Planning for Growth: Analyzing Opportunities and Funding Sources for Ades

This report focuses on varied key considerations for analysing the growth opportunities of the SME business Ades, including options for growth, sources of funding, designing a business plan, and exit options. The report evaluates different sources of funding which can be accessed by the firm and prepares a business plan for growth.

PLANNING FOR
GROWTH

CONTENTS
INTRODUCTION......................................................................................................................1
LO – 1........................................................................................................................................1
Main considerations Ades should take for analysing the growth opportunities.....................1
Options for growth using different analytical framework......................................................2
Evaluation of the prospects for growth by Ansoff growth matrix..........................................4
Options and pathways for growth including the risks of each option and ways of
extenuation.............................................................................................................................5
LO – 2........................................................................................................................................5
Possible sources of funding....................................................................................................5
Choosing the best source of funding with justified argument................................................6
LO – 3........................................................................................................................................6
Designing suitable and detailed business plan with financial information for scaling up the
business...................................................................................................................................6
LO – 4........................................................................................................................................9
Assessing exit options or succession planning for Ades including advantages and
disadvantages..........................................................................................................................9
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................12

INTRODUCTION
Small and medium business enterprise are being referred as those businesses which
are beginning their business and are of small and medium sized firms. these kinds of the
companies have normally less than 250 employees and their revenue is also around fifty
million pounds. Planning related to growth is very crucial for such businesses as with this
they can attain the path of success and growth and remain competitive in the market. Based
on this, the current research project is being planned to focus on varied key considerations for
analysing the growth opportunities of the SME business. The organization taken for the
present purpose is Ades, which is wholesale grocery super shop of London. The report will
evaluate different sources of funding which can be accessed by the firm and will also prepare
a business plan for growth in the subsequent task. It will encompass objectives, mission,
marketing and operational plans along with financial budget. The final section of the report
will emphasize on different exit plan or succession planning options available for Ades.
LO – 1
Main considerations Ades should take for analysing the growth opportunities
Talking in relation with the competitive advantage, it is being referred as the
condition which takes the firm in the favourable business position. If the owner of the
business is in a position to attain a competitive edge in the market than he or she will be able
to trade products and services without any difficulty and profitably. Nevertheless, a good
competitive advantage signifies that the small business is more likely to thrive as well as
possess the ability to grow and expand (Moen, Heggeseth and Lome, 2016). Competitive
advantage is very essential for the small and medium business-like Ades. Other than this,
there are varied type of considerations that needs to be engaged by Ades and these are as
follows:
 Resources – It is quite crucial that the company should scan their whole superior
quality of products along with the services in their super shop to the customers.
Seeking help from this, they will grab enhanced position in the market and better
satisfaction of the clients. They should have knowledgeable and skilled employees so
that they can make use of the resources efficiently.
 Capabilities – The industry in which Ades functions is quite dynamic as well as
competitive in nature and consequently, it is crucial for the company to focus on
developing good quality products for gaining an edge in the market. It is important
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that the firm should focus on their workers, organization of products in the shelf,
availability of certain products, easy payments with no longer queues etc.
 Core competencies – Core competencies are referred as the unique selling
prepositions through which the company can increase their amount of sales as well as
share in the market (Sardeshmukh, Goldsby and Smith, 2021). Some of the core
competencies that Ades need to focus on such as supply system, customer value,
designing and delivering of customer interface and efficient delivery and distribution
infrastructure.
Options for growth using different analytical framework
There are some other options as well through which this company can gain lot of
competitive advantage and will be in a position to know the whole condition of the market
easily and these are PESTLE analysis and Porter’s generic framework. Explanation of these
models is being done below:
Pestle analysis
 Political Factor – Because of this government-based factor, it is important on the part
of Ades to have varied kinds of progress for expanding their business within UK.
Further, they need to consider varied rules along with the policies which is being
stipulated by the government of UK (Zambon and et.al., 2019).
 Economical Factor – It generally encompasses inflation rate, foreign exchange rates,
rate of unemployment and many more. There are varied types of rules within UK,
which is required to be taken into account by the firm. The economy of UK is
growing exponentially and this will offer great opportunity to the firm in enhancing
the growth of their business.
 Social Factor – It is crucial that life style of the people along with the culture needs to
be considered for evaluating the type of products to be brought or introduced in the
market. The community of the UK spends good amount on luxury and healthy
products which will be quite advantageous for Ades for their future growth.
