Journal of Small Business and Enterprise Development, Volume 7, Number 1
Factors in the growth of micro-enterprises
(Part 2): Exploring the implications
Lew Perren
Brighton Business School, University of Brighton, Mithras House, Lewes Road, Brighton BN2 4AT, UK
Tel: 01273 642979; Fax: 01273 642980; Email: L.Perren@brighton.ac.uk
Received: 5th January, 1999; Revised: 16th August, 1999; Accepted: 11th November, 1999
ABSTRACT
This research examines micro-enterprises pursuing
gradual growth. The research ®ndings and implica-
tions are provided in two parts. Part 1 was pre-
sented in Volume 6, Number 4 of the Journal of
Small Business and Enterprise Development
(JSBED) (Perren, 2000). It developed an empiri-
cally veri®ed framework that explains how growth
was in¯uenced by a myriad interacting factors; this
led to a discussion of the policy implications of the
framework.
Part 2 explores the managerial implications of
the framework. A diagnostic toolkit is systemati-
cally developed to encourage micro-enterprise
owner-managers and advisers to explore the in¯u-
ences on the interim growth drivers identi®ed in
part 1. It is hoped this will help them to highlight
ways of `compensating' de®cits in particular factors
and to think creatively about growth opportunities.
The audience has changed from academics and
policy-makers to owner-managers, so the diagnostic
toolkit avoids technical language and employs a
Socratic questioning approach to encourage free-
thinking and self-analysis.
MANAGERIAL AND POLICY IMPLICATIONS
Key managerial and policy conclusions from
part 1
. Four interim growth drivers in¯uence
micro-enterprise development: owner's
growth motivation, expertise in managing
growth, resource access and demand.
. The interim growth drivers are in turn
in¯uenced by a myriad independent factors.
# 2000 Henry Stewart Publications, ISSN 1462±6004, 58±68
. Growth beyond the micro-enterprise phase
requires the combined in¯uence of the
independent factors to be positive on all
four interim growth drivers.
. There is the possibility of compensation,
the phenomenon where a de®cit in one fac-
tor's in¯uence against an interim growth
driver can be counterbalanced by another.
Managerial and policy conclusions from part 2
. The diagnostic toolkit provides micro-
enterprise owner-managers and their advi-
sers with a systematic way of exploring the
in¯uences on the interim growth drivers
and highlighting ways of compensating
de®cits in particular factors.
. Adopting a Socratic questioning approach
helps unleash owner-managers' intimate
knowledge about their businesses and
empowers them to think creatively about
growth opportunities.
. Owner-manager centred approaches like
this should be encouraged, as they can help
develop diagnostic skills and self-awareness.
They may also reduce the risk of over
dependence on external advisers.
KEY WORDS
Micro-enterprises, growth, factors, development,
start-up, diagnostic
INTRODUCTION
This research examines micro-enterprises pursuing
gradual growth.1 The ®ndings and implications
are provided in two parts. Part 1 was presented in
Volume 6, Number 4 of the Journal of Small Busi-
 Perren

