Importance of Planning in Business Growth

This assignment provides an analysis of the importance of planning in achieving business growth. It highlights how proper planning can increase market share and revenue, and discusses various strategies and techniques used by companies to facilitate this process. The report focuses on XYZ construction company's efforts to expand its business through effective planning, leveraging techniques such as smart growth planning and habitat conservation planning. By examining the role of planning in business success, this assignment aims to provide insights for entrepreneurs and managers seeking to maximize their revenue.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Evaluate different key considerations for finding growth opportunities...........................1
P2 Evaluate the growth opportunities through Ansoff Matrix...............................................3
P3 Potential sources of funding..............................................................................................5
TASK 3............................................................................................................................................6
P4 Design a business plan......................................................................................................6
TASK 4..........................................................................................................................................10
P5 Assess exit or succession options for a small business...................................................10
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Planning is very important process for every business firm in achieving growth or
success. In this included several activities which company undertake to develop sustainability
and competitive advantages in an appropriate manner. Planning is thinking process for making
effective strategies to develop business activities or functions that facilitate to attain economies
of scale within organisation (Barbour and Deakin, 2012). This report is based on XYZ
construction company that deals in constructing buildings, architecture services, infrastructures
in UK. They are coming under the contract for working purposes and their bid is £150,000. it
will describe growth opportunities that must be considered by SMEs and assess various methods
for accessing funding. It will develop an appropriate business plan as well as communicate this
to intend scaling up a business. There are defined various ways for small business for the
purpose of exiting and succession of organisation to achieve benefits.
TASK 1
P1 Evaluate different key considerations for finding growth opportunities.
In the modern era, competition is growing rapidly as many of firm try to capture
particular market by running their business functions or operations effectively. It is necessary to
develop strategy and action plan for every business entities to survive in the competitive
environment. In this included diversification, market penetration, product development, business
expansions and many more that undertaken by the organisations for maximising their wealth and
size of growth. On the other side, XYZ construction company is small firm that deals in various
products and construction services in the UK market. They also considered competition that
increased day by day, so better strategies should be formulated by them to achieve competitive
advantages and higher returns as well (Beatley, 2014). They provide various services including
constructing building, houses, dams, infrastructure, roads, and other architectures facilities to the
customers. Company is focusing on expanding business into other marketplace for generating
higher revenues and growth in an efficient way. Therefore, adequate planning must be required
to accomplish set goals or targets and it can be created by considering available funds, resources,
time schedules, tools or equipments, strategies, skilled workforce and many more. These are
essential in increasing growth and grabbing opportunities to develop business among
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competitors. There are defined some major aspects which beneficial to measures higher growth
and attains long term advantages as well. These are as followings:
Competitive advantages: There are lots of competition in the market place so it is
required to formulate effective plans or strategies for the purpose of gaining competitive
advantages in an appropriate way. Small and medium enterprises are focusing on creating
effective position among competitors through adoption of better strategies or action plans so that
higher growth can be achieved in well manner. Management decide business's aims or objectives
that must be accomplished within time frame and it support in define various ways or paths to
meet particular requirements.
Porters generic strategies: This model is beneficial in developing business growth and
competitive advantages with appropriate planning in well manner (Chen, 2014). In this consider
company's actual position, values and image among competitors so that better strategies can be
formulated. There are some components of this model such as:
 Cost leadership: In this defined the marketing position and effective strategies for
occupying that place in an effective way. Therefore, it is necessary to analyse customers
needs and wants for providing them better quality of goods to satisfy their desired
expectations. XYZ construction also considered customers demands regarding
constructions of buildings and houses at affordable prices so that they can be attracted
towards firm. It is needed to adopt best pricing strategies in an effective way.
 Differentiation leadership: There are necessary to have unique and featured products or
services for increasing sales and maximise wealth of the firm (Eddleston, 2013).
Therefore, XYZ construction company use better quality of building materials for
constructing best structure at reasonable costs, so that more customers can be attracted
and satisfy their demands.
 Cost focus: This is another important aspect of this model that beneficial in formulating
market strategies by which alteration and modifications are possible. Many of firms use
these types of plans for analysing customer's needs, wants, choices and expectations
towards goods or services. therefore, XYZ Construction required to manage their
available resources by allocating them into entire business activities for getting best
possible outcomes.
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 Differentiation focus: In this undertake product's Unique Selling Point (USP) for
providing higher satisfaction and experiences to the customers. XYZ construction firm
focus on increasing the qualities and effectiveness of materials, equipments and labours
for constructing strong building with good architect designs as well. It support in getting
more attentions of customers and gain profitability.
