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Small Business Growth Essay

1162 words - 5 pages

Introduction Small business growth is the process through which small market enterprises transform to huge enterprises with high revenues. A business growth strategy is applied to transform a small business into a big one according to the organization`s goals. Transforming a business requires a change of organization structure and sometimes a change of business form. Additional financing is also necessary to increase the level of operation of a business. Customers have to be wooed through promotions to enable the business to maximize its profits.
Growth Strategy Strategy is a purposeful choice to be different. Business growth strategy involves selecting alternatives and tradeoffs that will ...view middle of the document...

Jayne makes all the decisions and runs the management of the business. Her management and people skills have seen the business achieve tremendous success. However, a partnership form of business would be the most appropriate considering Jayne’s expansion plans. Jayne has hired professional business consultants to assist her in initiating her new business. She can partner with someone who has different management skills from her. Together they can form a complete team with the required skills to start and run the business without utilizing professional business consultants. This will reduce start up cost. The new business will mean an increased level of operation (Mazzarol, 2005). The partner can work in other departments like accounting while Jayne heads the operations in the kitchen. Jayne will have more employees than the current number and the partner can assist in supervision. Also a partnership is easier to form compared to other forms of business like limited and unlimited companies (sbtdc, 2014). Financing Assistance Jayne has both equity funding and debt funding available to her. Equity funding involves the sale of a percentage of the business while debt funding is where one borrows the capital required (sbtdc, 2014). Sources of equity funding include; venture capital firms, private investors and friends or relatives. Sources of debt financing include business loans, personal loans, bank overdrafts and borrowing from other financial institutions. Debt financing would be the most appropriate funding for Jayne to realize her short term goals. Unlike equity financing, ownership of a business is not diluted in debt financing and thus Jayne will continue enjoying all the profits. Also debt financing is cheaper than equity financing and it is considered a short term source of funding (sbtdc, 2014). A personal loan is most recommended for Jayne because she can obtain a personal loan without collateral. This financing will enable her to transform her enterprise into a more profitable venture in the short run. A personal loan is repaid through monthly installments thus Jayne will not be overburdened by repayment of debt as it is spread over a period of time. Organization structure and Staffing Needs Jayne has six employees currently which is a fairly small number. Supervision is easy and tasks can be assigned on a daily basis. The expansion plan will change Jayne`s staffing needs as new job positions will be created. Jayne will require a bigger work force and she will need to hire according to expertise. The expansion will require tasks and responsibilities to be clearly defined in advance to enable faster execution. Jayne will also require full time employees as the current ones work from 10am to 2pm. Jayne will need to delegate some tasks because her work load as...

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