I find myself addressing a common concern for small businesses: how fast is too fast to grow one’s small enterprise? For the past two years, I have had the opportunity to walk into a logistics company offices at least once every quarter on a consultancy arrangement.I have had my moments of surprises; a new car at the parking yard every two months, a new tablet for the boss, several laptops replaced, new employees to support an already large workforce, replaced seats, screens, new ambience, etc.

It all seems right at first to spend the money that the company is already making, have a great office and feel good about it. But it all turns wrong when reality begins to bite; overheads increase twofold within less than a year, you begin to notice a lot of idle staff, unused assets and gossip at the workplace. Perhaps it is too late when the bank balances are almost on the red.

Isn’t it fancy to just keep investing as long as the business is generating good revenues? Definitely not! Ten years ago, a regional investment bank that I did a case study for had 5 employees. At the time, investment banking was a basic operation that comprised of selling stocks and bonds. The company charged a commission of between 1.5 percent and 2 percent and this was the only source of income which translated to a net of less than US$. 250,00. Each of the five employees had at least three roles; a common role for all of them included sales and marketing for the company’s products. Each of the employees was an ambassador for the company’s core products.

For the next five years since 2003, the company only grew its workforce by 5. In contrast, its revenues had grown by over 500 percent over the period while its overheads remained unchanged. In 2008, the company was poised for growth and strategically invested in ICT, a few additions to its personnel with technical capacity to run the newly acquired systems and a few consultants to grow its strategy to absorb future growth in client numbers. Ten years down the line, the company has less than thirty employees, net income in excess of US$. 2 million per annum and a very solid client base. The company manages its public relations through a low budget PR professional on a low budget retainer- and it worked perfectly. 

I have a great admiration for the conservative yet smart CEO; spending less to maximize shareholder wealth. The company’s organic growth plan has borne fruit, and continues to grow regionally cannibalizing a very competitive industry that through innovation has seen many products being introduced into the market by new players.

My biggest concern with the young companies setting up operations today is that they have put the basic rules aside and now focus on taking their businesses to the next level as if it were a 12 month sprint; more of a 100 meters sprint. This approach does not work. I believe that for a business to grow and survive the shocks that come at early stage, an entrepreneur must treat the growth more as a walk in the park than a sprint. It is important for the entrepreneur to take notice of the shocks that come with every day and build capacity to handle each one of them, slowly adjusting to the environment around him, watching the flowers that bloom, the low hanging fruits that are good to pick and enjoying the sunshine every new day.

Seven years ago, I started a business, and in the first year of the operation, I did a sprint.  By the end of the first year of operation, I crossed the finish line; by all means the winner in new record time. The problem was that I was too tired to enjoy the glory from winning. Life gave me a chance to settle before the finals. And since life gave me another chance, I decided to go for a longer race. I prepared adequately and the race was tough at first. My body however adjusted and the systems slowly fell into place. By the end of the seventh year, I was still running a good race and almost made it to the finish line. It is unfortunate that something did not work out along the way but I know a thing or two about running a good long race.

Some of us work smart and achieve the most out of the one thing they are good at. A few make it while the majority don’t.  From my case study 10 years ago to the logistics company I’m consulting for to the experiences at my own firm to many other cases through my day-to-day interactions, I have learnt one thing for sure: I have lost a business before through rogue partnerships, but if I was to describe my business environment today, I would speak of one that is a garden that flourishes. It has roses that get thorny and flowers that blossom in winter. It has some plants that flower soon and bear bad fruit and others that take long and yield a good fruit. I have learnt to balance all, to walk in that park every day. I have learnt when to just admire and appreciate my park and when to work overnight; planting, weeding, flowering, transplanting and harvesting. I am appreciating every moment of my park as I plan for the next planting and harvesting.

I have forgotten about the short sprint, and keep wondering what the hell I was doing then.  My garden is my passion, and that garden is my business. My business is not my company name; it is that thing that I do every day that I love so much. It pays my bills, saves me money and wakes me up at 7am every day. I wish that I did that 10 years ago. What is your story? Is it a business story that keeps you running every day to firefight or that park that you want to constantly walk around, appreciate and improve?

By Michael Musau 
Consultant- Corporate Finance and Strategy.