We make a big thing of scale. It’s become almost a religion, worshipped by the government and supported by a veritable clergy of advisers offering salvation to those seeking it. And yet.
I find myself questioning it as I.see those pursuing it hollow-eyed and frantic as they pursue business models installed by those who have no real accountability for servicing the debts incurred in anticipation of success.
On the other hand, those I see who have smaller businesses that have grown more slowly are much more relaxed. They face the same uncertainty but have more options to deal with it, from choosing to take a hit on profits rather than sacrifice staff to completely changing strategy without persuading lenders. Of course, these are extreme ends of the spectrum of possibility, but the thing with worshipping scale is we end up with a skewed distribution curve with far more companies in the stressed and constrained categories.
The average life of a business is less than ten years, whilst the most robust small and medium-sized businesses start to get into their stride at around eighteen. A few of the scale chasing businesses will make it and give their owners more money than they can ever really use. The majority will not, and leave various debris as they fail. The slower growth ones often leave a different legacy, succession rather than acquisition, a good reputation in the communities that host them, and deep roots. A good number, of course, will fail, but fail gracefully rather than spectacularly. They are part of local ecology, not intruders and their owners mostly have far more money than they need.
In times of uncertainty, chasing scale is a high-risk pursuit, financially, socially and personally. Therefore, deciding to scale needs thought, reflection, and caution in listening to those who will profit from it whether it succeeds or fails.
Scale is often one dimensional, pushing profit and sidelining other things we value from our environment to our legacy.
We can create beautiful businesses if we choose to, make a good living, and create something that makes where we live a better place. Not such a bad ambition.
When it comes to scaling, it’s a good time to be a heretic,