Planning for Growth Report

This report examines the growth opportunities for Stone Builder, a small construction firm. It analyzes key considerations like Porter's generic strategies, PEST analysis, and Ansoff's matrix. The report also assesses potential funding sources, designs a business plan for growth, and explores exit or succession options for the company. Desklib provides past papers and solved assignments for students.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities..........................................1
P2 Apply Ansoff's matrix to evaluate opportunities for growth.................................................4
TASK 2............................................................................................................................................5
P3 Assess potential sources funding available to business.........................................................5
TASK 3............................................................................................................................................6
P4 Design a business plan for growth........................................................................................6
TASK 4............................................................................................................................................7
P5 Assess exit or succession options for small businesses........................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Planning for growth is an important concept that plays essential role for small scale
business concerns so as to expand their businesses in order to generate higher profits. . It is
necessary that top personnel conduct market research to have information about different market
opportunities, thereby make changes in system (Arku, Yeboah and Nyantakyi-Frimpong, 2016).
This report has been framed based on Stone Builder which is small firm providing construction
services. “replacement roof to listed building” is an important government based contract or
agreement in which owners of this company have invested around pound 80000. in assignment,
key considerations that are porter's generic, pest and ansoff's matrix to examine growth
opportunities is stated. Executive of SME's have shortage of capital for which funding sources
are assess by them to expand firm. Along this, succession and exit options for small business are
also assessed by business person which is described in the report.
TASK 1
P1 Analysis regarding key considerations that help in assessing future opportunities.
Small scale business entities have large number of possibilities to enlarge business and
market reach for enhancing sales volume and revenue. It is necessary that an executive have
information in respect to competitors to utilise growth opportunities. Porter's generic strategies
helps executive of Stone Builder to construct edge over rivals. Besides this, PEST analysis aid
them to have information about external factors influencing on business.
Competitive advantage: Every sector has large number of firms, so it is necessary that
top personnel design system in according to rival companies and market conditions. Along this,
they even require to execute business activities to establish appropriate recognition in market.
Executive of Stone Builder require to use strategies, which help them to construct edge over rival
firms to attract large number of customers. For this, porter's generic model is used to have
knowledge about competitive advantage which is stated below:
Porter's Generic strategies: Porter's generic model was propounded by Professor
Michael Porter . He is an economic researcher who has studied about competitive behaviour of
an organisation so that they can further enhance their profits and become successful. This model
is considered by managers of Stone builders for enhancing their long term growth and
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sustainability. Also it helps in providing competitive edge in respect of rival firms. Various
strategies in respect of Porter model has been stated as under:
Cost leadership: This strategy define that in firm, top authorities control and reduce
production expenses to provide items and services at reasonable prices. Stone Builder is
construction firm which require to create its share and goodwill in market. For this, executive
keep their profit share less in compare to competitors. Thus, services are provided at lower rates
than other firms which help them to attract large number of people easily.
(Source: Porter's Generic Strategy Model, 2018)
Differentiation: It is another strategy which can be adopted by companies to attract
customers by providing unique and creative products and services. For this, executive require to
make changes in system and implement innovative technologies to deliver high quality items to
buyers. Top personnel of Stone Builder require to create brand recognition, for this slate tiles are
used for construction of quality roof. Along this, flashing technique is used to create strong joint
between chimney and roof. This help company to provide security to customers about safety
from theft. Besides this, weatherproofing is taken care while construction of building to prevent
it from effect of water and air (Anderssonand Moroni, 2014)
Focus: This tactic is used by firms which concentrate on narrow segment to have large
number of customer base to enhance sales and profitability. Top personnel goal is to provide
products and services to fulfil demands and needs of people. For this, they have two strategies
which are as follows:
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Illustration 1: Porter's Generic Strategy Model

 Cost focus: It is strategy which help firms to identify cost advantage in target market
segment. For this, business person conduct advertisement to promote and inform people
about products and services. This help them in attracting customers to purchase items to
fulfil their demands.
