Comparing Residential Planning and Growth Models

This assignment involves analyzing a set of academic papers related to residential planning and urban growth. The selected papers cover various aspects such as path dependency in metropolitan planning, simulating urban growth under planning policies, family growth in metropolitan America, inner-city growth management, and more. These studies are from reputable journals and publications like Urban Geography, Australian Planner, International Journal of Geographical Information Science, IEEE Transactions on Reliability, Princeton University Press, Environment and Planning A, Networks and Spatial Economics, Soft Computing, and Journal of Urban Planning and Development. The assignment likely requires students to review the papers, identify key concepts and findings, and possibly apply them to a real-world scenario or discuss their implications.

PLANNING FOR GROWTH
IN HND BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysing key considerations to ascertain growth opportunities......................................1
P2 Evaluating growth opportunities applying Ansoff's growth vector matrix.......................3
M1 Analysing options for growth for understanding Chartridge's competitive advantage. . .6
D1 Critical evaluation of specific options and pathways for growth and risks .....................6
TASK 2............................................................................................................................................7
P3 Assess the potential sources of funding available to businesses.......................................7
M2 Evaluating potential sources of funding for Chartridge Development Ltd......................9
D2 Critical evaluation of potential sources of funding for Chartridge Development Ltd......9
TASK 3............................................................................................................................................9
P4 Business plan for growth including financial information and strategic objectives for
scaling up a business..............................................................................................................9
M3 Develop an appropriate and detailed business plan for growth and securing investment11
D3 Present a coherent and detailed business plan that demonstrates knowledge and
understanding ......................................................................................................................11
TASK 4..........................................................................................................................................11
P5 Assessing exit or succession options for a small business :............................................11
M4 Evaluating exit or succession options and making recommendations thereof..............13
D4 Critical evaluation of the implications of exit or succession options............................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
To make to plan is necessary for the growth of company so that business can expand and
higher profits can be generated. It is helpful to achieve the objectives and goals as a result
corporation can survive for a long run in the market and beat the competition. This allows
business to allocate its limited resources towards a centred efforts to adapt the required changes
in the industry driven by digital disruption and differentiate from the competitors(Waterhout,
Othengrafen and Sykes, 2013). The growth plan only contains the component of a business
where consumers can see value. In this present report chosen organisation is Chartridge
Development Ltd which is property development construction services provider in United
Kingdom.
The main aim of report is to make an effective plan which contribute to the growth of
corporation. In this report, there are following topics are covered such as : to analyse the key
considerations for evaluating growth opportunities, various methods through organisation access
funding and when to use different types of funding, business plan which includes financial
information and strategy(Porter, 2012). Apart from this it also discuss about the various ways a
small business owner can exit the company and succession options for a small business
explaining the benefits & drawbacks of each option.
TASK 1
P1 Analysing key considerations to ascertain growth opportunities
Housing market can be a very competitive market constantly changing based on needs
and preferences of a consumer. For a small and medium enterprise (SME), the business focus
changes once it has moved past its post-incorporation phase. Chartridge Development is an SME
operational in domestic housebuilding sector of UK with a net worth of £1.4 million. This
industry has experienced a rise in output by 55% in the past five years and is expected to grow
for affordable and luxury housing.
To partake in reaping benefits of such opportunities it is important for Chartridge to
evaluate its strategies keeping in mind these key factors:
 Business Goals: Sanjeev.k@cognust
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It is important to understand whether the growth opportunities identified are in line with the
mission and vision of Chartridge. Since it aims to deliver high quality luxurious properties to its
clients in sought after locations, any growth opportunity must be identified which fulfils this
criteria for the business.
 Client needs and Preferences:
Since housebuilding sector is a client-centric industry, it would be beneficial for Chartridge to
cater to those clients that are ready to expend heavily (Boddy and Hickman, 2013). Beaconsfield
is one of the most expensive towns outside London with £1 million average, Chartridge can
seek this opportunity by expanding its property clients located in Cobham, Surrey having an
average of £1,144,835. Thus, creating a large niche market for itself in UK.
 Competitive Analysis:
Chartridge focuses on delivering luxury homes at desirable locations to its clients. This is a
strong suit of the business that may have some competitors such as Bexwell Homes Limited.
Since competitive advantage forms the base of improvement and growth for any business, an
internal as well as external competitive analysis will provide the company to assess its strengths
and weaknesses. This can be done through SWOT Analysis (internal) and PESTLE Analysis
(external).
 Strategic Relationships:
Strategic Relationships pertain to improving synergies of a business through partnerships,
collaborations, joint ventures. Through creation of such kinship Chartridge can have access to
limited sources hence any kind of merger or acquisition or above mentioned methods would be
suitable to gain access to a bigger pool of funds, better economies of scale, increased availability
of human capital and market share for the company.