Acquisition of digitalisation within business: It is necessary to adopt best tools or
techniques as well as advanced technologies for improving business performances and
accomplish targets in an effective manner. For small and medium enterprises, digital technology
is helpful in enhancing growth and make entire activities in smooth manner (Galland, 2012).
XYZ construction firm can undertake several tools and technologies including websites, online
marketing, digital tools, software applications and many others for managing or maintaining
business activities.
Market share: In the present scenario, every firm try to increase its growth and market
shares by adopting best strategies and action plans in efficient ways. Company considered
innovative tools or technologies that are beneficial in attaining set targets by performing entire
business activities effectively. XYZ construction can use cloud technology for managing their
confidential data and improve the data storage power in well manner.
P2 Evaluate the growth opportunities through Ansoff Matrix
Every organisation focus on finding different opportunities and grab them to achieve
competitive advantages. In the corporate sector, there are various chances for organisation to
develop their business by using appropriate strategies, and adequate plans such as business
expansions, diversification, market penetrations and new product development so that they can
capture particular market and create better position among customers. It play crucial role in
defines several opportunities and ways to improve business so that maximum outcomes can be
get (Levy, 2016). XYZ construction firm also try to expand business at different areas or places
in the UK so they focus on their strategies to provide construction services at affordable prices
and give some free services such as building's designs, architectures, structure or blueprint to the
customers so that huge audiences can be targeted. Ansoff's matrix is one the best method for
analysing growth opportunities and capture market in an effective way such as:
 Market penetration: In this, company make strategy to sell its existing goods or
services into existing marketplace. Their main focus is to enhance growth and revenues
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by increasing sales volume. They consider effective strategies and action plan to attracts
maximum customers towards firm and satisfy their desired expectation through better
quality of goods or services and make them loyal towards organisation. Therefore, XYZ
construction company always try to promote their business by using appropriate
marketing tools or techniques so that maximum customers are to be aware. It is essential
in building good relationship among people and penetrate market through better quality
of construction services as well.
 Market development: In this, company formulate strategy to introduce their goods or
services into new marketplace so that more customer are to be targeted. They focus on
increasing size and wealth of the firm in an effective manner (MacLeod, 2013). It is
necessary to make better appropriate plans and marketing strategies to achieve
competitive advantages. There are required a proper market study and analyse particular
demands and customers so that business can be expanded with efficient way. XYZ
construction company have to create proper customers awareness while entering into new
marketplace.
 Product development: Company create strategy to develop new products or services for
capturing market as it is essential in enhancing growth as well as sales in adequate ways.
They have to conduct survey and find target market who can prefer such products to meet
their desired demands or requirements. XYZ construction company can develop its
business using effective and best quality of building materials, equipments, tools for
improving services in well manner.
 Diversification: As per this strategy, company introduce new products into new
marketplace for the purpose of getting maximum profits or generates revenues in an
appropriate way. Many of business firms undertake such strategy to enhance growth and
get best possible outcomes as well (Moseley, 2013). XYZ construction company can
introduce its goods and services into new market for the purpose of expanding business
and accomplish goals. There is necessary to adopt best marketing tools and techniques to
create awareness among target audiences.
From the above discussion, this is to recommend to the XYZ construction company that they can
adopt market development strategy to sell their services into new market by utilizing efficient
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resources by the respective company. This is the most suitable strategy for the purpose of
business expansion and increases the size of purchase in context of chosen organisation.
Market development is one of the most important strategy to sell existing product into new
market sphere and lot of ways with help of it can be achieved. In scenario of XYZ organisation
by finding new geographical area, new packaging and designing of products and by adopting
distribution channel with help of different pricing policy that helps in achieve new market
segment to achieve growth and enhancement. In case of XYZ corporation it can expand its
market by evaluating their own capabilities and access new market share because it is well
known in market and consumers favour their products already in marketplace.
P3 Potential sources of funding
Financial support is one the major task that must be required to adopt any strategies as
well as action plans for developing business and generate higher revenues in an effective
manner. There are many construction services are provided by XYZ construction. For the
purpose of enhancement of their business operations they decided to take the contracts from
external parties. To acquire specific contract, organisation provide the bid of £ 180000. The
number of funds which was actually have by organisation was £20000. Now, the additional
amount of £ 160000 should be borrowed from use of internal and external sources.
Internal sources:
Sales of assets: This is most suitable and easiest way to arrange funds within limited time
period. Most of firms undertake this method to gain appropriate financial support for running
business organisation in smooth manner (Schetke, 2012). XYZ construction also consider
internal sources for the purpose of completing any tasks or project without any interruption.
There are various assets that are to be sold by the company including old equipments,
accessories, tools, machinery and lands for raising funds such as £20K for particular project.