 Differentiation focus: This is another strategy which benefit companies to select market
segment, thereby provide unique products and services. This helps executive of small
firm to compete with larger company by providing them quality items.
Therefore, from above tactics executive of Stone Builder uses Cost leadership strategy to
grab attention of large number of people by providing them construction service at affordable
rates. For this, cost efficient material are used at construction time to reduce costs. Besides this,
company uses lead flashing for covering join between slate and tiled roof. This help them to
provide safety to client from weatherproofing and theft (Lohand Norton, 2015).
PEST Analysis: This is technique which is used by business person to have information
about external factors impact on company. Executive of Stone Builder assessed government
regulation, economic conditions, public demands and technology while conducting business to
analyse the probable growth opportunities. Political factor: It is component which comprises policies and rules that are formulated
by government for regulating functioning of firm. Government of UK has made flexible
laws to promote SME's by providing them tax concessions. Thus, executive of Stone
Builder is able to utilise funds properly by saving from tax payment. This help them to
have sufficient capital to expand business that is increase number of outlets. Economic factor: This is another element which includes growth, inflation, interest and
exchange rate which differ from one nation to another. UK is a developed country which
has good growth rate and inflation. This helps executive of Stone Builder to have large
number of people which require construction service at reasonable prices. Thus, company
have opportunity to expand business by increasing number of outlets in UK. Social factor: It is component which define that people purchase products and services to
attain their demands and requirements. Organisation require to provide innovative and
creative items to attract buyers by providing them distinct product than competitors.
Stone Builder provide construction service at affordable prices which help executive to
have good customer base to increase sales volume and revenue. Company uses flashing
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to provide weatherproof building which is secure from theft. Mobile application and
social media benefits business person to inform people about construction service. This
help them to increase market reach and customer base which require construction of
building at reasonable prices (Woltjer, 2014).
 Technological factor: This element state that top personnel require to implement
appropriate equipments in system to execute business operations effectively. Executive of
Stone Builder require to utilise funds properly, so that they are able to execute business
activities and accomplish business objectives. Lead flashing is technique which is used to
construct good quality roof and building for clients. This help business person of Stone
Builder to prevent roof from weatherproofing and also from theft.
P2 Application of Ansoff growth matrix.
Executive require to have information about growth opportunities so that they are able to
adopt in according to resource availability and competences of firm. For this, Ansoff's matrix is
appropriate model which is used by business person of Stone Builder to examine growth
opportunities (Miller,Hauerand Werner, 2015).
Ansoff's growth vector matrix: This is strategic planning instrument which consists
strategies that executive can use to make growth in future. It is concept which was proposed by
Igor Ansoff which state tactics that organisation have to expand business by utilising growth
opportunities. Thus, these are four tactics which Stone Builder have to increase their sales and
revenue are stated below:
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(Source: Ansoff's Matrix, 2018) Market penetration: It is first quadrant of matrix which is adopted by firms to expand
business with help of existing items in known market. This is effective tactic for business
person of Stone Builder to increase profitability by using advertisement tools. This help
them to grab attention of people in other parts of UK to take construction service from
them. Market development: This is another strategy which is used by company to target new
market to increase their customer base. For this, business person increase and set up
outlet in other countries to enhance sales volume and revenue. Executive of Stone Builder
uses this tactic with help of online tool that is social media to inform people about
products. This aid them to utilise funds and enhance number of buyers by constructing
connection with use of digital technology. Product development: It is strategy which is used by firms to construct strong market
share in existing one. Business person of Stone Builder conduct survey to make
modification in system, thereby provide creative and innovative products and services to
people. This help them to make firm distinct from competitors to attract large number of
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Illustration 2: Ansoff's Matrix

customers. Stone Builder uses flashing technique to construct effective roof which is
secure from theft and also weatherproofed (Brownand Mawson, 2016).
