Strategic Planning in the Small Business

Unit

3

HO 3-3 (continued)

leadership

and control. Often,

small business owners

have difficulty delegating

authority, even

when the level of business

growth clearly extends

beyond their means.

The owner must also

consider

issues of standard

quality and production

when expanding facilities.

In short, the

management structure,

personnel, and

operating policy areas

must be re-examined

as the

expansive growth

posture evolves.

Capsule 4-3

Crystal Rug Cleaners

Crystal Rug Cleaners

was started in an exclusive

section of Florida's

gulf

Coast in the mid-sixties

by Michael

Richards-an insightful

and

enterprising

young entrepreneur.

Initially, Richards' environmental

analysis revealed

a promising opportunity.

The market boasted

extremely

high income levels

and the homes were quite

large and expensive.

Of

course, quality

carpeting and rugs

were common in such

homes.

Although a number

of cleaning firms

existed, none had established

themselves as quality

businesses specializing

in carpeting. As a result,

the

upper income

market was reluctant

to entrust their cleaning

needs to most

of these operations-particularly

when

incorrect cleaning methods

could

damage

or ruin their carpets.

Richards, realizing these

concerns, trained

extensively

in cleaning methods

and techniques particularly

those unique

to high-grade

and oriental carpets. Because

of this training Crystal

Rug

Cleaners

received approval

and license status from

the National Institute

of Rug Cleaners,

the first and only cleaner

in the market area to earn

such

a distinction.

Richards further reasoned

that in order to fully

convey his

competence and expertise,

he would limit

his firm's activities solely

to

carpet and rug cleaning.

Thus, by distinguishing

himself from

his

competitors and

focusing on this single

product/market posture,

the

business

prospered and grew.

Within a

period of three years, the

demand for services out-stripped

the

firm's internal

capacity, warranting expansion

of the physical plant

and

eventually

the establishment

of satellite operations

in adjacent market

areas. Importantly, this

expansion did not occur in

a piece-meal fashion.

Clear projections

of growth were determined,

growth issues

(costs and

returns)

were budgeted, and

clear assessments of

growth needs were

developed. Thus, expansive

growth became

the focus for modeling

business decisions

as the business continued

its growth.

The Developmental Growth

Posture

A business that
utilizes a developmental
growth posture decides
to grow by either developing

new target m,-rkets
for its current products
or by offering product variations
to existing markets.

The two forms of developmental
posture are market
development and product
development.

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