 Business Performance:
Performance plays a crucial role while evaluating growth opportunities for a business as they are
one of the key indicators of success or failure when undertaking new projects or investments.
Chartridge has been performing quite consistently between 2015 and 2018, hence, it is viable for
the company to take up growth opportunities by investing in medium-risk projects due to
Chartridge's capability to survive such events.
 Innovation:
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Innovation includes development of new products or service that disrupts the current system or
industry (Hess and Sorensen, 2015). Chartridge can harness such innovations by discovering the
power of technology such as virtual reality (VR), 3D Cameras, Smart Buildings, tracking
progress of property purchase by clients in collaboration with companies like Properr in addition
to providing brochures. This will in attracting remote customers and help in expanding market
share of Chartridge.
Justification:
Since Chartridge is a growing company, innovation can help in creating infinite growth
opportunities for the organisation and create economies of scale. The government has also been
encouraging environment-friendly construction among the economy hence implementing ideas
such as Smart Building, VR and purchase progress tracking are viable options in current scenario
for Chartridge to opt for.
P2 Evaluating growth opportunities applying Ansoff's growth vector matrix
H. Igor Ansoff's Growth Vector Matrix is a generic strategy planning tool used by
businesses, large or small, to evolve an understanding of the potential growth opportunities
through business development (Bunker, 2012). This matrix takes into account Products and
Markets, new and existing for both scenarios (Ansoff Matrix, 2018). Thus, according to Ansoff,
an organization can either achieve Product Growth (What is sold) or Market Growth (Who it is
sold to) by employing these scenarios. A typical Ansoff Growth Matrix resembles the following
image:
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Illustration 1: Ansoff Matrix, 2018
(Source: Ansoff Matrix, 2018)
As can be observed from above image, Ansoff Matrix is applied to to ascertain
development opportunities for a business by taking into account four types of strategies under
four scenarios:
 Existing Product in Existing Market (Market Penetration)
 New Product in Existing Market (Product Development)
 Existing Product in New Market (Market Development)
 New Product in New Market (Unrelated/Related Diversification)
Also termed as 'Product-Market Matrix', it is one of the most popular strategic models
used by business in present scenario (Ruming and Davies, 2014). It helps in evaluating
opportunities by applying different combinations of products to ascertain what kind of strategy
would be most feasible for the organisation for undertaking expansion. Here's an overview of the
aforementioned scenarios:
 Market Penetration (Existing Product in Existing Market):
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The first possible combination that Ansoff suggests adopting is the Market Penetration
strategy. This combination includes strategically positioning existing products in an established
market so that the business is able to expand. Market Penetration Strategy is one suggested
combination that has the lowest risk associated with it (Gurran, Austin and Whitehead, 2014).
Since the organization does not need to explore other segments, area or channels of distribution
there is no requirement of undergoing intensive research and development procedures for
catering a pre-established customer base .
A business can adopt this option if its main objective is to achieve Product Growth in a
growing market scenario by making changes in the sales volume of its present product line.
Usually this option includes, offering more products to an existing audience or discovering in
new customers within these markets.
 Product Development (New Product in Existing Market):
The second combination that Ansoff suggested through his growth vector matrix included
developing new products in existing markets which would cater to the client's needs in a much
specific and closer form. This strategy aims to target the 'Product' and 'Promotion' components of
the service marketing mix (Abolhasani and et.al., 2016). As this alternative includes introduction
of new products or services, there is a heavy requirement for research and development hence
there is a higher risk associated with this factor as compared to the previous strategic alternative.
Therefore, it is important for the organisation to conduct a market research at length
inclusive of both existing and potential clients so that the new product or service idea is able to
meet the current needs and preferences of all the clients as well as improve the quality of existing
product/service.
 Market Development (Existing Product in New Market):
This strategic alternative includes introducing existing products in a newfound market
segment by selling more of an existing product to a new customer audience. Market
Development essentially includes venturing out to new geographical areas, sales channel or
demographic segments (Kapur and et.al., 2012). This combination holds a higher risk factor as
compared to Product Development and Market Penetration plan of action as there is a lot of
uncertainty regarding success of the new product. A company may face many challenges such as
inefficiency in obtaining market shares, customers not being able to recognize or associate brand
with themselves or difficulties in understanding the unfamiliar mechanisms of the new market.
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The key components of Marketing Mix that this strategy target are 'Place' and '
Promotion'. 'Place' includes new channels of distribution and markets in terms of regions or
countries whereas 'Promotion' includes reaching out to new target segments by properly
positioning company's products or services.
 Unrelated/Related Diversification (New Product in New Market):
Finally, Ansoff advised using diversification to achieve a business' growth objective
which would include introducing a completely new product or service in a different market. The
new product or service introduced by the business may or may not be related to the existing
product line(Westoff, 2015). If the product is diversified that caters to a completely new segment
of the new market that has no resemblance to other products or service offerings of the company,
it is called Unrelated Diversification and vice versa. This is the most expensive and risky option
to opt for by any organisation as it includes intensive research and development of markets,
needs and products.
