Whenever someone asks me what I do for a living, I’m finally at a point in my life where I’m excited and proud to tell them about my entrepreneurial journey and some of the great experiences it has provided along the way. When I held previous jobs and was asked this same question, I always felt as though I was making excuses, downplaying my position or glossing over my current career to talk about the career I one day aspired to have. It’s an incredible feeling to be living your passion every day as a small business owner, but I believe some misconceptions still exist about our measure of success. This most often rears its head when the inevitable follow-up question to owning my own business is, “How many employees do you have?” The unexpected truth is, it’s just me. I’m a sole proprietor, or S-Corp, and I’m small by my own design.
Small By Design
Not every business will or should follow the template of growing by X number of employees every year. The fact of the matter is that it’s not every business’s model to grow in this direction. Depending upon the service or product, it’s simply not necessary. And if it’s not necessary to have this many employees, why carry the extra overhead and liability? Outside of my residual monthly clientele, new or one-time projects for which I’m contracted are very unpredictable. In one day I can receive multiple new leads or things can be quiet for weeks. As a business of one, I’m able to tuck my tail and reduce my overhead to nearly zero when I’m in a business building phase. And when I’m swamped with work and requests for services, I can easily call upon my network to contract out certain work that’s more efficiently handled by their expertise. I love contractors and freelancers for the very same reason I am one to so many businesses. When times are great you can go full steam ahead and as soon as work slows down, you can cut back and preserve precious capital. Bigger businesses can’t do this as easily. They’re stuck with fixed expenses like rent and salaries that need to be paid regardless of cash flow. Another major benefit I see to being a business of one (at least for right now) is that I am accountable to my clients and that’s all. I don’t have to worry about keeping regular office hours to also be accountable to employees. I can travel as I please, work from home, set my own schedule and take vacation without the slightest sense of guilt so long as I maintain my work for my clients. While being small by design is not a luxury every type of business can afford, I highly recommend enjoying it for as long as you can. So long as you don’t measure your success by the size of your office or staff, this is a very strategic and enjoyable model for an entrepreneur.
The Measure of Success
What do you commonly use as the measure of success for a business? I know before I began my own, I was guilty of asking the common questions of “How many employees do you have?” or “Where is your office located?” to judge the legitimacy of a business. I’ve since had my eyes opened to the endless varieties of business structures that exist and most surprisingly is that I really have not found a strong correlation between size, structure and success. What I have found is a strong correlation between success and the type of leader running the business. Having been down a similar path, I’m now profoundly more impressed with a small business (especially consisting of one person) that provides the same perception and level of service as a firm two or three times its size. At the end of the day – or the fiscal year, rather – the profitability and success of a business is not determined by the number of employees or square footage of your office space. What it is determined by is your drive and dedication to seeking out new clients, providing exceptional service and functioning above the level of your competitors. And for me at least, I can efficiently and comfortably accomplish this right from my home office!
Have you ever owned or worked for a business that was small by design? How did you measure your success if not by the number of employees or size of your office? Share your thoughts with us by commenting below!
11 thoughts on “The Size of Success: A Profitable Business Doesn’t Require a Big Business”
Great post, Mrs. Shirley. I’m currently an owner of an online media company and it feels great to have the freedom to work for yourself. I definitely agree with growing slowly and being flexible. Still in the figuring it out stage of making money, but I know I will get there.
Thanks for the comment, Cheval! Yes – finding what you love to do is only half the battle. You also have to be strategic in how you can monetize it. A good start is to ask yourself “What need am I meeting?” Once you know who you’re serving, you’re in a better position to market yourself toward them.
I think it take a very brave person to run a business of their own. In one way decisions are probably made faster without having to convince others, but the success or failure of those decisions are enjoyed or suffered, as the case may be, by you alone! Great blog.
I always enjoy your comments! I’ve had people say you either have to be brave or really oblivious to start your own business – and it’s true in that I’ve met business owners who are each of these. While I enjoy making decisions for myself, it can sometimes be a challenge when sharing both the ups and the downs would be easier with multiple people.
Hey there! I’ve been following your blog for a while now and finally got the bravery to go ahead and give you a shout out from Houston Texas! Just wanted to mention keep up the excellent job!
Thanks for stopping by–the whole way from Texas!
This is the biggest advantage of your own business. I’d hate to have several people, other than my family, relying on me to bring in enough money to pay them, or worrying about not only my house, but renting an office, and the myriad of other expenses that come from having a bigger business.
Thank you for commenting, Dan! I do agree that it is one of the advantages to owning your own business – choosing if and when you hire. I love contracting out work for this reason because I feel like it’s the best of both worlds.
I agree with you, that size has nothing to do with whether you can succeed or not. The reality is that all it truly takes to be a successful small business is the desire and willingness to focus on meeting the needs of a small group of customers. Small businesses can often outperfom large ones simply because they focus on a narrower group of customers, thus better meeting their needs. Another advantage most small businesses fail to realize if they stay as small as possible there overhead rates will be a fraction of those of larger organizations, which means they actually can compete.
As I’m sure you’ve picked up from this blog, I’m a big advocate for as low of overhead as possible! Now as a business owner, I’m acutely aware of this, but even when I worked in government (and saw SO much waste in overhead) I was still very bothered by the wasted money and time of others.