Businesses of all kinds need to devise a plan with which to follow as they grow and expand. Growth of a business could involve moving to a new premise, production of new and better products in larger quantities than before and so on. Kelly as an entrepreneur who has specialized in the food industry only makes lunch currently. However with a chance to expand and grow the business, she needs to plan for the growth and expansion. As her plan for growth involves shifting base and improving the business form in general, her plan for business growth should be designed to suit the objectives and strategies that she has in mind for her business.
Growth strategy
As a small business sole proprietor, Kelly should consider prioritizing and organizing the growth strategy of the business in a careful approach. First, she should ensure that the goals she sets are achievable and realistic. Kelly should also have a way of financing the business in mind as well as the best business structure that would make the venture successful. The strategies should also suit the business marketing and customer satisfaction needs.
The first step in the organization of the business growth strategy should be to design the future business structure. Kelly should decide on the kind of business she wants to have in future. This will help her design the necessary steps to achieving the growth. The type of financing system and how to get the finances should be her next objective. She should decide on how to fund the growth of the business without affecting its day to day operations.
Kelly should then decide on the type of strategies the business will employ so as to compete effectively in the food industry. Since the business currently only makes lunch, Kelly may decide to be making more meals like breakfast and dinner so as to increase sales and competitiveness of her business. This will also mean that her business will be open for longer hours than it does currently. Since she will be moving into the city, the level of competition will be much higher than it was when she had a small enterprise. She will have to increase the number of employees, raise the quality and increase the variety of foods that she sales. Her marketing strategies will have to go a notch higher, maybe include merchandising and other forms of customer attraction like advertisements.
Business form
A sole proprietorship form of business is the most appropriate for Kelly’s expansion plans. This is because this form of business is easy to set up with very few legal procedures. This will make Kelly’s work easier and quicker to accomplish. This form of business is also easy to access capital and the taxing of profits is done directly on the individual and there are also opportunities to get fringe benefits. However, this form of business will put full liability of the business on Kelly.
Financial assistance
Kelly has very ambitious short term goals which will definitely require a lot of finances to be fulfilled. She has a variety of options to consider. First is to finance the business on her own from the money that her enterprise generates. However, this will not be a sufficient mode of financing because there are so many objectives to be accomplished in the short term. The best way to finance Kelly’s business in the short term is to borrow loans from a financial institution. This will enable her to fund the moving into a new premise in the suburbs, market her new location, and expand the business in terms of products and coping with the market competitiveness in the food and hotel industry.
The loan financing is the most suitable for her business because her business has been operating at a profitably. Her business plan is also very appealing to any credit providing institution because the short term and long term objectives for the business are well formulated, and they are very much achievable by the business. The business has a bright future with the opportunities ahead and since Kelly has proven to be an ardent investor, she has a very high credibility to be given a loan. Furthermore, a loan is the most suitable method of financing because it will enable Kelly to fulfill all those objectives on a short term basis. A loan given in lump sum will cater for the rent moving onto a new premise, purchase of hotel and food equipment like utensils and food, employ more manpower, increase the variety of food on the menu and ensure a successful transition of the growth of the business.
Organizational Structure and Staffing Needs
With the business expansion plans in place, Kelly has to find an appropriate business structure that will determine organization and staffing requirements. The business will require more staff to keep up with the new level of food preparation and sales as well as the competition. The four workers will need to be increased by at least doubling that number or even more. Increasing the number of workers such as chefs, waiters and marketing staff is necessary to match the level of expansion.
The organizational structure of Kelly’s business should remain centralized. This is best organization structure because the business is still a small one and can be easily be managed centrally. A centralized business structure will help save resources as well as promote efficiency in the business. In a centralized structure, Kelly is capable of individually managing the business in all aspects. She should organize the business by allocating duties to every member of staff. Every employee should have a clearly defined duty. There should be the marketing staff, the cooking staff, and the serving/waitering staff. Each team of staff should be under the management of an individual who will oversee their work. The employees, once hired should be oriented and trained properly on their duties as well as on how they should conduct themselves at their place of work. In that centralized and vertical hierarchy, the people in charge of each team will report to the head of the business who oversees its daily and general operations.
Customers and promotion
With the business moving to a place ten miles away, Kelly should devise a way to retain the customers at that place she is moving away from. This could be by retaining the bicycle services of delivering food to them every day. This will assure her of a section of the market for her new business. The existing customers should be notified of the change of location of the business to allow them adjust to the changes. As she moves to a new location, Kelly should have a range of promotion strategies so as to create an appeal to new customers. This could be by providing samples of their food to potential customers, hanging posters and bill boards. This will help promote and market the new business.
Ethical Issues and Social Responsibility
With the shifting to a new premise and expanding the business, the business should start participating in social responsibility activities like taking part in charity. Social responsibility will include participating in the society development projects and generally returning part of the gains to society and customers as well as employees. The ethical issues will involve the relationship between customers, employees, the owner and the community. The business should treat customers in the best manner possible, the staff should be friendly and supportive o all customers and society at large. A good relationship between the proprietor, the staff and customers is suitable to ensure a good business environment.
Summary
The plan for growth will include four aspects. First, Kelly will have to consider the kind of procedure that is most suitable to prioritize and organize the business growth. The strategies that she employs in this plan must contribute fully towards the successful business growth. Kelly should also consider matching the business form that she wants with the expansion plans. The form of the business should be sensible and achievable given the amount of resources at her disposal. Kelly’s strategies should be both short term and long term, keeping in mind the mode of financing, staffing and organizational structure. She should find a way of how to hold on to her existing customers and how to get more when she moves into the new premise. Finally, Kelly should keep in mind social responsibility and ethical matters both to the customers, workers and society so as to promote her business reputation.
Resources
Ferrell, O. C., & Fraedrich, J. (2012). Business Ethics: Ethical Decision Making & Cases (9 ed.). London: Cengage Learning.
Kumar, D. (2010). Enterprise Growth Strategy: Vision, Planning and Execution (illustrated ed.). New York: Gower Publishing, Ltd.
Longenecker, J. G., & Petty, J. W. (2011). Small Business Management: Launching and Growing Entrepreneurial Ventures (16 ed.). London: Cengage Learning.
Mullin, R. (2010). Sales Promotion: How to Create, Implement and Integrate Campaigns That Really Work (9 ed.). New York: Kogan Page Publishers.
Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2011). Business (11 ed.). London: Cengage Learning.
