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Why Bigger Isn’t Always Better, Part II.

Q: I am seriously thinking about starting my own business, but I’ve always worked for large companies. I liked what I read in your last column about going from large to small, but I can use some more convincing.  Do you have any other good reasons for starting or working for a small firm?

A: Why, of course. Here are some added myth busters to strengthen your resolve:

Myth: Small businesses offer fewer opportunities for advancement.

Dwight B., a former submarine officer and graduate from MIT, has always wanted a career in manufacturing. After interning at GM, he decided a smaller organization would give him more opportunity to impact its direction. Having fulfilled his commitment to the Navy and completed his MBA, he started with a small manufacturing company supervising an area of plant operations. In less than 10 years, he has moved up to COO at a second US-based manufacturer. 

At family-owned or stagnant small companies, this myth may be true. However, fast-growing small businesses must continually add employees and managers to keep pace with demand for their products and services. Employees in these organizations wear many hats simultaneously, so on-the-job training, continual learning and increasing responsibility are required.

Myth: Large companies are unlikely to do business with small firms.

Downsizing and reorganizations at large companies have created opportunities for small firms to provide services that were once performed in-house. (How many professionals do you know who have returned to former employers as independent contractors after being laid off?)      

Big companies are more interested in working with smaller organizations because they often receive higher quality service for a reasonable price from seasoned experts. Many larger firms and government agencies also must meet internal affirmative action goals that require them to contract with minority or women-owned firms. This creates even more opportunities for small businesses.

Myth: Small companies use the same hiring criteria as large organizations.

Most large corporations rely on education and experience requirements to screen new hires or promote existing employees. This perpetuates the practice of putting "square pegs into square holes."

But small-company managers tend to be more open to candidates with different backgrounds. While they may seek certain experience, they consider enthusiasm and aptitude when making hiring decisions. Entrepreneurs tend to trust their own instincts and are more willing to bring career changers or less educated professionals on board who demonstrate an ability to do the job.

Myth: You can't make a big contribution at a small company.

Jim L. is impressed by the authority he has to upgrade RSP's tooling department. As the company adds plants, he's responsible for ensuring their tool-and-die design meets quality, cost and efficiency standards. It would have taken years of employment and a bigger title to make a similar impact at his previous company.

Myth: Smaller companies don't act on opportunities the way a large firm can.

Ross Perot, a business legend and former presidential candidate, grew EDS into a very lucrative business process and data management firm. When GM began to realize that its way of getting things done needed tremendous improvement, it acquired  EDS. After a couple of years, a frustrated Perot said, "If someone at EDS sees a rattler, he kills it. If a GM manager comes across one, he puts together a committee to discuss the situation." That marriage didn’t last very long.

Small businesses tend to be more creative, nimble and aggressive in pursuing opportunities. Fewer management barriers exist, and less voices are likely to chant "If it ain't broke, don't fix it." Entrepreneurs don't have the luxury or comfort of being king of the jungle. As a motivational plaque says, "When a gazelle wakes up in the morning, he has two choices: He can either run like hell or be eaten." Small businesses have a lot in common with gazelles.

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