Start small when you start a business

Most entrepreneurs want to grow and become a large regional chain, but first you must learn the ropes and polish your skills.

All entrepreneurs strive to be successful. Everyone hopes their business will expand with multiple locations and plenty of employees. However, you must first crawl before you can walk.

If you are not careful, fast growth can actually be a fast business killer. Fast growth could require you to spread yourself too thin, taking on too many priorities at once. When you start small, with a single location, employee and product, you will be able to polish your business acumen before it is put to the test.

Michigan State University Extension professionals have known many business owners who have made this common error. The following is an example of a business that expanded too quickly. A couple of business partners started a fruit stand together at a county fair. Not soon after they opened the stand, they decided to expand their business into a pizza parlor/sports bar with a full-service menu. These two business partners opened four different locations at the same time and as their business grew, so did their problems.

When the business was small with a single location, they found much more success. The business was well-managed because they both had time to oversee all the operations. The business's revenue was profitable and the owners were well compensated. However, after they decided to grow their business by adding multiple locations, profits began to shrink. 

It was a disaster from the beginning. The new sports bars were developed too quickly. They devised a full-service menu, purchased equipment and decorations, and hired a large staff that was undertrained. When they had their grand opening, the employees had not properly memorized the menu and the chefs had not mastered the cooking. Their presentation of food and delivery of service was awful.

Business growth is a desire for all entrepreneurs. By starting small, and growing in small increments, you can survive the inevitable hurdles involved in running a small business. Entrepreneurs who have modest growth can recover from small issues. The two partners who started the sports bar with full-service restaurant eventually were forced to close. They made monthly rent payments for more than a year until another entrepreneur eventually purchased the business.

You can obtain free business counseling by registering with the MSU Product Center.

Did you find this article useful?