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Welcome back ladies and gentlemen. Now I want to basically summarize the
concepts from week one, what I call a more realistic view of growth.
Now make a statement, the first statement on the slide.
Growth is like mother nature. Let's pause a moment.
I say mother nature what do you think about?
Hm, mother nature is good. Mother nature gives us sun.
Sun grows plants, grows food. Some, sun warms us.
Nice. Oh, wait a minute.
Mother nature can give us tornadoes, cyclones, hurricanes, earthquakes,
floods. Look, the little cow can be thrown off.
The houses can be blown away. The trees.
So why do I say growth is like Mother Nature?
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because growth can be goodm just like the sun.
And we've learned growth can be bad. Growth can destroy value if you don't
manage growth properly. If you let growth outstrip your capacity
to manage, or your controls, or your processes, or your people, bad things can
happen. If you let it go on too long, you can
lose your business you can lose your money. Some cases, you can also have real
emotional distress. Point number two,
growth should not be assumed. Don't buy into the false statement,
companies grow or die. It's just not true.
Rather it should be a decision made by you, weighing the pros and the cons of
growing and not growing. The pros and con's of growing and not
growing. That's what this is here, this scale.
How does the scale tilt? A scale can tilt like that, it can tilt
like that. And it allows you to take into account
that growth requires more people, processes and controls.
Now we're going to learn in the next class how to think about this, and
basically think about that very fundamental growth decision.
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An entrepreneur has only so much time each day.
You can also add to that an entrepreneur only has so much money.
Alright. You have limited time, limited money,
limited people. What's important?
It's important that you prioritize your time every day and understand that growth
is expensive. In many cases if you're going to grow
your business, you have to hire more people, buy more raw products, maybe rent
more space. You have to pay out money before it comes
in. You have to think that through.
How much growth can you afford? How much growth can you afford?
How do you that? Because you do the numbers, okay?
What's the timing of the outlays? You gotta go higher, people.
You gotta go higher, people, if they want to be paid.
People don't want to basically come to work for you if you say, I want you to
come to work for me. It's going to be a month before we get revenue from your
work. So I'd like you to work for me a month
free. Uh-uh, it doesn't work that way in most
cases, unless they're family or really good friend, alright?
Or really good rich friend who doesn't have to work, alright?
How much growth can you afford? We've already talked about that growth
can put you into a different, more competitive space.
The game will change. Growth fundamentally changes everything,
because when you grow, you will learn, okay?
Then in some cases you need more and better processes.
You need more and better controls. You need more and better technology to
give you the information, real time, to manage your business.
And you will need more people, and unfortunately, in some people, you will
need better, more qualified people. Alright, let's stop here.
Another quiz. I told you you're going to have short
quizzes, so you can basically sort of put this
into your mind and think about it. That's how you learn.
Give meaning to this in your life and your stories and stories you know.
Give meaning to it from Julie's story. Given meaning to it from the images, the
pictures that I've tried to show you which gives you a visual representation
because the more you rehearse this and replay it in your mind, the more likely,
in the future when you need it, you will remember it.
Edward D. HessProfessor of Business Administration
