Planning for growth INTRODUCTION 1 TASK 11 P1. Key considerations for evaluating growth opportunities

Developing a creative plan is a necessary for company through which they can easily achieve growth and success.This helps to pre- determine objectives which are essential for a business organisation. This bring highlights on how to design a business plan and includes strategy which helps in to identify the exit and succession option for a small business that can able to overcome from any difficulties that are to be faced by a business enterprise.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analyse key considerations for evaluating growth opportunities....................................1
P2. Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.............4
TASK 2............................................................................................................................................5
P3. Sources of funding to businesses and discuss benefits and drawbacks............................5
TASK 3............................................................................................................................................7
P4. Design a business plan for growth...................................................................................7
TASK 4............................................................................................................................................8
P5. Exit or succession options for a small business and their benefits and drawbacks..........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Planning for growth plays a crucial role in every business enterprise. Developing a
creative plan is a necessary for company through which they can easily achieve growth and
success. This helps to pre-determine objectives which are essential for a business organisation. It
assists in achieving goals through pre planning of each activity in better manner. This report is
based on XYZ company which provides various services regarding computer services (Sarver,
2015). It comes under a contract with Digital data and technology at a bid price which starts from
£20,000 and should not exceed more than £300,000. The total amount of bid is
£20,000 in which £10,000 are paid and remaining are acquiring by taking loan. This bring
highlights on how to design a business plan and includes helps in to identify the exit and
succession option for a small business that can able to overcome from any difficulties that are to
faced by a business enterprise.
TASK 1
P1. Analyse key considerations for evaluating growth opportunities
Planning for growth mainly focuses on changes as small medium enterprise moves
beyond the start-up stage. It guides in to make blue print of planned activities. This will develop
for compare the actual performance with the standard performance that are made at a time of
planning. This helps in carry out innovative and creative ideas which are required to attain their
desired goals. This assist in to generate opportunities for growth and development to ensure the
sustainability of XYZ company which runs a business of information technology (Lu and Yu,
2014). It serves wide range of computer services like cloud computing, resolve problems related
to hardware and software. This also includes various languages to build a program or
applications and so on. This section includes the factor that evaluate growth opportunities for
XYZ company. It can be analysed from porter's generic model and pestle analysis to identify the
external aspects that can bring effects on respective business enterprise. This are explained under
below as:
Porter's Generic Strategies
This model is used to measure the competitive advantages to increase the growth
opportunities of XYZ company. This helps in to gain over the competitors by offering consumers
1

greater value through lowering the cost or by providing benefits and services that can able to
justify high price. The Generic Strategies can be used to determine the direction of respective
enterprise. This model is based on three types of competitive advantages that a business firm can
serves that is low cost, differentiation and focus. These are further briefly described under
follows as:
Cost leadership: It can be define as developing product along with high quality based
and provide to their customers at reasonable rate so this will attract large number of buyers
towards brand. It will assist in enhancing profitability and satisfy their customers by fulfilling all
needs and wants at affordable price. If XYZ company are required tio produce products at
reasonable rate to sustain the large market position.
Differentiation: According to this strategy, a respective firm seeks to be a unique in its
industry with their different criteria that bring effects valued by buyers. It is necessary for a
company to bring differentiation so that they able to attribute more customers and meets their
needs. This can be rewarded for its uniqueness at a premium cost, by applying this strategy it
able to develop the growth of a respective business enterprise. This is required for company is to
develop differentiating services from other brand that will create unique image in the mind of
customers and encourage them for buying such facilities.
Focus: In this aspect, generic strategy focus on the niche markets so that they can easily
choose narrow competitive scope with existing business enterprise which can improve the
overall growth of XYZ company. This helps in to target the customers which are selected on the
basis of segments or group of segment in the business world. For paid some loan amount, they
need to decrease the price of products which help in enhancing number of buyers with make
improvement in brand image. Focus strategy is classified into two category are as:
 Cost focus: Under this strategy, it is focused on cost advantage in their target segment.
This helps in to exploit differences in cost behaviour in some segment that assist in to
achieve desired objectives.
 Differentiation focus: In this strategy, it is focused on the explore of needs of the
customers in specific segment of a business enterprise (Lu and et. al., 2013). This helps in
to increase the sale of their products and services that are acquired by the customers.
2