 Technological Factor – There are different companies who are working and
introducing innovative and creative techniques on a regular basis for influencing
people in the market. the firm is also required to execute innovative technologies for
offering quality products and services to their target market (Lebedeva and
Zhikharevich, 2018).
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 Legal Factor – For expanding the business within any nation, legal rules and
regulations should be considered as each and every nation have their own set of legal
laws and legislations for conducting operations. if the firm will follow and comply the
same than they can earn huge profits.
 Environmental Factor – This is in concern with the environmental condition such as
weather, climate and many more. In this context, it is necessary for Ades to keep their
products in safe and secure environment for giving better and enhanced quality to the
clients as they are dealing in groceries. In addition to this, investment in regards with
protection of the environment should also be done and must adopt practices that leads
to sustainable business.
Porter’s generic framework
It is being defined as one of the most important frameworks for identifying the core
competencies of the companies. It can be utilized by Ades for gaining competitive edge in the
market in a perfect way (Islami, Mustafa and Latkovikj, 2020). Porter’s generic framework
always helps the small and medium businesses in increasing their growth and opportunities
flawlessly. Some of the strategies in reference with this model are being elaborated in the
subsequent section:
 Cost leadership – Speaking about the cost leadership strategy, it is being define as the
technique wherein the prices are being kept low as compared to the competitors of the
company for achieving more profit margins.
 Differentiation leadership – Differentiation leadership is defined as that technique in
which the company emphasize on make differences in their merchandise and services
to that of their competitors. This is being done as they want to lead the overall market.
 Differentiation focus – In this type of porter’s generic strategy, the main focus is
majorly on offering different products and services that to in a specified niche market.
 Cost focus – Cost focus is being referred as the strategy wherein the company pays
attention on the niche market and offers products at lower prices for the purpose of
attaining high level of profits and growth in the market. this is almost similar with the
cost leadership strategy with only different of targeting specified niche market
(Camilleri, 2018)
Taking into account the market situation from both PESTLE analysis and porter’s
generic framework, it can be said that cost leadership strategy is more appropriate for the
company who is planning to expand and desires to grow. In addition to this, Ades is also in a
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great need to focus on offering high level of quality services and products to their target
market. meanwhile, keeping the cost lower also should be the prime priority of the firm so
that they can attain competitive position in the marketplace.
Evaluation of the prospects for growth by Ansoff growth matrix
Ansoff growth matrix is an important tool or model for analysing the opportunities
required for the growth of the organization. Further, this model is being utilized for
maximising the profit of the firm as well as for occupying the major share in the market.
Ansoff matric helps in offering stability for the large-scale development of the firm. There
are four different strategies being included in this model and these are: product development,
market development, diversification and market penetration. The key principle of this
framework is nothing but to carry out evaluation of the products along with market. the
explanation is done underneath:
 Market penetration – It is being regarded as the less risky strategy as it is
concentrated on selling the existing products in the existing market for development
of profitability. Market profitability can easily be gained by evolution of the image of
the market and conducting marketing promotions with several loyalty programs in
creative ways (Yin, 2016).
 Product Development – This strategy can be grouped as a medium degree of risk
strategy as it is concentrated to selling entirely new products in the existing market. It
encompasses making efforts to augment the range of products and developing the
products in the market place.
 Market Development – This is the strategy wherein the business is dealing with the
existing products and services but in the new place or market. In this, the company
always pays attention on the sectors of the clients. nevertheless, the growth of the
company is improved through introduction of latest products in the novel markets.
 Diversification – This is the strategy which is being regarded as the riskiest out of all
growth strategies as it is concentrated on selling new products and services in the new
marketplace. It is necessary that the company must evaluate the assessment for
diversifying with moderately more limitation (Sazonov and et.al., 2016).
On the basis of the Ades’s position in the present marketplace and its good brand
value, it is suggested that market penetration strategy be the best strategy for the company. In
addition to this, company should focus on marketing and promotion of their products as it
will help them having more footfalls and this will enhance the overall sales of the company.
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For applying this strategy, it is essential that Ades should focus on conducting marketing
plans along with the promotions that will help in increasing the profit earning capacity and
sales of the company.