ness and Enterprise Development (JSBED) (Perren,
1999). It developed an empirically veri®ed frame-
work from 16 case studies that explained how
growth was in¯uenced by a myriad interacting
factors. This led to a discussion of the policy
implications of the framework.
Part 2 is presented here and explores the man-
agerial implications of the framework. The
emphasis moves from a historic analysis of cases to
a practical agenda for helping owner-managers
and advisers achieve growth. This switch of
emphasis raises some methodological issues. First,
although the agenda is now more practical, it is
still important that an audit trail of evidence is
maintained (Miles and Huberman, 1994). The con-
version of elements from the framework in part 1
to the diagnostic questions in part 2 needs to be
systematic and transparent. Tables 1 and 2 provide
example conversions. They show how there is a
need for elements in the framework to be trans-
lated into more general questions while retaining
the underlying meaning.
Secondly, the audience has changed from
academics and policy makers to owner-managers.
Therefore, it is important that the diagnostic
questions are presented in an appealing way that
will make them easy to use. Technical language
will be avoided (eg Curran et al., 1997; Perren et
al., 1998),2 the personal pronoun `you' will be
employed to draw the owner-manager into the
process (eg Kirschenbaum and Henderson, 1990)3
and a clear diagrammatic overview provided (eg
De Bono, 1990; Eccles and Nohria, 1992).4 The
metaphor of a `diagnostic toolkit' will be used to
convey functionality and utility (eg Keizer and
Post, 1996).5 It must also be recognised that many
owner-managers will not wish to pursue growth
(eg Hakim, 1989; Barkham et al., 1996; Watson et
al., 1998) and that the diagnostic toolkit will be of
little help to them. Thus, the early questions will
focus on the owner-managers' growth orientation
(G1) to help them decide whether they wish to
continue with the rest of the diagnosis.
Thirdly, the diagnostic toolkit cannot o€er the
guarantee of future growth nor its prediction.
The complexity of interacting elements is just too
great (eg Runciman, 1999) and, as the part 1 ana-
lysis showed, many of the factors that in¯uence
growth are outside the control of the owner-
manager. This may leave growth beyond the
grasp of some owner-managers, even when there
is the possibility of compensation between
factors. However, the diagnostic toolkit can o€er a
systematic process for an owner-manager to
develop awareness of his or her circumstances, to
explore the potential for growth and perhaps to
identify opportunities that are currently being
neglected.
The diagnostic toolkit will employ a Socratic
questioning approach as a way of unleashing the
owner-manager's intimate knowledge (eg Curran
et al., 1997; Perren et al., 1998)6 of his or her
business and galvanising it into analysis. Russell
(1961) suggests that the Socratic method should
be used when we already have `knowledge to
come to a right conclusion, but have failed,
through confusion of thought or lack of analysis,
to make the best logical use of what we know'
(p. 110). The diagnostic toolkit may also act as a
stimulus for owner-managers to investigate

Table 1: Example elements from an independent factor in¯uencing the interim growth driver resource
access (G3) (excerpt from Table 6 from part 1)

Resource access (G3) Element Nature of in¯uence Case references

Independent factor number

(F12) Debtors and creditors
1 . A supplier o€ering special terms of business can A,E,F,G,I,J,L,M,N
be a positive in¯uence (in combination with
factor 8)
2 . A supportive bank can be a positive in¯uence B,E,F,G,H,J,K,M,P
3 . Especially quick-paying customers and good C,D,G,K,N
debtor management can be a positive in¯uence.
4 . Poor debtor control can be a negative F
in¯uence.
5 . Cash based business with low stocks can be a I,O
positive in¯uence.
6 . A major bad debt can be a negative in¯uence. N

Journal of Small Business and Enterprise Development 59

Factors in the growth of micro-enterprises (Part 2): Exploring the implications

Table 2: Example questions developed from elements in Table 1 (excerpt from Table 5 from part 2)

G3. Resource access Questions (please skip irrelevant questions) Audit trail
Independent factors

Examining sources of resource

Making the most of your suppliers
(F12) Debtors and creditors & . What special terms are you currently receiving from your suppliers? Element 1
(F8) Transferable network of . How could you negotiate even better terms from your suppliers? Element 1
contacts . How could you negotiate stock on a sale or return basis?
. What other supplier contacts do you have that may o€er favourable
terms of trade?
Making the most of your bank
. How supportive is your bank? Element 2
. What is your relationship with your bank manager?
. How could you make the bank more supportive?
. How could you keep the bank more informed of how business is
going?
Keeping control of your debtors
. How quickly do you get paid? Element 3,
. How do you keep a watchful eye on people that owe you money? 4&6
. How do you chase people that owe you money?
. What are your terms and conditions of trade?
. How could you improve your control of debtors?
. What risks do you have of a major bad debt?
. What steps could you take to reduce this risk?
Keeping control of stock and cash
. How could you reduce the amount of stock you hold? Element 5
. What level of your business is cash based?
. How could you increase the number of cash sales?

