Managing a Growing Business

Once an entrepreneurial business is up and running how does the owner manage it? Often the traits of self confidence, creativity and internal locus of control lead to financial and personal grief as the enterprise grows. A hands on entrepreneur who gave birth to the organization loves perfecting every detail. But after the start up continued growth requires a shift in management style. Those who fail to adjust to a growing business can be the cause of the problems rather than the solution. In this section, we will look at stages through which entrepreneurial companies move and then consider how managers should carry out their planning, organizing, leading and controlling.

Stages of growth:

Entrepreneurial business go through distinct stages of growth, with each stage requiring different management skills. The five stages are illustrated in Exhibit:

1) Start up: In this stage the main problems producing the product or service and obtaining customers. Several key issues facing managers are: Can we get enough customers? Will we survive? Do we have enough money? Burt’s Bees was in the start up stage when Roxanne Quimby was hand making candles and personal care products from the beeswax of Burt’s Shavitz’s bees and selling them at crafts fairs in Maine.

2) Survival: At this stage the business has demonstrated that it is a workable business entity. It is producing a product or service and has sufficient customers. Concerns here have to do with finances – generating sufficient cash flow to run the business and making sure revenues exceed expenses. The organization will grow in size and profitability during this period. Burt’s Bees reached $3 million in sales by 1993, and Quimby moved the business from Maine to North Carolina to take advantage of state policies that helped her keep cost in line.

3) Success: At this point the company is solidly based and profitable. Systems and procedures are in place to allow the owner to show down if desired. The owner can stay involved or consider turning the business over to professional managers. Quimby chose to stay closely involved with Burt’s Bees, admitting that she’s a bit of a control freak about the business.

4) Take off: Here the key problem is how to grow rapidly and finance that growth. The owner must learn to delegate, and the company must find sufficient capital to invest in major growth. This is pivotal period in an entrepreneurial company’s life. Properly managed the company can become a big business. However, another problem for companies at this stage is how to maintain the advantages of smallness as the company grows. In 2003, Quimby sold 80 percent of Burt’s Bees to AEA Investors a private equity firm. For more than $175 million she will continue as CEO and focus on continuing to grow the business.

5) Resources maturity: At this stage the company has made substantial financial gains, but it may start to lose the advantages of small size, including flexibility and the entrepreneurial spirit. A company in this stage has the staff and financial resources to begin acting like a mature company with detailed planning and control systems.


In the early stage formal planning tends to be nonexistent except for the business plan described earlier. The primary goal is simply to remain alive. As the organizations grow, formal planning usually is not instituted until around the success stage. Recall that planning means defining goals and deciding on the tasks and use of resources needed to attain them. Entrepreneurs define goals and implement strategies and plans to meet them. It is important that entrepreneurs view their original business plans as a living document that evolves as the company grows or the market changes.
Source: International Marketing