When your startup is struggling and you can’t stop spending your meagre savings to make it profitable, venture capital funding appears to be the cornerstone. The most important question about “bigger is better” is whether there is a rule stating that it is always better.
Raising funds from investors allows you to expand your team, buys you time to do things right, and establishes you as a credible business person.
While all of this is true in some cases, there is another side to it that tells us that “bigger” may not often be the best option for an entrepreneur or a company.
Though “bigger is better” is the prevailing mantra among startups, keeping a tight rein on expansion may actually be better for the company. Every business owner has their own definition of success, and not all see the need for more money, customers, or employees.
In this week’s Let’s Talk, we asked experts to share their thoughts on business expansion and whether it is always the best option.
“Expanding your business, whether that be with new staff or into new markets, is an incredibly exciting time for business owners. Whether that expansion directly equals a better business is something that can’t be determined by an outsider. It depends entirely on what the business’ goals are and if they’ve scaled their activities to be ready for that expansion.
“While a large business may be seen as a safer bet to some stakeholders, in theory, I don’t believe this rings true in practice. Throughout the pandemic, some of the largest organisations in the digital space have gone under, while smaller sized businesses have been able to prosper by offering niche, bespoke products. This isn’t to say one is more fallible than the other, it’s simply to question the notion that a bigger business equates to success.
“What’s best for the business will always rely on what the end goal of the business is and how success is defined. For many, ever-growing expansion simply just isn’t a piece of that puzzle.”
Andrew Cornale, Co-Founder and Digital Experience Director, UnDigital