Introduction
A small business must be managed carefully and closely to produce the desired amounts of success to be obtained from taking a chance on future expansion plans and investment decisions, that will enable the organization to grow. Smaller businesses seeking the opportunity to expand or grow should practice the intensive growth strategy. A growth strategy should be implemented to ensure all organizations seeking growth in the future should utilize performance measurement systems and target setting. An organization must decide on a business form that will offer the owner freedom, as well as protection from any type of liability. Staffing and organizational structure are vital to the survival of any organization.
Growth Strategy
Some small business owners have a goal of growing into a larger, more corporate organization. The reality of that actually happening is small. “Research suggests that only one-tenth of 1 percent of companies will ever reach $250 million in annual revenue” (Dahl, 2010). An intensive growth strategy should consist of market penetration, a market development plan, alternative channels, product development, and new products for new customers. The next type of growth strategy that could be utilized by an organization is an imperative growth strategy or an acquisition. In most cases an acquisition is the perfect example for organizations that are on the downward spiral.
Performance measurement systems and target setting will give an organization vital information about the market and which way to direct its attention and company. It will also provide a starting point for a system of target-setting that will help the owner or manager implement strategies for growth. A manager must be aware of...
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...the organization is ran. Any manager can detail the organization to be ran to the best of its abilities.
References
Dahl, D. (2010). How to develop a business growth strategy. Retrieved from http://www.inc.com/guides/small-business-growth-strategies.html.
Davis, S. (2014). Organizational structure & staffing. Retrieved from http://smallbusiness.chron.com/organizational-structure-staffing-10875.html
Info Entrepreneurs. (nd). Measure performance and set targets. Retrieved from http://www.infoentrepreneurs.org/en/guides/measure-performance-and-set-targets/.
The Company Corporation. Business entity types. Retrieved from https://www.incorporate.com/business_structures.html.
The U.S. Small Business Administration. (nd). What SBA offers to help small businesses grow. Retrieved from http://www.sba.gov/content/what-sba-offers-help-small-businesses-grow.
As with many small business owners they vision of their business usually only extends to their own abilities. They are driven and full of determination and believe their abilities will be able to sustain the business to success. Unfortunately, many small businesses lack the knowledge to be able to effectively be owners’ and leader’ to their organizations.
Tapinos, E., Dyson, R.G. & Meadows, M. (2005). The impact of performance measurement in strategic planning. International Journal of Productivity and Performance Management, 54(5/6), 370-384.
Growth can overwhelm a business if it is not handled effectively. There are both internal and external risks to growth. Some internal risks that Fellers will face are management risk, not having enough personnel to handle the new demands, having to train or retrain employees; money concerns, such as not having enough cash flow to grow; and quality and quantity control. Some external risks to consider would be related to competition, staying ahead of the curve, continuously searching and retaining customers and staying abreast to what the customers want. Fellers has made her business successful thus far and needs to continuously keep in mind how she became successful to begin with and capitalize on her strengths. Before she decides to grow, she needs to ask herself, at what pace or rate should she grow (CSU,
It is a little known fact that small businesses make up a major factor of the American workforce. Since the word small is in the title most people think nothing of them, but when one takes the time to think that there are millions of small businesses, most with at least two to ten workers, the amount of people begins to add up. There are many factors that could contribute to a business failing, and it happens all the time in America. Small businesses must have solid business plans, a good use of technology, appealing merchandise, and appropriate financing to survive and prosper in the economy.
Katz, J. A., & Green, R. P. (2014). Entrepreneurial small business (4th ed.). New York, NY: McGraw-Hill/Irwin.
Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
Simple structure is widely used by small businesses in which the owner directly manages the day to day operations. The benefit of using the simple structure is that it is simple. One person normally calls the shots and takes full responsibility for the businesses success and failure. “It’s fast, flexible, and inexpensive to maintain, and accountability is clear” (Judge & Robbins, 2007, p.546). Unfortunately, using simple structure as an organizational design limits the business of its full potential, as it grows, it becomes more difficult for one individual to oversee the daily operation and make quick executive decisions. Once an organization reaches this point, it must change its organizational design in order to remain competitive within its market.
Unfortunately, many small businesses fail or do not reach their full potential because the small business owner spends too much time working in the business, and too little time working on the business.
Growth strategy is the organisation formulating their plan to accomplish their objectives and goals to grow in revenue and size of the business. However according to (Bridge, O’Neill and Cromie 2003), she defines growth strategy as a “...the movement of the business into bigger premises, taking on more staff, significant increases of turnover, taking on a new product line or lines, buying another business, and so on” Growth Strategies are important for businesses as they allow the business to move in a formal direction. Businesses can easily be affected by the smallest of changes for example new customers or the arrival of new competitors which could have a negative impact, so planning is very important and takes care of additional effort and resource for faster growth. With these growth strategies, organisations try to achieve numerous things for example, obtaining economies of scale, attaining market leadership and retaining talented staff.
Life is all about setting goals and trying to achieve them. The same theory also applies in the managerial industry. The accomplishment of desired results in a business is called performance. One of the major concerns of the top managers of a firm is the actual performance of the firm so its measurement is unavoidable.
Growth in the small and medium business in Canada and other developed countries has been very significant. This sector of the business community now represents about 40 percent of GDP and accounts more than half of total employment. Today small businesses are more diverse and more vigorous than ever, but they also faces newer and more challenges or inhibitors to their growth than their older conter parts. This research will attempt to find the answer to the following hypothetical question:
The formation of organization implies that a leader should take the role to control the activities of the group; the work done by the leader is what we call management.
Organizing involves determining the tasks to be done, which will do them, and how those tasks will be managed and coordinated. Managers of an organization have to put a work team together so that proper information, resources, and tasks can flow properly and efficiently in an organization.
Small businesses have been considered the mainstay in countries around the world. In many European countries for example, the small business has been considered crucial to the success and flourishment of the country in general. Most individuals start upon a small business venture in the hopes of realizing ownership, independent profits and personal success. Small businesses can prove extremely successful when planned properly. Studies suggest that several small businesses, however, close or fail within the first few years of operation. This failure suggests that a majority of small business owners may not have as yet realized the crucial success factors necessary for successful implementation of a small business.
There are several external growth methods that entrepreneurs may choose for growing their business which are ‘a merger with’ or ‘acquisition of’ other companies.