aspects of the business that have been overlooked,
even when there is readily available information
(eg Daniels and Henry, 1998).7 The intention is
to encourage `soft analysis' by posing `the right
questions' so `complex issues get opened up to
thoughtful consideration instead of being closed
down prematurely by snap decisions' (Mintzberg,
1998, pp. 222±223).8
THE DIAGNOSTIC TOOLKIT
Now the methodological issues have been
explored, it is timely to present the diagnostic
toolkit. The analysis in part 1 suggested that, for a
business to achieve growth beyond the micro-
enterprise phase, the combined in¯uence of the
independent factors on all four of the interim
growth drivers (G1 owner's growth motivation,
G2 expertise in managing growth, G3 resource
access and G4 demand) must be positive.9 An
interim growth driver can be in¯uenced by a
number of di€erent independent factors. This
introduces the possibility of `compensation', the
phenomenon where a de®cit in one factor's
in¯uence against an interim growth driver may
be counterbalanced by another factor's in¯uence.
Figure 1 develops this theme by providing a
diagnostic toolkit to help micro-enterprise
owner-managers and advisers explore the in¯u-
ences on the interim growth drivers (G1 to G4),
highlight ways of `compensating' de®cits in parti-
cular factors (F1 to F16) and suggest methods to
help them think creatively about development
opportunities.
The factors in Figure 1 are grouped into three
categories, illustrated by di€erent shapes.10 Hexa-
gons represent those factors that will require a
degree of self-awareness on the part of the owner-
manager and, to some extent, may be viewed as
part of his or her psychological make-up. The psy-
chological make-up of individuals that start up
businesses has caused considerable discussion over
the years (eg Chell et al., 1991; Shaver and Scott,
1991; Chell and Pittaway, 1998); indeed Daryl
Mitton (1989) described research in this area as `a
theory jungle'. The approach here is pragmatic; a
trek through this theory jungle is outside the scope

60 Journal of Small Business and Enterprise Development

 Perren

F16. F4. Innovator

F3. Active F9. Family and
Competitive
risk taker investing friends
dynamics
F8. Transferable
network
F16.
F1. Desire to Competitive
F2. Desire to dynamics
be one’s own
succeed
boss
F3. Active F12. Debtors
risk taker and creditors
F14. State of
economy
G1. Owner’s
Growth
Motivation
F5. Transferable
personal capital F10. Key
employees

F10. Key G3. Resource Growth of

G4. Demand F3. Active
employees Access Micro-Enterprise
risk taker

F9. Family and F6. Transferable

investing friends G2. Expertise in primary skill
Managing
Growth
F14. State of F8. Transferable F15. Product
economy network sector

F7. Transferable F8. Transferable F13. Societal

support skill network and ‘outer’
factors
F9. Family and
investing friends
F11. Active
F10. Key F9. Family and F2. Desire to
professional
employees investing friends succeed
advisers

Key

Factors that require owner-manager self-awareness.

Factors that are pervasive and the owner-manager has little control over.

Factors that the owner-manager has more control over.

Interim Growth Drivers.

Growth of Micro-enterprise.

Figure 1: Empirically veri®ed diagnostic toolkit for micro-enterprise growth

of this paper. The hexagons merely suggest, in a
common-sense way, that diagnosing these factors
will require the owner-manager to consider his or
her own wishes and feelings.
Squares represent those factors (mostly external)
that exercise a pervasive in¯uence, rather like grav-
ity.11 The owner-manager may be able to adjust
the strategy of the micro-enterprise to take account
of these factors or look for compensation, but he
or she can exercise little in¯uence over the actual
factor. Octagons represent those factors (mostly
internal to the business) over which the owner-
manager has more control. There has been a long-
running debate in the strategy literature regarding
the level of control that a business can have over its
a€airs (eg Whittington, 1993) and various schools
of thought have emerged (eg Mintzberg, 1998).12
Becoming entangled in this debate would be an
unhelpful distraction, so a pragmatic approach is
adopted. Indeed, some researchers in the strategy