Therefore, XYZ company should adopt cost leadership since this helps in to maintain
balance between earning profits and able to sustain for longer period in the competitive world. It
helps in to grab opportunities from existing business competitors.
PESTLE analysis
This helps to analyse the growth opportunities from external environment and able to
meet their goals on target. It increases the productivity as well as maintain their reputation into a
marketplace. These are defined under follow as:
Political factor: This aspect helps in to determine the political stability that assist in to
manage business organisation policies according to the conditions of political parties (Lewis,
2013). thus, XYZ company is need to determine the political stability of specific area while
conducting business and it directly impact on business operations and its functions.
Economical factor: Under this, it bring highlights on the taxes, interest rate, custom and
excise duties, inflation and many more. This helps in to attain the growth of a respective business
through export their services into worldwide. Therefore, company should analyse the market and
according to that they should decide the prices of their products and services to attain growth in
their business.
Social factor: Through this, a respective company able to know about the taste,
preference, culture and needs that are required by the customers. It will help in to increase their
market by fulfilling the consumer requirements. If company analyse their customers needs and
demand so they can easily attract them towards unique goods which help in reaching with higher
growth to business.
Technological factor: According to this factor, it helps in to use upgraded technology
that assist in to increase the productivity of a respective business enterprise. Hence, it is
necessary for XYZ company to utilised high equipped tools helps them to sustain for longer term
that increases profits.
Legal factor: There are various rules and regulations which are made by government so
it is necessary for XYZ is to follow all current formulated norms. Also adopt different rules on
their company policies and procedures in better manner because this will help in achieving
desired growth.
Environmental factor: This part relates to environment, it is essential for every
organization to focus on the growth as well as reduces pollution, global warming, ozone
3

depletion and many more. Therefore, company should adopt those techniques that can reduce the
exploitation of natural resources that helps in to increase their growth in a business world.
P2. Evaluate the opportunities for growth applying Ansoff’s growth vector matrix
This model is essential for strategic marketing planning. It helps in to grab the
opportunities to grow income for a business through developing their fresh products or services
into new or existing market. Therefore, sometimes it is also known as “Product Market Matrix”
or “Vector Matrix”. This is used to evaluate possibilities for a respective business to increase
their sales by screening secondary combination of new markets as they are offering into four
different strategies (Goodfellow, 2013). Within each strategy there is a different level of risk
originated. These are mentioned under below as:
Market penetration: This includes accelerating market share into existing market
segments. It can be achieved by selling existing products or services to achieve more customers
within a market place (Mobin and Keyser, 2016). This can be done through, developing new
market strategy to encourage people to use their product more and more. XYZ company can
introduce a loyalty schemes for their existing consumers that can able to increase their growth
opportunities. Also, it includes launching new price or special offers for promotions and so on.
Product development: This strategy is used to develop new products for existing
markets. It includes thinking about how a fresh goods or services can meet consumers needs.
XYZ corporation can apply similar strategy in developing their product in existing market. For
doing the same, they need to manufacture innovative goods by this they can easily attract their
users towards company facilities like innovational computer applications or services. This in-turn
assist them in gaining high amount of income at the end of per year.
Market development: This scheme is used when a company want to expand their
business activities in a new place or market-location. It can be done by offering existing
merchandises to people who are living in newer marketplace. If XYZ venture wish to develop its
commercial actions to some other nations or places then they should consider market
development strategy. In this regard, company can sell their current products or services to new
customers who are surviving in new countries.
Business diversification: By implementing this scheme, a firm can move in a different
business sector or commercial aspects i.e. production of different goods or services is carried on
for completely new users (MacLeod, 2013). This plan of action is considered as quite risky since
4

