Analyzing Entrepreneurship Strategies and Exit Plans

This assignment delves into the world of entrepreneurship strategies, focusing on exit plans for small businesses. It includes a review of existing literature on SME innovation, exporting, and growth, as well as case studies on strategic planning in local government and measuring innovative human capital's impact on firms' propensity to innovate. The assignment also covers various models such as the BCG Growth-Share Matrix, Ansoff Matrix, and exit strategy planning for small businesses.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P 1 Key consideration for identifying growth opportunities.......................................................1
P 2 Ansoff growth vector matrix.................................................................................................4
LO 2.................................................................................................................................................7
P 3 Potential sources of funding..................................................................................................7
LO 3.................................................................................................................................................9
P 4 Designing Business Plan.......................................................................................................9
LO 4...............................................................................................................................................12
P 5 Succession Option For Small Business...............................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

Illustration Index
Illustration 1: BCG Matrix...............................................................................................................3
Illustration 2: Ansoff Growth Vector Matrix...................................................................................5

INTRODUCTION
Business plan is considered as backbone for success of business unit. Planning aids in
identifying opportunities of growth and finding risk associated with it. Southern business
technologies Ltd is being taken into account for the present study. It is small size private firm that
has fewer employees in the organization. It offers amazing telecommunication services in
England. The main agenda of entity is to expand its business and increase profitability of
company. Current assignment will analysis factors that need to be considered by SME when
evaluating growth opportunities. Furthermore, it will apply Ansoff matrix with reference to
Southern business technologies Ltd and will find opportunities for growth. There are various
sources of funding for small size organization; the report will assess potential sources of funding.
In addition, study will discuss benefits and drawback of these sources of finance. It will design
business plan by including financial and strategic information for scaling up business.
LO 1
P 1 Key consideration for identifying growth opportunities
It is very important for the manager that to identify that whether business idea of company
is viable or not. In order to examine viability of the enterprise it is essential to consider various
elements that can support in identifying opportunities of growth. Objective of Southern Business
Technologies Ltd is to expand their firm and enter into new market (McGuirk, Lenihan and Hart,
2015). But first entity will have to ensure that it can work better in new location and it has
numerous growth options. Key consideration for analysing growth opportunities in the firm are
as described below:
Capabilities and competencies of the firm
It is another most important part that needs to be considered by Southern Business
Technologies Ltd for evaluating growth opportunities. If entity has strong financial position or
skilled employees then it would help the organization in improving performance and providing
satisfactory telecommunication services to mass audience (Smith and Brooks, 2018). Cited firm
is small size thus, it has limited funds but market research and marketing strategies of the
company are very strong. With the help if these competencies it can enter into new market and
can gain success significantly.
Utilization of resources
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It is considered as one of the most important element that defiantly needs to be looked
upon by business for identifying options of growth in the firm. If entity is able to utilize its
resources well then it would be beneficial for organization to save money and reduce cost as
well. Southern Business Technologies Ltd is small size firm which is recently providing quality
telecommunication services in England (He and et.al, 2015). But enterprise has limited resources.
It is important for the firm that to utilize these resources well, n order to accomplish its objective.
Human resources are assets of the business, if company has employed skilled people and if they
are performing well then it would support in the growth of the firm. Manager has to consider how
entity is utilizing its financial, human, technical resources for evaluating growth opportunities. If
planning to utilize these resources is well then it can help in gaining growth opportunities and
expanding business in new location easily.
Portfolio strategies
It is another essential key consideration factor that needs to be considered by Southern
Business Technologies Ltd for evaluating growth opportunities (Love and Roper, 2015). BCG
matrix is the method that supports entities in identifying market share and growth of various
products and making effective portfolio strategies. Dongs are such products which growth and
market share is very low. On other hand questions are such items that can grow rapidly but these
products take time to generate revues in business. Starts are another kind of products of Southern
Business Technologies Ltd that has high growth and share. Cash cows has high market share but
low growth. Southern Business Technologies Ltd has to look upon the most growing products
and have to invest money for the growth of such products that can generate revenues for the
organization. Entity emphases on stars because this helps in getting more opportunity to enhance
its profit and gain success in the market (Arregle and et.al, 2015).
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Illustration 1: BCG Matrix
Source:(BCG Growth-share matrix, 2018)
Development of products
This is the factor that helps in identifying whether entity has capability to meet with
expectation of people of not. This aids in evaluating growth opportunities in organization. If
organization is able to develop its products and services then people will feel happy and they will
frequently by its products but if entity is offering them out dated products then they can become
negative in such condition it will not be able to get growth opportunities (Carter and et.al, 2015).