Options and pathways for growth including the risks of each option and ways of extenuation
The decision being adopted by the company is needed to be relied on different
analysis which are being performed out by the company. Before making use of any strategy
in context of growth, it is important to understand different risk associated with those
approaches. If the firm will take into account product development strategy which involves
medium risk, Ades should focus on cultural aspects of the UK as it might impact their
operations. On the basis of the societal factors, the firm can emphasize on the evolution of the
new product for their target market. Further, if the company will consider diversification
strategy which is quite risky, the company is required to pay attention on analysing different
factors of potential markets and afterwards should work on launching the new product in that
market (Matyash, 2018). On the other side, if Ades will adopt market development and
penetration strategy than they should emphasize on marketing, pricing and promotional
technique for mitigating their risk.
LO – 2
Possible sources of funding
There are varied sources of funding which can be accessed by the Ades for planning
their growth and expansion and these are being elaborated in the subsequent paragraph:
Venture finance
Speaking in relation with the venture capital, it is being referred as the financing
process wherein the investors offer monetary help to the company who is starting the
business and is anticipated to have enduring growth possibilities. Nevertheless, such type of
funding options comes from prosperous investors, economical institutions and banks. There
are certain benefits as well as drawbacks of venture capital financing. Firstly, it helps in
offering economical help to the business who is starting their business along with the
precious consultation and source direction as well. Secondly, such type of funding option is
well-connected with society of the business. however, it has some disadvantage of loss of
control and ownership (Júnior and Chaves, 2015).
Bank loan
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It is being regarded as one of the most usual sources of funding being adopted by
SMEs. Bank loan can be taken both for the short or longer period of time. In this bank offers
the required sum to the owner of the business for stipulated period of time along with the
decided rate of interest to be paid back with the principal amount. Bank loan is important
because the rate of interest is tax deductible. Secondly, it become easy to repay the amount as
it is to be paid instalments. Finally, it is one of the cheapest sources of financing.
Nevertheless, there are some drawbacks of this source such as inflexibility. Moreover, the
borrower does not have equal amount of asset than loan will not be granted.
Crowd sourcing
It is being referred as the method wherein the funding is being done through
accumulating small amount of money from large number of people by the way of internet or
online. There are different benefits of this source (Jain and Gupta, 2018). Firstly, with this
method Ades will be able to raise the amount needed for expansion quickly and without
paying any fee. Secondly, investors can monitor the growth of the business easily. On the
other hand, it is not open for all the businesses and if the target amount is not collected then
the investors can take their money back.
Choosing the best source of funding with justified argument
At the point when the Ades is anticipating to develop their business than it is
significant for them to focus on using reasonable basis of financing. There are assortments of
techniques for financing present for the firm anyway picking the best appropriate one is
essential. Subsequently, the sales of the organization are very great and is likewise having
great picture on the lookout, it will help in creating a more noteworthy number of benefits
without any problem. Taking into account this, it may be credited that the organization will
be in a situation to reimburse the sum effectively and hence, bank credit ought to be chosen
for getting reserves. Advance ought to be taken from banks as they offer funds at lower rates.
Moreover, crowd subsidizing is additionally the best technique as it gives better learning
experiences to the business. In this way, the small and medium enterprise ought to go for
these choices.
LO – 3
Designing suitable and detailed business plan with financial information for scaling up the
business
Executive summary
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Ades is one of the leading super shops of London which is planning to offer quality
products at affordable and accessible to the clients in UK, London and European Union. The
below is the business plan for the company which will include marketing strategies,
operational plan and financial budget of the company (Bowen, 2018).
Mission and vision
Ades is a wholesale and retail grocery super shop the South East London. The main
mission of the company is to augment their ranges of products for example top-quality drinks
as well as food enduringly and further to be sold at competitive prices for holding wider share
in the market.
Objectives and values
There are different goals and values of the company and some of them are being
elaborated below:
 Making improvement in the profit margin by 10% by the end of the first year
 Beating with the expectation of the client in supplying top quality drinks and foods
 Providing wide variety of products and services
 Making improvement in the base of the client, customer retention and loyalty by 10
percent ()
Stakeholders
The stakeholders of the company are of two types that is internal and external. The
internal stakeholders of the firm include workers, managers and owners and the external
stakeholders include clients, suppliers and government.
Capital funding
Talking in relation with the capital funding, the overall funding being needed by the
firm is £10000. The sources by which the capital funding is attained are crowd funding.
