Growth, Funding, and Exit Strategies for ANS Limited: A Report

This report provides a comprehensive analysis of growth opportunities for ANS Limited, a service industry firm operating in the UK. It explores various methods for evaluating business growth, including understanding customers, product innovation, and asset assessment. The report applies the Ansoff matrix to identify market development, market penetration, product development, and diversification strategies. It then examines potential funding sources, such as equity financing, venture capital, IPOs, debt financing, and bank loans, detailing their benefits and drawbacks. The report also covers exit or succession options for the business, offering a complete overview of strategic planning for growth and sustainability.

Planning For Growth

TABLE OF CONTENTS
INTRODUCTION: .........................................................................................................................1
P-1 Growth opportunities for business........................................................................................1
P-2 Opportunities of growth using Ansoff matrix......................................................................2
P3. Potential sources of funding available to businesses with their benefits and drawbacks.....4
P-4 Business plan for growth opportunity..................................................................................7
P-5 Succession or exit options for small business......................................................................9
M-1 Growth options of business. .............................................................................................10
M-2 Potential source of funding...............................................................................................10
M-3 Business plan for ANS Limited........................................................................................10
M-4 Exit or succession of business...........................................................................................11
CONCLUSION:.............................................................................................................................11
REFERENCES:.............................................................................................................................12

INTRODUCTION:
To effectively run a business for long term it is important that accurate and proper
planning must be done. It helps in achieving goals and surviving in the market. A business can
sustain in market only when it is having strong financial position and capability to raise funds
and generate profits. The present assignment shows various growth opportunities for efficient
planning by applying Ansoff matrix. This report will show the potential sources of financing the
business and benefits and drawbacks of each source. In addition to this exit or succession
options for business to shut down its operations is shown.
For undertaking this the organisation selected is ANC Limited. The cited firm belongs
to service industry and operates in UK. The existence of the company in such a competitive
market requires effective business planning.
P-1 Growth opportunities for business.
There are various methods by which the growth opportunities can be evaluated in
business. It is not that the ANS Limited is not creative or don't have talented people. To find
edge opportunities for growth in business these are the steps can be taken:
Understand your customers-- The first and foremost function of any organisation is to
understand its customers. Understanding means not only to know their demands but also to know
what they feel about company, what are their views regarding the company and its products, how
customers respond to the their products, etc. (Blackburn, and et.al 2013) The company segments
the market according to the customers so it is important to know your customers whose needs
are already meeting. Once the customer’s needs are known innovation in the product can be
done.
Provide products in more creative way- Sometimes to unlock new opportunities it doesn't
require to change what company is offering to customers but to change the way it charges for
that product. It means to provide extra benefits to customers by charging some amount. For
example- ANS Limited is engaged in cloud service provider so it should provide some extra
service to customers by innovating the product. It will be lead more customer satisfaction among
the customers and the customer retention.

