Micro businesses shirk growth amid concerns over extra burdens: survey

Small businesses are deterred by the extra responsibilities that accompany growth such as legal and regulatory responsibilities, a researcher says.

Martie-Louise Verreynne, senior lecturer in strategy at UQ Business School at the University of Queensland, says her survey of 2100 chief executive officers found that large companies were more likely to seek growth than smaller ones.

Questioned on how they viewed and measured success, the CEOs’ answers ranged from satisfying clients, increasing profits and growing, to providing a quality product or service.

But Verreynne was struck by the small business response to growth aspirations, with micro businesses employing between one and four people least likely to seek “substantial growth” and most likely to want to “stay the same or shrink”.

“You’d think small would have larger growth intentions than larger businesses, because have more room to grow,” Verreynne told SmartCompany this morning.

“But the larger the firm was, the more likely they were to have growth aspirations, which is almost counterintuitive.”

Verreynne puts the reticence down to so many small businesses being ‘lifestyle’ projects, wherein the purpose is not to grow but to employ oneself and perhaps aslo family members.

“They don’t want to employ other people because it becomes cumbersome, with legal issues and regulations and so on,” she says.

Verreynne says the results may reflect a view that there comes a point at which a growing business hinders lifestyle.