Planning for Growth: Potential Funding, Business Plan, and Exit Options

This document discusses the importance of planning for growth in businesses and explores potential sources of funding, designing a business plan for growth, and evaluating exit options for small businesses. The case of ThirdWay Group in the commercial real estate sector is used as an example.

Planning for growth

Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
P3. Assessment of potential sources of funding available to businesses.....................................1
TASK 3............................................................................................................................................4
P4. Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.............................................................................................4
TASK 4............................................................................................................................................9
P5 Critical evaluation of exit or succession options for small business and making a decision
of appropriate courses of action...................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Planning for growth is considered as essential as well as efficacious areas for enterprises that
is associated with evaluation as well as performing towards opportunities and growth
determination. Furthermore, this is vital for aspects that have to be obeyed through societal or
simulated venture in order to assure effectual competitive advantage along with effective and
planned sustainability into market area where entity performs (Cai and et. al., 2020). The
undertaken company for this report is ThirdWay Group which is Operating in Commercial Real
Estate sector having its main headquarter in London, England. Also, they facilitate best, real
estate investment, technology, furniture, workplace consultancy and design-and-build practices.
The topics which are going to be covered in this report are potential sources of funding, business
plan and the several exist and succession options for business.
TASK 2
P3. Assessment of potential sources of funding available to businesses.
Finance is undertaken as essential prospects of whole ventures by which they might able to
manage their practices in consequent way and become capable to formulate numerous tactics for
rendering many benefits to their audiences. In addition to this, for the development as well as
growth of entity, it is essential to opt appropriate sources of funding. As this is considered to be
allocation of monetary resources in such manner that assists business in order to ensure that
effective growth strategy could be implemented (Egidi and et. al., 2020). Furthermore, this is
vital that firm determined whole potential sources that are available and opt the effective source.
In context of ThirdWay Group, this also requires several amounts to gain higher goals. As per
this, financial prospects are divided onto two wherein initial term is undertaken for equity
finance which states exchanging parts of business ownership. Along with this, another aspect is
Debt which describes to manage financial resources effectively and efficaciously. Therefore,
some sources of funding that ThirdWay Group can use are discussed below:
 Bank loan: This is considered as one of the effective funding source wherein entity takes
loans from bank by putting some security. Moreover, this is also described as the
agreement among firm as well as banks in which they provide whole requested amount
from bank along with rate of interests. Therefore, entity lending loan amount from bank
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as it aids them to boost their sales as well as also repaid the money to bank along with its
applicable interest rate at certain time duration.
o Benefits: The key benefits of respective source of funding is, this very safe as
well as simple as by this guaranteed funds could be raised.
o Drawbacks: Its key drawback is, entity would be need to pay interest amount at
monthly basis at certain periods that could be some how risky.
 Crowd funding: This is considered as the way by which entity form appeal within
marketplace for paying its funds, in return to have smaller parts of share into firm that
they could gain as well as retain later on when their scope would be boarder (Faraji,
Hashemi-Dezaki and Ketabi, 2020).
o Benefits: The key advantage of utilising respective source of funding is that it is
helpful in enhancing growth as well as success at future time duration.
o Drawbacks: Its key drawback is this needs huge amount of funds as well as
potential for operating its business effective and efficient manner.
 Angel finances: This is considered as the effective source of funds whcih aids in
rendering capital to new ventures or start ups. Moreover, this is appropriate for that who
are exploring funds at marketplace. The respective firm may simply undertake such funds
as this do not bear any kind of collateral security as well as risks. Some of its benefits and
drawbacks are discussed below:
o Benefits: One of the key benefit of respective funding source is that it do not
needs any kind of collateral security as new ventures undertakes loan for their
establishment. Moreover, this do not needs any monthly payments as well as
interest.
o Drawbacks: The main drawbacks of angel funding is, this is time taking as
various formalities are going to be verified. Also, this needs much control in
business.