Analysis of complementary products- it is crucial to monitor the performance of other
companies who are providing similar products to the customers. It helps in comparing the
business growth of past and present year. Changing trends in complementary products and
markets should be taken into account while making investment decisions
Assessment of assets- it is important that the company must make assessment of its assets. It
will be useful to identify their growth level in the market (Eddleston, and et.al., 2013.) It not only
include equipments or buildings but also culture, organisation knowledge and relationships with
suppliers, distributors, etc. by doing this it helps in knowing the value of assets, use of assets and
what are the areas in which these assets can be used for future growth purpose.
P-2 Opportunities of growth using Ansoff matrix
Market development- It means searching for a new market for selling products. The new
market can be inside or outside the geographical area of country. ANS Limited can enter a new
market where growth opportunities are there. Potential markets for them are neighbouring
counties. They can also make segmentation in the market like focusing different people across
the country. For example ANS Limited can focus on European market for providing service to
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various peoples. Also, they can enter in other countries like Africa where they can provide goods
and services.
Market penetration- It is a strategy in which the focus is on selling existing products in existing
markets. It can be done by increasing the customer base through personal selling. In this either
the market share of current product is increased or decreased. It is a strategy in which business
goes as usual (Keough, 2015.) ANS Limited should get good information of competitors and
customers need. It will require investment to have deep research on this. The company can
introduce some new products in the market which will enable in attracting more people.
Diversification- It is the most risky of all the strategies followed because in this the organisation
has to develop both new product for new market. However, it has the advantage of gaining a
whole new market with new product. ANS Limited should focus on smaller countries where they
can find new opportunities. It is also of three types.
 Concentric- It means introduction of new but related products in new markets. It is good
for area where there is slow or no growth. It also helps in increasing the sales of current
products.
 Conglomerate- In this new products are added to business which are not related to
existing products. ANS Limited should offer different product like sales force cloud
which helps in controlling and managing sales force to new market which are not related
to its current products.
 Horizontal- In this new and unrelated products are provided to existing customers. It is
less risky than conglomerate because in this the customers are already related to
company.
ANS can diversify with new products in new markets like in European and African countries. It
will help in attracting more people and generating revenue.
Product development- By using this strategy the ANS Limited can focus on development of
new products in existing market. It will be effective for them as it is a company which operates
in service sector and in this the customers' taste and preference changes according to changing
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technology (Floyd, 2015) Different people can have different demands according to their
needs. They should focus on research and development for producing a new product.
ANS can develop new products by adding some more features in it.
P3. Potential sources of funding available to businesses with their benefits and drawbacks
Equity financing- A process of raising capital through sale of shares. It allows the investors to
share in company’s profits. It is a permanent investment and is not paid by the organisation. An
equity stake in company can be in the form of membership or in preferred stock ( Floyd,, 2015).
Venture capital
It refers to financing that comes from other companies or individual. They provide capital
in exchange of ownership share of business. They generally invest in those companies that are
profitable and have received investment from founders.
Benefits
 It provides business expertise as it helps in business decisions including finance and HR
management. These help in connections with business community.
Drawbacks
 There is loss of control in ownership which harms the management’s efficiency.
IPO's
Initial public offerings is used when there is a strong demand of their products or
services. Companies doing business for several years participate in this.
Benefits
 It helps in reaching at a large number of investors in quick time. The amount can be used for further business activities and also it helps in marketing.
Drawbacks
 It is very time consuming and costly process (Keough, 2015.)
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 The shareholders get voting rights which they override management decisions.
Friends or relatives
It is the first type of source any business looks for. This may be in the form of debt
capital at low interest rate. It is just like borrowing from commercial lender. It includes the
amount borrowed, interest rate, repayment terms, etc.
Benefits
 The rate of interest is low providing more flexible terms of repayment. It may offer loans without or less security than banks or other financial institutions.
Drawbacks
 The individuals may feel that he or she is now owner of business and has a right in
decision making.(Mutanda, and et.al, 2014)
Equity shares
It is a method of raising capital by selling the shares of company to public, investors or
financial institutions. Those who buy these shares are referred as owners of company.
Benefits
 Investors often provide follow up funding as business grows. It helps in saving the costs of bank loans and debt finance.
Drawbacks
 Business has to regularly provide information to investors.
 Investors seek background information of business before investing.
Debt financing
It involves borrowing funds from creditors by repaying the principal plus interest at
specified future time. It may be secured or unsecured. Secured means attaching collateral (an
asset attached to satisfy the loan in case of default by borrower) and unsecured means no
collateral attached. Debt financing may be short or long term. Short term is used to finance
current activities while long term is used to finance asset (.Rakodi,., 2014.)
 Benefits- it helps in maintaining ownership.
 Also the impact of tax deductions on banks interest rate helps in lower interest rate.
 Drawbacks- Even if business fails repayments has to be made to lenders.
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 It has bad impact on credit rating of firm..
Banks
They are the most popular sources of business financing. They provide short, medium
and long term financing. This helps in generating enough cash flow. On the behalf of giving
loans, banks want assurance of repayment by taking a personal guarantee such as assets or other
things.
Benefits
 It does not take any ownership in the business and provides flexibility as regular
instalments payment is done. The interest on bank loan is tax deductible
Drawbacks
 A lot of processing is involved in getting loans from banks
 The rate of interest is also high as compared to others.
Commercial finance companies- This is done when the business is unable to secure finance
from other sources (Bushnell and et.al., 2015.). This can be done when business is not
having enough personal assets. The cost of finance of company is usually higher than
commercial lenders
Benefits-
 It helps in easy getting of loan in less security deposit than bank.
Drawbacks-
 it affects the functioning of firm as timely instalments has to be made.
.
Bonds
It is a special type of debt finance which is issued by company for specific activity. It is
different from all others because in this, company specifies the interest rate. It offers company
the opportunity to access finance without worrying about repayment. This is because bonds are
of specific time period and payment is not done until its time of maturity. It helps in raising capital faster to earn and save profits. It is much cheaper than issuing
shares.
Drawbacks
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 It becomes difficult to pay back to lenders if company borrows too much money.
Trade credit
A short term credit extended by suppliers of goods to a buyer to enhance sales. In this,
