Question

When asked about their growth plans, entrepreneurs often answer with something like, “we’ll cross that bridge when we come to it,” or “that will be a great problem to have.” However, it is possible for new businesses to fail because they aren’t ready for growth. Likewise, having a detailed exit strategy can impact how a company run’s its day to day operations. Discuss the importance of growth and exit strategies. What are some possible avenues the company can take in relation to growth and exit strategies for the company in which you developed your plan?

Please dont use an already answered question as i want a different perspective

Answer 1

In the words of Stevenson and others, "Entrepreneurship is the process of creating value by bringing together a unique package of resources to exploit an opportunity". According to A.H. Cole, "Entrepreneurship is the purposeful activities of an individual or a group of associated individuals undertaken to initiate, maintain or organize a profit oriented business unit for the production or distribution of economic goods and services."

All activities undertaken by an entrepreneur to bring a business unit into existence are collectively known as entrepreneurship. It is the process of changing ideas into commercial opportunities and creating values. In short, entrepreneurship is the process of creating a business enterprise.

Qualities of a successful entrepreneur includes

• Willingness to make sacrifices and assume risks
• Hard work
• Optimism
• Self confidence
• Leadership

Research is defined as a "systematic inquiry aimed at providing information to solve managerial problems." The term systematic is related to the scientific method, the idea being that research is the process of inquiry conducted in the best, or at least, most appropriate way.

According to Naresh Malhotra, a popular researcher and professor the definition of Marketing research is : The systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems (and opportunities) in marketing.

Growth can be good for business for many different reasons. It may allow you to

• take advantage of new opportunities
• expand your products or services
• attract more customer
• increase sales
• employ more staff

examples of growth strategies are

Promotion - Promoting products and services in order to gain market share. Promotion is key part of marketing programme and is concerned with efficiently and effectively communicating the decisions of marketing strategy to target audiences. It is the marketing function concerned with persuasive communication of the marketing programme to target audience with the intent to facilitate exchange between the marketer and the customer, which may satisfy the objectives for both customer and organization. Promotion mix are Advertising, Personal selling, Sales promotion, Publicity, Direct Marketing.

Branding - Branding means giving a name to the product by which it could become known and familiar among the public. When a brand name is registered and legalised, it become a Trade mark. All trade marks are brands but all brands are not trade marks. A brand's assets can be categorized in five groups

1. brand loyalty
2. Brand name awareness
3. Brand's perceived quality
4. Brand association in addition to the perceived quality
5. Other proprietary brand assets like patents, trademarks, channel relationships, and so on

Pricing - Setting the right price is important. It is the only part of the marketing mix that generates revenue (product, promotion and place are all about marketing costs)

Price is also the marketing variable that can be changed most quickly, perhaps in response to a competitor price change.

Innovation - Product development that aims to completely change an industry as opposed to directly competing with what exists today.

Quality - Improving marketing share by improving the quality of products and services. In many industries, reputation systems allows with a high quality product relative to price to be quickly rewarded.

Every company needs an exit strategy. Ideally, the exit strategy should be signed off by the founders before the first dollar of external investment goes into the company. a good exit strategy, well matched to the characteristics of the business and market will:

• improve the probabilities of success
• shorten the time to exit, and
• often significantly increase the ultimate exit valuation

Here are some exit strategies

Initial Public Offer - Initial public offers (IPO) where you sell a part of your business to the public in the form of shares. This strategy offers more benefits in the sense that it enhances access to liquidity for you in the event that investors are seeking returns or refunds earlier than anticipated. Most importantly, it offers you a chance to buy out other companies that are also privately held and trading, and have reached a financial roadblock.

Mergers - Another important and often considered exit is a merger. It is necessary for startup company to exercise the option to merge with another company should cash flow or liquidity become an issue. All investors want to known whether they can get their money back should the deal go south.

Private Offerings - The offering need not be registered with the SEC, and are exempt from required reporting arrangements and allows for existing shareholders to be bought out in a new fundraiser round.

Private offerings are less expensive and need less time to conduct since the services of underwriters or brokers are less required. You can choose investors who exhibit similar goals and interests, offering these investors more complex and confidential transactions.

Venture Capital - The key to maintaining a level of security among investors is to keep the cash rolling into the startup. Venture capitalists usually invest large sums of money into businesses and startups that are deemed worthy of note. Currently, there had been a downward trend of investments by venture capitalists due to the length of time it would normally take for investments to mature.