CASE STUDY: PLANNING FOR GROWTH 8
What steps should Kelly take to organize and prioritize herbusiness growth strategy?
A growth strategy will comprise of plans that are repetitive andaimed at ensuring that a business progresses in the right direction.A growth strategy will need various steps that will ensure that thebusiness grows. In this case study, Kelly needs to take various stepsthat will ensure that her business grows. To start with, Kelly needsto diversify her business and include more products and services intoher menu. It is evident that Kelly has largely concentrated herefforts in the sale of sandwich in her current sandwich stop shop. Inorder to organize and prioritize her business strategy, Kelly has totake the step of selling more foods to her customers.
Kelly should also take the step of adopting affiliate marketing. Itis apparent that she currently uses Facebook to reach her customersand advertise for her products and services. Affiliate marketing willbe critical for the growth of her business. This form of a networkmarketing where affiliates market products and services on behalf ofthe seller has become extremely popular and successful. Thirdly,Kelly must take the step of expanding her market area within theexisting and new markets. This will be critical in increasing thereturns for business and therefore enhancing its growth (Thakor,2011). Kelly has to look at the option of partnering with otherstakeholders in the business. This help the business in terms ofacquiring cheap supplies and enhancing marketing. Lastly, Kellyshould ensure that she puts in place systems that will enhanceefficiency and productivity.
What business form might make sense, given her expansion plans,and why?
It is evident that Kelly has operated as a sole proprietor in hersandwich concessions in town and she has been extremely successful.As a result of her success as a sole proprietor, it is only prudentthat she takes sole proprietorship as the form of her expandedbusiness. Kelly has proven to be extremely success as a soleproprietor and there would be no necessity to change the formbusiness. In addition, Kelly will enjoy the autonomy of managing thebusiness alone without any influence or control from any person. As asole proprietor, she will take the whole responsibility and liabilityof the business. It is also imperative to point out that it will easyfor her when making decisions in regard to the business.
Furthermore, the legal requirements for starting a soleproprietorship business are few. The business will be easy to startand Kelly will only need a business permit and a license from thestate. Another aspect that Kelly should consider in selecting soleproprietorship as a form of business is taxation. It is critical tonote that the sole proprietor, in this case Kelly, and the soleproprietor’s business are charged a single tax. Equally, Kellyenjoys all the income from the business as a sole proprietor and haslittle or no obligations to any person except her business creditors.Lastly, the experience that Kelly has had with sole proprietorship inher sandwich concession in town and the bicycle towed concession willbe of immense importance when operating the expanded business at therestaurant.
Focusing primarily on Kelly’s short-term goals, what kind offinancial assistance might be available to Kelly? Which options wouldyou recommend, and why?
With the short term goals of increasing the variety offoods and services, as well as increasing the business’scompetitive edge in the region, Kelly has a variety of sources thatcan offer financial assistance. Getting a bank loan is the mostprobable source of financing for Kelly’s short term goals. Banks doeasily provide loans to small businesses without very strictconditions (Thakor, 2011). It is also evident that Kelly can acquirea loan from various micro-lenders. These are lenders who provideloans to small businesses for growth.
Since Kelly’s business is a small one, it is also evident that shecan access loans from friends and family members. This would beextremely helpful since the loans from friends and family members donot require any form of guarantee or security. It is also prudentthat Kelly approach the attainment of the short term goals throughfinancing some of the activities through her own savings. In thespirit of supporting small and upcoming entrepreneurs, the Americangovernment has embarked on offering some financial grants for smallbusinesses. Kelly can take advantage of these grants and acquire afinancial grant for her business’s short term goals.
Kelly should resort to her savings before extending her search forfinancial aid to loans. Should her own savings fails to finance heractivities, Kelly should resort to loans from friends and familymembers, as well as grants. This is because these forms of financingare cheap and will not put undue pressure on her during repayment(Thakor, 2011). However, Kelly should keep options open and shouldacquire cheap loans from banks and micro-lenders to supplement theamount she might be having.
