Small Business Today Magazine JAN 2015 AIM GLOBAL LOGISTICS | Page 36
EDITORIALFEATURE
To Grow or
Not to Grow
By N. D. Brown
N
ot that long ago a surefire way to
buckets of gold was to own an FCC
license to broadcast. Those who
owned radio and television stations
were raking it in. Now, there are social
media, iPhones, iPads, YouTube, plus and
more and more. All of them are competing for the same customers, so what has
happened?
The other day I received a blog from
one of the guys I worked with negotiating
to buy time for our advertising clients. Today, he teaches at a university and consults
with advertisers and station owners. His
blog discussed broadcaster investors had
decided that the buckets are filling with
brass.
Here are some reasons:
Not that many years have passed since a
television program could be expected to
reach 9 percent to 10 percent of the population. Shows in primetime reached in
excess of 20 percent! In those days, a program that was watched by 3 percent to 4
percent of the population would soon be
pulled off the air. Today, shows that deliver
3 percent to 4 percent are now a solid buy
in primetime television!
Yet, the cost to reach that diminished audience has not decreased; it has increased.
It costs more for programming that delivers smaller audiences and investors are
not lining up to buy what used to be a sure
way to get rich.
Running a profitable station is complicated
but my point is about our insatiable need to
grow. Everything is based on growth. Why?
This is where I get what might be considered
a little controversial. I don’t think growth is
necessarily a good thing.
Wall Street analysts make Daedalian
predictions on corporate projections of
costs and revenue to determine profitability. What can stakeholders expect to get
after all the bills are paid? What should
the company be worth? In addition, every
year Wall Street always expects more.
Let’s say your company has had an excellent year. You have strong margins and have
held costs in check and added new revenue streams. You draw a nice salary, pay bonuses, and there is a little left over to invest
in a new piece of equipment. If you have
investors, they say “Thank you very much”
and then ask “What about next year? How
much of an increase should we expect?”
Why can’t the expectation be to do as
well as this year and why can’t it be expected to repeat that year after year?
The answer: We are addicted to growth.
It’s what we are supposed to do.
You own and operate a small business,
perhaps a Mom and Pop operation, and
you are the Mom and the Pop. You are
not working to be in the Fortune 600. You
love the business and the life it lets you live
so why drool over growth that might kill
you and put your business at risk?
Back to our once fat cat broadcast station owners mentioned in the beginning of
this article. The truth is, every year there
are more and more ways to reach consumers. Once television was the medium
that reached just about everyone; now
everything television can do, such as offering entertainment and news, is on your
phone, laptop, or iPad. You don’t plan your
schedule around when your favorite show
will be on; you make your favorite show
come on when you want it to come on.
34 SMALL BUSINESS TODAY MAGAZINE [ JANUARY 2015 ]
Television audiences are shrinking but advertising media is growing.
Now you know more about operating a broadcast station than you cared to
know but it makes my point about growth.
Broadcast is actually doing very well by almost every standard so why do pundits
predict its demise? When is the last time
you heard about a television or radio station going off the air? You haven’t. Yet, the
negative people are fixated on growth so
they predict the end of the medium.
You started your small business because
you love the work. If you are making a
healthy living, paying all your bills and your
company’s bills, and you have enough
money left over to stay even with or a little ahead of your competitors, why stress
yourself worrying about growth?
This scenario is saleable when you get
to the point in your life when that makes
sense. If you want to sell your company
in a few years, then forget all this and do
whatever it takes to get double digit gains
every quarter.
So here is my heretical position:
Should you ignore those who predict if you
don’t chase as much growth as you possibly
can you won’t achieve all that you should?
I admit I started my small business thinking the only way to run a business was to
grow it as fast as I could. I missed many little
league games, dance recitals, and a few birthdays. Then I started another small business
thinking that I was going to enjoy my work
and my life. So I decided I will never retire to
the leisure life but whatever I am doing will
be something I enjoy and won’t require me
to run after growth.
»Continued on Page 38