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Journal of Small Business and Enterprise Development, Volume 7, Number 1

Factors in the growth of micro-enterprises


(Part 2): Exploring the implications

Lew Perren
Brighton Business School, University of Brighton, Mithras House, Lewes Road, Brighton BN2 4AT, UK
Tel: 01273 642979; Fax: 01273 642980; Email: L.Perren@brighton.ac.uk

Received: 5th January, 1999; Revised: 16th August, 1999; Accepted: 11th November, 1999

ABSTRACT . Growth beyond the micro-enterprise phase


This research examines micro-enterprises pursuing requires the combined in¯uence of the
gradual growth. The research ®ndings and implica- independent factors to be positive on all
tions are provided in two parts. Part 1 was pre- four interim growth drivers.
sented in Volume 6, Number 4 of the Journal of . There is the possibility of compensation,
Small Business and Enterprise Development the phenomenon where a de®cit in one fac-
(JSBED) (Perren, 2000). It developed an empiri- tor's in¯uence against an interim growth
cally veri®ed framework that explains how growth driver can be counterbalanced by another.
was in¯uenced by a myriad interacting factors; this
led to a discussion of the policy implications of the Managerial and policy conclusions from part 2
framework. . The diagnostic toolkit provides micro-
Part 2 explores the managerial implications of enterprise owner-managers and their advi-
the framework. A diagnostic toolkit is systemati- sers with a systematic way of exploring the
cally developed to encourage micro-enterprise in¯uences on the interim growth drivers
owner-managers and advisers to explore the in¯u- and highlighting ways of compensating
ences on the interim growth drivers identi®ed in de®cits in particular factors.
part 1. It is hoped this will help them to highlight . Adopting a Socratic questioning approach
ways of `compensating' de®cits in particular factors helps unleash owner-managers' intimate
and to think creatively about growth opportunities. knowledge about their businesses and
The audience has changed from academics and empowers them to think creatively about
policy-makers to owner-managers, so the diagnostic growth opportunities.
toolkit avoids technical language and employs a . Owner-manager centred approaches like
Socratic questioning approach to encourage free- this should be encouraged, as they can help
thinking and self-analysis. develop diagnostic skills and self-awareness.
They may also reduce the risk of over
dependence on external advisers.
MANAGERIAL AND POLICY IMPLICATIONS
KEY WORDS
Key managerial and policy conclusions from Micro-enterprises, growth, factors, development,
part 1
start-up, diagnostic
. Four interim growth drivers in¯uence
micro-enterprise development: owner's INTRODUCTION
growth motivation, expertise in managing This research examines micro-enterprises pursuing
growth, resource access and demand. gradual growth.1 The ®ndings and implications
. The interim growth drivers are in turn are provided in two parts. Part 1 was presented in
in¯uenced by a myriad independent factors. Volume 6, Number 4 of the Journal of Small Busi-