Journal of Small Business and Enterprise Development 61

Factors in the growth of micro-enterprises (Part 2): Exploring the implications

area have themselves recently been calling for more
pragmatic approaches (eg Jones, 1998).13 The
square and octagons categories are not intended to
be absolute, they merely indicate, in a common-
sense way, the level of control that an owner-
manager is likely to have over a given factor.
Now an overview of the diagnostic toolkit has
been provided, it is timely to focus on the diagno-
sis and compensation of the interim growth dri-
vers. Each interim growth driver will be
considered in turn, and a table detailing the diag-
nostic questions provided.
Diagnosing and compensating for owner's
growth motivation (G1)
Table 3 converts elements from the framework in
part 1 to provide questions that diagnose and com-
pensate for owner's growth motivation (G1).
The questions focus on ®ve potential in¯uencing
factors: desire to succeed (F2); desire to be `one's
own boss' (F1); active risk taker (F3); family and
`investing' friends etc (F9) and competitive
dynamics (F16).
Diagnosing and compensating for expertise in
managing growth (G2)
Table 4 converts elements from the framework in
part 1 to provide questions that diagnose and com-
pensate for expertise in managing growth (G2).
The questions focus on ®ve potential in¯uencing
factors: transferable support skills (F7); key
employees (F10); family, `investing' friends etc
(F9); active professional advisers (F11) and transfer-
able network of contacts (F8).
Diagnosing and compensating for resource
access (G3)
Table 5 converts elements from the framework in
part 1 to provide questions that diagnose and com-
pensate for resource access (G3). The questions
focus on seven potential in¯uencing factors: active
risk taker (F3); debtors and creditors (F12); transfer-

Table 3: Diagnosing and compensating for the interim growth driver owner's growth motivation (G1)

G1. Owner's growth motivation Questions (please skip irrelevant questions) Audit trail
Independent factors

Asserting your ambitions

(F2) Desire to succeed
(F1) Desire to be `one's own
boss' and (F3) active risk
taker.
(F9) Family, `investing'
friends etc
(F16) Competitive dynamics
. What are your hopes for your business over the next ten years? Element 1
. What are your business ambitions? &2
. How do you measure business success? Element 3
. How important is business growth to you compared with your
other measures of business success?
. How important is having a personal control of most aspects of the
business to you?
. How do you feel about delegating aspects of the business? Element 1
. How large does your business need to be for you to feel for secure?
. How much will you need to grow the business to achieve this size?
Re¯ecting on your ambitions
. What family problems might a€ect your drive? Element 1
. What steps you can take to reduce family friction?
. What scale does your business need to be to achieve the level of Element 1
income you want?
. What competitive pressures might cause you to increase the scale of
your business?
. What circumstances might cause margins to be reduced so you need
to increase volumes to maintain your current pro®t level?
. What circumstance might cause your suppliers to expect larger
volume orders?
Summing-up
. How would you summarise your growth motivation?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

62 Journal of Small Business and Enterprise Development

 Perren

Table 4: Diagnosing and compensating for the interim growth driver expertise in managing growth (G2)

G2. Expertise in managing Questions (please skip irrelevant questions) Audit trail
growth
Independent factors

Reviewing your management/administrative skills

(F7) Transferable support
skills
(F10) Key employees,
partners etc
(F9) Family, `investing'
friends etc
(F11) Active professional
advisers
(F8) Transferable network
of contacts
. What management skills have you developed from your previous Element 1
job(s)? &2
. What experience do you have of managing sta€?
. How familiar are you with the support systems your type of
business will need (eg bookkeeping, stock-control, customer records)?
. How do you feel about undertaking such management tasks?
Reviewing others' management/administrative skills
. How could your current/future employees help you with the Element 1
setting-up and running of support systems (eg bookkeeping, stock- &2
control, and customer records)?
. What support systems have your employees already set-up?
. How well are they working?
. Who could you employ to help set-up and run your support
systems?
. How could members of your family help you with the setting-up Element 1
and running of support system?
. What members of your family have worked in an oce before or
have bookkeeping skills?
. How could your professional advisers (eg accountant, bank- Element 1
manager etc) help with the setting-up and running of support systems?
. What steps you could take to obtain such advice?
. Who do you know who has set-up a similar type of business? Element 1
. What questions could you ask them about their support systems?
. How could you persuade them to let you have copies of their
invoices, terms of trade, stock control systems etc?
Summing-up
. How would you summarise the factors in¯uencing expertise in
managing growth?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

able network of contacts (F8); transferable personal CONCLUSIONS AND IMPLICATIONS

