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Is there job security working for a small company?

Posted by Charlie Meek on Feb 1, 2019

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So let’s define a small company before we begin, for the purposes of this article, let’s just say the company you are looking to work for has less than 100 employees, making it a pretty small.

The first thing that comes to mind when you look towards a small company is what if that company fails or ceases to exist anymore, are you better off going to a bigger company or a well known brand?  Let’s explore the things you need to know:

Just because a business is small, doesn’t mean it isn’t successful or stable.  If this is something that is a real concern for you, it isn’t hard to do some research on the financial state of any company.

Find out how long the company has been incorporated for, if it’s been around for less than a year, there is a 20% chance it may fail, if it’s been around for less than 5 years, there is a 50% chance the company may fail.  So research financial performance is definitely a good idea.

Is the company growing in revenue and profit?  It’s not always a negative if the company is stagnant, as it may just have the market it wants tied up.  If the company is shrinking in revenue, then maybe look deeper as firstly it’s strange to hire when you shrink and secondly shrinking is not a long term trend that results in retained staff.  The most important number for any business is their profit margin, some small businesses have low revenue but very high profits, which is a very secure position to be in.

When you talk to the business, ask about long standing members of the team, who has been there the longest and why?  Fair and encouraging questions to ask.

Ask the business what its ambition is, are they looking to grow or stay the same size, the answer they give only impacts you depending on your own ambitions.  If you are looking for a job to get on with for years and are happy in the same position, then a company looking to remain the same size is just for you, as the likelihood of promotion lowers massively if there isn’t growth in the company.  However if you are looking to grow, go up the ranks, you need to be looking for a company with as much ambition as you have.

If the company is brand new, for example started in the last 18 months and you are joining at a ‘significant level’ or sacrificing your earning potential as you are brought into the vision, arguably you should be bought into a shareholding as well, definitely something for discussion when you negotiate a working package.

The US census estimates that there are around 30 million small businesses which accounts for 99.7 of all businesses in the country, which equals 44.5% of all payroll, and of those companies with less than 100 staff account for 98.2% of all the businesses, so there is a high chance that you will end up working for one.  Almost half the country relies on these businesses to pay their bills, so you are not alone when you make the choice to work for an SMB.

  1. There are some significant benefits to working in a small company such as:
  2. Job Diversity - Working in a small business normally means wearing more than one hat in your role, something many people find challenging and engaging.
  3. Work towards the Mission - You’ve been there since the start, see you may see it to its finish too.
  4. Work Closely with Senior Leaders - Your boss maybe only be a few layers or in-fact a few feet from your desk.
  5. It teaches you to be dynamic - Successful small businesses are always dynamic.
  6. You can watch the business grow -  The only way is up when you are small.

There really are so many great reasons to work for a small business and it’s up to you to weigh up the pros and cons.  Our best advice, above all, is understand the financial state of the company before you go there, then everything else purely become subjective to your needs and what gives you work satisfaction.

The reality is, there always a risk almost anywhere you work, from fortune 500 to companies under 10 staff, the reality is things can happen that make big business disappear, look at Lehman Brothers to Toys R Us, nothing is ever certain no matter how big you are.

Posted by Charlie Meek on Feb 1, 2019

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