SMALL BUSINESS
MANAGEMENT
Chapter Fourteen
Managing Growth
1
The Business Cycle
 Introduction
 Growth
 Maturity
 Decline
2
Problems Created by Growth
 Owner-Manager
Fatigue and Stress
 Lack of Communication
 Lack of Coordination
 Shortage of Cash
 Low Profitability
3
Problems Created by Growth
 Breakdowns
in Production Efficiency
 Lack of Information
 Decreasing Employee Morale
 Owner Lifestyle
4
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 ?
5
Evaluating the Growth Question
 Growth
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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
6
Planning for Growth
 The
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Expansion Plan
set objectives
determine alternatives
select the best alternative
7
Planning for Growth
 Understanding
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the Requirements of Growth
Greater Management Depth
Intelligent Expansion
Additional capital
Financial Information
Organizational Change
Implementing Managerial Controls
Monitoring the External Environment
8
Concept Checks
 1.
What concepts can help the ownermanager deal effectively with growth
problems ?
 2.
What are the four stages of the business
cycle?
 What
are the problems created by growth ?
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Concept Checks
 4.
How can the owner-manager deal
effectively with growth ?
 5. Why don’t small business owners use
more formal planning ?
 6. What are the steps in the growth plan ?
 7. What are the requirements of growth ?
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