company would be going to manufacture a unique or different merchandises which has not been
produced by them yet. If XYZ enterprise wish to create an attractive brand image for their
customers then they can producing that goods which is totally variant in nature as compared to
other organisation brands. It is to be noted that these services would be sold to new consumers,
so there is a great risk associated with the success of venture i.e. that product will be liked or
disliked by people. In order to cope with this risk, XYZ firm can take help of promotional tools
such as Facebook, newspapers, magazines, etc. for seeking attention of large number of civilians.
Therefore, XYZ company should adopt product development strategy that helps in to
expand the business in the new market. This approach helps in to attain desired results for a
respective business enterprise.
TASK 2
P3. Sources of funding to businesses and discuss benefits and drawbacks
Funding is an action or a process that provide financial resources in form of money or
monetary terms. It helps in to grab the new opportunities so that XYZ company can expand their
services at a large scale(Beatley, 2014). This can be achieved by various sources of funds which
are available in large extent. It comes under a contract with Digital data and technology at a bid
price which starts from £20,000 and should not exceed more than £300,000. The total amount of
bid is £20,000 in which £10,000 are paid and remaining are acquiring by taking loan. The
sources of funds assist in to arrange funds for the business enterprise to raise their capital. The
major source of funds are explained under below as:
Crowd funding : It is the method of raising small amount of money from large number
of people through the internet. Through crowdfunding, vast number of people come together on a
social platform. It increase the entrepreneur in the economy because they get fund from the large
number of investors. The crowdfunding method bring investor and entrepreneur together and
provide money beyond the traditional method of borrowing fund. The XYZ company can raise £
2.5 k from this source of fund for getting a contract of computer service.
Advantages :
 With the help of this, organisation able to know the views and thoughts of public towards
their idea and product as the information is shared on the website. If the people are invest
capital in their idea than it is a good sign for the company.
5

 It is the fastest way of raising fund which has no charges and fees.
 By sharing idea, enterprise sometimes get valuable feedback and expert guidance for the
improvement.
Disadvantage :
 The major disadvantage of this method is that if organisation does not reach the fund
target then whole amount is returned to the investor and enterprise gets no money.
 Idea should be protected through copyright and patent otherwise some other person see it
on crowdfunding and break the originality of the idea.
Bank loan : It is the most popular form of borrowing money (Mason, 2015). A loan is
the amount which is borrowed for a set period after fixing repayment schedule. The repayment
amount depend on the rate of interest, size and duration of borrowing. Loan is provided to the
individual on the basis of their credit history and credit scores to understand that whether
company is capable in paying their debt or not. If XYZ organisation have good relationship with
the bank and they understand business working than they will advise them best product for
fulfilling financial need. The respective company for getting a contract of computer service can
raise £ 2.5 k from this source. XYZ company can giving remaining bid amount by taking loan
from bank which is the main source of funding.
Advantages :
 The loan amount remains generally for three to ten years unless borrower breach the
contract or loan conditions. The loan amount is never repay on demand so it does not
create ciaos in the business working.
 Interest of loan amount is deductible from their taxable income, which is biggest
advantage of borrower in the form of tax saving.
 In loan generally the interest rate is fixed for the term, due to this individual able to know
the repayment amount throughout the process.
Disadvantage :
 Bank follow strict repayment schedule which must be fulfilled by the borrower. If the
borrower fail to do so then it will reduce the borrower's credit score and future credibility
(Chapin, 2012).
6

 For passing a loan, bank generally charges a processing fee which later on add to the loan
amount. It is charged in percentage form. Higher the loan amount, higher the processing
fee.
 Organisation or individual can have trouble in making monthly repayment if there
customers or there borrowers does not make payment on time. It creates cash problem in
the organisation working.
TASK 3
P4. Design a business plan for growth
Overview
XYZ company facilitates wide range of computer services such as cloud computing,
hardware, software, applications, develop programs according to the customers needs. This also
includes the planning across digital, data and technology functions (Moseley, 2013). It develops
a series of ready to use software products for building up of applications. These are used by
reputed engineers and contractors.
Vision: Bring innovative information technology for better world.
Mission: They should provide innovative solutions and services to their customers by offering
them electronics, wireless communications and many more.
Objectives: The company have various objectives such as become pioneer in computer
application, enhancing its market share, formulate different strategies which help them in gaining
income and profitability.
SWOT analysis
Strength Weaknesses
 They have strong technological
equipments.
 Quality of products and productions
services
 They have lack of funds.
 In market place, company products has
low reputation.
Opportunities Threats
 By providing training and services to
their employees for enhancing their
 Large number of competitors.
 The main threat is that there is always
7

