Small Businesses vs. Startups

Scott Francis
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Love this article. Key passage:

“If you do want to grow, you’ll have a much better chance of doing it from a position of power with a successful, profitable smaller company. When you already have an established product and cash-flow, you’re not only a more attractive prospect for future investors, but you can even fund your larger growth out of your own pocket. Not to mention the fact that you’ll have a wealth of knowledge and learning behind you that can only make scaling easier.”

Often companies that start with no ambition to grow large, discover that their small successful business has more range than they expected. And by starting with more grounded ambitions, they’re able to really get the model right before they worry about getting bigger. That was certainly the case for our business at BP3. We never needed to get to the size we are now, to be happy and satisfied with what we’re doing.

You also have great examples of companies that never “scaled up” but are very successful. Bookpeople in Austin comes to mind — founded around the same time as WholeFoods and Bookstop and others major retailers, it stayed in one spot in Austin, and has a loyal, engaged following even today, while the major Book vendors have struggled. It provides community space for schools to run events there, where they can engage parents in book drives, for example.  There’s nothing to laugh at, the owners just built a business that they wanted to be local, smart, and a key ingredient of community in their home town. Think of small businesses like restaurants. Is a restaurant *worse* if it doesn’t expand to a chain? Of course not: some of the very best restaurants have only one location.  The same is true for businesses – some of the best are actually small businesses rather than large.

 

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