# 2000 Henry Stewart Publications, ISSN 1462±6004, 58±68


Perren

ness and Enterprise Development (JSBED) (Perren, Post, 1996).5 It must also be recognised that many
1999). It developed an empirically veri®ed frame- owner-managers will not wish to pursue growth
work from 16 case studies that explained how (eg Hakim, 1989; Barkham et al., 1996; Watson et
growth was in¯uenced by a myriad interacting al., 1998) and that the diagnostic toolkit will be of
factors. This led to a discussion of the policy little help to them. Thus, the early questions will
implications of the framework. focus on the owner-managers' growth orientation
Part 2 is presented here and explores the man- (G1) to help them decide whether they wish to
agerial implications of the framework. The continue with the rest of the diagnosis.
emphasis moves from a historic analysis of cases to Thirdly, the diagnostic toolkit cannot o€er the
a practical agenda for helping owner-managers guarantee of future growth nor its prediction.
and advisers achieve growth. This switch of The complexity of interacting elements is just too
emphasis raises some methodological issues. First, great (eg Runciman, 1999) and, as the part 1 ana-
although the agenda is now more practical, it is lysis showed, many of the factors that in¯uence
still important that an audit trail of evidence is growth are outside the control of the owner-
maintained (Miles and Huberman, 1994). The con- manager. This may leave growth beyond the
version of elements from the framework in part 1 grasp of some owner-managers, even when there
to the diagnostic questions in part 2 needs to be is the possibility of compensation between
systematic and transparent. Tables 1 and 2 provide factors. However, the diagnostic toolkit can o€er a
example conversions. They show how there is a systematic process for an owner-manager to
need for elements in the framework to be trans- develop awareness of his or her circumstances, to
lated into more general questions while retaining explore the potential for growth and perhaps to
the underlying meaning. identify opportunities that are currently being
Secondly, the audience has changed from neglected.
academics and policy makers to owner-managers. The diagnostic toolkit will employ a Socratic
Therefore, it is important that the diagnostic questioning approach as a way of unleashing the
questions are presented in an appealing way that owner-manager's intimate knowledge (eg Curran
will make them easy to use. Technical language et al., 1997; Perren et al., 1998)6 of his or her
will be avoided (eg Curran et al., 1997; Perren et business and galvanising it into analysis. Russell
al., 1998),2 the personal pronoun `you' will be (1961) suggests that the Socratic method should
employed to draw the owner-manager into the be used when we already have `knowledge to
process (eg Kirschenbaum and Henderson, 1990)3 come to a right conclusion, but have failed,
and a clear diagrammatic overview provided (eg through confusion of thought or lack of analysis,
De Bono, 1990; Eccles and Nohria, 1992).4 The to make the best logical use of what we know'
metaphor of a `diagnostic toolkit' will be used to (p. 110). The diagnostic toolkit may also act as a
convey functionality and utility (eg Keizer and stimulus for owner-managers to investigate

Table 1: Example elements from an independent factor in¯uencing the interim growth driver resource
access (G3) (excerpt from Table 6 from part 1)

Resource access (G3) Element Nature of in¯uence Case references


Independent factor number

(F12) Debtors and creditors 1 . A supplier o€ering special terms of business can A,E,F,G,I,J,L,M,N
be a positive in¯uence (in combination with
factor 8)
2 . A supportive bank can be a positive in¯uence B,E,F,G,H,J,K,M,P
3 . Especially quick-paying customers and good C,D,G,K,N
debtor management can be a positive in¯uence.
4 . Poor debtor control can be a negative F
in¯uence.
5 . Cash based business with low stocks can be a I,O
positive in¯uence.
6 . A major bad debt can be a negative in¯uence. N

Journal of Small Business and Enterprise Development 59


Factors in the growth of micro-enterprises (Part 2): Exploring the implications

Table 2: Example questions developed from elements in Table 1 (excerpt from Table 5 from part 2)

G3. Resource access Questions (please skip irrelevant questions) Audit trail
Independent factors

Examining sources of resource


Making the most of your suppliers
(F12) Debtors and creditors & . What special terms are you currently receiving from your suppliers? Element 1
(F8) Transferable network of . How could you negotiate even better terms from your suppliers? Element 1
contacts . How could you negotiate stock on a sale or return basis?
. What other supplier contacts do you have that may o€er favourable
terms of trade?
Making the most of your bank
. How supportive is your bank? Element 2
. What is your relationship with your bank manager?
. How could you make the bank more supportive?
. How could you keep the bank more informed of how business is
going?
Keeping control of your debtors
. How quickly do you get paid? Element 3,
. How do you keep a watchful eye on people that owe you money? 4&6
. How do you chase people that owe you money?
. What are your terms and conditions of trade?
. How could you improve your control of debtors?
. What risks do you have of a major bad debt?
. What steps could you take to reduce this risk?
Keeping control of stock and cash
. How could you reduce the amount of stock you hold? Element 5
. What level of your business is cash based?
. How could you increase the number of cash sales?