 Retained earnings: It is undertaken as the sources of funds as well as this is associated
with saving that firms gains among their profitability and revenues. Moreover, it is one of
the essential internal sources that can be stated as the earning left after paying dividend to
the shareholders or drawing through owners of capital (Gomes, 2020). Also, this is a
longer term source of funds for firm as there is noy any essential maturity such as
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debentures and term loans. Therefore, some benefits and drawbacks of this are discussed
below:
o Benefits: One of the key benefits of respective source of funding is there may be
no extra equity to be issued and also there may be no dilution of manage and
ownership in the enterprise.
o Drawbacks: the key drawback of retained earnings is it might cause minimisation
into dividends towards stakeholders.
Therefore, from the above mentioned various sources of funding, Thirdway Group should
utilise Bank loan as this is one of the safest and secure option for raising funds for its business
growth. Moreover, in this firm have to pay fixed rate of interest at stipulated time duration.
Investment decision making
The manager have to emphasised upon developing budget for investment within entity
for gaining the opportunity as well as attaining advantages in comparison to their competitors so
the senior authority of ThirdWay Group can able to concentrates upon building effective tactics
for business growth which depends upon facilitating offerings as per the consumers
requirements.
Methods of financial appraisal
This can be opted through entity for facilitating value to money and several methods or ways
that may be utilised through Thirdway group in order to take effective decision in context of
investment that are discussed below:
Payback period: This is regarded as the procedures by which entity may focus upon
recovering its investment cost (Heinen, 2020). In respect of ThirdWay Group, the payback
period can be opted through them in order to recover the investment money cost which is
undertaken within months and years.
Payback Period = Initial Investment/Net Cash Flow per Period
Net present value: This is computed within the formula that present value of cash outflows
can get subtracted from current cash inflow value through ascertaining the time interval. In
respect of ThirdWay Group, the superior authority can focused upon determining the needed
information, value of business and also brings new ideas which have to be related to cash inflow
as well as inflows.
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Formula for NPV
NPV = (Cash flows)/( 1+r)^t
Cash flows = Cash flows in the time period
r = Discount rate
t = time period
TASK 3
P4. Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Business plan
Business plan is document which is used by the organisation order to learn about the
different functions objectives and system which are used ready for in order to geological and
manage to functions according to the set activity (Hersperger, Grădinaru, and Siedentop, 2020).
A business plan can also define agent blueprint which is used by the organisation in order to
manage the function of various activities and perform then in an appropriate manner so that it
can achieve the objectives and manage the function according to the needs and requirements.
Business plans consists of number of items which are related to the objectives of the organisation
and has to be performed according to the requirements. In context of the chosen organisation
which is Third way group. Appropriate business plan is discussed below which consist of
different activities
Executive summary
The current business plan is based on the discussion about the third way group which is
operating in the commercial real estate sector of UK where headquarter of organisation is
situated in London. Organisational working as a small size form which is work thing with
employees about it to 150 to 200. Organisation is aiming to provide best real estate investment
technology furniture work please consultancy and order to build up appropriate practice system
and improve the organisational functions in the current business environment.
Vision and mission: “the current version of organisation is to provide high quality
services in sector of real estate in order to meet the requirements of the customer and perform its
functions in an appropriate manner according to the needs and requirements.”
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Smart objectives
“To to provide appropriate services within the real estate business to the customer by
increasing the market reach of organisation by 15% as well as increasing profitability of
organisation by 20% within a year.”
Entrepreneur strategy
Entrepreneur release strategy can be defined as in function which include different
decisions which are related to the products and services which has to be sold by the organisation
in order to bring innovation within the industry as well as achieve its objective full stop it is
identified that there are number of strategies and planning tools which are improved by the
organisation to manage its function and achieve its objective within the market in order to
implement the production services (Kroen, 2020). Therefore it is also identified that there are a
number of functions which has to be performed by the chosen organisation in context of
improving it services within the real estate industry and become a better organisation full stop
this is also identified that in order to achieve the entrepreneurial strategy organisation is required
to function STP approach full stop the further discussion on STP approach is mentioned below.
