Stay or grow?

A business activity has a series of equilibrium points that vary over time in relation to diverse circumstances; it is the task of managers to determine where these equilibrium points lie and how they shift over time. All SMEs come to a turning point at some time in their life cycle: at such times a firm’s intended role in the competitive arena becomes a key determinant of its long-term growth prospects; it also distinguishes one class of entrepreneurs from another. Defending a niche or deciding to grow is not simply a turning point: it represents a pivotal mo-ment in the life cycle of an SME and the outcome is far from mechanistic. It is necessary to assess, from an entrepreneurial perspective, whether there is scope within the industry to maintain a position based on profitable and sustainable focus strategies, or whether market dynamics suggest that growth is desirable or even unavoidable.