Many small businesses start of well and show good growth indications. However, small businesses reach a stage where growth begins to plateau and stagnate. That is a point where the small business becomes very vulnerable to shocks like recession or stock market crashes. Why? Small businesses have the advantage of working efficiently at low costs.
When you employ 1000 people in your business, you will have to setup a detailed and complicated organization structure to ensure work gets done. You will also have to appoint many persons to take care of the organization structure as such.
On the other hand, when you are working in a room with five other employees, you don’t have to bother about something like organization structure. You can keep track of each and every aspect of the business on your own and control it without any difficulty.
Since you are the entrepreneur and the person who is going to receive maximum profit out of the business profits, you have complete incentive to work hard. Big businesses are attracted to the advantage that small business offer and deal with them accordingly. Better efficiency, low cost and reliability often attracts big businesses. This is a win-win situation for everybody. However, the growth percentage begins to taper off as the small business reaches its maximum capacity.
At this point, the entrepreneur will have to decide whether he or she wants to proceed further and expand for stick to the same performance levels. Both options have their own set of risks. Success can be very dangerous because it can cause the entrepreneur to get distracted.
The task of marketing and seeking more clients may lead to current clients being ignored. Since it is a closely knit unit, even the slightest distraction is going to lead to complications. You will have to consider all these aspects as your small business begins to grow.