|This chapter provided a model that suggested where an entrepreneur could look for (or create) opportunities to grow his or her business-opportunities that would provide a basis for a sustainable competitive advantage. The relevant growth strategies are: (1) penetration strategies—encouraging existing customers to buy more of the firm's products, (2) market development strategies—selling the firm's existing products to new groups of customers, (3) product development strategies—developing and selling new products to people who are already purchasing the firm's existing products, and (4) diversification strategies-selling a new product to a new market. Most of these growth strategies can lead to a competitive advantage because they capitalize on some aspect of the entrepreneur's, and the firm's, knowledge base.
Business growth has important implications on the economy, the firm, and the entrepreneur. High-growth businesses can stimulate an economy, improve its international competitiveness, and reduce unemployment. Even modest levels of growth by small businesses can have a dramatic impact on an economy because the population of small firms is so large. It is also important to acknowledge that growth strategies often involve the entrepreneur's taking some risk, which means that sometimes they will not succeed. A failed attempt provides information for that entrepreneur and other entrepreneurs, and learning from failure has an important positive impact on an economy.
Because growth makes a firm bigger, the film begins to benefit from the advantages of size but also introduces a number of managerial challenges. It puts pressure on existing financial resources, human resources, the management of employees, and the entrepreneur's time. There are actions the entrepreneur can take to better manage these pressures and more effectively grow his or her business.
To overcome pressures on existing financial resources the entrepreneur should apply more effective financial control, record keeping, and inventory management techniques. To overcome pressures on existing human resources the entrepreneur must address the question of what proportion of the workforce should be permanent and what proportion should be part time; should be prepared to fire incompetent employees; and, at the same time, should build and maintain a functional organizational culture. It is important that the entrepreneur interact with employees, so as to establish a team spirit; effect open and frequent communication to build trust and provide constructive feedback; provide key employees with the flexibility to take the initiative and make decisions without the fear of failure; and provide continuous training for employees.
Entrepreneurs can always make better use of their time, and the more they strive to do so, the more it will enrich their venture as well as their personal lives. Better use of time can lead to increased productivity, increased job satisfaction, improved interpersonal relationships with people inside and outside the business, reduced anxiety and tension, and possibly even better health. Efficient use of time enables the entrepreneur to expand and grow the venture properly, increase personal and firm productivity, and lessen the encroachment of the business into his or her private life. Effective time management requires adherence to six basic principles: desire, effectiveness, analysis, teamwork, prioritized planning, and reanalysis.
Some entrepreneurs lack the ability to make the transition to this more professional management approach, while others may be unwilling to do so. Entrepreneurs who possess both the necessary abilities and the aspiration are most likely to achieve firm growth. Entrepreneurs who possess the necessary abilities but do not aspire to do so will manage firms that have unused potential and/or lifestyle firms. Entrepreneurs who aspire to grow their business but do not possess sufficient abilities are most likely to be frustrated by the firm's lack of growth and are in the most danger of business failure unless the entrepreneur replaces himself or herself. Finally, entrepreneurs who possess neither the necessary abilities nor the aspirations to grow their businesses may run businesses that provide a sufficient income if the businesses remain at a smaller scale.