43
See also: Beating the odds at start-up 20–21 ■ Managing risk 40–41 ■ The
Greiner curve 58–61 ■ Who bears the risk? 138–45 ■ Small is beautiful 172–77T
he business landscape may
appear to be dominated by
corporate goliaths, but the
reality is that small businesses
outnumber large companies by a
significant margin. In fact, most
businesses never grow beyond the
scope of the owner—they start small
and stay small. In the US, more than
99 percent of companies employ
fewer than 500 people. In 2012,
there were almost 5 million small
businesses (with fewer than 49
employees), but only 6,000 companies
employing more than 250 people.
Aspiration, or its lack, is a key
factor for small-scale companies.
Many small-business owners are
content with the lifestyle the
business allows them, and have
no desire for growth. But he biggest
reason for a lack of growth is finance.
Growth requires access to capital,
which is difficult and expensive
to access for small companies.
Moreover, unlimited liability means
that an owner’s personal assets
(such as the family home) are at
risk if the business fails—a risk
that many are unwilling to take.Entrepreneurial spirit is defined
as the willingness to take risks.
Business owners who do aspire to
growth must be willing to take the
risky but important second step.
For most small-business owners,
this means employing the first
nonfamily member and beginning
to acquire the necessary leadership
and management skills to scale the
business and manage the people,
systems, and processes. ■START SMALL, THINK BIG
Large businesses might appear to be
towering oaks, but most have acornlike
beginnings. A common difference
between them and companies that stay
small is the willingness to take risks.IN CONTEXT
FOCUS
Expanding the business
KEY DATES
1800 French cotton
manufacturer Jean-Baptiste
Say popularizes the term
“entrepreneur,” which is taken
from the French for the verb
“to undertake.”
1999 Chinese business
magnate Li Ka-shing
underlines the importance of
vision for business growth,
stating “Broaden your vision,
and maintain stability whilst
advancing forward.”
2011 The Lean Startup by
US technology entrepreneur
Eric Ries encourages new
businesses to utilize resources
as efficiently as possible to
encourage growth.
2011 The number of active
entrepreneurs in mature
countries grows by about 20
percent, reflecting job losses
due to the economic downturn.
BROADEN YOUR VISION,
A N D M A I N T A I N
S T A B I L I T Y W H I L E
A D V A N C I N G F O R W A R D
TAKE THE SECOND STEP