IAN FERGUSON: Forgoing growth can be major profit boost


Ian Ferguson

Growth is a long-term objective for most businesses. However, some firms never grow and remain as small businesses forever. Here are a few factors that explain why some businesses do not have growth as the main objective.


One thing the founders of larger companies have to give up is a certain level of control. If you choose to stay small, you can often have more balance in your life and pursue other interests and passions along the way.


Staying small and having lower operating costs increases your margins, which leads to profit. High-growth companies often negate profit as their goal in lieu of selling their operation as a value-add to another company regardless of unprofitability. If you want your business to continually make profit, and give bonuses and good pay, then grow at a logical pace that is sustainable.

Niche Domination

Sometimes remaining small can allow for greater expertise in a given field or industry and greater market penetration. Focusing on one specific area of business not only facilitates a greater measure of growth, but it also strengthens the overall company brand. Remaining small helps to perfect your company’s core competencies.

Quality and Efficiency

One of the great headaches involved in running a larger enterprise is the enormous cost of overhead expenses and the higher amount of raw materials and other inputs that are required. Remaining a small, dedicated, focused and, perhaps, home-based business ensures your ability to manage quality and efficiency. The strong recommendation from many who have expended is to stay small, agile and nimble to stay alive.

Culture and Employee Quality

You are only as good as the weakest member of your team. If you have one person dragging down the culture or attitude, it can become cancerous. High-growth companies that are hiring staff quickly run the risk of sacrificing a solid employee culture and product quality. Focus on building a cohesive group of like-minded individuals who believe in your company’s mission, and you will be able to punch far above your weight class.

The additional headache of creating and managing departments, divisions and units to organise the division of labour is strenuous and challenging. Many make the decision to remain small to avoid this immense bother.

The Boutique Route

If you have an expertise and are in the client services industry, a boutique is the way to go because you have flexibility and can work on the projects you want to work on. You do not have to deal with multiple headaches involving growth and numerous employees.

Stay small and partner with larger companies or agencies that can offer greater back-end support. This will allow you to make more money without all the headaches. Boutique firms can be highly successful, which people sometimes forget because they are not always expanding or hiring.

• NB: Ian R Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities. He has served organsations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at tcconsultants@ coralwave.com.


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