NEW YORK (AP) — When a small business is successful, an owner will likely face the question of whether to grow. After a lot of soul-searching, many say no.
Some worry that the quality of their products or services might be hurt because a larger company can be more difficult to operate. Or they don’t want to tip their work-life balance away from spending time with family and friends. Others want to grow, but the time isn’t right — they may be worried about the economy, and reluctant to take risks like hiring the staffers needed to handle more business.
Web design firm Geeks Chicago put expansion and hiring plans on hold for six to 12 months because its customers — companies of all sizes — have cut their budgets, says President Mark Tuchscherer.
“They’re putting things on the back burner, developing only what they need right away,” he says.
For Tuchscherer to start thinking about growth, he’d need to see customers bringing in projects at the pace they did two years ago.
The economy clearly is discouraging many owners from expanding. A Bank of America survey released in May showed 55 percent of 1,000 owners plan to expand in the next five years, down from 66 percent a year earlier. The survey also found that just 38 percent of owners expect their local economies to improve in the next year, and 29 percent expect the national economy to improve. The National Federation of Independent Business, which surveys its members monthly, found in July that just 8 percent believe it’s a good time to expand.
A look at the factors some business owners have wrestled with:
SPREAD TOO THIN
When Ben Freedland started ZINK, his online company selling tote bags and other accessories, in 2010, a brick-and-mortar store seemed like the most logical next growth step. Two years later, he opened a shop in Austin, Texas, only to discover that much of his time and energy was spent running it rather than creating new designs. Furthermore, the expense of operating the store put pressure on Freedland, especially when the uncertain economy made customers reluctant to buy.
Freedland closed the store in April, and is happily back to being what he calls a niche brand sold on the internet or in other people’s stores. He’s not committed to that forever, but amid the current economic conditions and the presidential campaign, he’s content for ZINK to stay smaller.
“It’s OK not to grow. It’s OK for me because my main goal is to produce quality products, not to be the biggest company in the world,” he says.
A LIFESTYLE CHOICE
Paul Maplesden and Tara Foss turn down some assignments for their freelance writing and editing businesses. They work out of their home in Asheville, North Carolina, creating content like articles, blog pieces and emails for companies, and they don’t want to take on any more.
“Although money is important, we both value time and freedom, and we’re not prepared to sacrifice that just for a bigger bank balance,” Maplesden says.
Freedom for them means the ability to set their own schedules and choose their assignments. They have enough interest from clients that they could hire others and form a writing and editing agency. But that would require dealing with human resources issues and an investment in more technology.
“It invites whole other problems I don’t want in my life,” Maplesden says.
ONCE BURNED, TWICE CAUTIOUS
After downsizing his printing company, selling equipment and reducing his staff from 12 to three in 2011, Victor Clarke isn’t looking to expand or hire in the near future.
The internet, email and document-sharing services had already devastated many printing companies before the Great Recession took another toll.
“I want to be a business owner that hires more people, but the economy hasn’t been the greatest in the last eight to 10 years,” Clarke says.
His Lynchburg, Virginia-based company, Clarke Inc., no longer does actual printing, but instead processes and formats documents and sends them to other companies that do print.
“Since we made the conversion five years ago, profit is up from a negative number to six digits and my stress level is down 99 percent,” Clarke says.
If the business continues to do well and the economy picks up, he might hire another worker.
“Someday, but we’re not there yet,” Clarke says.
KEEPING SERVICE STEADY
Jake Wilson is on the fence about his 5-year-old company, Top Class Lawn Care, and whether he should add to his staff of three and buy another truck. Wilson’s concerned that if he does expand, he won’t be giving his customers in the Kansas City, Missouri, area the kind of service he does now.
“A majority of my customers probably appreciate that the owner is on the property doing the work, or one of his right-hand men,” Wilson says.
But he also worries about saying no to business because his company is small.
“I hate turning down potentially good paying customers,” he says.
WHICH DIRECTION TO GO?
Peggy Jean’s Pies has been such a success since it opened two years ago in Columbia, Missouri, that owners Rebecca Miller and Jeanne Plumley are thinking about expanding beyond the storefront that houses their bakery and store. The space next door is available, but maybe it would be better to open in a bigger city like St. Louis, 120 miles away. Or maybe acquire a production facility and sell pie dough in stores.
“All of these are attractive options,” Miller says, but she adds, “I want to make sure that when we grow, it’s in a smart, sustainable, long-picture way.”
One concern is how she would handle problems bound to come up at two different locations.
“Sometimes I think, maybe I should take a deep breath and know we’re in command where we are,” Miller says.
Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg . Her work can be found here: http://bigstory.ap.org/content/joyce-m-rosenberg