One of the assumptions in the world of business is that growth is good whereas stagnation or retraction is bad.
In reality what happens in SME’s is that some years are good and some years are average or even bad, but you nevertheless always have this pressure that you should be constantly growing.
But here’s a few reasons why constant growth is an unattainable fallacy
- Firstly it’s impossible. If every business grew by just 5% then in fourteen years every business would have doubled its turnover. This would only be sustainable if the entire population’s spending power also doubled every fourteen years which it doesn’t.
- Constant growth implies a constant business environment, but this isn’t realistic. If you are doing well then competitors will come into the market and make things harder for you. Taxes and other regulations change. Then you get the occasional market shock like The Great Financial Crisis in 2008 or Coronavirus in 2020. The business environment is in constant flux which makes it nearly impossible to achieve constant growth.
- Constant growth will lead to an ever increasing size of business. It is very rare that the founder of a small business will also be the right person to lead a larger business. The two skillsets are completely different. You could put in senior management and take a step back but the business world is littered with failures that were caused by the founder taking a back seat (Apple being a good example when Steve Jobs was removed in 1985 but returned to revive the ailing company in 1997).
- And finally constant growth – which leads to a larger business and even more headaches than you already have – might not be what you want. You may prefer a life with more time for your family and/or the opportunity to travel more.
So whilst constant growth is considered to be a fundamentally good thing in business it is virtually impossible to make happen in the real world. And more importantly it’s probably not what you want from a quality of life point of view anyway.
