In business, there is a lot of energy spent answering the question how can we grow? There's another question that needs to get asked first - a question that is often neglected - what is the optimal size?
As a business coach, I was all about growth. I was helping my clients grow, and trying to grow myself. At one point I had ten coaches working in the business, a gorgeous office and a full time PA. It looked great, but I was working six days a week, stressed to my eyeballs, not making any profit, and not having any fun.
Almost four years ago now I made the transition from a business to a practice (i.e. went back to just me) ... and made the remarkable discovery that I could make more money on my own working one day a week from Bali than I could working six days a week running the business in Melbourne. The optimal size for my practice is me and a couple of support staff.
My friend Aaron had a great fitness studio that he had set up in his apartment. Numbers were limited by the size of the space, and he only invited the people that he was happy to have in his home. Everyone loved it, so the obvious thing to do was to get a bigger space. So he got a commercial space, put on more people to take classes, and grew the client base. Problem is he stopped loving it. It became something else, and again had much higher overheads, and less profit. The optimal size for Aaron was actually the one room studio at home.
I also remember a client who ran a manufacturing business with a factory and an installation team. At $150k a month the business ran beautifully and he made a nice profit. At $250k a month things broke. Suddenly there was a whole lot of overtime needed, everyone was tired, mistakes were made, stress went up, and paradoxically the profit disappeared. In hindsight rather than trying to grow the business, we should have identified the optimal size, and worked out how to keep the business there.
One of the things we have identified working with 1,000s of people running Thought Leader practices is that there is a sweet spot at what we call blue belt to black belt - $500k to $750k. For a lot of Thought Leaders that is the optimal size.
Love to hear your thoughts - what's the optimal size for you? You can leave your thoughts below.