At The Peloton we work with many businesses who want to grow, and we help and encourage them to do this. But growth isn’t always the goal. Sometimes it makes sense to stay small. In this case it’s our job to demonstrate how you can maintain a smaller business size and create a healthy profit. We show businesses how they can go for stability over growth, how they can be more efficient and therefore free up time to do what they want to do. We set targets like ‘I will get my work done every day in time to pick up my kids from school’ or ‘I want to cut my hours to 4 days a week without taking a cut in salary’.
So, what are the advantages of choosing stability over never ending growth?
-You don’t have to reinvest so much money
Growth requires investment, but sometimes revenue doesn’t grow fast enough to repay it. The resulting cash flow crunch can be stressful. Non-growth businesses don’t have to worry so much about this.
-Financial predictions will be simpler
Revenue and expenses are simpler to forecast with a smaller lifestyle business. There are fewer building projects, equipment upgrades and new hires to budget for. That stability can make it easier to balance your bottom line, so you spend less time worrying about your financials.
-You’ll feel less stressed
It can be hard to relax when you keep pushing, growing and raising expectations. Ongoing expansion generally requires a lot of bandwidth. That might be good for your bank balance – but not for your blood pressure. Less aggressive targets can reduce stress and leave you more time to enjoy life.
-The quality of your work may be higher
Even with the best of intentions, business owners who are focused on growth and money can be distracted from the quality of their work. With a lifestyle business, you can focus on doing high quality work all the time.
-You can build goodwill
Non-growth businesses often spend more of their energy on non-financial goals like delighting customers and being best-in-class. The extra focus on serving the market can create goodwill and encourage greater customer loyalty.
-You can adapt quickly to market conditions
To chase growth, businesses often have to lock themselves into long-term strategies. But what if the market conditions change? When business size isn’t so important to you, you can stay nimble. With no fixed growth strategy, it can be easier to change direction.
Five top tips from Xero to keep your business steady and stable:
-Spread your risk
If you don’t have to do a huge volume of business, it might be tempting to drop clients and work with just a few of your favourites. Try to avoid doing that. You don’t want to become too dependent on one or two accounts.
-Value every customer
Finding new customers is expensive. It takes a sales and marketing push, then you may have to onboard them. If your revenue’s relatively flat, you probably won’t have a big budget for all this. So treat your customers well and aim for only minor churn. It’s much more cost effective to keep your existing customers than gain new ones.
-Stay on top of your finances
If you’re running a lean business, you have to watch cash flow closely. If costs start climbing or sales start dropping, you’ll need to course-correct quickly. Make sure you have access to the numbers you need to keep an eye on. An accounting dashboard will track those metrics in real time so you can check in whenever you like.
-Keep setting targets
You might not be chasing big growth, but you should still set targets to keep you focused. Not all your goals will be financial. You might aim to achieve 99 percent customer satisfaction, for example. But make sure finances are still represented. You need concrete targets to help keep the business sustainable.
-Don’t forget your aim
If you chose a lifestyle business because you wanted more time and flexibility, keep reminding yourself of that. Business can be addictive. You might start chasing extra work because you get a buzz from closing deals or your competitive instinct kicks in. It can take just as much discipline to maintain a small business size as to go all-out for growth.
For business advice – big or small – let us help you. Call us on 01326 660022