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.

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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
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Introduction
Growth
Maturity
Decline
Two Guys & a Truck

Problems Created by Growth
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Owner-Manager Fatigue and Stress
Lack of Communication
Lack of Coordination
Shortage of Cash
Low Profitability

Problems Created by Growth (cont.)
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Breakdowns in Production Efficiency
Lack of Information
Decreasing Employee Morale
Owner Lifestyle
Golf Gifts

Evaluating the Growth Question
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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.)
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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
Jelly Belly

Planning for Growth
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The Expansion Plan
 set objectives
 determine alternatives
 select the best alternative

Planning for Growth (cont)
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Understanding the Requirements of
Growth
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Greater Management Depth
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Intelligent Expansion
Additional capital
Financial Information
Organizational Change
Implementing Managerial Controls
Monitoring the External Environment