Growth and Exit Report

Growth and exit report

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
P3 Assessment of potential funding sources and discussion about its benefits and drawbacks:. 3
M2 Evaluation of potential sources of financing and appropriate source adoption and its
justification:.................................................................................................................................5
D2 Critical evaluation of potential sources of financing along with justifies argument about its
adopting one source or combining these sources on the basis of company's needs:...................5
TASK 3............................................................................................................................................6
P4 and M3 Designing business plan with involvement of financial information as strategic
motives fro growth or scaling up of business:.............................................................................6
D3 Presentation of in-depth business plan that provides demonstration of knowledge as well as
understanding of formulation, application and achievement of business objectives:..................8
TASK 4............................................................................................................................................9
P5 Assessment of succession options for small companies along with its benefits and
drawbacks:...................................................................................................................................9
M4 Evaluation of exit options available for small business along with comparison and
contrasting available options and making recommendations:...................................................11
D4 Providing critical evaluation of exit or succession options for small business and deciding
appropriate course of action with recommendations:................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business growth refers to the opportunities that an organization pertains for expansion of
its scope and generation of positive cash flow. It enables firm to expand its customer base which
leads to improvement in its profit earning capacity. On the contrary business exit strategies
indicates methods that company adopts for closure, which may be of various reasons such as
market uncertainty and business failures (Berkowitz, Monfort and Pieńkowski, 2019).
This report is based on growth and exit strategy analysis of ABC. Potential sources for
funding that is available in business are evaluated along with its benefits and drawbacks. Further,
business plan is designed for the purpose of growth and financial information as well as strategic
objectives is included in it. Additionally, exit options available for small entities is accessed with
the explanation of its pros and cons.
TASK 2
P3 Assessment of potential funding sources and discussion about its benefits and drawbacks:
Sources of funding can be explained as resources that provides finance to company. This
plays an important role in enhancement of growth opportunities for an organization. There are
various sources of finance available for business. Assessment of such sources by the technique of
investment appraisals provides brief overview about its benefits and limitation which helps ABC
is selecting suitable funding sources (Cha and Kang, 2018). Main sources of finance that are
available for expansion of an enterprise accompanying with its pros and cons is described below:
 Bank Loans: In this form of funding, company take loan from banks. In other words,
bank grants loan to business on the basis of its value and capability of paying back.
Benefits: This source of funding is reliable or trusted. Banks are capable of lending high
amount, hence, ABC can take loan of high monetary value and for longer term , that though, at
reasonable rate of interest. This helps business in making long term strategies that require higher
funding, for example, expanding business in untapped areas, increasing product portfolio etc.
Drawbacks: Loan term offered by banks are rigid and its process of application is also
complicated. It is a time consuming process as it requires proper business and expansion plan of
ABC and high legal fees is also involved. Further, taking bank loans increases the risk factor of
ABC and improves fixed expense of business in the form of interest charges. It also requires

collateral over the assets of business, so, if business plan fails than company have to bear huge
loss.
 Crowdfunding: In the funding method, large amount of capital is obtained by company
from sourcing of small monetary amounts from large number of people. It is mainly
utilised for raising funds for new business ideas (Coad, Daunfeldt and Halvarsson, 2018).
Benefits: It provides easy accessibility to achievement of target or funding goals of
company. Further, it encourages engagement of people towards growth plan of ABC as it creates
forum for audience involvement. It serves as a easy way of raising fund with no upfront fees
involvement and pitching. It helps in risk diversification.
Drawbacks: It reduces the confidentiality of business projects and it is not necessary that
ABC acquires its targeted amount of fund. If such project fails than it negatively affects the
reputation of an organization. For the purpose of sourcing fund through crowd, ABC have to
declare about its plans which increases the risk associated with idea copying. Additionally,
strong network of business and high band image is required for raising money through this
source of finance.
 Peer to Peer Lending: Also termed as P2P lending, it is a practice that pinpoints lending
of money to business via online services which concerns about aligning lender with
borrower (Darst and Dawson, 2019). Therefore, through P2P lending ABC can directly
obtain loan from individual or it can be stated that this financing source connects
company to investors through online platform.
Benefits: While considering advantages of this funding source it is noted that peer to peer
lending turned out to be fast and convenient way of borrowing loan. It is an easily accessible
source of finance that provides direct interaction opportunities for ABC and lenders. In peer to
peer market, flexible rating exists fro matching the demand and supply between firm and
investors. Further, this funding source provides quick access to finance for ABC.
Drawbacks: High credit risk is involved in peer to peer lending and even immediate
lending of cash is not provided (DeSantola and Gulati, 2017). Availability of wide range of
choice makes the decisions making complicated for management of ABC. This financial source
includes high risk as no adequate government regulations are implied in its hence it is a risky
affair.