Lessons We’ve Learned: Why We Don’t Chase Rapid Growth
Growth is usually presented as an unquestionable measure of business success.
More employees, more clients, more offices and more turnover must mean a better business.
After nearly four decades at Weald, I’m not convinced that’s always true.
Of course we want to grow. We want new clients, increasing recurring revenue, good utilisation of our people and a healthy profit.
But we’ve learned that building a better business and building a bigger business aren’t necessarily the same thing.
Turnover isn’t the same as success
It’s very easy to become impressed by turnover.
A business grows from £2 million to £3 million, then perhaps £4 million or £5 million, and from the outside it appears to be doing extremely well.
But what did it cost to get there?
How many additional employees and managers were required? Did profit increase at the same rate? Did service improve? Did the business become financially stronger, or simply larger?
We’ve always taken a fairly conservative financial approach at Weald. We prefer to retain cash, build reserves and avoid borrowing wherever practical.
That isn’t necessarily the fastest route to growth, but it gives us something I value much more highly: independence.
If something goes wrong, we have room to deal with it. If an opportunity appears, we can decide whether to take it. And if the economy becomes difficult, we aren’t immediately making decisions because a lender or investor requires us to.
Cash reserves aren’t particularly exciting, but financial strength gives a business choices.
Growth shouldn’t create dependency
Not all growth reduces risk.
Winning a very large client can be fantastic. It brings additional revenue, creates opportunities and can help justify investment in new capabilities.
But if one client eventually accounts for a disproportionate amount of the company’s profit, losing them isn’t simply disappointing — it can affect decisions throughout the business.
That’s something we’ve always tried to avoid.
It doesn’t mean avoiding large clients. It means building a business strong enough that no individual client determines its future.
The same principle applies elsewhere. Excessive dependence on one client, supplier, employee, technology or source of new business can make a company vulnerable.
A resilient business should be able to absorb change.
Growth should follow capability
Rapid growth also creates a very practical problem: you have to deliver it.
Taking on significantly more work and then desperately trying to find enough people to service it may increase turnover quickly, but it can undermine the things that made the business successful in the first place.
Standards get compromised, people become overloaded and existing clients notice.
We’ve certainly made mistakes over the years, but one lesson has become increasingly clear: growth works best when the capability to support it grows with it.
That doesn’t mean being unambitious or turning away good opportunities.
Sometimes growth requires recruitment. Sometimes it requires investment in technology or automation. Sometimes it’s simply about improving the way we already work.
The objective shouldn’t be to employ as many people as possible.
It should be to enable good people to achieve more.
Bigger isn’t necessarily better
We’re ambitious for Weald. We want to attract new clients, improve our services, develop our people and continue building a strong and profitable company.
I hope we’ll be bigger in five years than we are today.
But that’s not how I’ll decide whether we’ve been successful.
A £5 million business isn’t automatically better than a £3 million business, just as a company with 50 employees isn’t automatically more successful than one with 20.
I’d rather judge a business by whether it has good people, loyal clients, strong finances, manageable risk and the freedom to make its own decisions.
Nearly four decades in business have taught us that growth can be a very good thing.
But it should be the result of doing the right things well, rather than the objective in itself.
Weald doesn’t need to become the biggest IT company in Sussex. We need to continue being very good at looking after the clients who choose to work with us.