This study was undertaken by Durham Business School on behalf of theSmall Business Service from February to July 2006 and is intended toprovide a better understanding of the perceptions of small businessabout growth. In total, 73 small businesses took part in 10 in-depthfocus groups conducted throughout England. The sample wasdeliberately structured to include a range of both micro (under tenemployees) and small businesses (between 10 and 50 employees). Theaim was to capture the views of businesses with a track record of growth, and contrast them with newer and smaller businesses withsuccessful operating experience, but relatively static levels of employment and/or turnover.While extant research describes the barriers to growth faced bybusinesses, this study tries to distinguish between those barriers that
real and others which owner-managers
to be real, but are, infact, exaggerated or non-existent. It is proposed that owners of youngerbusinesses are susceptible to these misperceptions or ‘myths’, and as aresult are less inclined to grow their business. The experiences of suchbusinesses are contrasted with those of more mature businesses withgrowth experience, to illustrate that some of these beliefs present alower barrier than imagined, and the available range of solutions. The report’s key findings include:
Most owners aimed for growth in efficiency (profit and margins),rather than in the standard indicators associated with becoming‘larger’ (output, employment and assets). There is not universalagreement that ‘business growth’ equates to ‘being bigger’.
Many businesses distinguish the idea of being larger from theprocess of how to bring about change leading to growth. Non-growers are particularly susceptible to rejecting a strategy of growth because of negative views of the consequences of beinglarger. For these businesses, the questions of how to grow arenever explored in great detail, simply because they do not want todeal with the anticipated consequences.
Even for those who consider that being larger brings net benefits,the actual process of growth is believed to be inherently risky andassociated with an exaggerated prospect of failure. Non-growerstend to think that maintaining their business at current levels isless likely to result in operating difficulties than a scenarioinvolving growth.
Non-growers are less likely to consider how risk can be quantifiedor minimised, by collecting data and calculating projections of their future profitability and cashflow.1