5.1.4 Challenges Of Growth

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Business growth is a goal that most entrepreneurs try to achieve. It is the key to expanding operations, generating higher revenue, and achieving long-term success. However, business growth can come with a number of challenges and obstacles.

Additional Physical Resource Requirements

Physical Resource Requirements are the tangible assets and resources that a business needs to operate effectively, such as buildings, equipment, raw materials, and inventory. These resources are essential for a business to produce goods and services.

  • Buildings: As a business grows, it may need more space for offices, factories, or warehouses.
  • Equipment: A growing business may need more machines, tools, or vehicles to support its operations.
  • Technology: A growing business may need to upgrade its software, hardware, or communication systems to keep up with its demands.

Additional Human Resource Requirements

Human Resources (HR) refers to the personnel or workforce of an organisation. It includes all the employees, both full-time and part-time, temporary or permanent, who work for the business. HR also refers to the department in the business that manages the staff.

Number Of Employees
  • Skills: A growing business may need employees with specialized skills or knowledge to handle new tasks or projects.
  • Number Of Employees: A growing business may need to hire more staff to handle the increased workload.


Sensitivities are the emotional or mental responses that people have to certain issues, topics, or situations. Sensitivities can be related to personal values, beliefs, experiences, and cultural background.

  • Cultural: As a business expands into new markets or countries, it needs to be aware of different cultural norms and customs. E.g. Ikea has a large number of names for their products that are banned as they translate to offensive or swear words in other languages.
  • Local: A growing business may face resistance from local communities that are worried about its impact on the environment or quality of life.

Understanding National And International Legislation

National and International Legislation refers to the laws and regulations made by governments that apply to everyone, including businesses. These laws cover many areas, such as how people are treated at work, how things are made and sold, and how the environment is protected and how much tax is paid.

  • Import Tariffs: A growing business may face higher costs if it imports goods from other countries that have tariffs or taxes.
  • Import Quotas: A growing business may face restrictions on the number of goods it can import from other countries.


1. Pick a business scenario:

  • A small coffee shop that is expanding to a new Location.
  • A software company that is launching a new Product.
  • A retail store that is opening a new branch.
  • A manufacturing company that is expanding its production capacity.
  • A service company that is hiring new employees.

2. Conduct a detailed risk analysis on some of the possible challenges the business could face as they grow. Include all challenges from:

  • Additional Physical Resource Requirements
  • Additional Human Resource Requirements
  • Sensitivities
  • Understanding National And International Legislation

5.1.3 Efficiencies And Costs Of Business And Enterprise Expansion

6.1.1 Funding Types