WHEN JAMES BUSSHART opened his first Mr. Oil Change shop in April 1981, the idea of instant car maintenance was new to many Buffalonians.
But the entrepreneur says he knew that some day what was considered a fad would become a way of life for many motorists. So Busshart set an ambitious goal of building 10 outlets within 10 years.
Seven weeks ago, he met that goal and promptly set a new target of five additional stores by 1993. "I made it with six months to spare," Busshart said, pointing to a plaque presented to him by the Quaker State Corp. in recognition of his accomplishment.
In the last decade, Mr. Oil Change Inc. has grown from a struggling venture to a $4.1 million empire with a work force of 82.
Busshart has achieved what many small-business owners only dream about. He has expanded his company without endangering its long-term financial health.
Making a business bigger is one of the most difficult challenges facing an entrepreneur, according to Michael C. Thomsett, author of "The Expansion Trap: How To Make Your Business Grow Safety & Profitably" (American Management Association, $24.95).
"Growth is not necessarily the same thing as success," the small-business expert and former accountant said. An impatient small-business person, itchy to boost profits and market share, may well be flirting with disaster.
Purchasing new equipment, building a new factory or simply hiring more workers can place an enormous strain on a company's resources. Problems tend to compound and soon the small-business owner finds himself in bankruptcy court, Thomsett said.
"Once the growth process takes over and is allowed to run its course, you're no longer in control. And that's where the problems begin."
Careful planning and concentration are essential to avoid the many pitfalls inherent in making your company bigger. Expansion, Thomsett says, doesn't have to lead to financial disaster, if you follow these steps:
Always make the customer's requirements your top priority, no matter how large the company becomes. And diversify your customer base in order to support expansion.
Don't spend money on computers unless your sales can justify the expense.
Before taking out a loan, prove to yourself the expansion plan will produce profits that exceed the cost of borrowing.
Don't become overconfident. "Stay humble and hungry," Thomsett said.
Seek advice from small-business experts.
Avoid spending your days on administrative tasks. Take time to be creative.
Stick to your expansion plan and keep an eye on your ledgers.
Put controls on your actions. "If you discover that cash flow is declining, overhead is rising, or that you are losing market share, be prepared to take action to reverse the trend," Thomsett said.
Don't be a carefree risk taker. Choose your battles carefully and purchase insurance to cover anticipated disasters.
Let your workers know what's going on and include them in decision-making. However, don't hire more employees until you have the sales to support such growth.
Busshart said he has used many of these survival tips at Mr. Oil Change. He noted, however, that a small-business owner really doesn't have much choice when it comes to growth.
"If you stand still in the market, you're going to be dormant," the entrepreneur said. "If you're like me and you want to dominate the market, you have to grow."
Hundreds of Western New Yorkers take their cars, trucks and vans to Mr. Oil Change every day for a 10-minute maintainence check-up. Fifty-eight vehicles are serviced daily by teams of mechanics at each of the company's shops.
Busshart says he takes it as a compliment when customers, looking at the number of Mr. Oil Change stores, ask him if the company is part of a large franchise network rather than a locally owned business. In fact, both of Busshart's main competitors, Instant Oil Change and Avis Lube, are nationwide operations.
Richard Gajewski, a local advertising executive and Busshart's former partner, explained that Mr. Oil Change has developed a number of innovations that are being copied throughout the oil-change industry. The newer shops, for example, have above-ground storage tanks to prevent oil spills.
"One of the secrets of Mr. Oil Change's success is that it didn't become just another service station," Gajewski said.
Busshart agreed, saying: "The reason we've been able to grow is because we do one thing and we do it well."