 Diversification: This is strategy that is adopted by executive to expand business into new
market to increase number of buyers. Along this, innovative and creative products are
provided in according to requirements and demands of people. For this, alteration in
system that is implementation of advanced technologies and equipments. Business person
of Stone Builder can uses diversification strategy in which multinational storey contract
are also taken by firm. This helps company to increase clients to enhance sales and
profitability.
Executive of Stone Builder uses market penetration to increase customer base by using
promotional techniques that is advertisement. For this, newspaper and online tools that is social
media is used to attract people by informing them about products (Sager, 2017). Thus, these
techniques help company to increase customer base to enhance sales volume and revenue.
TASK 2
P3 Potential sources of funding that are available to business
An entrepreneur have shortage of capital which require to be utilised efficiently. Small
firms have large growth opportunities which business person require to use to increase sales and
profitability. For this, business person find out all potential sources of funding through which
they can arrange additional money for expanding purpose. Thus, these are different funding
sources which are mentioned below:
Crowdfunding: This is source of funding in which large number of individuals contribute
money in small amount. In this, internet is tool which is used by people to communicate and
make decision in respect to investment. This technique have certain merit and disadvantage
which are stated below: Benefits: This tool helps business person to ascertain potential investors through which
they can increase capital and enlarge business. Drawback: It is time consuming as executive first find out potential pool of investors
which are ready to spend money.
Small business administration (SBA) loan: It is another source of funding which
involves support that is granted by government to small firms. For this, authorities are ready to
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provide amount to executive for taking contracts and expanding purposes. It is tool which have
certain merit and disadvantage which are described below: Benefits: Relationship between borrowers and lenders improve with use of this
technique. Along this, executive is able to increase chance of getting loan from bank if
SBA loan is managed properly (Beatley, 2014). Drawback: Business person require that firm passes all qualification guidelines to get
approval from government.
Bank loan: It is popular form of funding which is used by firms for arrangement of
capital for business. Bank provide money in three forms which are short, medium and long term
which have different time of repayment of money. Thus, these are advantage and demerit of
bank loan which are stated beneath: Benefits: Bank provide loan in different types which aid executive to take money in
according to business requirements. This is quick process and also benefits top personnel
from loss of control of decision-making.
 Drawback: Business person require to conduct documentation process with bank which
consumes large amount of time. Apart from this, business assets are taken by bank if
timely money is not paid by company (Gurran, Austin and Whitehead, 2014).
Henceforth, “Replacement roof to listed building” is government contract in which
company has made bid of £80,000. From this amount, business person have £20,000 and
remaining £60,000 are arranges from bank loan and crowdfunding. Thus, this help them to
arrange funds for bid process in government contract.
TASK 3
P4 Design a business plan for growth
Business plan is a name given to a formal document that is usually present in a written
form and prepared by business men so as to provide necessary data and information to
stakeholders as well as other people. There are various components such as vision, mission,
objectives, financial information etc. which are stated in this plan. Executive of Stone Builder
have prepared business plan which is described below:
Company overview: Stone Builder is small firm which have outlet in Blackburn, United
Kingdom. This is a construction company which construct building for people. Flashing
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technique is used for providing security from theft and weather conditions. “Replacement roof
to listed building” is government contract in bid of £80,000 is made by firm.
Vision and mission statement: Mission of Stone Builder is to increase market reach to
enhance sales and revenue. Vision of Stone Builder is to construct strong building to create
strong brand image (Haalandand van den Bosch, 2015).
Strategic objectives: Executive of Stone Builder uses SMART tactic to formulate goals
which are specific, measurable, achievable, reliable and time bound. Thus, these are objectives
which are described below:
 Increase firm's brand image and goodwill to attract large number of customers. Enhance sales volume and profitability by 30% in next two years.
Product and services: Stone Builder provide construction services at reasonable prices to
people. This helps businessperson to attract large number of people to enhance sales volume and
profitability (Pothukuchi, 2015).
