Thinking Entrepreneur

An owner’s dispatches from the front lines.

I was fascinated by the recent case study in The Times about a Seattle-based retailer that decided to open a location on the other side of the country. The piece hit home with me because we’ve often had similar conversations here.

My home furnishing store, Jayson Home, has gotten a lot of attention for its mix of merchandise and the way it is displayed. While the business was certainly affected by the economy and the housing crisis, its sales have been growing for the last few years. We are about to unleash a new Web site, and we are always getting flattering reviews in home décor magazines and on blogs. It is very tempting to think about opening another location, and we have crunched the numbers. But I have resisted, because I have a very different view and understanding of growth than I used to.

When I started my business, I was determined to grow as fast as I could. And I did. The business doubled for a few years, and then continued to grow at double-digit rates. It was quite exhilarating, and exhausting. The words growing and business are often said together like soup and sandwich. Why would you want one without the other? Whether it is to fulfill a dream, to get wealthy, or to create opportunity for your staff, it seems like the natural and ambitious thing to do. These days, it might even be the patriotic thing to do since a growing business will create much-needed jobs. And it makes sense — until it doesn’t make sense.

It really comes down to priorities. Do you want to take outside capital and the “partners” that come with it? Do you want to take on more risk? More employees? More travel? More stress? More potential aggravation? I’ve learned over the years that growth is a complicated animal. Many entrepreneurs just keep entrepreneuring without considering the consequences. It’s hard to turn it off. I know, I am one of those entrepreneurs. And while I can’t say that I have turned it off, I have turned it down. I think things through now. I have some rules of engagement. Maybe I have actually grown up! Probably not. But I have learned one important lesson of entrepreneurship: Just because you can, doesn’t mean you should. The most important word in business just might be no.

I regularly get calls from real estate agents who think they have the perfect location for another location for my home store. No. I regularly get approached by investment bankers who either say they have a buyer (probably fictional) or that they want to invest in my business. No. I get solicitations to buy other businesses. No. (All right, maybe). It gets back to my rules of engagement. I don’t want to answer to anyone except my customers, my employees and my family. No investors. No landlords. I don’t want to be forced to travel more. And, finally, I have figured out that I need more money less than I need more aggravation, which, happily, is at an all-time low.

I have also figured out that business is not just about growth. For one thing, it is also about making a profit, which many companies seem to forget as they grow themselves out of business. Business is also about understanding the reality that bad things happen: recessions, lawsuits, uncollected receivables, new competitors, and assorted calamities like fire, flood and other biblical afflictions. Choosing to over-expand instead of being prepared for this kind of stuff can put the company in jeopardy. It happens all of the time — especially in an economy like we have now.

Sometimes, slowing down the growth is the safer and more responsible thing to do. But that can be boring — and that can be a problem, not just for me but for some of my staff. Terms like economies of scale and synergy get thrown around like catnip to the entrepreneurial cat: More buying power! No more advertising needed! No additional buyers! All resulting in a larger marginal profit!

But I respond with my own terms: More travel! An expensive new lease! More money to lose if the economy tanks again! And last but not least, the second most important word in business: Why? I need to know why exactly I should take the risk. For the money? Maybe yes, maybe no. It’s important to remember that we just might lose money. For ego? That’s always a bad reason. How many entrepreneurs have become financially successful at the cost of their health, family or sanity?

It comes down to not only figuring out what your priorities are but also to recognizing your limitations. That is a word that an entrepreneur in the chase is loath to accept. But we all have limitations, which does not mean you can’t be wealthy, happy and wise. So will we expand? Will we take on some new challenges? Maybe. Probably. But I won’t even think about it until: I have the money to burn. And I have the right people in place to handle the additional responsibilities.

These days, I look before I leap. It is a new concept for me.

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=a992fd98a3be6e56e5863a3f9062da6c