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Businesses: Does Size Matter?

Being an entrepreneur is full of decisions. One thing to decide is what road your company will be going. A company without a clear cut state of mission, vision, and goals is like a rudderless ship lost in the ocean.

There was a speaker I heard say that “Vision without Action is the same as Action without Vision.” It would be pretty stupid to work day in and out, without you having a clear cut goal of where you want your company to be. The same could be said for a company that has a vision but does work for it.

The goals of the company are often linked with the goals of the owner. Do your personal goals include being able to achieve a certain lifestyle, a company that can lasts for years, be respected, help the community, be free from bosses, or have an innovative product? Think clearly what your reasons are for starting a business.

As the founder of your company, you can be able to build your business in the form to achieve your personal goals. To help out, write down all the personal goals you have thought about. This will be made more clearly once you have written it all down.

Then you’d have to decide whether you’d want a lifestyle company or a high potential one. At first thought, it’s always best to build a high potential company; however there are times that a high potential company can mean bigger investments. It will all be explained further later on in the article.

Lifestyle companies are usually the small companies such as local restaurants, hardware stores, barber shops, franchises, etc. These are local companies that will be rarely having sales reach up to a million dollars. People who open them are usually sole proprietors, partners or small corporations.

Having a lifestyle company has its advantages: be able to control the company, be able to continue doing what you love without much risk, can have a positive cash flow early on, report only to yourself and have your own time.

The disadvantages of lifestyle companies include: It will be hard to hire a top talent. This is because top talent will usually work for companies that offer stock options. Top talents also avoid companies with little growth potential. There is also the risk of not having that bigger gain you are looking for in business.

High potential companies are those that develop products to sell internationally. They sometimes base their product on technological breakthroughs or a change in a regulatory environment. They may also raise venture capitals to explore those lucrative opportunities. If these companies succeed they could be looking at more than 50 million dollars worth of sales.

The advantages of high potential companies include: large returns on investments, be able to attract outside investors, and have a great team to make the company succeed. The disadvantages will be the long time to have the positive cash inflow. There is also a chance that the company may take in large amount of debts.

There is no right or wrong choice of what kind of business you’d want to put up. As said earlier the business you put up should always be in sync with your personal goals.

Small/Home Business Tips, General 2006-06-23 Home Business Tips