7 Alternatives to ‘Scaling’ Your Business
For much of the traditional business world, entrepreneurial success is often defined by how much you grow your company and, subsequently, what you sell it for. But what if that’s not what motivates you?
Are there viable alternatives to the standard scale-and-sell model? If Certified B Corporations and other conscious companies are redefining success in business, how do we grow in ways that are regenerative and impactful rather than extractive or exploitative? Or do we even need to grow? To address these questions, I reached out to several B Corp business leaders who have taken different approaches to growing their businesses.
Built to Scale
Traditional business paradigms often pressure entrepreneurs into thinking they need to scale in order to be successful, as if the two things are inherently tied. For some entrepreneurs, this pressure can be at odds with their personal aspirations of better work/life balance, schedule autonomy or quality of life, as well as any impact goals they might have.
“If I had it to do over again, I would do one thing differently,” says Lisa Curtis, founder and CEO of Kuli Kuli Foods, who scaled her operation from the kitchen table to 12 employees and $5 million-plus in sales in just five years. “I wouldn’t spend as much time thinking about how to be big. There are many advantages to staying small. I would value that time to refine processes, simplify and focus.”
Adopting a scale-or-fail mentality can impact every element of a business, so if this approach isn’t right for you, figure out what is, then put processes in place and communicate priorities to company stakeholders. Let’s explore what this means in more detail.
Mightybytes is part of the community of businesses that have used a third-party verification of their impact. Use the free B Impact Assessment to evaluate your company’s impact on all stakeholders, including the environment, your workers, your community and your customers.
Growth vs. Impact
For many purpose-driven companies, creating positive social and environmental impact can be a primary driver for growth. A company’s ability to create measurable differences in specific impact areas can serve as an inspiring incentive to expand products and services in ways that consider people and planet while also benefiting the business.
“When we evaluate new potential client engagements and organizational growth, it ultimately boils down to assessing the positive impact we can create. That’s our North Star, ” says George Chmael II, CEO of B Corp Council Fire, a global management consultancy that helps purpose-driven organizations thrive by creating lasting economic, social and environmental value.
Sharon Rowe, CEO and founder of ECOBAGS and author of The Magic of Tiny Business, takes a similar approach with her B Corp. “Make sure you’re going after the right business. We define our how based on the company’s priority to help people make greener choices,” she says. “Purpose-driven business owners have to prioritize often to make sure they’re not crowding out important things just to chase more business.”
At my agency Mightybytes, we support a culture of learning and continuous improvement, educating both internal and external stakeholders along the way. We know that by always improving knowledge and abilities, we can better serve our mission-aligned customers. This strengthens our client relationships and keeps us relevant in a frenetic, always-evolving marketplace. Adopting a growth mindset makes us more resilient and helps us view challenges and failures as opportunities for learning and improvement. It’s also the driving force behind our impact strategy. However you balance growth and impact, it’s important to be intentional when executing these strategies.
7 Alternatives to ‘Scaling’ Your Business
Want to use impact and purpose as drivers for your organizational growth? Here are some recommendations from experts who have done it.
Put Self-Care First
Stress — be it financial, legal, operational or otherwise — is a huge challenge for any small business. This can negatively impact a business owner’s physical and mental health, which in turn impacts everyone around them. Sharon Rowe notes, “You owe it yourself and your health to safeguard against financial disaster. Put the necessary systems in place to maintain your well-being and that of your company.”
Level Up Your Hiring and Onboarding
If you have decided not to scale quickly, clearly communicate your growth strategy to your team and new hires. Communicate your approach verbally in interviews and in writing via employee handbooks and onboarding materials. Employees and contractors want to know what they’re getting into. Some actively seek out small businesses because they prefer to work in a close-knit team with less corporate red tape. Others prefer high-octane growth.
Also, small businesses often do more with less. Our team skills cross disciplines. Hire people who are better than you at specific things. All great teams are well-balanced. Find people who complement you and vice versa.
Finally, use consultants as needed, but do the homework yourself. You don’t have to be an expert at everything in your business, but you do need to know how it all works together. Regularly review company processes and collectively identify ways to improve them.
Choose Your Investors Wisely
Most companies need financial capital to build their business. An investor’s priorities can really affect a company’s approach to growth.