Advantages:
 There is no required any legal formalities and legislations that are to be followed by firm
during selling of assets. One of the easiest method for arranging adequate funds without paying any interests in
returns.
Disadvantage:
 This may be not possible for small enterprises that to have sufficient assets to sell out.
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 It can takes more time in raising funds.
External sources:
Bank loans : It is best external source to arrange sufficient funds for running business. In
this includes a set of procedure for taking loans from any bank according to requirements (Haase,
2012). As per this method, amount can be increased by the XYZ construction firm around £60K.
It is necessary to pay fixed rates interest in every year.
Advantages: This is essential in raising financial resources as per the requirements as company can
fulfil its needs within time period.
Disadvantage:
 The major disadvantage of this method is that there is necessary to pay interests which
decided by the bank during loan procedure.
Therefore, Bank Loan source of fund is the best for XYZ construction company, as this help
them to overcome from insufficient balance from the same. The main reason behind employing
the bank loan technique is that SME's help them to provide loan at a low interest rate as
compared to other financial institutions. Also, the organisation will be in safe and secure mode
while choosing this source of fund.
From the above mentioned options one of the best method to choose of fund raise is bank loan
because an organisation can borrow large funds from by leasing some important asset of
company so that they can borrow money as they require. In case of XYZ corporation they aimed
to launch a new product into market place so require lot of fund and investment. Hence in that
case they have to borrow money from bank.
TASK 3
P4 Design a business plan
The business can be explained as an document that contains details about designing
products, leadership, staffing, financing, operations model other factors which are necessary for
success. It also involves description for several effective as well as efficient strategies which are
helpful to carrying out various kinds of procedures or activities properly (Kötter, 2012). It is
important to make an appropriate plan because it provides correct direction to put efforts in
sufficient manner to attain goals successfully. There are different departments in an organisation
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which has role to conduct their particular activities in accurate way to fulfil regular targets
effectively which facilitate to complete overall objective of business in specific period of time.
More appropriate techniques or policies are beneficial to be implemented because they improve
outcomes on daily basis which results into achieving better growth of company. In case of XYZ
construction, they are required to make an effective business plan which darneder correct
direction to staff members so that they will focus in right way to complete their tasks regularly
along with attaining required outputs properly. A defined business plan of XYZ construction is
given below:
Executive summary: The business plan includes several factors which are includes in
operational procedures and have relevance with same thing. It is necessary to build an effective
planning according to which efforts of employees can be directed towards required way (Todes,
2012). It will help to complete various kinds of events and processes in correct manner to
generate required outcomes on regular basis. XYZ construction is following an appropriate
business plan to conduct operational activities on daily basis properly to gain desired objectives.
They classified several events or procedures to conduct them into parts so that confusion will be
avoided and desired targets can be achieved successfully.
Overview of the company: The XYZ construction is kind of company that deals with
several constructing buildings, infrastructures, dams, bridges, pools and many more. It was
founded in the year around 2013 and owned by two partners for running business properly. They
have a scheme to reduce cost of production step by step accordingly which facilitate to render
services at reasonable price to customers. It in this company, they use their knowledge and
innovative techniques or ideas to conduct operational activities to complete their targets
successfully in given period of time.
Products and services: There are several products which are provided by XYZ
construction by putting an appropriate efforts at affordable rates. They work on various long
term projects and perform in correct manner to complete particular target (Valler, 2012).
Products of the given organisation are dams, bridges, pools, buildings, infrastructures, houses
and so on at reasonable price. More effective strategies are followed by this organisation to
manufacture particular product in given period of time to satisfy requirements of people.
Situational analysis: There are various kinds of factors which are relevant to internal and
external environment of business. All these elements have positive or negative impact on
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operational activities that results into certain issues in company. It is necessary to conduct
situational analysis to determine strengths, weaknesses, opportunities and threats after evaluating
various environmental components properly.
SWOT analysis of XYZ construction company
Strengths Weaknesses
 They have an affordable rates for
various products due to which people
prefer this company more as compared
to others.
 It includes an effective and healthy
relationship between two partners and
their suppliers, builders etc.
 They focus on quality of product while
working on long term projects due
which more customers are attracted
towards them.
 Due to having limited partners so that
they have problem of funds which
creates problem to run business
successfully.
 They have small company which has
low profit share in market because of
poor goodwill.
 The both owners of this firm has less
experience of market and lack of
knowledge to run business and
techniques to gain growth as well.
Opportunities Threats
 Having small business, they have
number of opportunities in changing
trends of market which are helpful to
attain growth of firm.
 They can apply several effective
technological equipments or machines
to make regular activities easy.