Southern Business Technologies Ltd is facing huge completion there are many
telecommunication firms those which are offering 4G services to consumers in the UK market.
But still entity continuously develops its products. Earlier 2G services was being provided by
Southern Business Technologies Ltd but now it is offering 3G services in rural and urban areas.
Influence of external factors
Porter’s five model helps in identifying influence of macro elements in the firm and
knowing to what extent entity is being affected by these components (Yamakawa, Peng and
Deeds, 2015).
 Competitors: Southern Business Technologies Ltd is small size firm, it is facing huge
competiton. There are many big brands such as EE limited, Vodafone etc. those who are
offering 4G services to consumers. This influence decision of consumers and they prefer
to buy telecommunication products from these brands. Competitors have high power thus;
Southern Business Technologies Ltd is required to pay attention on these rival firms for
gaining more growth opportunities (Smith and Brooks, 2018).
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 Buyer power: Consumers are life blood of business; if they are satisfied with the entity
then they become frequent buyers. They have high power to influence decision of entity.
 Supplier’s power: Suppliers have moderate power because there are enough number of
suppliers those provide services at affordable rates. If entity is not happy with one
supplier then it can move towards other (He and et.al, 2015).
 Threats of new entrants: Southern Business Technologies Ltd does not get affected by
new entrants because these new firms have less power to make changes in industry.
 Threats of substitutes: This external factor has moderate power, though Southern
Business Technologies Ltd is small size firm but has strong market reputation. It does not
get affected by substitute products (Smith and Brooks, 201).
P 2 Ansoff growth vector matrix
There are many big organizations that always make effective strategies that help entities in
growing well. This strategic planning aids in identifying growth opportunities and conducting
operations successfully. Ansoff growth vector matrix is the model that can help in identifying
growth opportunities for Southern Business Technologies Ltd in telecommunication industry.
Market penetration
It is the type of strategy in which existing products are being promoted into existing
market. This is basic growth strategy that supports entity in attracting existing buyers and
retaining then in the firm for longer duration. Market penetration is beneficial in increasing
presence of Southern Business Technologies Ltd in existing market (BCG Growth-share matrix,
2018). By this way local people will become positive towards the entity and they will buy goods
and services of business unit. Southern Business Technologies Ltd is currently operating its
business in England only, it can sells telecommunication services in London and can open more
physical outlets so that more people can get attracted towards the brand. Entity has opportunity to
enhance its number of outlets and enhance awareness of people in the market.
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Illustration 2: Ansoff Growth Vector Matrix
(Source: Ansoff matrix, 2017)
Market development
It is another type of growth strategy that can be implemented by Southern Business
Technologies Ltd for expanding its business into new location. In this method entity can enter
into new market with existing products (Carter and et.al, 2015). This development can be
beneficial in increasing sales revenues and enhancing number of consumers of business unit.
Southern Business Technologies Ltd is small size firm and it has limited number of buyers. By
entering into new location it would be able to attract more people and making them loyal towards
the brand. Statistics shows that more than 45% business of telecommunication firms generates
through this growth strategy. Southern Business Technologies Ltd also has opportunity to
implement this technique and grow well in this industry. Southern Business Technologies Ltd is
providing services in urban areas only, it can focus on rural areas as well. By taking support of
promotional and advertisement strategy cited firm can make good connection in new market and
can make people aware with its telecommunication products and services. Southern Business
Technologies Ltd has opportunity to enter into new market by conducting effective market
research (Yamakawa, Peng and Deeds, 2015). If it fails to carry out an effective research then it
might be problematic for business. In the absence of good detail about market condition,
consumer requirement it would not be able to gain success in new market. Thus, before
developing market it has to look upon overall situation of new market. Southern Business
Technologies Ltd has capability to conduct effective research thus, it can gather in-depth detail
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about new markets and can enhance its sales by entering into these places (Arregle and et.al,
2015).
Product development
In this growth strategy enterprise can sell new product in existing market. Southern
Business Technologies Ltd is providing 3G services to consumers but now it is planning to offer
4G services to buyers in England. Furthermore, it can plan to provide them network facilities and
mobile application. This can help the organization in gaining attention of mass audience and
gaining competitive advantage in present market. Existing England telecommunication is very
broad and still Southern Business Technologies Ltd has opportunity to attract more people.
