Managing Change in the journey of entrepreneurship for SMEs
One thing’s for sure; change is part of running a small business. No sooner one gets comfortable doing one thing, something will change or thrust change on your business. In small business, that’s how it is, and your capacity to manage change is vital to surviving.
Transition Management is a process to enable a business to adapt to changes –be it internal/external to the enterprise or for very personal reasons of entrepreneurs. Planning for transition is something very compelling. Because it is a way of assuring everybody, be it family members, employees, or other stakeholders, that they have no reason to fear threats or feel deprived of opportunities.
To understand an enterprise’s normally found growth habits, please look at the Five Stages of Growth of small businesses.
There are four noticeable transition stages such as :
ï Start-Up: Beginning of the entrepreneurial journey
ï Growth Planning-Expansion of existing business
-Diversification to a new area
-Adding new locations
ï Succession Planning-Passing on the baton
ï Contingency planning-To meets the unforeseen eventuality-sudden demise of promoter, serious illness,
These stages are explained in detail in Transition Stages
Why is transition so important? Please refer to Business Transition Planning FAQs
Transition is a process. Goals can be different:
For a firm to grow, the management must consider its market shares (market segmentation), competition, innovation, and workforce reorganization. The inability of management to understand its organization’s development problems can result in a company becoming “frozen” in its present stage of evolution or, ultimately, in failure, regardless of market opportunities. On the other hand, for an entrepreneur to scale through involves many challenging tasks, as many barriers create bottlenecks. As a result, those opting to take the business forward may have to do it carefully, roping in experts and crafting a strategy. However, the transition need not always be growing the business. Because challenges in family and personal life invariably have a bearing on a business owner’s motivation to engage in the business. For instance, however successful the company is, the founders don’t need to continue to grow it. The reasons for growing/not growing the business are purely emotional and personal for every small business owner. In either case, the promoters need to undertake specific strategic measures to protect the value of the enterprise and experience a pain-free transition.
Four things to facilitate easier transition:
1. Be clear about the result or expected outcome of the transition process
2. Accordingly, prepare a realistic business plan before embarking on a transition
3. Evolve organizational structure and HR practice commensurate with growth
4. Draft a succession plan