How might Kelly’s staffing needs change? What kind oforganizational structure do you think Kelly’s expanded businessshould have, and what is the best way for her to organize, orient,and train her restaurant staff (e.g., functional categories, units,teams, flat or vertical hierarchy) to meet the needs of her newbusiness?
Apparently, Kelly has employed four part time employees. As thebusiness expands, it is critical to note that the staffing needs willchange immensely. The number of employees will increasing and theworking hours will also change. The employees might also stop beingpart time and become permanent employees in the business. It istherefore clear that Kelly has to add the number of employees for herbusiness and adjust their working hours.
Kelly should adopt a flat hierarchy form of organizationalstructure. Since the expanded business will be a sole proprietorship,a simple organizational structure will be effective for the expandedbusiness (Baligh, 2009). Authority will be concentrated on the owner,in this case, Kelly and the rest of the employees will only takecommands from her. This is because the simple structure is earmarkedfor small businesses such as the one for Kelly in this case (Baligh,2009).
Kelly could also consider having an assistant under her in order toaid her in duties. The assistant could be the leader of the otheremployees. Kelly could also consider organizing her staff in terms ofdepartments. Since her business has expanded, it is imperative forher to have a unit or department that deals with cooking, a team ofwaiters and subordinate staff such as cleaners. The employees must betrained depending on their department. For instance, Kelly must trainand orient the team of employees who will be working as cooks. Thewaiters must also be trained in order to offer excellent services toKelly’s customers. It is vital for Kelly to note that the successof her business depends on the quality of services and products thatshe offers for her customers.
How should Kelly deal with her current customers in regard tothe change? What kind of promotion should she consider in attractingcustomers to her new location?
It is apparently clear that Kelly’s current customers willbe totally disappointed with her departure. As a way of maintainingthis customer base, Kelly should consider delivering food to thecurrent customers on order. This will not only expand her market, butwill also keep her old customers satisfied. It is also vital for herto communicate effectively with her current customers in regard toher new location. It can be argued that some of the customers mightbe finding time to buy her delicious food from her new location.
Penetrating a new market has been easy for any kind of business. Inthis light, Kelly must be creative in finding a way of attractingcustomers into her business’s new location. Promotions have beenthe strategy that businesses use in trying to attract customers(Stafford & Faber, 2012). It would be prudent if Kelly wouldconsider giving free samples of her delicious food for the first dayof opening in her new location. The most critical thing in herbusiness is for customers to know the high quality of her products.Advertising through the social media such as Facebook and Twitterwould also be extremely helpful in marketing her new location(Stafford & Faber, 2012).
What are the ethical issues and potential socialresponsibilities highlighted by this change? (Consider customers,employees, the current and new communities, and other stakeholders.)How might these issues be dealt with most appropriately?
The expanded business in the new location has a number of ethicalissues to deal with. It is a fact that the new location has diversepeople from different races and ethnic backgrounds. The business musttreat all the customers equally without discrimination. Kelly’sbusiness has also the duty of ensuring that it serves all thecustomers with honesty and trust. In other words, the business mustestablish trust with both the employees and the customers. Thedevelopment of trust between the business and the customers will be asignificant factor in ensuring that the expanded business succeeds(Thakor, 2011). The decisions made in regard to the employees must beseen to be fair and just. Kelly must treat all the employees equallyand there should be no employee who is favored over the rest.
Every business has the social responsibility of protecting theenvironment as a way of giving back to the society. Kelly’sbusiness should be in the front line in protecting the environment.For instance, it would be prudent for the business to package foodsfor delivery with degradable materials as a way of protecting theenvironment.
Baligh, H. H. (2009). Organization structures: Theory and design,analysis and prescription. New York: Springer.
Thakor, A. V. (2011). The Four Colors of Business Growth.Burlington: Elsevier Science.
Stafford, M. R., & Faber, R. J. (2012). Advertising,promotion, and new media. Armonk, NY: M.E. Sharpe.