capital (F5); family, `investing friends' (F9); key
employees (F10) and the state of the economy (F14).
Diagnosing and compensating for demand (G4)
Table 6 converts elements from the framework in
part 1 to provide questions that diagnose and com-
pensate for demand (G4). The questions focus on
11 potential in¯uencing factors: the state of the
economy (F14); societal and other `outer' factors
(F13); product sector and market segments (F15);
competitive dynamics (F16); transferable network
of contacts (F8); transferable primary skills (F6);
innovation (F4); active risk taker (F3); desire to
succeed (F2); key employees, partners etc (F10);
and family, `investing friends' etc (F9).
The framework in part 1 provided a ¯exible
structure that contributed a clear agenda for
analysing a micro-enterprise's growth, whilst
allowing speci®c issues to be investigated within
their environmental context. It enabled the host of
factors that might a€ect the growth of micro-
enterprises to be investigated. The cases suggested
that for a ®rm to achieve growth beyond the
micro-enterprise phase, the combined in¯uence of
factors on all four of the interim growth drivers
had to be positive. This introduced the possibility
of `compensation', the phenomenon where a de®-
cit in one factor's in¯uence against an interim
growth driver could be counterbalanced by
another factor's in¯uence.

Journal of Small Business and Enterprise Development 63

Factors in the growth of micro-enterprises (Part 2): Exploring the implications
Table 5: Diagnosing and compensating for the interim growth driver resource access (G3)
G3. Resource access
Independent factors
(F3) Active risk taker
(F12) Debtors and creditors & . What special terms are you currently receiving from your suppliers?
(F8) Transferable network of . How could you negotiate even better terms from your suppliers?
contacts
(F5) Transferable personal
capital
(F9) Family, `investing'
friends etc
(F8) Transferable network
of contacts
(F10) Key employees,
partners, etc
64
Questions (please skip irrelevant questions) Audit trail
Re¯ecting on your attitude to risk
. How do you feel about taking risks to obtain the resources for Element 1
growth? &2
. How do you feel about taking personal ®nancial risks?
. What level of personal ®nancial risk will you need to take to pursue
growth?
. What ways are there for you to reduce your personal risks?
. How will your attitude to risk in¯uence your willingness to tap the
sources of resource examined below?
Examining sources of resource
Making the most of your suppliers
Element 1
Element 1
. How could you negotiate stock on a sale or return basis?
. What other supplier contacts do you have that may o€er favourable
terms of trade?
Making the most of your bank
. How supportive is your bank? Element 2
. What is your relationship with your bank manager?
. How could you make the bank more supportive?
. How could you keep the bank more informed of how business is
going?
Keeping control of your debtors
. How quickly do you get paid? Element
. How do you keep a watchful eye on people that owe you money? 3, 4 & 6
. How do you chase people that owe you money?
. What are your terms and conditions of trade?
. How could you improve your control of debtors?
. How likely is it that you will su€er a major bad debt?
. What steps could you take to reduce this risk?
Keeping control of stock and cash
. How could you reduce the amount of stock you hold? Element 5
. What level of your business is cash based?
. How could you increase the number of cash sales?
Investing your own money Element 1
. What money or assets do you have that could support growth? &2
. How willing are you to use your personal money or assets?
. How could you use your personal assets as security for a loan?
. What ways could you use your funds and still keep them protected?
Investing your family's or friends' money Element 1
. What money or assets does your family or friends have that could
be used to grow the business?
. How willing would they be to let you use their money or assets?
. How could you use their assets as security for a loan?
. What ways could you protect their money?
. What personal contacts do you have that could give you access to Element 1
funds?
. What local business people do you know who might be willing to Element 3
invest in your business?
. Who do you know that might become a partner to help you with
®nancing start-up or expansion?
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Table 5: Continued

(F10) Key employees, Making the most of employees Element 1

partners, etc . What employees do you have that are willing to work longer hours &2
or more ¯exibly than normal?
. How can you encourage employees to be supportive of the
business?
. What employees do you have in critical roles?
. How well are they performing in these critical roles?
. How could you improve their performance?
(F14) The state of the Looking out for changes in the law Element 1
economy and its . What changes in the law may stop some of your working practices?
management by . What local authorities or other agencies may in¯uence how you can
government use your resources?
Summing-up
. How would you summarise the factors in¯uencing resource access?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