Operational plan
After carrying out the evaluation of the market and the current competitive
environment, the firm has taken decision to execute cost leadership strategy. Ades is making
plans to offer quality foods and drinks and thus, for this they will need skilled and resourceful
team for accomplishing these plans (Nair and Blomquist, 2019).
Resource plan
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Resources like materials, manpower and many other intangible resources such as
understanding of their choices, taste of the clients and understanding of the market trends will
be required.
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Technology plan
Other than this, the firm is also planning to offer online services and thus, for this they
will require necessary online presence, network system along with websites. Ades is also
planning to have messaging platform for allowing the clients to have contactless interaction
with the employees and clients.
Risk factors
Some of the risk being involved in the cost leadership strategy is organizational,
financial and market risk (Mandl, Berger and Kuckertz, 2016).
Marketing plan
The marketing plan of the Ades will involve development of the website as it is being
considered as one of the most effective online marketing strategies. In addition to this, the
firm will also ensure to make use of social media platforms like Facebook and Instagram in
order to market their food and drinks. Different offers and discount coupons will also be
offered by the company as their promotional strategies.
Time frame
Activities 1 2 3 4 5 6 7 8
Conducing
planning of the
business
Protecting and
obtaining funds
for the business
Technological
and other
resources
planning
Market research
and planning
Financial information (Budget)
Expenses Amount (£)
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R&D 3500
Employee’s salary 2800
Marketing and promotion 2000
Administration expenses 300
Equipment’s 1400
Total 10000
LO – 4
Assessing exit options or succession planning for Ades including advantages and
disadvantages
Speaking in relation with the business exit strategy, it is being referred as the strategy
which is being utilized by the owners or the investor to leave the business. the exit plans for
owners and the investors are:
Family succession
This plan is being applied to the small business at times when they have the
willingness for keeping the business within the family for longer period of time. In such
method, a business is being transferred to their successor after grooming them overtime hand
afterwards it is being handed over to them (Cruz and Nordqvist, 2017).
Advantages disadvantages
The owner is being able to select as well as
train the suitable member within the family
There might be or might not be efficient
individual in the family who can carry on
the business and run it successfully
The owner does not have to cut themselves
totally from the business
This method might result into general,
emotional along with monetary family.
Selling shares to investors or management
This is the option in which the owner of the organization has the right to sell their
share to the partners, investors or the workers and management. the workers along with the
management have knowledge about the business and its operations which will allow them to
efficiently run the business. additionally, share can also be sold to the investors or the other
partners of the business.
Advantages disadvantages
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In this method, the business will continue as
usual and is being given to those who have
high level of understanding and knowledge
of the business and its operations.
This method might involve possibilities of
conflicts and disagreements between the
management, partners and the workers
(Brill, 2017)
It will also allow the involvement of the
owner in some areas as advisor or mentor
This option might also influence in the
existing customers and they might resist the
exit option.
Merger or acquisition
This is being referred as the important method when the business fails. This method
allows the business to get merged or acquired with the firm having same objectives as well as
goals. Further, it is a good exit option however needs more time to research for the suitable
firm (Blom and Guthrie, 2018).
Advantages disadvantages
In this method, the owner is being in a
position of taking clear break from the
business if they are planning to take break
This is very time-consuming method
because it needs lot of study to search for
suitable firm for mergers and acquisition
Mergers and acquisition also offer different
prospects to negotiate for price for any other
terms in case of mergers or acquisition
The name of business might cease in case of
mergers or acquisition
Liquidation
This exit option is normally being utilized by the owners in the situation of heavy
losses in the business. Further, it involves selling of the business to another individual. This
process also needs owner to make repayment of all the debt and creditors. An effective exit
plan is needed to be made by the owner prior executing liquidation option.
Advantages disadvantages
With this method huge profit is being
earned by the owner of the business through
selling of the business
There can be dissatisfaction between the
customers and the management
Owner gets the chance to negotiate price Return on investment might not be as
expected (Puddington, 2017)
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CONCLUSION
Thus, from the above evaluation, it can be said that planning about the growth is very
essential for small and medium enterprise businesses. Seeking help from this planning,
companies can create plans along with effective strategies. The report has clearly focused and
analysed different key considerations for the growth opportunities through application of
different models. Along with this, it has also accessed different sources of funding along with
the preparation of a business plan for growth of the Ades. Financial information along with
the marketing budget was also being prepared for scaling up the business. the final section of
the report has clearly highlighted varied exit options and succession planning available with
the company in case it fails in conducing the business successfully.
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