Managing Change in the journey of entrepreneurship for SMEs
One thing’s for certain, change is part of running a small business. No sooner do you get comfortable doing one thing when something changes and you need to adapt. In small business, that’s the way 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 enterprise or very personal reasons of entrepreneurs. Planning for transition is something very compelling. Because it is way of assuring everybody be it family members, employees, other stakeholders, that they have no reason to fear threats or feeling deprived of opportunities.
To understand the normally found growth habits of enterprise please refer Five Stages of Growth of small business
There are four noticeable transition stages such as :
1. Start Up: Beginning of entrepreneurial journey
2. Growth Planning-Expansion of existing business
Diversification to new area
Adding new locations
1. Succession Planning-Passing on the baton
2. Contingency planning-To meet the unforeseen eventuality-sudden demise of promoter, serious illness,
These stages are explained in detail in Transition Stages
Why Transition is so important? Please refer 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), competitions, innovation, and reorganization of the work force. Inability of management to understand its organization 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 lots of challenging tasks, as many barriers create bottlenecks. Those who opt for taking the business forward may have to do it carefully roping in experts and crafting a strategy.
However, transition need not always be growing the business. Because challenges at family and personal life invariably have bearing on business owner’s motivation to engage in the business. For instance, however successful the business is, it is not necessary that founders continue to grow it. The reasons for growing/not growing the business are purely emotional and personal for every small business owners.
In either case the promoters to need undertake to certain strategic measures to protect the value of enterprise and experience pain free transition.
Four things to facilitate easier transition:
1. Be clear about end result or expected outcome of the transition process
2. Accordingly prepare realistic business plan before embarking on transition
3. Evolve organisational structure and HR practice commensurate with growth
4. Draft a succession plan