Business growth is a complex process, which involves making strategic choices towards achieving business success. Small businesses and entrepreneurs face many business growth challenges attributed to limited resources such as capital, managerial skills, time and the inadequacy of a skilled workforce. If these resources are not managed well, growth strategies tend to pose serious business risks in form of viability and endurance. Julie Allinson, the Chief Executive Officer (CEO) of Eyebobs Company faced significant risks due to limited financial resources. Allinson started operating her company with little capital, devoid of borrowing from banks. The case study analyzes various approaches that Allinson utilized as a growth and financial strategy in managing Eyebobs Company.
Various pros have been identified concerning Allinson’s growth and financing strategies. Managing a company’s growth in sales without depending on borrowed loans often acts as a strength to many entrepreneurs in form of sustenance and satisfaction. This is vital because it enables entrepreneurs in handling business operations smoothly without any form of intrusion. Allinson did not dwell on unexpected success because she never focused on impractical accomplishments. Allinson’s business growth strategy always focused on innovative and creative ideas essential for creating required changes in the business. Thus, Allinson opted to use inferior materials to make fancy designs and reading glasses that could be sold at lower prices. Applying the given financial strategy approach was essential in enabling her to manage as well as operate the business successfully.
Additionally, Allison’s approach enables her to sustain enhanced demand in business sales thus making the developing the company in terms of inflows. Allinson developed a comprehensive sales strategy necessary for effective business growth. Subsequently, her attention was solely bent on the implementation factor; Allinson’s focus was directed towards achieving a well-stocked inventory component. Although the strategy evidenced several risks, it helped her distinguish production needs and engender consumer loyalty. Allinson understood that an unmanaged business growth was acted as an indication of fast growth. Thus, she used cash flows to ensure that resources were not overextended hence contributing to a slow yet manageable growth of the company in all given periods. Allinson spent little capital in product sourcing thus leading to effectual overheads management, translating to high profitability.
A prominent demerit however concerning Allinson’s growth and financing strategy is that it may lead to poor company performance. This is because when starting a business, one cannot only depend on his or her own savings. Loans from financial institutions are a helpful factor in supporting growth in terms of expansion. In fact, Allinson faced major financial problems refrained from borrowing practices owing to her fears that the business would not perform well. This approach instilled a retrogressive aspect into the company in terms of worker deficiency because she could not be able to get enough resources for hiring individuals with high managerial skills. Thus, Allinson was forced to borrow ideas from other companies in order to acquire operational knowledge necessary for business growth.
Another disadvantage is that the financial approach used is noted in terms of its inefficiency. Many CEOs find it challenging to nurture their businesses while at the same time handling supervisory roles on production processes since growth and implementation requires diverse mindsets for superior perspectives. Usually, many small businesses fail to manage risks because of poor execution of growth processes as well as lack of enough resources to fund expansion activities. Many of them end up employing poor financial strategies that pose significant risks, similar to the ones Allinson used. In extreme instances, this ends up causing failure in business operations thus contributing to financial loses that may even lead to company closures.
If I were on Allinson’s advisory board, I would recommend various strategies for Allinson in creating a competitive pack for the business. First, I would recommend that she assume the responsibility of a general manager but not a functional specialist in the business. For small business owners, growth requires fundamental change in not only what an entrepreneur does but also the way he or she handles business. That is why it is advocated for small business owners to step back from being functional specialists to general managers at the earlier phases of business. Being a general manager is more essential because it enables one to manage a business more effectually and thus creating a competitive pack. Allinson should also ensure that other company roles are fitted with accountable and competent employees for optimal role execution.
Additionally, Allinson should be more innovative and apply creativity in producing unique and superior eyebobs in terms of quality. This will enable her to participate in competitive instances with well-established rivals in the reading glasses market, thus creating market niches within the organization. Moreover, adding value to these innovative products instead of increasing or reducing prices is vital. This is because products, which are of high value in the market, can capture the attention of many customers thus contributing to increased sales. In turn, it will enable Allinson’s company to be more competitive. Thus, Allinson needs to be more creative and work extremely hard towards achieving leadership in the given market. Moreover, Allinson should use creativity skills in designing and differentiating her products in a unique manner for brand creation.