Vodafone, EE limited etc. are many firms those who have strong command over this market but
if Southern Business Technologies Ltd develop its products and provide more amazing services
to clients then it would be beneficial in earning more revenues and sustaining in the market for
longer duration (Love and Roper, 2015). It can get license for 4G services and can improve its
network facilities. This will be beneficial for entity and it will help the organization in increasing
its profitability. Southern Business Technologies Ltd has opportunity to take license for product
development and growing ell in this market.
Diversification
It is most effective growth strategy for the corporation because in this entity can enter into
new market with new products. Southern Business Technologies Ltd has capable employees and
has strong market sense. This ability of business can support entity in growing well in new
market and developing products as well. Southern Business Technologies Ltd can diversify its
existing market portfolio and can launch new global machine to machine (M2M) platform for its
new consumers in the new location (He and et.al, 2015). With the assistance of this product it
will be able to manage wireless system. Furthermore, new products in new market such as China
or France will enhance demand of these products and will attract more corporate buyers. If
Southern Business Technologies Ltd offers these services in France then it will support in
opening new avenues of growth for the company and will support in increasing profitability.
LO 2
P 3 Potential sources of funding
Source of fund can be defined as medium through which company can raise its capital. This
money is utilized by business to raise operational efficiency of the firm and expanding its
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operations across the world (Smith and Brooks, 2018). Being a small scale firm it is very
important for Southern Business Technologies Ltd that to select appropriate source of finance
that can enhance its profitability and can control over liability as well. Potential sources of
finance available for Southern Business Technologies Ltd are described as below:
Self funding/ family funding
It is most common funding source that is used by most of the small scale business.
Southern Business Technologies Ltd can invest own capital in its business or can take money
from family members.
Benefits
 This is personal saving of the owner thus, individual needs not to pay any kind of interest
to other on this capital.
 Ownership remains in the hand of owner only. As this is personal saving so all rights
remain in the hand of proprietor only (McGuirk, Lenihan and Hart, 2015).
Drawbacks
 If Southern Business Technologies Ltd fails to perform well in new location then it would
spoil stability of the individual. This might create problem of bankruptcy.
 Owner can collect limited funds only for the growth of entity.
Bank loan
Bank offers loan to small business for their growth and development. They charges lower
interest with these entities (He and et.al, 2015). Financial institutions always look upon capability
of firm to repay money and accordingly they provide them money. By getting bank loan
Southern Business Technologies Ltd can develop its products and can expand its business in new
location.
Advantage
 It is easily available source of finance; with the assistance of this method entity can
collect huge money which can fulfil long term need of the company.
 Southern Business Technologies Ltd will get benefit in tax after taking loan from
financial institutes.
Drawback
 It can increase long term liability of company because entity will have to pay interest for
longer years to bank (Carter and et.al, 2015).
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 Bank can refuse to give loan to enterprise.
Venture Capital
Venture capital is money which is use in new start-up. It is type of funding for new
business. Private firm, government, semi government is also provided capital to ventures for
returns higher than market interest rate. It is related to the high risk organisation gathering large
amount of money from investor for the motive of starting new venture. It is also the sources of
finance. Southern Business Technologies Ltd is also dealt with venture capital and mostly work
for venture capital. This company is collect large number of cash from inventors and using this
cash for growth of the equity capital. When this organisation starting up a new business they will
invest venture capital.
Benefits
 It is helpful for long run business and venture capital invest money in form of equity
capital supplier are also invested for the purpose of obtaining maximum profit.
 Innovative project ventures capital also earn high profitability' in their business (Carter,
and et.al., 2015).
 Venture capitals is also provides valuable information which is beneficial for achieving
the goal of the business.
Drawback
 The drawbacks of venture capital is company share all the information, rights with
capitalist venture. If company profitability is better so they invest otherwise investors are
not willing to invest and they have right to know all the legal details regrading their
amount which is generally they invested.
 Generally it is depended on size of the Southern Business Technologies Ltd which is
more than 50% if they lose management control so they also lose their ownerships.
Retained Earning
Retained earning it is the sources of finances it helps to generated profitability of the
business. It helps to reduced the loss of business. It also refers to the accumulated earning, profit,
surplus, income or undistributed earning. It is cumulative profit is calculated retained earning by
adding net income and then deduct net loss from beginning retained earning and compute divided
which is paid by the investor of the company. The part of profit not distributed among the
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partners but retained and used in this organisation is called retained earning. It is most important
sources of finances which is used for working capital requirement. It is also helpful for removing
the issues related to the price.
