How Would You Define Optimal Business Size?

Short Answer

Optimal business size is the scale where a company gives its owner the most of what they want, such as income, working hours, quality, and the kind of work, while costs stay under control. It is not the largest size the business could reach. Past that point, each step of growth can cost the owner more than it gives.

Right size = the point where the next step adds less than it takes from what you want

Doctor Owl, in Plain English

“How big could it get is the wrong question. Ask how big you want it, and what each step would take from you.”

How This Guide Works

Need the answer fast? Read the Short Answer above and the numbered steps. Want the full picture? Follow Louie, a labrador with two waffle cafés from Dr. Paul’s Fabled Forest Business School Series, as a whale offers to put his waffles in three more places. His story shows up in a few short gold notes along the way. The math sits in one section, clearly marked.

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Meet Louie Again: Two Cafés and a Very Big Offer

Some lessons stick better as a story. Dr. Paul’s Fabled Forest Business School Series teaches business through a forest full of small business owners. Doctor Owl, a dry-witted consultant who lives in the Lone Oak, helps them fix the same problems real owners face.

Today he hears from Louie Waffles, the labrador who learned to run two cafés with a cousin in charge and a five-line nightly card. Now a whale who owns the biggest warehouse on the coast wants waffle counters in three more coast towns. Louie brings the four-page proposal, and waffles, to the Lone Oak.

Why Is Bigger Not Always Better for a Small Business?

Every step of growth has costs beyond money: more of your hours, more people to manage, more places where quality can slip, and often slower payment from bigger partners. At some size, those costs start to outweigh what the extra sales bring in.

Few owners ever set a target size. They ask how big it could get, or they let opportunities decide for them. Knowing your optimal size gives you a reason to say yes or no that is about your own goals.

In the Fabled Forest

Three new counters would each need a lead. Louie had exactly one cousin. It meant reading five nightly cards instead of two, visiting the square two days a week instead of five, and roughly twenty extra hours of work every week. And the counters would pay in ninety days.

How Do You Decide How Big Your Business Should Be?

  • List your personal goals for the business. Pay, schedule, the type of work, your team, and the standard you hold.
  • Pick a test. One concrete sign that the business is still doing what you want. Make it personal and checkable.
  • Price the next step. For each growth move, weigh its gains against what it costs your list.
  • Compare with your focus. A clear strategic focus makes the answer easier.

In the Fabled Forest

Louie’s personal test was simple: would he still know all his Saturday regulars by name? At two cafés, with his cousin, he could, just about. Two is plenty, he said.

How Do You Turn Down a Growth Opportunity?

Say no to the size, not the person. Thank them, explain what you are building, and offer what you can do that fits. A good partner will respect a clear answer more than a reluctant yes that falls apart later.

Then write your size down. When the next offer comes, and it will, you will have a reason ready, and you will not have to decide from scratch while someone is waiting.

In the Fabled Forest

The next day Louie delivered his answer at the warehouse dock, along with a waffle. The whale took the waffle, very delicately, and did not stamp anything at all.

What Would Three More Locations Cost the Owner?

This is the math section. Skip it if you only want the steps.

Here is Louie’s week at two cafés, and what the offer would have made it.

Two cafésFive locations
Leads needed1 (his cousin)4
Nightly cards to read25
Days on his own square5 a week2 a week
Hours a week, his estimateAbout 60About 80
When the new money arrivesDaily90 days for the counters
Knows every regular’s nameYes, just aboutNo

Step 1: Hours. 80 − 60 = 20 more hours a week, about 1,000 a year.

Step 2: Time at the original. Two days a week on the square instead of five: 60 percent less time at the place that built the business.

Step 3: Your version. For your next growth offer, list the hours, people, cash timing, and personal goals it changes. Then ask whether the added profit is worth what it takes.

Illustrative numbers from the book. Use your own hours and goals.

How Do You Find Your Business’s Right Size?

Four steps before the next big offer arrives.

  1. Write what you want from the business.

    Income, hours, the work you love, and the quality you want to protect.

  2. Choose one personal test.

    A simple sign that the business still gives you what you want.

  3. Price every growth step against the list.

    What it adds, what it takes, and whether your test still passes.

  4. Write down your size, and say no clearly.

    Put the limit where you will see it, and thank people while you decline.

In the Fabled Forest

Doctor Owl’s scroll for Louie had just two questions: what the business is for, and how big it can get before it stops serving that purpose.

What Did Louie Say to the Whale?

This page gives you the short version. The book gives you the whole week: the boat race round the lighthouse, the news about the warehouse counters, a four-page proposal in three copies, the evening at the Lone Oak, and a waffle delivered to the deep-water dock.

Every chapter of Growth for Small Businesses works the same way. One owner, one problem, one real idea you can use on Monday, plus a one-page worksheet to do it.

What Does a Consultant Ask Owners Who Feel Pushed to Grow?

Dr. Paul Borosky, DBA, MBA · Business Consultant

When an owner feels pushed to grow, Dr. Paul asks a question most advisors skip: what is this business supposed to give you five years from now? Income, hours, the work itself, time with family, the quality you are proud of. Then he prices the growth step against that list, not just against revenue. Sometimes the answer is to grow. Often it is to grow profit instead of size: better prices, better margins, fewer but better customers. Owners who decide their right size make clearer decisions, burn out less, and frequently earn more than owners who chase every opportunity that walks in the door.

Which Questions Come Up About How Big to Grow?

What is optimal business size?
It is the scale where your company gives you the most of what you want, such as income, hours, and quality, while costs stay under control. It is often smaller than the largest size possible.
How do I know if my business is big enough?
Write down what you want the business to give you and pick one test that shows it is still doing that. If the next step of growth would break the test, you may already be at the right size.
Is it a mistake to turn down growth opportunities?
Not if the opportunity would cost you more in hours, quality, or cash timing than it adds. Saying no to the wrong growth protects the business you have.

Written by Dr. Paul Borosky, DBA, MBA, business consultant and author with 14+ years of experience and 1,000+ clients served. Weighing a growth move and want a second set of eyes? See business consulting and prices.

This page is for general educational purposes only. It is not legal, financial, employment, or other professional advice. Figures are illustrations. The Fabled Forest and its characters are fictional. For decisions about your own business, consult a qualified professional.