5 big reasons to stay small
“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius—and a lot of courage—to move in the opposite direction.”
Albert Einstein (via 37 Signals)
Do you know how many people are employed in the two Chinese factories that makes Apple’s iPads and iPhones?
Well, according to this worrying Guardian article & NGO investigation, the Shenzhen and Chengdu factories house 500,000 workers. That’s larger than the population of Manchester, UK or Atlanta, Georgia.
The industrial concept of ‘economies of scale’ has led us to create mammoth corporations, in the hope that the efficiency makes them more profitable. It’s a daunting prospect for new entrepreneurs. But very few consider the benefits of doing the opposite – of running an intentionally small company.
If you’re a journalist dreaming of dipping your toe into business waters, staying small is where it’s at.
Five big reasons to run an intentionally small business
.01 The risks are lower: when you stick to being small your overheads are much lower and you invest less time and money. If the idea eventually fails, you haven’t lost too much, but gained plenty of experience. It’s the old adage: fail fast, fail often.
.02 You are profitable sooner: you don’t have a business until the money you bring in exceeds the money you spend. Up until that point you’re running a hobby, not a business. Staying small – keeping your overheads low – means you’ll be in profit sooner, and your profits will be higher.
.03 It’s an edge over the competition: if you’re going into competition against established brands, online magazines or production companies, your small size is a big advantage. With no office rent, stationary or admin staff to pay for you can focus on investing in the business itself. The bigger companies need to charge more to sustain their mass.
.04 You can do things a lot faster: You can launch faster. You can change direction faster. If it’s clear the business needs to go in a different direction you can move that way almost instantly; a larger company needs to consult its board, its shareholders and put strategies in place. Cue big delays…
.05 Because you can! The internet has cut the overheads of running a business right down to virtually nothing. In the past you needed to rent landlines, offices and office equipment. These days a website and some moo cards is all you need.
People make the mistake of believing that being bigger and more complex makes them better. I think the opposite: the more simple and small your business is the better your product or service is going to be.
So, if you’re toying with the idea of launching your own news business – an online magazine, a hyperlocal blog, or a design agency, then set yourself a challenge of doing it small:
- force yourself to strip your idea right down to its bare minimum
- challenge yourself to launch it on less than £100/$150
- challenge yourself to launch it in less than two weeks
- challenge yourself to make a profit within two months
- always ask yourself how you can do things faster, cheaper, more simply
Last year I launched studio .fu, my online video production company on these terms. After I wrote my idea down I kept reducing it, removing the complexity and convolution. I narrowed my offering down to just online video and motion graphics. I challenged myself to launch it on less than £100 (it actually cost me £60) and in less than two weeks (I did it in 5 days). Within two weeks I had my first gig – which instantly knocked me into profit.
What, do you think, are the other benefits of being small?