Part 2 has explored the managerial implications ACKNOWLEDGEMENTS

of the framework presented in part 1. A diagnostic
toolkit has been systematically developed to
encourage micro-enterprise owner-managers and
advisers to explore the in¯uences on the interim
growth drivers. It is hoped this will help them to
highlight ways of `compensating' for de®cits in
particular factors and to think creatively about
growth opportunities.
The audience has changed from academics and
policy makers to owner-managers, so the diag-
nostic toolkit avoids technical language and
employs a Socratic questioning approach to en-
courage free thinking and self-analysis. Adopting
a Socratic questioning approach will hopefully help
unleash owner-managers' intimate knowledge
about their businesses and empower them to think
creatively about growth opportunities. By empow-
ering owner-managers to question their own situa-
tion, the diagnostic framework can o€er timely
and tailored support without exorbitant cost. Some
form of participatory action (Reason, 1994) may
be appropriate, where an owner-manager uses the
diagnostic toolkit with a business counsellor to
develop growth strategies for the future. Owner-
manager centred approaches like this should be
encouraged, as they can help develop diagnostic
skills and self-awareness. They may also reduce the
risk of over dependence on external advisers.
The author hopes the diagnostic toolkit will be
helpful to micro-enterprise owner-managers and
advisers in their quest for growth. The author
would welcome readers' feedback on their applica-
tion of the diagnostic toolkit.
The author is grateful to Professor Aidan Berry,
Professor John Bessant, Professor Robert Black-
burn, Professor Tom Bourner, Peter Hovell, Peter
L. Jennings, Barry Le Scherer, Dr David Paskins,
Professor Monder Ram, Seymour Roworth-
Stokes, Professor Adrian Woods and the anon-
ymous reviewers for their helpful feedback on this
research.
NOTES
1. The European Commission has de®ned micro-
enterprises as ®rms with fewer than ten
employees (Stanworth and Gray, 1991). The
term is now accepted by the small business
research community; for example, Robertson
(1994) and Storey (1994) have both referred to
micro-enterprises. For this research, gradual
growth is de®ned as taking four years or more
to grow beyond the micro-enterprise phase.
2. Curran et al. (1997) and Perren et al. (1998)
both found that owner-managers lack manage-
rial and technical vocabularies, although they
may well have an understanding of underlying
concepts.
3. Kirschenbaum and Henderson (1990) note that
the use of personal pronouns by Carl Rogers
was `a subtle yet signi®cant factor in his wide-
spread impact'. They observe that people
would comment, `I felt as though he were
addressing me personally . . . even when
Rogers was speaking to hundreds or even
thousands of people' (p. 5).
4. De Bono (1990) suggests that images `can be

Journal of Small Business and Enterprise Development 65

Factors in the growth of micro-enterprises (Part 2): Exploring the implications
Table 6: Diagnosing and compensating for the interim growth driver demand (G4)
G4. Demand
Independent factors
(F14) The state of the
economy and its
management by
government
(F13) Societal and other
`outer' factors
(F15) Product sector and
market segments
(F16) Competitive dynamics
(F16) Competitive dynamics
& (F8) Transferable network
of contacts
(F13) Societal and other
`outer' factors
(F6) Transferable primary
skills
(F4) Innovation
66
Questions (please skip irrelevant questions) Audit trail
Scanning and acting
Scanning and acting on broad changes
. What are the main trends in the economy? Element 1
. What are the newspapers saying about the economy? &2
. What is the local economy like? How is it di€erent from the
national economy?
. What steps should you take in the light of the economic situation?
. How could an economic downturn be to your advantage? Element 3
. How could you take advantage of government deregulation or Element 4
other major economic policies?
. What are the changes in society's attitudes that may in¯uence your Element 1
business (eg attitudes on health, leisure, pollution etc.)? &2
. How are these changes in attitude causing changes in the law?
. How will potential legal changes in¯uence your business?
. What steps can you take to exploit or avoid these changes?
Scanning and acting on close changes
. How is the general sector your business trades in performing? Element 1
. What are the changes in competition? &2
. What changes are occurring in the number and size of competitors?
. What steps can you take to remain competitive?
. How could you take advantage of the protection of a major Element 3
customer? Element 4
. What types of customer does the market serve? &5
. What are the opportunities for you to target a particular type of
customer or focus on a particular geographic area?
. What type of customers are you targeting at the moment? Element 2
. How could you change the type of customers that you are &3
targeting? Element 1,
. What large competitors are in your geographic area? 4&6
. What are the trends in competition in the area?
. What in¯uence would expansion have on the competitors that you Element 6
face? Element 1
. How close is your relationship with your customers?
. How could you improve the closeness of your relationship with
your customers? Element 3
. What are the changes in the local population (eg age, wealth, and &4
numbers)?
. What in¯uence will these changes have on your business?
. What steps should you take in the light of these changes?
Exploring skills and attitudes that in¯uence demand
Re¯ecting on your skills and attitudes
. What core technical or sales expertise do you have? Element 1
. What core technical or sales areas are you less con®dent in? &4
. How experienced a negotiator are you? Element 2
. What steps can you take to exploit or plug the gaps in your
expertise? Element 1
. How good are you at spotting market opportunities? &2
. How often do you think of new marketing opportunities for your
business?
. How often do you think of new types of customers you could
approach?
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 Perren

