When It’s Good to Be Small — and When It’s Not

Efficiency is the key to turning a startup into a profitable venture, which is undoubtedly true for the people who make up the business. But how small is too small? It turns out that being small has some advantages and some disadvantages.

In December 2012, more than 700 startup executives were interviewed for the Silicon Valley Bank Startup Outlook Report. They were split into categories of size: fewer than 10 employees, 11 to 49, and 50 to 499.

Small and Strong

First of all, businesses with fewer than 10 employees were more likely to report that they performed at or above their revenue targets in 2012. And compared to 2011, they were most likely to say that business conditions improved.

These small businesses also found it easier to expand than their larger counterparts. They were twice as likely to say that finding new workers with the necessary skills was “not very challenging.”

The Limits of Small

Not everything is ideal for businesses as small as ten employees. Outlook for the next year was lower among them than among larger businesses in 2012, and the employees who were easier to find were more specialized.

Businesses usually start small, with the goal of growing larger. In reality, being large is not ideal in every circumstance or industry. If the same thing can be accomplished by a small group, being larger is not an advantage.

If you’re starting small and looking for a way to add data analysis without adding data analysts, stay tuned for more information on Popily.