The rule of 4 by 2 for growing a small business.

The 4 by 2 or 2 by 4 rule for growing small businessesA few months after writing about the rule of 4 (that small business is harder than most people think – especially to grow), I heard another battered, bruised and successful business owner put an even better twist on my rule of 4 for small business.

He called it the rule of “4 by 2″.

Here it is:

It will take 4 times as long as you think, and cost you twice as much; or take twice as long and four times the cost. The only difference is you get to choose.

Now this is an excellent way to think about the rule of 4, you have a choice:

  • Grow faster, and you’ll need more cash; or
  • Grow more slowly, and you conserve cash (but the impatient entrepreneur within you will be frustrated by this)

It is an on-going struggle to balance growth with time and cash, our two most limited resources.

The key point from my original “rule of 4″ post still stands. Small business is harder than most people think -  I believe twice as hard to start, and four times as hard to grow.

What can a small business owner / manager do to reduce the rule of 4 by 2:

  1. Choose which path you are taking your business – fast (needing more cash) or slow (but still quadruple your expectation for the time it will take to successfully grow your small business)
  2. Re-adjust your expectation, now. Small business is tough, particularly when trying to grow it
  3. Follow the actionable advice in the original ‘rule of 4′ post

If you have, or attempted to grow a small business, what is your experience and thoughts on this?

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