cash is not immediately paid.
Benefits
 It is easy and automatic source of finance as it helps business in focusing on its core
activities. It does not require any formal agreement (Blackburn, and et.al 2013).
Drawbacks
 It is only available if there is good track record of repayment in the past.
 It is very expensive if payment is not done on due date.
SBA
Small business administration offers a number of loan programs. Loan guarantee helps is
to provide loans to small businesses that are not able to obtain finance. This can be obtained
through a lender (usually a bank).
 Benefits
 It is able to finance projects that lack assets It provides flexibility in the repayment according to company’s schedule.
Drawbacks
 The rate of interest is higher than banks.
 They are not regulated by government which gives them right to do business in their own
way.
P-4 Business plan for growth opportunity
Strategic objective –
 To expand in other European countries
 To gain market share of 5% in next quarter
Business description- the service sector belongs to industry where there are many ways
in which the different kind of services is provided to different kinds of people. It is a very large
industry as compared to primary and secondary industry. There are various markets presents in
this industry like hospitality, transport, food, distribution and retail industry. Many new product
are been developed every day according to the demands of customers. Technology is a key
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element in this industry. The current company is having turnover of less than 25 million euros
and employees of 242. it is having gross asset of 12.5 million euros.
Market strategies- To survive in service sector is entirely dependent on marketing your
products. marketing strategies describes how effective your product is. The features and
characteristics of product is described by its way of marketing (Rakodi,, 2014)
Today marketing is done by using digital media. It includes social media marketing, email
marketing, search engine optimization etc. a huge amount of money is invested in doing this.
ANC should use the effective technique of digital marketing as it is a cheap and easy way of
marketing products. For this effective marketing strategies must be made. Also, company is able
to afford this.
Competitive analysis- Its purpose is to determine the strengths and weakness of competitors
within the market. It helps to find loop holes of the competitor and using that in order to enter the
market. Barriers can also be developed to prevent the competitors to enter the market. There is a
tough competition is service industry to attract customers. The sales force must analysis on the
policies and strategically of competitors. For this more employees must be recruited or ANC
must take the help of media, agents, suppliers and offer them benefits for that. This will have an
effect on financial budget of ANC.
Design and development plan- It provides the investors about the product design and the
development which will help the ANS Limited to reach its goals. It helps in creating budget of
future development to achieve objectives. They should start designing new product for
experimenting them in the market to know the demand of different customers. This department
requires good budget for completion of task (Bushnell sand et.al., 2015.)
Operations and management plan- It describes the roles and responsibilities of the
management related to the operations of business. It divides the task, duties of each department
within an organisation. It also assigns the capital and expenses of each departments. In this the
budgets are allocated to different department according to their task and roles.
Financial factors- It is the most important component of a business plan. Without this the entire
plan that is made above will not work. This includes the entire financial statements of the overall
firm and it helps in knowing the financial performance of firm. It shows that to execute the above
plan effective resources are there or not. If not than how much fund is required and which is the
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best way for source of funds. It also shows that the ANC has the capability to handle access fund
or not. What will be the financial situation after sourcing of fund.
Activity Funds
Purchasing raw materials €500
Development of product €1000
Marketing and promotion €750
Control and evaluation €500
Total funds €2750
P-5 Succession or exit options for small business
A business started by any individual may get failed and later there are many options to
successfully exit from business (Blackburn, and et.al 2013). These options helps in
Merger and acquisition (M&A)- It indicates that the business owner wants to sell its entire
business to a similar or larger company. As decided in the terms of merger and acquisition
process the original owner may still get involved in daily operations. It is easier for bigger
companies to grow their revenue than creating new products. There are situations in which the
decisions taken by new management are not in the interests of company. In this case the original
owner feel powerless.
Liquidation- It is the last option that remains for the business. This is done when the business is
struggling and found themselves to never grow up again. In this the business is not in a situation
to pay its obligations when they become due. they choose to liquidate it's all assets. Assets are
distributed based on various parties like first it is distributed to secured creditors, who have
collateral on loans to the business and next comes the unsecured creditors which include
employees. Shareholder are the last to get remaining..
IPO- Initial public offering is a way to sell the shares of company to public. It is the easiest way
to make exit from the business as it brings large amount of cash within short time. It helps in
easy exiting from business and do not require any extra efforts (Eddleston, and et.al.,
2013)
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Sell to friendly buyer- It is not merger and acquisition since it is not combining two entities into
one. It usually happens in a family business where one family member passes the operations to
another. It can also include friends, relatives or even employees or customer. The idea buyer is
someone who has more skills and ability to run the business. If it is sold it to a friend it gives
satisfaction that the business will run more or less according to friend’s capability
Life style company exit- Its aim is to maximise the profit of the business without having any
plan of growth or expansion ( Ward,, 2016.). In this all the profits go directly into the owners
pocket. Such business are private and small in scale and are dissolved when there are no profit to
run or the owner wants to move to a new venture. It is a straight forward exit. Consultancy firm
is common example of life style company exit.
M-1 Growth options of business.
ANS Limited should use the growth strategy of market penetration as in service industry
it is very important to maintain existing customers with existing products. The reason behind that
is this company is based on technology and it changes frequently. So by understanding the
customers and providing the latest innovative product to them will help in growth of company.
By analysis the competitor’s strategies and evaluating the performance of company it becomes
easy to retain customers and capture the market. If customers are retained then it is easy to offer
them new products which will help in getting the feedback. The feedback then can be used for
making improvements in the product and competing with competitors.
M-2 Potential source of funding.
As a consultant it is required that ANS Limited should go for bank loan. They will easily
be able to get loan from bank as the financial position is stable and well maintained. It will be
very beneficial and good for them (Mutanda, and et.al, 2014). It will lead to focusing on
growth and expansion of ANS limited. They will be able to satisfy the demands of customers
and meet their objectives. The amount can also be used in marketing their product through social
media. The current assets of the company is also good which will help them to raise finance
through bank. By getting good amount it can help the research and development department to
do more research on how to use the latest technology in expanding the business and market share
of ANS Limited. The other exit options of liquidation, IPO, these both involves time and cost. So
M&A is much better option for exit.
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