1 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Chapter 10: Business Growth and the Entrepreneur

2 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Learning Objectives To understand how the skills needed by the entrepreneur will change as the business grows To comprehend why the entrepreneur should consider tailoring the size of the business to his or her personality To be able to explain why some entrepreneurs become dissatisfied when a company grows too large To understand the entrepreneur’s options if the company becomes too large

3 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Six Stages of Business Development Conception Survival Stabilization Growth orientation Rapid growth Maturity

4 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Personnel Management Early years Time management Setting goals Measuring performance

5 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Personnel Management As business grows Finding, retaining, motivating employees Move from direct to indirect management Do not micromanage

6 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Change in Company Structure Simple structure Limited growth structure Departmental structure

7 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Financial Management Overtrading Company cannot pay short-term costs incurred in pursuit of growth Manage accounts receivable to collect funds in a timely manner

8 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Marketing Concerns Cost-effective advertising Increase in competition Need to find new opportunities

9 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Match the Company and the Entrepreneur’s Personality Craftsperson Coordinator Classic entrepreneur Employee teams

10 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Business Growth and Dissatisfaction Loss of challenge of start-up Loss of family atmosphere Changing role of entrepreneur

11 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Options Keep the company small Rediscover the entrepreneurial spirit Cash in

12 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Business Growth and the Business Plan Growth is shown through financial projections Show consistent, but manageable, growth