Situational analysis: Business person of Stone Builder require to have information about
system capabilities and market conditions. Strengths are assess by them to utilise market
opportunities, thereby expand business to enhance sales volume and profitability.
Strengths:
 Stone Builder uses digital technologies that is mobile and social media to provide online
facility to people to take construction service in according to their demands.
 Company is using flashing technique to provide people security from theft. Along this,
waterproof building is provided to client. This helps executive to attract large number of
people to take construction service from them.
Opportunities:
 Businessperson of Stone Builder require to conduct branding process to increase
awareness among people. Real estate industry is growing at fast rate which benefit company to have large number
of buyers to get construction service.
Financial information for scaling up business: Cash flow statement define information
about investment of business person of Stone Builder that is £60,000. It is statement which
includes information about January to June 2018 credit sales, fixed hardware, direct material
expenses. Thus, net cash flow is ascertained which help executive to have knowledge about
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closing balance which is £10, 040. Thus, this is cash flow statement of Stone Builder is stated
below:
Particulars Jan Feb Mar Apr June Total
Cash
Inflow
Investment 6000 6000
Credit
Sales 2000 2200 3500 3000 2000 12700
Total
Inflow 8000 2200 3500 3000 2000 18700
Cash
outflow
Fixed:
Hardware 3500 2000 2500 1500 2800 12300
Variable:
Direct
Material 450 150 350 250 180 1380
Total
Outflow 3950 2150 2850 1750 2980 13680
Net cash
flow 4050 50 650 1250 -980 5020
Opening
balance 0 4050 4100 4750 6000 5020
Closing
balance 4050 4100 4750 6000 5020 10040
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TASK 4
P5 Assess exit or succession options for small businesses
Executive of small firms start new venture to utilise funds for conducting business,
thereby generate money. It is necessary that they have information about succession and exit
chances to adopt options in according to performance of company. Business person of Stone
Builder analyse exit options so that they adopt best one which aid them to wind firm.
Exit options for small business: These are different types of exit methods which are
mentioned below:
Liquidation: This is process which is used by executive to shut down company by selling
assets to get money for payment of debts of company. It is appropriate tool for small business
whose functionality depend on value of assets and image of company which determine sell time
assets take (Hessand Sorensen, 2015). Benefits: It is simple activity which help business person to wind up business at fast rate.
Sale of assets takes some time which determine shut of firm from marketplace. Drawback: This tool have demerit which is low level of return gain by executive in
respect to initial investment. Land, equipment, inventory and other assets are disposed by
them whose value always depreciate due to usage and time constraint.
Sell of business to manager and/ or employees: It is another option which small firms
have is to wind up business by selling it to existing superiors or subordinates. But this tool have
certain advantage and demerit which are described below: Benefits: Executive sell business to people which have knowledge in respect to firm, so
this help them to carry out firm easily. Thus, they have competent individual which are
ready to purchase firm.
 Drawback: It is not necessary that manager and staff members have qualification to take
over firm. Along this, they might not have sufficient money that is required to purchase
company (Keough ,2015).
From the above, liquidation is tool which is used by executive of Stone Builder to wind
up business. For this, business assets are sold by them to get money for making payment of
creditors and other debts of firm. Besides this, business person also get funds that they have
invested for further usage.
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CONCLUSION
In the above report, it has been stated that small and medium firms have growth
opportunities for expanding business and profitability. From porter's generic tactic, it is analyse
by business person that cost leadership is effective technique. PEST analysis help executive to
have knowledge about external factors influence on business. Along this, Ansoff's matrix
assessment state that market penetration aid them to increase customer base by using
promotional tools. Bank loan and crowdfunding etc. are several funding sources that can be
employed by small firms to increase capital and utilise market opportunities. Business plan is
created by top authorities to state background of company, vision and mission, strategic
objectives and many other data to people which have connection with firm.
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REFERENCES
Books and Journals
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