Table 6: Continued

(F3) Active risk taker
(F2) Desire to succeed
(F10) Key employees, partners Re¯ecting on others' skills and attitudes
etc & (F9) Family, `investing' . What employees, partners or family members have good sales
friends etc
(F10) Key employees, partners . What problems might arise with such employees, partners or family
etc
. How focused are you on the technical side of the business compared
with its marketing?
. What steps can you take to become even more focused on the
market?
. How willing are you to take on challenging or risky orders? Element 1
. When do you turn down customers because their requirements are &2
too large or too risky?
. When do you need to take on larger or more dicult orders to
stimulate growth?
. What steps can you take to assess the risk of taking on larger or Element 1
more dicult orders?
. What particular markets do you like to serve even though there are
more lucrative customers elsewhere?
. Why do you like to serve these markets?
. What particular technical areas do you like to operate in even
though there are more pro®table areas?
. What new markets could you move to?
Element 1
&2
abilities? Element 1
. How can you make the most of them?
members? Element 3
. What employees or partners have key technical skills?
. How can you make the most of them?
. What customer contacts do your employees have that could be Element 5
helpful?
. How can you attract employees or partners that have customer
contacts? Element 4
. How can you make the most of such contacts?
. What are the risks of an employee or partner setting-up in
competition?
What steps can you take to stop partners setting-up in competition?
Summing-up
. How would you summarise the factors in¯uencing demand?
. What are the opportunities for compensation between factors?
. What actions are you going to take now?

more powerful than words for conveying
ideas because, unlike words, they exist comple-
tely at one moment in time' and they engage
right-brain thinking that perceives patterns
and relationships. Eccles and Nohria (1992)
also point to the importance of diagrams when
communicating a message to managers, they
suggest that the success of the Boston Consult-
ing Group's growth/share matrix is in part due
to the ease of its pictorial representation.
5. Keizer and Post (1996) suggest that metaphors
o€er a powerful way for managers to com-
municate change. They suggest that Phillip's
use of the Centurion metaphor for its change
programme may have evoked the image of
the power of the famous tank and the formal-
ity of the ocer in the Roman army.
6. Curran et al.'s (1997) investigation of pricing
in small businesses found that, while the meth-
ods of information provision were informal,
they supported quite sophisticated decision
making. Perren et al. (1998) found that
owner-managers of successful growth-orien-
tated service sector businesses developed inti-
mate tacit knowledge of their businesses.
7. Daniels and Henry (1998) suggest that man-
agers can become prisoners of their mental
models and only accept `con®rmatory' infor-
mation. The diagnostic toolkit may help man-
agers to breakout of their mental cage.

Journal of Small Business and Enterprise Development 67

Factors in the growth of micro-enterprises (Part 2): Exploring the implications
8. The following websites helped with framing
open questions: www.ifaassociates.com,
www.williecrawford.com, www.consults-
kills.com and talec.ntu.ac.uk.
9. An intervening factor emerges as a function of
an independent factor(s) acting in a given
situation, `and helps to conceptualise and
explain the in¯uence of the independent' fac-
tor(s) on the dependent factor (Sekaran, 1992,
p. 70).
10. This idea was stimulated by one of the anony-
mous reviewers.
11. This example was taken from another source,
but the precise reference cannot be remembered.
12. Mintzberg (1998) provides a helpful summary
of the di€erent schools of thought.
13. Jones (1998) calls for observers not to be over-
whelmed by the di€erent strategic perspectives
and that they should be `melded together in a
practical situation' (p. 427).
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