aspects of the business that have been overlooked, in¯uence against an interim growth driver may
even when there is readily available information be counterbalanced by another factor's in¯uence.
(eg Daniels and Henry, 1998).7 The intention is Figure 1 develops this theme by providing a
to encourage `soft analysis' by posing `the right diagnostic toolkit to help micro-enterprise
questions' so `complex issues get opened up to owner-managers and advisers explore the in¯u-
thoughtful consideration instead of being closed ences on the interim growth drivers (G1 to G4),
down prematurely by snap decisions' (Mintzberg, highlight ways of `compensating' de®cits in parti-
1998, pp. 222±223).8 cular factors (F1 to F16) and suggest methods to
help them think creatively about development
THE DIAGNOSTIC TOOLKIT opportunities.
Now the methodological issues have been The factors in Figure 1 are grouped into three
explored, it is timely to present the diagnostic categories, illustrated by di€erent shapes.10 Hexa-
toolkit. The analysis in part 1 suggested that, for a gons represent those factors that will require a
business to achieve growth beyond the micro- degree of self-awareness on the part of the owner-
enterprise phase, the combined in¯uence of the manager and, to some extent, may be viewed as
independent factors on all four of the interim part of his or her psychological make-up. The psy-
growth drivers (G1 owner's growth motivation, chological make-up of individuals that start up
G2 expertise in managing growth, G3 resource businesses has caused considerable discussion over
access and G4 demand) must be positive.9 An the years (eg Chell et al., 1991; Shaver and Scott,
interim growth driver can be in¯uenced by a 1991; Chell and Pittaway, 1998); indeed Daryl
number of di€erent independent factors. This Mitton (1989) described research in this area as `a
introduces the possibility of `compensation', the theory jungle'. The approach here is pragmatic; a
phenomenon where a de®cit in one factor's trek through this theory jungle is outside the scope

60 Journal of Small Business and Enterprise Development


Perren

F16. F4. Innovator


F3. Active F9. Family and
Competitive
risk taker investing friends
dynamics
F8. Transferable
network
F16.
F1. Desire to Competitive
F2. Desire to dynamics
be one’s own
succeed
boss
F3. Active F12. Debtors
risk taker and creditors
F14. State of
economy
G1. Owner’s
Growth
Motivation
F5. Transferable
personal capital F10. Key
employees

F10. Key G3. Resource Growth of


G4. Demand F3. Active
employees Access Micro-Enterprise
risk taker

F9. Family and F6. Transferable


investing friends G2. Expertise in primary skill
Managing
Growth
F14. State of F8. Transferable F15. Product
economy network sector

F7. Transferable F8. Transferable F13. Societal


support skill network and ‘outer’
factors
F9. Family and
investing friends
F11. Active
F10. Key F9. Family and F2. Desire to
professional
employees investing friends succeed
advisers

Key

Factors that require owner-manager self-awareness.

Factors that are pervasive and the owner-manager has little control over.

Factors that the owner-manager has more control over.

Interim Growth Drivers.

Growth of Micro-enterprise.

Figure 1: Empirically veri®ed diagnostic toolkit for micro-enterprise growth

of this paper. The hexagons merely suggest, in a factor. Octagons represent those factors (mostly
common-sense way, that diagnosing these factors internal to the business) over which the owner-
will require the owner-manager to consider his or manager has more control. There has been a long-
her own wishes and feelings. running debate in the strategy literature regarding
Squares represent those factors (mostly external) the level of control that a business can have over its
that exercise a pervasive in¯uence, rather like grav- a€airs (eg Whittington, 1993) and various schools
ity.11 The owner-manager may be able to adjust of thought have emerged (eg Mintzberg, 1998).12
the strategy of the micro-enterprise to take account Becoming entangled in this debate would be an
of these factors or look for compensation, but he unhelpful distraction, so a pragmatic approach is
or she can exercise little in¯uence over the actual adopted. Indeed, some researchers in the strategy

Journal of Small Business and Enterprise Development 61


Factors in the growth of micro-enterprises (Part 2): Exploring the implications

area have themselves recently been calling for more `investing' friends etc (F9) and competitive
pragmatic approaches (eg Jones, 1998).13 The dynamics (F16).
square and octagons categories are not intended to
be absolute, they merely indicate, in a common- Diagnosing and compensating for expertise in
sense way, the level of control that an owner- managing growth (G2)
manager is likely to have over a given factor. Table 4 converts elements from the framework in
Now an overview of the diagnostic toolkit has part 1 to provide questions that diagnose and com-
been provided, it is timely to focus on the diagno- pensate for expertise in managing growth (G2).
sis and compensation of the interim growth dri- The questions focus on ®ve potential in¯uencing
vers. Each interim growth driver will be factors: transferable support skills (F7); key
considered in turn, and a table detailing the diag- employees (F10); family, `investing' friends etc
nostic questions provided. (F9); active professional advisers (F11) and transfer-
able network of contacts (F8).
Diagnosing and compensating for owner's
growth motivation (G1) Diagnosing and compensating for resource
Table 3 converts elements from the framework in access (G3)
part 1 to provide questions that diagnose and com- Table 5 converts elements from the framework in
pensate for owner's growth motivation (G1). part 1 to provide questions that diagnose and com-
The questions focus on ®ve potential in¯uencing pensate for resource access (G3). The questions
factors: desire to succeed (F2); desire to be `one's focus on seven potential in¯uencing factors: active
own boss' (F1); active risk taker (F3); family and risk taker (F3); debtors and creditors (F12); transfer-