services.
 They can promote their products by
using internet and advertisement.
change in clients requirements.
[XYZ Ltd.]
Cash Flow Statement
For the Year Ending 31/12/2017
Cash at Beginning of Year 22,500
Operations
Cash receipts from customers 500000
Cash paid for
Inventory purchases -100000
General operating and administrative expenses -10000
Wage expenses -100000
Interest 8000
Income taxes 20000
Net Cash Flow from Operations 318000
Investing Activities
Cash receipts from
Sale of property and equipment 35000
Collection of principal on loans
Sale of investment securities
8

Cash paid for
Purchase of property and equipment -45000
Making loans to other entities
Purchase of investment securities
Net Cash Flow from Investing Activities -10000
[42]
Financing Activities
Cash receipts from
Issuance of stock
Borrowing
Cash paid for
Repurchase of stock (treasury stock)
Repayment of loans -42000
Dividends -45000
Net Cash Flow from Financing Activities -88000
Net Increase in Cash 79,000
Cash at End of Year 100000
TASK 4
P5. Exit or succession options for a small business and their benefits and drawbacks
This method helps in to get exit from business world by adopting exit and succession
process to overcome from the business loss and other losses.
Liquidation – This is a exit strategy of firm which is associated with the getting out
option of firm. In this process, company winding up their business operations by selling assets
9

and stocks at discounted rate. The liquidation of assets is the best option for an organisation in
order to paid a proper amount for their liabilities (Keough, 2015). These kind of methods are
feasible for retail businesses. These strategies basically uses to paid limited liability of firm by
raising option of income through business assets. For a better option, organisations provided
discount for clearing products sales easily. Liquidation has several advantages and disadvantages
as -
Advantages -
 This is a effective strategy for a business which has a major liabilities on the assets
valuations, so that owner can paid them by selling assets on their valuation.
 After implementing such strategies, owner can be from their business liabilities.
Disadvantages -
 This strategy also associated with some negative terms as its vanish the entire efforts and
funds of owner that are invested in the project of company.
 It is not possible that owner can get appropriate amount of assets sales procedure over
their liabilities. Liquidation impact negatively on the goodwill of the company.
Merger and acquisition is the procedure of combining two organisation into one. The
main purpose of integrating two or more businesses is to reaching with desired goals and
objectives (Eddleston and et. al., 2013). Merger is conducted when two companies combine
together with mutual understanding. On the other hand, acquisition is that term in which one firm
purchase another organisation and smoothly running the business operations and functions.
Advantages of merger and acquisition :
 Most of the companies enter in the M&A agreement for enhancing their size eliminate
their competitors from the market.
 Companies require to enter in merger and acquisition contract which main purpose is
taxation. The integrated resources and talent of new firm assist in gaining and maintaining
competitive edge.
Disadvantages of merger and acquisition :
 With the merger, competition reduces the industry and new firm provide high pricing
power.
10

 The result of merger impact on loss of job. The acquiring of companies will shutting
down the under performing areas of an organisation.
 The enhancement in size will lead to dis economies of scale for new organisation. It is not
necessary for control performance of company.
CONCLUSION
From the above report, it has been concluded that planning is an essential factor for the
growth every business organisation. This helps in to determine the roles and responsibilities
which are required by a respective enterprise. Also, it assist in how to achieve desired goals and
objectives that are important part for business concern. This report guides in how to make
competitive advantages in a market place, helps in to arrange the source of funds that are
required by a respective business enterprise. It is also identified that exit or succession options
for a small business such as liquidation and merger and acquisition to achieve their desired
outcome.
11