Benefits
 It is very beneficial for the Southern Business Technologies company it helps to maintain
the stability of the business.
 It is also helpful for increasing the value of market share (Arregle and et.al., 2015).
Drawback
 The drawback of retained earning is not allowed investors to enjoy benefits of the actual
earning of Southern Business Technologies organisation. It creates dissatisfaction all the
shareholders
 If in case company not generate huge profit and they have limited funds so they can not
invest or obtain earn more profit so that the Southern Business Technologies is also
reduced their financial strength.
LO 3
P 4 Designing Business Plan
For any organization it is very important to have an effective business plan which can
help them to increase their productivity in target industry. It helps the organization Southern
business technologies Ltd to in improving their decision making processes. It is a type of written
description of the business's future. It can also be used in the expansion of their business. Before
writing a business plan it is very important to study all the required aspects which can be used in
the plan (Ward, 2016). Business plan for growth and development of Southern business
technologies Ltd is designed as below :
Executive Summary :
This includes all the details of the company which is used to design effective business
plan for them. Southern business technologies Ltd operates in telecommunication industry and is
a small size organization. All the employees working in this company are well qualified for their
job and are hard working to achieve their target on time and with perfection.
Aim and Objectives :
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The main aim of Southern business technologies Ltd is to increase their sales productions
and enhance their competitive advantage in the market. Their mission is to stay in top position in
the industry with maximum number of customer rate as compared to their competitors
(Perkowski and et.al., 2017). Their objective is to produce high quality product to satisfy their
customers and gain a good revenue.
Situational Analysis :
Situational analysis is very important to understand their business more accurately.
Internal and external situation of Southern business technologies Ltd helps their management
team to build an effective business plan for the organization. It can be understood by SWOT and
PESTLE analysis.
SWOT analysis : This is used to understood the internal factors of the organization, such as,
Strength Weakness
 They have well qualified and skilled
workers.
 They have good strategic planning.
 They have poor technological support.
 Less number of employees.
 Poor financial condition.
Opportunities Threats
 High rate of Globalization.
 Continuous development in the
technological aspect.
 There are so many competitors in target
sector.
 Changing in the customer's preferences.
PESTLE analysis : These factors are used to evaluate the external factors which can affect the
functioning of the company.
Political Factor
Change in political factor has a great impact on the company. They have to follow all the rules
and regulation made by the government.
Economic Factor
It can affect the overall functioning of the organization as it plays an important role for them.
They have to be very attentive on the continuous change in the economy of the country in which
they are operating. There business will be according to that situation.
Social Factor
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This is the main factor which can affect the company a lot as it is directly connected with their
customers life style pattern, their needs and preferences, etc. This process will help Southern
business technologies Ltd to deliver the right product to their right customers by offering them
satisfactory products and services in market (Johnson, 2016).
Technological Factor
As they operating in telecommunication sector, it is very important for them to update their
system with the latest tools and technology which is required in their organization. This will
help them to increase their sale in the market by providing their customers quality products.
Legal Factors
There are so many legal factors which is responsible for successfully running their business in
the target market. There are laws and regulation which they have to follow properly in their
management system.
Environmental Factors
Southern business technologies Ltd will have to take care of their surrounding atmosphere and
have to fulfill its corporate responsibilities towards their environment to protect it.
Opportunities in Business :
By conducting SWOT analysis method, Southern business technologies Ltd is able to
identify the opportunities present for them in the target industry as they are performing good in
their sector and giving a tough competition to their rivals.
Ethics and Values :
It is very important for Southern business technologies Ltd to follow all the ethics and
value made for their company to work effectively and in maintaining the brand image in the
market.
Target Industry :
Southern business technologies Ltd has to evaluate their target market such as, youth as
they are more prone to use technological tools. They prefer to use advance telecommunication
services. This will help them to expand their business as well (Kemp, 2018).
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Strategies for Growth :
For Southern business technologies Ltd, it is very important to have an effective strategy
for their growth in the market. For this they are taking help of niche market to attract maximum
number customers to buy their services and help then to generate a good revenue and
profitability rate. This will enhance their sustainability in the target industry.
Financial Information :
Financial information is very important for any organization to understand their budget to
plan an effective business plan for them. It will help them to expand their business in the future
(Levy, 2016).