Table 3: Diagnosing and compensating for the interim growth driver owner's growth motivation (G1)

G1. Owner's growth motivation Questions (please skip irrelevant questions) Audit trail
Independent factors

Asserting your ambitions


(F2) Desire to succeed . What are your hopes for your business over the next ten years? Element 1
. What are your business ambitions? &2
. How do you measure business success? Element 3
. How important is business growth to you compared with your
other measures of business success?
. How important is having a personal control of most aspects of the
business to you?
(F1) Desire to be `one's own . How do you feel about delegating aspects of the business? Element 1
boss' and (F3) active risk . How large does your business need to be for you to feel for secure?
taker. . How much will you need to grow the business to achieve this size?
Re¯ecting on your ambitions
(F9) Family, `investing' . What family problems might a€ect your drive? Element 1
friends etc . What steps you can take to reduce family friction?
(F16) Competitive dynamics . What scale does your business need to be to achieve the level of Element 1
income you want?
. What competitive pressures might cause you to increase the scale of
your business?
. What circumstances might cause margins to be reduced so you need
to increase volumes to maintain your current pro®t level?
. What circumstance might cause your suppliers to expect larger
volume orders?
Summing-up
. How would you summarise your growth motivation?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

62 Journal of Small Business and Enterprise Development


Perren

Table 4: Diagnosing and compensating for the interim growth driver expertise in managing growth (G2)

G2. Expertise in managing Questions (please skip irrelevant questions) Audit trail
growth
Independent factors

Reviewing your management/administrative skills


(F7) Transferable support . What management skills have you developed from your previous Element 1
skills job(s)? &2
. What experience do you have of managing sta€?
. How familiar are you with the support systems your type of
business will need (eg bookkeeping, stock-control, customer records)?
. How do you feel about undertaking such management tasks?
Reviewing others' management/administrative skills
(F10) Key employees, . How could your current/future employees help you with the Element 1
partners etc setting-up and running of support systems (eg bookkeeping, stock- &2
control, and customer records)?
. What support systems have your employees already set-up?
. How well are they working?
. Who could you employ to help set-up and run your support
systems?
(F9) Family, `investing' . How could members of your family help you with the setting-up Element 1
friends etc and running of support system?
. What members of your family have worked in an oce before or
have bookkeeping skills?
(F11) Active professional . How could your professional advisers (eg accountant, bank- Element 1
advisers manager etc) help with the setting-up and running of support systems?
. What steps you could take to obtain such advice?
(F8) Transferable network . Who do you know who has set-up a similar type of business? Element 1
of contacts . What questions could you ask them about their support systems?
. How could you persuade them to let you have copies of their
invoices, terms of trade, stock control systems etc?
Summing-up
. How would you summarise the factors in¯uencing expertise in
managing growth?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

able network of contacts (F8); transferable personal CONCLUSIONS AND IMPLICATIONS


capital (F5); family, `investing friends' (F9); key The framework in part 1 provided a ¯exible
employees (F10) and the state of the economy (F14). structure that contributed a clear agenda for
analysing a micro-enterprise's growth, whilst
Diagnosing and compensating for demand (G4) allowing speci®c issues to be investigated within
Table 6 converts elements from the framework in their environmental context. It enabled the host of
part 1 to provide questions that diagnose and com- factors that might a€ect the growth of micro-
pensate for demand (G4). The questions focus on enterprises to be investigated. The cases suggested
11 potential in¯uencing factors: the state of the that for a ®rm to achieve growth beyond the
economy (F14); societal and other `outer' factors micro-enterprise phase, the combined in¯uence of
(F13); product sector and market segments (F15); factors on all four of the interim growth drivers
competitive dynamics (F16); transferable network had to be positive. This introduced the possibility
of contacts (F8); transferable primary skills (F6); of `compensation', the phenomenon where a de®-
innovation (F4); active risk taker (F3); desire to cit in one factor's in¯uence against an interim
succeed (F2); key employees, partners etc (F10); growth driver could be counterbalanced by
and family, `investing friends' etc (F9). another factor's in¯uence.

