Stay Small or go for Global Domination?

Whether to stay small or to go for growth is a good question and whether you’re a sole trader or you’re already set up for more, taking the step to take on staff and try for bigger things is a big one.

Of course, if you’re a sole trader or just starting out with a business idea but you know you want to start out with some premises and a number of staff to help, the first thing you’ll need to do is register as a limited company. This is inexpensive and can be quick and easy to do, especially with the help of a formations agent. Once you’re registered you’ll be able to take on employees and grow your business with confidence.

Even if you’ve been trading for several years and you’ve been happy to date with the way your business is ticking along there may come a time when you reach a critical mass and you need to take that next leap of faith.

Here we take a look at what you’ll need to consider and the pros and cons of going for growth.

Thinking of going for growth

You’ll probably be considering growth because your business is doing well and you need to take it to the next stage or you may be responding to a market need or a competitor’s move to grow.

Alternatively, you may still be setting your new business up and trying to decide whether to start big. Whatever your reason research and planning for the size of your business is essential.

Starting big

If you’re just starting out, but you want to start with big ambitions, setting up as a limited company is key. As a limited company you’ll have the peace of mind of knowing that you aren’t personally liable for debts of your company and, if your business runs into trouble, your home will not be affected.

The pros

  • Thinking big from the beginning, you’ll be seeking out investment that suits your plans.
  • With employees on board from the beginning, you should have help and support when you need it.
  • As a larger company, you’re likely to be taken more seriously and to be seen as more established.

The cons

  • Start-up costs, overheads and financial obligations will be higher.
  • You’ll need to think about and be responsible for employees and premises straight away.
  • Administration and legal and regulatory obligations will be greater.

Growing because of success

If your business is already established, and your customers are knocking down your door for more, you may wish to grow your company to keep the profits rising and the customers coming.

The pros

  • You have a strong brand and you have the opportunity to be a market leader.
  • With more staff on board, you may be able to take time out for yourself more easily.
  • As well as taking more profit you’ll be helping the local economy by creating jobs.

The cons

  • Fast business growth can sometimes become unsustainable.
  • Pressure will be greater as you have more responsibility for employees and overheads.
  • Administration and legal and regulatory obligations will be greater.

Growing in response to market needs

If you find there’s a change in the market, sales are falling and you need to diversify or your competition is growing you may need to grow to stay in the game.

The pros

  • A relaunch of your company with additional services and people may attract new customers.
  • Greater capacity for sales can equal better profits.
  • Expanding into other locations may help you tap into a new source of customers.

The cons

  • If you’re growing because your business is struggling you may be even less likely to recover.
  • Pressure will be higher and you’ll have more responsibility for employees and overheads.
  • Administration and legal and regulatory obligations will be greater.

Planning Ahead For Your Business

Whether you’re a hairdresser with dreams of global domination in mind or you’re an accountant who’d prefer to go it alone there are pros and cons to starting up at any size. Creating a sound business plan, researching your market and target audience and forming a company that suits your business needs are all essential for you to get started and find the funding to make it happen. You’ll find more on making more salestaking on staff and finding premises in our help centre guides.

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