This is not a popular position in my industry. Most accounting and advisory content treats growth as the default goal. The implicit assumption in almost every piece of strategic content written for business owners is that more revenue is the point. Bigger team. Bigger turnover. Bigger numbers across the board.
I do not think this is right, and I have watched enough businesses to be reasonably confident in saying so.
What I have observed is that growth, in a business led by its owner, is not a neutral act. It changes the business. Sometimes for the better. Often not. The owner who grows from three million to six million in revenue is not running the same business twice the size. They are running a different business that happens to have the same name, and the new business has a completely different set of problems, pressures, and demands than the one they actually liked running.
I have watched businesses grow themselves out of profitability. They added headcount to chase revenue, the revenue came, but the margin did not, and three years later the business was bigger and less profitable than it had been at half the size.
I have watched businesses grow themselves out of freedom. The owner used to work four days a week and take six weeks of holiday a year. The growth move required them to be in the business full-time again, managing a larger team, dealing with problems they had previously been one step removed from. The business is bigger. The owner’s life is worse.
I have watched businesses grow themselves out of being saleable. A business at three million in revenue with strong margin and a small experienced team can be a genuinely attractive acquisition. The same business at seven million with eroded margin, a larger less experienced team, and the owner deeply embedded in operations is much harder to sell, and worth less per dollar of revenue when it does sell.
I have also watched businesses stay roughly the same size for ten years, deliberately, and end up worth significantly more than the businesses that grew. Because they got better instead of bigger. Higher margin. Cleaner operations. A stronger position in their market. A team that ran without the owner.
Growth is a strategic choice. Like any strategic choice, it has costs, and the costs are not always obvious in advance. The cost of growing is more than the investment required to get there. It is the shape of the business that emerges on the other side, and whether that shape is the one the owner actually wants to run.
The questions I think owners should ask before they commit to growth are not questions about whether the market will support it. The market usually will. The questions are about whether the business will be better after the growth than it was before. Whether the owner will be in a better position personally. Whether the margin profile holds up. Whether the team can carry it. Whether the cash position can absorb the lag. Whether the next phase of the business is one the owner actually wants to be in.
If the answer to those questions is yes, growth is the right move. If the answer to any of them is uncertain, the growth should at least be examined more carefully than it usually is.
The default in this industry is to assume growth is the goal. I think the more honest default is to assume that the right shape of business is the goal, and that shape might or might not involve being bigger.
If you are running a business that is currently the right size, that is not failure. It might be the most strategically sound position you could be in. The question is whether you got there deliberately or by accident.
Murray.