“Investors can put a lot of pressure for financial growth on a business,” says Bruce Boyd, principal at Arabella Advisors, a financial consultancy that helps its clients achieve social and environmental impact at scale. “If you’re looking to balance growth and social or environmental return, you will need to find a values-aligned investor who understands your vision. This is not a traditional approach. Even impact investors are looking for a market return, so be sure to find a partner who is looking for a safe, decent investment but is also values-aligned.”
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Sharon Rowe agrees. “In business, the balance of power is with the dollar,” she says. “Make sure you choose your partners wisely and clearly articulate your if/then.”
For some companies, bootstrapping is a viable alternative to taking investment money. Mightybytes has operated for 22 years without any investors. We are a more resilient company because of it. Rowe has taken a similar approach with ECOBAGS. That said, the value of good credit and a great relationship with your bank can’t be overstated.
Trim for New Growth
By pruning your business and staying focused, you can better influence outcomes needed for intentional growth or impact goals. This means ruthlessly and continuously prioritizing. It’s easy in business to get distracted by the latest tools or other shiny things that keep you from staying “laser-focused, intentional, and profitable”—which Rowe says are the characteristics of a “tiny business.”
“I’ve kept the business small as a means of sustainably growing a team that cares about its own sustainability,” says Andrew Boardman of B Corp Manoverboard, a design firm in Winnipeg, Manitoba. “This includes mental health as well as financial imperatives. In the history of organizational management, growth—let alone hypergrowth—was always considered an anomaly, and we simply cannot afford to work more, extract more and create more. Our design approach is built around minimalism, and I would like to think that the business approach is as well.”
Run a Tight Financial Ship
Keep your finances balanced in relationship to one another. Forecast as needed to ensure financial solvency even in challenging times. Don’t overextend yourself. This may seem like basic advice, but it is surprising how many small businesses don’t heed it.
“Tiny businesses are under extra financial pressure because they have committed to doing more with less,” Rowe says. “Because of this, it’s critical for business owners to know all the details about their cost versus revenue structures and to create tight forecasting in order to maintain margins.”
This means saying no to things, sometimes aggressively so. Internal and external forces work hard to convince companies to part with their hard-earned cash. You won’t be in business long if you haven’t mastered the art of staying financially solvent.
You don’t do anyone — or the planet — any good if your “Greatest Sustainability Co.” is out of business, say Mike Mayer and Kate Jakubas, husband and wife co-founders of Meliora Cleaning Products.
Measure, Then Improve
Create a strategy to measure and improve the right business data. This will save you time and help you determine which metrics are aligned with company growth and impact goals. Work to improve those aligned metrics over time. Don’t get distracted.
Meliora’s Jakubas and Mayer say it takes time to move toward a zero-waste facility, which can be especially challenging for businesses that create products and aren’t tracking waste yet.
Their advice:
- Start by measuring and paying attention to what’s happening in your facility.
- Set up a waste collection station, then use it to identify what kinds of waste your business makes. This will help you focus your time and effort on what matters.
- Use actionable data to identify the areas that make the most impact to improve.
- Remember that time is your most important resource. Don’t waste it sifting through the trash for a bottle cap when you should be looking for ways to keep piles of pallet wrap from the landfill.
Have an Exit Strategy
Finally, know your endgame. Crafting a good succession plan was on my to-do list but always got pushed back for more immediately pressing matters. Then 20 years went by. When I received an offer on my company earlier this year, the process felt rushed because I hadn’t thought through exit plan details. It’s important to know this.
I turned down the offer because the potential buyer’s 10x scaling strategy didn’t align with our company’s identity. I knew the plan wouldn’t be a good fit for me or for our team. Those conversations were valuable, however. Moving forward, I have more clarity on what an exit plan might look like for me and for other company stakeholders, and that’s good. Knowing your ultimate goal helps you make better decisions along the way.
Built to Benefit
You don’t have to scale your company in the traditional sense to be successful. Using impact goals as your guide, it’s possible to create a company that grows organically and holistically while also benefiting people and planet in the process.
“We will inevitably hit massive economic shock if we believe that business sales and growth alone is our mantra,” says Boardman of Manoverboard. “Natural resources are not being rationed for the long term, and the costs of carbon are not yet built into market economies. Companies that use impact and sustainability principles to stay in the game will ultimately be around longer.”
B the Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