 High level of competitio9n of market is
big threat of this enterprise which
creates problem in achieving success of
business.
 Poor image in market are results into
inappropriate productivity as well as
profitability.
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Formulation of budget : In this stage of business plan, budget for the organisational activities is
prepared by the manager. This budget is formulated on the basis of business operations and
requirement of every sector of business. Budget of XYZ construction company is described as
below which includes its financial information of profit and losses.
Cash budget-
Particulars 2014 2015 2016 2017
Cash inflows
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Investment 8000
Credit sales 1200 2000 7500 3000
Total inflows 9200 2000 7500 3000
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500
Variable : Direct material 350 300 250 150
Total outflows 2850 1500 1750 2650
Net cash flow 6350 500 5750 350
Opening balance 0 6350 5850 11600
closing balance 6350 5850 11600 11950
From the above illustrated cash flow of XYZ construction company, it has been analysed
that this enterprise have appropriate funds which are enough to pay off all the debts and
liabilities. Taxes of the firm are paid on yearly basis.
PEST Analysis of XYZ constructions
Political factor: This includes several rules of political bodies and government of
particular area that creates problem in construction process (Phelps, 2012). It is necessary to get
updated information about such norms and follow them to reduce issues and complete their
projects properly in particular period of time.
Economic factor: This refers to several factors such as taxation, inflation, interest rates,
value of currency and so on. Thus, all these elements impacts on operations of business that
facilitate quality or quantity of productivity.
Social factor: There are various kinds of religions or cultures which are followed by
different types of people due to which they have differentiated needs and demands. It is
important to make an appropriate product and make sure that it will not harm cultural or religious
thoughts of any person.
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Technological factor: This includes criteria of adopting advanced technology which is
helpful to boost up regular productivity as well as profitability (Wood, 2012). Several
technological equipments can used to conveying message to overall workers in single stroke,
store data in bulk etc.
TASK 4
P5 Assess exit or succession options for a small business
The small business is established in limited amount of funds and require less time to
establish and run business properly along with attaining required outcomes. Some of techniques
that are used for exit and succession for small business are given below:
Acquisition: This refers to an process in which large business will purchaser other small
firm and then new business is known by purchaser company in market. Through this technique
small business can exit from market in proper manner by gaining desired amount.
Advantages Disadvantages
 It render profits to small business by
using policy of acquisition at larger
rate.
 This provide business a unique
technique that result into growth and
success of a company.
 Acquisition is helpful for organisation
to build frequent market by reducing
competitive stronghold. In case of XYZ
corporation acquisition is very helpful
to capture large market share.
 It is long procedure and face several
legal issues due to legislation of
particular place.
 In this, the cost would be inflated if
there is any delay in acquisition
process.
 In acquisition cost should be climb very
slowly in some projects. In case of
XYZ corporation it not be prove
fruitful in hostile takeovers to manage
profitability and reduce turnover.
Liquidation over time: In this technique, the correct owner extracts all possible profits
from business and then sell of close the same.
Advantages Disadvantages
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 Maximise cash withdrawal from
business on an ongoing basis which can
be used for personal needs (Assche,
2013).
 This is simple and clean solution, and
there is no transaction plan to worry
about, no buyer to negotiate with it.
 Liquidation is a fast way to exit
business and extract at least some of
value.
 In case of XYZ corporation liquidation
is low. In that scenario company have
to prepare statement of affairs while
call the creditors.
 Extraction of profits reduce growth
potential and sale rates of business.
 This usually sells the physical assets
and not paying any personal guarantee.
 In this, assets are not retained from
creditors.
 In liquidation director of small
organisation have to pay debts. In case
of XYZ corporation if company is
liquidated they are liable for debts to
repay it.
Thus, on the basis of these advantages and advantages of exit procedures, it is concluded
for XYZ construction company to adopt liquidation option for exit the business. As this will
help in legally shut its operations as no other individual can claim, after receiving payment as per
their obligations.
Strategies for succession planning
 The utilisation of advanced technological equipments, machines, software and many
more to improve regular productivity that helps to attain growth successfully (Beunen,
2013).
 The training and development programs to improve skills of workers so that they can
perform in better way that facilitates to manufacture best quality product.
CONCLUSION
From the above report, it has been concluded that planning play an important role in
increasing market share and growth in the marketplace. Company considered appropriate
planning for generating higher revenues because it includes various activities that facilitate in
maximising profit as well. This report is defined bout XYZ construction company which deals in
providing several construction services in UK. They have focused in expanding business through
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proper planning for growth. Many of strategies and techniques have undertaken by them to
complete such contracts or projects in well manner.
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