9 Benefits to Staying Small in Business

In business, it often seems like bigger is better… but is that really the case? We’re always hearing that your business should “grow bigger” and “grow faster”. “Most fast and break things” is the common Silicon Valley advice.

But is this right? Well, the answer is complicated. The answer is “it depends”.

But, before we jump into some of the many benefits of not growing large, let’s first examine some things that are small and perfect just the way they are:

tiny business pig

Would you want those any bigger? I wouldn’t either.

But enough (tiny)horse-play, let’s get into the real reasons and benefits to keeping your business small.

1. Lower overhead

The smaller you are, the less expenses, space and resources you need. Staying small, in both team size and scope of work, allows you to put more money back into your business instead of spending it on things like monthly rent for a large workspace and/or expensive equipment or software used by a big team.

By staying small, your overall cost of doing business will stay down as profits increase – win win!

2. Strategic flexibility

One of smaller companies’ greatest strengths against larger businesses is that they’re quick and agile.

While a large business will take time to change directions, develop new offerings or wade through the paperwork and approvals required to start a new partnership, smaller companies have the advantage of approving decisions and changes more quickly, changing process and production, and trying new things on a smaller scale.

If something doesn’t work, they can fix it, change it or cut it without it being a long, drawn out process.

While a big company may pull a lot of weight and have the money to back it up, a smaller company can be quicker to the draw and bring in higher profits more rapidly thanks to lower overhead and expenses.

3. Less risk

Of course, there’s always risk in business, but staying small helps you manage the risk in more controlled doses. In smaller businesses you only have to answer to yourself and it often takes less time, energy and money investing into new ventures.

If, for some reason, those ventures don’t work out, you’re able to bounce back quicker thanks to the lower initial investment and risk compared to a larger business.

4. Faster profits

However, if taking that risk does pay off, then less start up costs, low overhead, quick turnaround times and fewer employees mean you can turn a profit quicker than in a larger corporation.

Sure, you may not be making as many millions in profit as a bigger biz, but the money you are making is divided among fewer expenses and salaries, meaning you get a greater portion of the cut.

Staying small also means that, as the founder, you continue to have a large stake in the company.

5. Quicker results

There’s less bureaucracy in smaller companies and, with less people, the owners and founders are closer to the action resulting in quicker decision-making, streamlined process and faster results.

Simply put – you can get stuff done!

6. Personal service

A smaller company can more easily tailor fit their service and offerings to their client creating stronger ties, trust and repeat customers.

Everyone wants to feel like they’re special and being listened to and when you’re smaller you can really take your clients’ needs into consideration and quickly implement changes to your business or products that better serve their requests.

Additionally, you’re team is more likely to feel involved, engaged and connected to the business when each individual has a higher level of responsibility and stake in it.

7. Location, location, location

Larger companies are often limited to where they can be located both in terms of space and having to be in a location where their employees can get to.

If you’re running a company with hundreds of employees, chances are you’ll need to be in a centralized area, but if you stick with a small team you can set up shop pretty much wherever you want which means you have more control over where you live.

8. Freedom

Running your own business certainly isn’t easy and in the end will probably take up more of your time than if you stayed working for someone else, but with that increased responsibility and control also comes a higher level of freedom – freedom to live where you want, freedom to do what you want, freedom to pop out of the office and catch your child’s baseball game whenever you need, and the freedom to create the lifestyle and relationships you want.

As with anything, there are pros and cons to running your own biz, but staying small allows you to stay in control and have the freedom of living and working on your own terms.

9. You can keep doing what you love!

As a company grows and changes, so does the role of its founder… and sometimes not in the way you would like it to. When more projects and people are added to the team, the founder can often become more distanced from the actual workings of the company as they move toward a higher-level management role.

On the other hand, in a small business the founder can stay closely connected with the company’s work and keep doing what, presumably, they set out to do in the first place by starting the company.

So, what do you want to do – stay small or go big?

Which benefits to staying small in business did we miss? Let us know via Twitter 🙂



We invest in profit-focused lifestyle businesses (and then help grow them)

Investors in
Bootstrapped Businesses

We take minority ownership positions in “lifestyle businesses”.
We’re not VC’s, but partners for the longterm.

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