Journal of Small Business and Enterprise Development 63


Factors in the growth of micro-enterprises (Part 2): Exploring the implications

Table 5: Diagnosing and compensating for the interim growth driver resource access (G3)

G3. Resource access Questions (please skip irrelevant questions) Audit trail
Independent factors

Re¯ecting on your attitude to risk


(F3) Active risk taker . How do you feel about taking risks to obtain the resources for Element 1
growth? &2
. How do you feel about taking personal ®nancial risks?
. What level of personal ®nancial risk will you need to take to pursue
growth?
. What ways are there for you to reduce your personal risks?
. How will your attitude to risk in¯uence your willingness to tap the
sources of resource examined below?
Examining sources of resource
Making the most of your suppliers
(F12) Debtors and creditors & . What special terms are you currently receiving from your suppliers? Element 1
(F8) Transferable network of . How could you negotiate even better terms from your suppliers? Element 1
contacts . How could you negotiate stock on a sale or return basis?
. What other supplier contacts do you have that may o€er favourable
terms of trade?
Making the most of your bank
. How supportive is your bank? Element 2
. What is your relationship with your bank manager?
. How could you make the bank more supportive?
. How could you keep the bank more informed of how business is
going?
Keeping control of your debtors
. How quickly do you get paid? Element
. How do you keep a watchful eye on people that owe you money? 3, 4 & 6
. How do you chase people that owe you money?
. What are your terms and conditions of trade?
. How could you improve your control of debtors?
. How likely is it that you will su€er a major bad debt?
. What steps could you take to reduce this risk?
Keeping control of stock and cash
. How could you reduce the amount of stock you hold? Element 5
. What level of your business is cash based?
. How could you increase the number of cash sales?
(F5) Transferable personal Investing your own money Element 1
capital . What money or assets do you have that could support growth? &2
. How willing are you to use your personal money or assets?
. How could you use your personal assets as security for a loan?
. What ways could you use your funds and still keep them protected?
(F9) Family, `investing' Investing your family's or friends' money Element 1
friends etc . What money or assets does your family or friends have that could
be used to grow the business?
. How willing would they be to let you use their money or assets?
. How could you use their assets as security for a loan?
(F8) Transferable network . What ways could you protect their money?
of contacts . What personal contacts do you have that could give you access to Element 1
funds?
. What local business people do you know who might be willing to Element 3
(F10) Key employees, invest in your business?
partners, etc . Who do you know that might become a partner to help you with
®nancing start-up or expansion?

64 Journal of Small Business and Enterprise Development


Perren

Table 5: Continued

(F10) Key employees, Making the most of employees Element 1


partners, etc . What employees do you have that are willing to work longer hours &2
or more ¯exibly than normal?
. How can you encourage employees to be supportive of the
business?
. What employees do you have in critical roles?
. How well are they performing in these critical roles?
. How could you improve their performance?
(F14) The state of the Looking out for changes in the law Element 1
economy and its . What changes in the law may stop some of your working practices?
management by . What local authorities or other agencies may in¯uence how you can
government use your resources?
Summing-up
. How would you summarise the factors in¯uencing resource access?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

