Chapter 13 Managing Growth
Two Guys & a Truck Joe Six Pac Jelly Belly
Earning potential of the growth business is much more significant Larger companies are also better prepared to handle downturns in the economy Larger growth business often have an easier time raising capital Copyright © 2014 McGraw-Hill Ryerson. All rights reserved.
Growing business can usually attract and retain employees compared to small stagnant companies Growing business can often be sold for more money than small firms with low growth stories Copyright © 2014 McGraw-Hill Ryerson. All rights reserved.
The Business Cycle Introduction Growth Maturity Decline
Two Guys & a Truck
Problems Created by Growth Owner-Manager Fatigue and Stress Lack of Communication Lack of Coordination Shortage of Cash Low Profitability
Problems Created by Growth (cont.) Breakdowns in Production Efficiency Lack of Information Decreasing Employee Morale Owner Lifestyle
Evaluating the Growth Question Is the business one that can grow ?
Is the business owner prepared to make the effort ?
Does the owner-manager have the capabilities to grow?
How should the owner-manager pursue growth ?
Evaluating the Growth Question (cont.) Growth options new markets for the product or service increased sales by increasing frequency of use.
add new products or services or modify existing ones.
new uses for present products or services acquire other small companies
Planning for Growth The Expansion Plan set objectives determine alternatives select the best alternative
Planning for Growth (cont) Understanding the Requirements of Growth Greater Management Depth Intelligent Expansion Additional capital Financial Information Organizational Change Implementing Managerial Controls Monitoring the External Environment