build a coffee table from Ikea. You know, if that's the project, then one person is fine. So you see where I'm going here. The more talent you have on your team, the better chances of the result being significantly more valuable. Now, having said all that, if you like working alone, if you're not big on leadership, if you're happy with keeping as much as possible the money, your profits because you're not spending it on employees and keeping your costs down, then you can have a very healthy business with a healthy amount of revenue and you can balance your work life if it's doing well. But it's important for me to be honest and show you the advantages and disadvantages. Everything has advantages and disadvantages in business. Just choose what you feel is better for you. If you feel like, hey, I'm good with making $200,000 a year. That's plenty of money for me to live off. I want minimal issues, minimal headaches, minimal management, minimal costs. I'm not really interested in growing a team or working with a team or seeing what can be created beyond myself. That's not really something I'm interested in. I just want to build a business that's going to fulfill my own needs, doing the thing I love. That's totally acceptable. Because hey, it's your life, it's your business. And and don't let anybody else tell you that's not okay. That's totally okay. And a large percentage of the world would envy that position. But be conscious of your choice. Either choose to stay small or choose to grow.

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Lesson, having a small business, being a solopreneur, having a couple employees. Totally okay. Totally fine, as long as it fits your needs. Do not feel like you have to grow for no reason. You don't have to be the next Uber or Instagram or Airbnb. You do what's best for you and your life and your circumstances and what you really want out of your business and out of your entrepreneurial career. This is a tough question. It's not an easy question to answer, but it's important for you to answer so you know where you're going, you have clear direction to to how you want to build your business. Thank you so much for listening. I hope you enjoyed today's lesson and got something out of it. If you did, let me know in an itunes rating and review. We read every single review. And by leaving us a review, enter our weekly random draw we call Free Ride Friday. Listen in on Friday to see if you won access to our course called Easy Course, a $500 course over at EasyCourse Co on how to build your own online course. You can win it for free. Just leave us an itunes rating and review and then listen out on Friday to see if you won. Guys, before I go, I want to leave you with this. You can move from one position to another. For a very long time. I wanted just a small business. I wanted to be a solopreneur. And that's how I was happy. That's what I did. But I changed my mind. I decided I wanted to grow something bigger than just myself. I wanted to build a team. So it's okay to start in one place and then transition to another later on? All right, thank you so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care.

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