STP approach
STP approach can be defined as tool which is used by the organisation in order to divide
the market and ruled the market according to the requirements so that form can easily achieve its
business objective and can maintain profitability within the market where it is going to trade for
trading currently. There are a number of options available for the organisation in order to
implement its strategies which are based on STP approach. STP approach consists of different
kind of strategies which are related to the organisation. The main strategies which are covered
under the STP approach system are segmenting targeting and positioning. There are different
kind of tools and techniques which are covered under the entrepreneurial strategy of segmenting
targeting and positioning which is directly related to the organisational performance. In context
of this all the important aspects within the theory are discussed below:
Segmenting: Segmenting can be defined as an approach which is used by the
organisation in order to segment the targeted market according to the needs and requirement.
Under the segment system organisation used to divide the market in small slots so that it can
easily implements it marketing strategies by dividing the market according to different factors
which are related to the targeting of product (LeCounte, 2020). It is also identified that under this
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strategy organisation can use different kind of distributions which are based on age gender
income and many other aspects. In context of the current scenario of the chosen organisation, it
is identified that there are a number of functions which has to be performed in order to achieve
the business objectives and perform the functioning in an effective manner. There are different
kinds of functions which are used under this. In order to target the customer within the market
the organisation will use to segment its market according to the age and income group level of
different individual full stop it is identified that it there are a number of options available within
the market for investing with which belongs to the age group of 25 to 45. This is the best age
group which can be used by the organisation this is because there are great opportunities as
which can be used to get investment. Organisation will also target high income group you can
easily invest in the business of real estate as well as organisation can improve its profitability by
advising the high income group individuals. These are the targeted segment which will be used
by the organisation in order to target the customer within the market.
Targeting: Targeting the second step in the process where organisation has to target the
individuals which are selected and divided in different segments in order to sell the products and
services of the firm within the market where it is trading (Lynch, Nel and Binns, 2020). It is a
stage where organisation will decide the targeted customer as well as method of targeting system
so that organisation can easily implement its strategies and achieve the objectives of profitability.
In context of the chosen organisation, it is identified that organisation is going to target the
customer in an appropriate way as well as use this system to achieve the objectives. Here
organisation will use various kind of, targeting approaches such as advertisement sales
promotion many other which will help in targeting the individuals and achieving the objectives
of organisation.
Positioning: Positioning is the last day stage in this process where organisation used to
position its product in the market where it is going to launch it as well as achieve the function
according to the requirements. it is analysed that in order to achieve better results organisation
has to improve its function as well as implement the product in an appropriate way so that it can
achieve the market advantage as well as advantage of the research which is conducted to
implement the product within the market. also to use its function and manage the function in
appropriate way so that it can guide them according to the requirements and achieve better
results at a desired time.
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Marketing mix: marketing mix is essential part of every strategy in which organisation
has to use an appropriate system of marketing functions which are directly related to the different
principles which are followed by the firm to achieve its objective. In context of this it include
product price place and promotion mix which must be used in an appropriate manner in order to
conduct proper plan for executing the product within the market (Nikolopoulos and et. al., 2020)
. In context of the current organisation it is identified that organisation is operating at global level
which is required by the firm to measure its performance and use all this function according to
the needs and requirements. Under this organisation is operating within the real estate business
where it is required by the firm to follow appropriate system which will support better
functioning.
Financial projection: also act as an important part of business plan which include the
number of activities which has to be performed by the organisation as well as appropriate
budgeted information which will provide insight about the expenditure and revenue which will
be generated while performing that particular business plant. in order to beat the objectives with
the real estate business The chosen organisation is required to formulate an effective system
which provide pre-launch and post lodge information about the budget which will be used by the
organisation on different activities and performing the function according to the needs and
requirements.
