Six strategic advantages of starting small
For any new enterprise, the requirement to ‘start small’ is more likely to be a necessity than a preference. This is because the resource base, competitiveness and market reach, that are so characteristic of larger organisations, take time to develop.
But it is easy to forget that starting small actually offers many important strategic advantages and benefits, which are denied to organisations of greater size and with more plentiful resources. Harnessing these opportunities is crucial, because it helps to ensure that an organisation that starts small, in the short term, will be better able to grow sustainably in the longer term. Set out below are six strategic advantages of starting small.
1. Maximises the value of limited resources — if you have little to work with, then you will always look to make the most of what you have. Resourcefulness is so much easier when every penny counts and when every second of productive time must be accounted for. Starting small is therefore the ideal place to learn good habits, apply good principles and model good practice. It is also worth noting that resourcefulness is scalable. As such, the practices that you apply when you are small, can also be applied as you grow.
2. Builds character — to truly appreciate what it means to have much, you must first appreciate what it means to have little. Character is what you develop when you are under pressure, face tough challenges and keep going long after others have given up. If you are a small fish in a big pond you are perfectly placed to develop the resilience to survive, the courage to compete and the determination to succeed. But even more than being well placed to achieve success, those who start small are equally well placed to sustain it.
3. Enables intimate relationships to develop with staff and customers — big organisations are more likely to know their stakeholders by number, whilst smaller organisations are more likely to know their stakeholders by name. To build loyalty you need to establish relationships and the most effective way to establish relationships is to get to know people and develop intimacy. This is where size offers distinct advantages to smaller organisations who are more naturally suited to developing one-to-one relationships and are therefore more likely to be rewarded with loyalty for doing so.
4. Innovation is much easier — as organisations grow, structures fall into place which, over time, can become rigid and unwieldy. Needless to say, inflexible structures are often the most difficult environments within which to develop fresh thinking and implement new ideas. By contrast, one of the greatest advantages of starting small is the freedom it provides to innovate and do things differently. The more you experiment, the more you learn and the more you learn the more confident you can be about what works and what doesn’t.
5. Decision-making is much quicker — if you do not have to delegate or escalate, then decision-making can be much quicker. If you cannot make a quick decision, it doesn’t matter whether or not you know the right answer. Speedier decision-making not only positions you to take advantage of opportunities as and when they arise, it also creates a perception of agility and organisational competence. This is crucial in building confidence amongst employees, customers and potential investors.
6. Responsiveness and flexibility — one of the most valuable assets of any organisation is its capacity for responsiveness. Being responsive is more than the ability to reassess priorities and refocus effort in light of changing needs and demands; it is the ability to do so in a timely fashion. By virtue of size, smaller organisations are much better able to surf the curve of change and respond quickly as and when required.
The overarching message of this blog is that there are many distinct advantages of starting small. However, though a business might start small, the longer term aim is usually to become bigger. This is just the natural order of things because growth is an important indicator of progress and progress is an important indicator of success.