Part 2 has explored the managerial implications ACKNOWLEDGEMENTS


of the framework presented in part 1. A diagnostic The author is grateful to Professor Aidan Berry,
toolkit has been systematically developed to Professor John Bessant, Professor Robert Black-
encourage micro-enterprise owner-managers and burn, Professor Tom Bourner, Peter Hovell, Peter
advisers to explore the in¯uences on the interim L. Jennings, Barry Le Scherer, Dr David Paskins,
growth drivers. It is hoped this will help them to Professor Monder Ram, Seymour Roworth-
highlight ways of `compensating' for de®cits in Stokes, Professor Adrian Woods and the anon-
particular factors and to think creatively about ymous reviewers for their helpful feedback on this
growth opportunities. research.
The audience has changed from academics and
policy makers to owner-managers, so the diag- NOTES
nostic toolkit avoids technical language and 1. The European Commission has de®ned micro-
employs a Socratic questioning approach to en- enterprises as ®rms with fewer than ten
courage free thinking and self-analysis. Adopting employees (Stanworth and Gray, 1991). The
a Socratic questioning approach will hopefully help term is now accepted by the small business
unleash owner-managers' intimate knowledge research community; for example, Robertson
about their businesses and empower them to think (1994) and Storey (1994) have both referred to
creatively about growth opportunities. By empow- micro-enterprises. For this research, gradual
ering owner-managers to question their own situa- growth is de®ned as taking four years or more
tion, the diagnostic framework can o€er timely to grow beyond the micro-enterprise phase.
and tailored support without exorbitant cost. Some 2. Curran et al. (1997) and Perren et al. (1998)
form of participatory action (Reason, 1994) may both found that owner-managers lack manage-
be appropriate, where an owner-manager uses the rial and technical vocabularies, although they
diagnostic toolkit with a business counsellor to may well have an understanding of underlying
develop growth strategies for the future. Owner- concepts.
manager centred approaches like this should be 3. Kirschenbaum and Henderson (1990) note that
encouraged, as they can help develop diagnostic the use of personal pronouns by Carl Rogers
skills and self-awareness. They may also reduce the was `a subtle yet signi®cant factor in his wide-
risk of over dependence on external advisers. spread impact'. They observe that people
The author hopes the diagnostic toolkit will be would comment, `I felt as though he were
helpful to micro-enterprise owner-managers and addressing me personally . . . even when
advisers in their quest for growth. The author Rogers was speaking to hundreds or even
would welcome readers' feedback on their applica- thousands of people' (p. 5).
tion of the diagnostic toolkit. 4. De Bono (1990) suggests that images `can be

Journal of Small Business and Enterprise Development 65


Factors in the growth of micro-enterprises (Part 2): Exploring the implications

Table 6: Diagnosing and compensating for the interim growth driver demand (G4)

G4. Demand Questions (please skip irrelevant questions) Audit trail


Independent factors

Scanning and acting


Scanning and acting on broad changes
(F14) The state of the . What are the main trends in the economy? Element 1
economy and its . What are the newspapers saying about the economy? &2
management by . What is the local economy like? How is it di€erent from the
government national economy?
. What steps should you take in the light of the economic situation?
. How could an economic downturn be to your advantage? Element 3
. How could you take advantage of government deregulation or Element 4
other major economic policies?
(F13) Societal and other . What are the changes in society's attitudes that may in¯uence your Element 1
`outer' factors business (eg attitudes on health, leisure, pollution etc.)? &2
. How are these changes in attitude causing changes in the law?
. How will potential legal changes in¯uence your business?
. What steps can you take to exploit or avoid these changes?
Scanning and acting on close changes
(F15) Product sector and . How is the general sector your business trades in performing? Element 1
market segments . What are the changes in competition? &2
. What changes are occurring in the number and size of competitors?
. What steps can you take to remain competitive?
. How could you take advantage of the protection of a major Element 3
customer? Element 4
. What types of customer does the market serve? &5
. What are the opportunities for you to target a particular type of
customer or focus on a particular geographic area?
(F16) Competitive dynamics . What type of customers are you targeting at the moment? Element 2
. How could you change the type of customers that you are &3
targeting? Element 1,
. What large competitors are in your geographic area? 4&6
. What are the trends in competition in the area?
(F16) Competitive dynamics . What in¯uence would expansion have on the competitors that you Element 6
& (F8) Transferable network face? Element 1
of contacts . How close is your relationship with your customers?
(F13) Societal and other . How could you improve the closeness of your relationship with
`outer' factors your customers? Element 3
. What are the changes in the local population (eg age, wealth, and &4
numbers)?
. What in¯uence will these changes have on your business?
. What steps should you take in the light of these changes?
Exploring skills and attitudes that in¯uence demand
Re¯ecting on your skills and attitudes
(F6) Transferable primary . What core technical or sales expertise do you have? Element 1
skills . What core technical or sales areas are you less con®dent in? &4
. How experienced a negotiator are you? Element 2
. What steps can you take to exploit or plug the gaps in your
expertise? Element 1
(F4) Innovation . How good are you at spotting market opportunities? &2
. How often do you think of new marketing opportunities for your
business?
. How often do you think of new types of customers you could
approach?

