“If I gave you $100,000 dollars, what would you do with it?” I sat there a little stunned. To be honest, I wasn’t sure what I would do with it, because I didn’t ask for it. It was weird. I felt pressured. I asked myself, “so is this one of those opportunities I’m not supposed to pass up?” A guy I knew very little about, wanted to invest $100k into my small Web Hosting and Development Business. I felt like I should know what to say, after all, I had been doing Web Development for over 10 years at this point. I was completely flattered that he wanted to invest in my business, but really, why me?
I met him at a family gathering and we struck up a conversation. He already had a successful business and was looking to get into something else. Diversify. He was very nice and asked all the right questions. He clearly knew business. It was 2006 and the market was heating up. The housing bubble was in full effect and people were pulling money out of their houses to buy more houses, vacations and stuff. Money was in the air. Not sure what to do, I confided in a former CEO that I had previously worked for. He told me in confidence, if he had to do it over again, he wouldn’t have taken any money. He asked me what my plans were for the business. Did I want to grow it big? Was I ready to take it to the next level?
At that point I already had my Web Hosting business for a few years. I was making a decent living, but I was working a lot. Spending a lot of time each day, tracking down why someones email wasn’t working, was starting to get a little old. Besides the fact that a $100,000 Angel investment really wasn’t enough to take my business to the “next level,” I wasn’t so sure I even wanted to stay in the Web Hosting Business. I enjoyed the business, especially the recurring revenue, but being on call 24/7 for someones business is a tremendous responsibility and one that I didn’t take lightly. After some thought, discussions with my wife and some advisors, I declined the Angel Investment. At the end of the day, it just wasn’t the right time. I didn’t have a big idea, a new app or some unique differentiator. I had a Website Hosting Business, where I also sold High Speed Dialup and built Websites. Yes, there was consistent revenue, but I felt the urge to make it smaller, not bigger.
Smaller has always provided a lot of flexibility for me and multiple revenue streams. I’ve been able to consult on many issues from Web Development Strategy, to Web Project Management to Web Business Development. In addition, it’s helped me get work done faster. With less chef’s in the kitchen, Website Development can be shortened by months, compared to larger agencies I’ve worked for, where there is more overhead. Being small also allows you to turn down work that isn’t the right fit. Larger agencies feel stuck sometimes taking bigger jobs, because they have more mouths to feed. There is nothing worse than taking work from a crappy client, because you need the money.
Taking investment from someone, even a loan, influences your business and puts you in a position to make considerations that you wouldn’t normally make. Yes, you would have new opportunities, but you may also have limited choice. Depending on your business niche and the terms of your investment, you may have to work with contacts your investor provided. All of the sudden, you are in a company that doesn’t look remotely like the one you started. I’m not against taking investment at all, what I’m advocating is taking it for the right reasons. For example, if you are having a hard time making ends meet and want to take on investment so you can have a consistent pay check, that’s NOT the reason to take on an Angel Investor. I’ve seen this happen before and usually the general feeling is, “why didn’t I just work smarter?”
Smaller Web Development Teams have the luxury of taking big risks, but can also reap big rewards. Creating a minimum viable product or service that is outside the focus of your business, can be done in a weekend, but would be frowned upon in a larger organization as a waste of resources. This is an asset that small businesses can leverage again and again, consistently morphing with the ebb and flow of the volatile Web Industry. Having a small Web Development Business is a choice and should coincide with your goals. Many small Web Shops appreciate the lifestyle that a small business provides. Working from home, flexible hours and the ability to work on different types of projects, are just a few of the obvious reasons for running a Small Web Business. This can dovetail well into your personal life if you have small children or are at the age where you have to start taking care of your parents. Going big can be an incredible adventure, but being small may be the exact fit at the right time.