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Monitoring and evaluation: there are number of evaluation is important function which is
used by the organisation in order to maintain the profitability with the market as well as perform
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its function according to the needs and requirements. Monitoring and evaluation include number
of activities which are identified by the person as well as used in order to beat the requirements
for stock under this business there is use of appropriate system which will ensure effective flow
of publication as well as help in achieving the objective in an appropriate time. This will manage
business productivity and will improve the functions according to the needs and requirement of
organisation so that the benchmarking can be established in order to motivate the employees and
perform function in an effective way.
TASK 4
P5 Critical evaluation of exit or succession options for small business and making a decision of
appropriate courses of action.
It is essential that the succession or exit options are determined that would be facilitate
firma an appropriate ways of that this would be considered after developing it up to the maturity
degree (Rego and et. al., 2020). Therefore, this have been identified that strategies of exits is
undertaken to be efficacious term for smaller business like ThirdWay Group with aids of it they
might accomplish their goals as along with particular mission in order to obtain competitive
business advantages in gainful manner. In addition to this, business could simply invest their
funds for attaining effectual sales as well as incomes effectively and efficiently. Also, there is
various kinds of tactics that respective entity may undertake for gaining success. Few of them are
mentioned below:
Selling up of business: This is also stated as an efficacious exit option by which firm
could become competent to close their business. Moreover, this would be advantageous for the
owner of entity in respect of profitability which it obtain after selling this as well as also
experiences into the existent market areas (Seo, and Cho, 2020). Although, owner’s goodwill
would be lost as this could be more challenging for them to make this again if they try to develop
any other new business or ventures.
o Benefits: The key benefit of this is to facilitate firm’s owner to be involved into its
business which would assist their purchaser to maintain relations of faith with new
ownership.
o Drawbacks: One of the key drawbacks of selling up business is that, system of
negotiating the sale of your commercial enterprise might be lengthy and time-ingesting.
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Moreover, planning to sell your business would affect any personnel it may perform
uncertainty degree- at least it may have an effect on their morale as well.
Liquidation: It is undertaken as one of the efficacious strategies of exit for closing up
business and selling up whole their assets into market area in order to accumulate for remaining
amount of funds (Zafar and Akhtar, 2020). Moreover, this is beneficial in respect of business as
it facilitates firm’s owner with effective flexibility that would also drives business towards
profitable sales of products and services without any form of problems. Along with this, the
return upon investment that businesses acquire on the procedures of liquidation is lower that
might not be at par with its personal desires.
 Benefits: It is regarded as a strategy that is utilised by entity to sell offerings through
entity as well as the amount would be recovered from market area. Moreover, the
liquidation cost is relatively lower as there would not be any initial cost to prepare the
firm’s statement of affairs as well as calling the creditors. However any costs are not paid
then this can be done after selling of their assets.
 Drawbacks: The key drawbacks of opting this option is that respective firm have to leave
the particular marketplace. Moreover, the debt that has been personally guaranteed
through entity’s owner survive the liquidation as well as creditors would be become
competent for pursuing the owner personally.
Based upon the above mentioned strategies of exist, Liquidation option is effective for
ThirdWay Group as it could be advantageous in relation to profitability. In addition this, it is sold
effectually towards potential buyers and could be facilitating entity with an ease as well as
appropriate flexibility that cannot be shown if ventures is sold to stakeholder of organisation.
CONCLUSION
As per the above report, this has been concluded that planning for growth is essential for
entity in order to explore its competitive edge with sustainability within market area. Moreover,
the effective funding source is essential to be considered as well as determined into firm so that
an appropriate option that would help them in future development plans. In addition to this
appropriate business plan is formulated as this assists them to gain competitive edge and enhance
their productivity effectively and efficiently. Also, it is used by entity in order to learn about the
different functions objectives and system which are used ready for in order to geological and
manage to functions according to the set activity. Apart from this, several exits or succession
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options can used as its assist entity to attain objectives with specific way for gaining competitive
advantage in efficient way.
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REFERENCES
Books and Journal
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Operational Research.
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