To grow or not to grow? That is the question asked by many entrepreneurs who are doing well but uncertain about whether getting bigger means getting better.
For Rob Bateman, the decision of whether to expand his bicycle retail and repair business was propelled by real estate limitations as much as climbing sales.
Operating out of a small store in downtown Toronto, Bateman's Bicycle Co. was bursting at the seams. Doing business meant having to bring new, used and repaired bicycles in and out of a converted garage on a daily basis, which was time-consuming and energy-zapping.
When a nearby bicycle storeowner approached Mr. Bateman out of the blue about buying the business, the 29-year-old wavered. After balking at purchasing the business outright, Mr. Bateman eventually agreed to lease the store and buy the existing inventory.
"It was a difficult decision," Mr. Bateman said during an interview in the newly renovated bicycle store that opened last month. "I was confident, things were going really well and there was growth every year, but the business was getting stagnant."
A key consideration for Mr. Bateman was whether having a larger business was a better situation than continuing to operate as a small but profitable and steadily growing entity.
Financing was also an issue, given the money needed to take over the lease and buy the inventory. After considering bank loans, Mr. Bateman financed the deal using his own capital and a loan from his mother.
Rather than close the original location, Mr. Bateman plans to keep it open to handle small repairs and sell refurbished bikes. The new and larger store will handle new bicycle sales and repairs. Mr. Bateman said it will also host riding groups, workshops and special events, such as bicycle swaps.
He said the big challenges will be maintaining the company's reputation as the local bicycle shop while attracting business from outside the neighbourhood to support higher expenses. Just as important, he said a key focus will be maintaining a healthy work-life balance, particularly as the business will stay open seven days a week.
"I'm excited," Mr. Bateman said.
"I think this was an opportunity in disguise. I talked to a lot of people about it. I thought if I didn't do anything, maybe the current owner would do stick around, or someone else would buy the store."
Special to The Globe and Mail
Mark Evans is the principal with ME Consulting, a communications and marketing strategic consultancy that works with startups and fast-growing companies to create compelling and effective messaging to drive their sales and marketing activities. Mark has worked with four startups – Blanketware, b5Media, PlanetEye and Sysomos. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshmarketing and meshwest conferences.
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