66 Journal of Small Business and Enterprise Development


Perren

Table 6: Continued

. How focused are you on the technical side of the business compared
with its marketing?
. What steps can you take to become even more focused on the
market?
(F3) Active risk taker . How willing are you to take on challenging or risky orders? Element 1
. When do you turn down customers because their requirements are &2
too large or too risky?
. When do you need to take on larger or more dicult orders to
stimulate growth?
. What steps can you take to assess the risk of taking on larger or Element 1
more dicult orders?
(F2) Desire to succeed . What particular markets do you like to serve even though there are
more lucrative customers elsewhere?
. Why do you like to serve these markets?
. What particular technical areas do you like to operate in even
though there are more pro®table areas?
. What new markets could you move to?
(F10) Key employees, partners Re¯ecting on others' skills and attitudes Element 1
etc & (F9) Family, `investing' . What employees, partners or family members have good sales &2
friends etc abilities? Element 1
. How can you make the most of them?
(F10) Key employees, partners . What problems might arise with such employees, partners or family
etc members? Element 3
. What employees or partners have key technical skills?
. How can you make the most of them?
. What customer contacts do your employees have that could be Element 5
helpful?
. How can you attract employees or partners that have customer
contacts? Element 4
. How can you make the most of such contacts?
. What are the risks of an employee or partner setting-up in
competition?
What steps can you take to stop partners setting-up in competition?
Summing-up
. How would you summarise the factors in¯uencing demand?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

more powerful than words for conveying the power of the famous tank and the formal-
ideas because, unlike words, they exist comple- ity of the ocer in the Roman army.
tely at one moment in time' and they engage 6. Curran et al.'s (1997) investigation of pricing
right-brain thinking that perceives patterns in small businesses found that, while the meth-
and relationships. Eccles and Nohria (1992) ods of information provision were informal,
also point to the importance of diagrams when they supported quite sophisticated decision
communicating a message to managers, they making. Perren et al. (1998) found that
suggest that the success of the Boston Consult- owner-managers of successful growth-orien-
ing Group's growth/share matrix is in part due tated service sector businesses developed inti-
to the ease of its pictorial representation. mate tacit knowledge of their businesses.
5. Keizer and Post (1996) suggest that metaphors 7. Daniels and Henry (1998) suggest that man-
o€er a powerful way for managers to com- agers can become prisoners of their mental
municate change. They suggest that Phillip's models and only accept `con®rmatory' infor-
use of the Centurion metaphor for its change mation. The diagnostic toolkit may help man-
programme may have evoked the image of agers to breakout of their mental cage.

Journal of Small Business and Enterprise Development 67


Factors in the growth of micro-enterprises (Part 2): Exploring the implications

8. The following websites helped with framing Keizer, J. A. and Post, G. J. J. (1996) `The Metaphoric
open questions: www.ifaassociates.com, Gap as a Catalyst of Change', in C. Oswick and
www.williecrawford.com, www.consults- D. Grant (eds) Organisation Development: Metapho-
kills.com and talec.ntu.ac.uk. rical Explorations, Pitman, London.
Kirschenbaum, H. and Henderson, V. L. (1990) The
9. An intervening factor emerges as a function of
Carl Rogers Reader, Constable, London.
an independent factor(s) acting in a given
Miles, M. B. and Huberman, A. M. (1994) `Qualitative
situation, `and helps to conceptualise and Data Analysis', Sage, Thousand Oaks, CA.
explain the in¯uence of the independent' fac- Mintzberg, H. (1998) `The Fall and Rise of Strategic
tor(s) on the dependent factor (Sekaran, 1992, Planning', in B. de Wit and R. Meyer (eds)
p. 70). Strategy: Process, Context, Content, International
10. This idea was stimulated by one of the anony- Thomson, London (adapted version of an article
mous reviewers. originally in the Harvard Business Review).
11. This example was taken from another source, Mitton, D. G. (1989) `The Compleat Entrepreneur',
but the precise reference cannot be remembered. Entrepreneurship Theory and Practice, 13(3), 9±19.
12. Mintzberg (1998) provides a helpful summary Perren, L. (2000) `Factors in the Growth of Micro-
of the di€erent schools of thought. Enterprises (Part 1): Developing a Framework',
Journal of Small Business and Enterprise Development,
13. Jones (1998) calls for observers not to be over-
6(4), 366±385.
whelmed by the di€erent strategic perspectives
Perren, L., Berry, A. and Partridge, M. (1998) `The Evo-
and that they should be `melded together in a lution Of Management Information, Control And
practical situation' (p. 427). Decision-Making Processes in Small Growth
Oriented Service Sector Businesses: Exploratory
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68 Journal of Small Business and Enterprise Development