SMALL BUSINESS MANAGEMENT Chapter 13 Managing Growth

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SMALL BUSINESS MANAGEMENT

Chapter 13 Managing Growth

Two Guys & a Truck Joe Six Pac Jelly Belly

Small Business and Growth

 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.

Small Business and Growth (cont.)

  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

Golf Gifts

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

Jelly Belly

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

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