Defining Small Business Success

We recently had an interesting set of discussions on the definition of small business success.  In our conversations with a mix of entrepreneurs, we quickly learned that almost all them defined success as meeting their personal objectives for their business.  No great surprise here, but what is interesting was how broad the range of business objectives were.  Because of this, we heard many different definitions of success.

Among the entrepreneurs we talked to success metrics were mostly defined by the type of business the entrepreneur started, and we found most fell into one of three categories:

1.  Return businesses:  these are businesses that were started primarily for traditional financial purposes.  The objectives of these businesses focused on creating a strong enough revenue and income stream to support the lifestyle objectives of the owner. 

One of the interesting things we found was that very few of the entrepreneurs we talked to had an objective of growing their small business into a medium or large business.  Most felt their businesses weren't capable of becoming big, or they believed it wouldn't be worth the effort to get big.

This is consistent with other research we've done.  Simply put, most small business owners aren't motivated or interested in growing their firms into big businesses.   

2.  Passion businesses:  quite a few entrepreneurs talk about their small businesses existing to allow them to pursue their passions.  The main passions mentioned in our recent discussions were creativity and social causes, both broadly defined.  "Doing well pursuing my passion" and "doing well by doing good" were the main themes for these types of businesses.

Again, few in the passion category had as an objective getting bigger.  This group is thrilled to be pursuing their passion and earning enough to support themselves.

3.  Lifestyle businesses: many personal businesses are lifestyle businesses and their owner's objectives tend to be creating a flexible work environment so there is time for other pursuits.  Almost by definition, lifestyle business owners have little interest in growth.

Obviously, many businesses fall into more than one category.  But in most cases there seems to be a primary set of business objectives that fall into one of the three categories.

These discussions once again reminded us there are no easy ways to segment the small business market.   

Comments

[J Allen]

Personally I believe success to be mostly a state of mind. If you have the right state of mind the other traits of success will follow.

http://www.rexxindustrialparts.com

[Sharon Wilson]

Great post! One thing I can advice for entrepreneurial success is to consider the idea of "dress for success" and be not afraid to be authentic in who we are. http://www.spiritualpreneurs.com/as-you-work-to-%E2%80%98dress-for-success%E2%80%99-how-important-is-it-to-balance-both-your-masculine-and-feminine-sides-in-business/

[Jacob]

There is no question that a business owner that keeps their business small can sleep better at night. No worrying about who to lay off or how to make the next big loan payment. Oddly enough you can feel more secure in a storm than some of the big dogs.
http://www.rexxsales.com

[Rob Johnson]

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[Steve]

John:

Very interesting. While we haven't done any formal research on this topic, based on our related work this makes sense.

Steve

[John]

I've recently being doing some research into technology adoption within small (and micro) businesses. One of the barriers often cited is a lack of desire/motivation on behalf of the business owner to grow the business, which impacts on technology adoption as it is often sold and perceived as a mechanism for growth.