List Year 1 Year 2 Year 3
Cash Revenue
Sales 25000 30000 45000
Total Cash Inflow 25000 30000 45000
Cash Outflow
Marketing Expenses 2500 3000 2200
Staff Salaries 10000 12000 11500
Utility Bills 500 500 400
Rent 3000 3300 3600
Insurance 1000 1000 1000
Total Cash Outflow 17000 19800 18700
Net Income 8000 10200 26300
LO 4
P 5 Succession Option For Small Business
Succession plan is very important for any company in exiting from their business. There
are so many reasons which can give rise to this procedure, for example, it can be retirement,
health issues, change of mind or interests, etc. Southern business technologies Ltd is small size
organization which has limited resource, so it might be possible that they can fail to generate
revenues in new location and satisfy their customers. This process ensures that business is
continues to operate efficiently in the market without people who were holding key positions in
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the past as they must have retired, resigned, etc. There are so many ways in succession planning,
for example,
Transferring Ownership :
This is the easiest way which can be opted by the organization their succession in the
business. This method is usually done when there is no successor of the owner to whom he or
she can transfer its business. They can transfer their business or its ownership to their relatives
who are interested in their business (Hawkey, 2017).
Selling the Business :
This also an effective way used by the owner as an exit strategy. In this process the
owner can sell his or her whole company to some other third party who can take their business.
But they have to be clear about whom they are selling their business.
Passing it to Successor :
This is the best way which can be opted by the owner to used as a succession strategy. In
this method, they pass their business to their successor present in their family. It widely used
method as it is very easy to implement because it gives the owner the right to have involvement
in the business if he or she wants to. While choosing the successor for the business they have to
keep in mind that they are ideal for that post and can run it successfully (Bryson, 2018).
Liquidation :
In this process, owner of the company or business stops operating it and sells all its
assets to third party in order to pay its debts. This is the simplest way for any owner which he
can use as their exit strategy. It can help them to wind up their business very fast and quickly.
But it has some disadvantages also, like, it gives the lowest return on investment
Merger or acquisition :
In merger or acquisition method, owner of the business sells their all interest gained into
the business to the buying company who is ready for the acquisition with them. It has to done
very carefully by the organization (How to Pick an Exit Strategy for Your Small Business, 2018).
Apart from this, there are various other different types of succession or exit strategies as
well which can be effective for the owner of the business, such as,
 They can sell their business to comparatively a larger company present in the market,
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 Owner can sell it to a private equity firm or some other investor,
 He can pass it on to a family member or close relatives who can take their business,
 He can seek help from their employees or managers to buy you out, etc.
CONCLUSION
From the above study it can be articulated that planning is the key significant element for
growth of business. If company makes effective plan then it can support in identifying
opportunities and risk. Ansoff matrix is considered as most effective model that helps entity in
knowing about various options that can be beneficial for the development of organization. Bank
loan is the easiest way to raise capital of the firm. By this way company can invest money in
product development and can run its business in new location easily.
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REFERENCES
Books and Journals
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growth. Entrepreneurship Theory and Practice. 39(2). pp.313-344.
Bryson, J. M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Carter, S. and et.al., 2015. Barriers to ethnic minority and women’s enterprise: Existing
evidence, policy tensions and unsettled questions. International Small Business
Journal. 33(1). pp.49-69.
Hawkey, J., 2017. Exit Strategy Planning: Grooming your business for sale or succession.
Routledge.
He, W. and et.al., 2015. A novel social media competitive analytics framework with sentiment
benchmarks. Information & Management. 52(7). pp.801-812.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Kemp, R. L., 2018. Strategic planning in local government. Routledge.
Levy, J. M., 2016. Contemporary urban planning. Taylor & Francis.
Love, J. H. and Roper, S., 2015. SME innovation, exporting and growth: A review of existing
evidence. International small business journal. 33(1). pp.28-48.
McGuirk, H., Lenihan, H. and Hart, M., 2015. Measuring the impact of innovative human capital
on small firms’ propensity to innovate. Research Policy. 44(4). pp.965-976.
Perkowski, E. F. and et.al., 2017. The EXIT strategy: an approach for identifying bacterial
proteins exported during host infection. Mbio. 8(2). pp.e00333-17.
Smith, G. L. and Brooks, L., 2018. Incorporation of the socio-cultural dimension into strategic
long-term planning of mineral assets in South Africa. Journal of the Southern African
Institute of Mining and Metallurgy. 118(4). pp.331-336.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Yamakawa, Y., Peng, M. W. and Deeds, D. L., 2015. Rising from the ashes: Cognitive
determinants of venture growth after entrepreneurial failure. Entrepreneurship Theory
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Online
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