In context of given case scenario, it would be recommendable that Chartridge
Development opts Product Development strategy. This is because, it has been a niche market
based business that only caters to the elite group of clients present in the property market. Being
a start-up it would be beneficial for the company to take up a medium-risk based strategy and
explore UK's other hotspots such as Midlands and North/South regions of UK.
M1 Analysing options for growth for understanding Chartridge's competitive advantage
Using Ansoff's Matrix, Chartridge is convinced that a product development strategy
would be most feasible for achieving its growth objective. As the business is in growing stage,
diversification (un)related will be highly expensive. Market Development is only viable when it
has considerable brand equity. As Chartridge wants to grow its product line, new product
development is highly feasible. As undertaking medium-risk projects would not pressurise the
resources of the company to extremity and increase its market share in new regions of the
country.
D1 Critical evaluation of specific options and pathways for growth and risks
For any small and medium enterprise, it is important to cautiously evaluate its options by
assessing the risk involved with each project in relation to their risk taking capabilities (Kim,
2017). In Chartridge's case, product development is the most justifiable option as it plans to
expand its horizons through the medium of innovation. This would involve taking lower risk
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with higher returns based on Chartridge's risk-taking capability as a growth firm in comparison
to other combinations suggested by Ansoff. Other suggested combinations include intensive
research and development as well as very high risk associated factors fit for mature
organisations.
TASK 2
P3 Assess the potential sources of funding available to businesses
Any business or organisation cannot function without funds or money. It contains financial
resources in the form of money, effort, time, programme and projects. This means from where
they collect money to run a business. Chartridge development has the following sources to raise
funds:
Venture capital:
This is one of the most important source of fund for a new, running or growing business.
Under Venture Capital, financial support is provided by investors to start-up companies and
small businesses that are believed to have future growth and expansion prospects (While, Gibbs,
and Jonas, 2013). There are some benefits and drawback to it also. Such as Chartridge can use
venture capital that will helps to start a business or bring new changes. They are as follows:
Benefits:
 It helps to run a young business with valuable guidance and experience. It will provide a
benefit to Chartridge in order to raise the funds for growing business activities.
 It also helps to make better decision and growing of business hence, it will helps
Chartridge to select better options.
Drawback:
 Minority ownership status which is depend on the size of firm's stakeholders hence, it
may be barrier for Chartridge that reduce its ownership because of shreholder's
investment.
 Loss of control which is associated with equity finance in general terms.
Debenture/ bond:
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These are debt instrument which is issued by government and company to raise the funds.
This term is used for long term source of finance by the company. Chartridge development issues
bond and debenture to raise the funds as well as growing business.
Benefits:
 Investors who wants less risk or cost and fixed income preferred by them it may be
helpful for Chartridge to issued debt instrument in order to collect capital for business
growth.
 As a debenture holder not need to carry voting rights and finance.
Drawback:
 The company need to make provisions for repayment of redeemable debenture on a
specified date it may be loss situation for Chartridge for repayment of loan that reduces
the profit.
 Every company has limited borrowing capacity. To issue of debenture the company's
capacity for further borrow funds reduces.
Bank loan:
Bank loans are important source of funds for small and medium enterprises. They provide
funds to investors and entrepreneur to start up or run their business and for this there should be
effective business plan. Thus a Chartridge development can apply for bank loan in order to
growth of business then it has to be prepare a effective business plan and also require a personal
guarantee.
Benefits:
 Through this can get easy finance short term as well as long term it will helps Chartridge
to raise funds from bank loan and increase business activity with the helps top loan
amount.
 Interest amount on bank loan is treated as tax deductible expenses it will provide a
benefit to Chartridge that its credit capacity will increase by bank loan.
Drawback:
 Sometimes bank does not provide full amount of loan, it gives lower than loan applied so
it will be a drawback for Chartridge that it need more funds as it applied to run a
business.
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 Loans are secured which is provided against the assets of business or personal possession
for loan amount hence, Chartridge has to submit its document and professional
possession documents.
Retained earnings:
This is a continuous and permanent source of funds available to an organisation. It helps
to exclude explicit cost in the form of interest, floatation cost and dividend.
Chartridge development raise funds and increase profits by using cost of
finance,floatation cost, control of existing shareholders and legal formalities. It also helps to
increase the value of shareholders in case of expansion of business.
Benefits:
 Retained earning contains cheaper source of finance which does not include any
acquisition cost hence it Chartridge can raise funds from retained earnings by reducing
cost of acquisition.
 It also helps to give financial stability to the companies and stable dividend that will help
Chartridge to be stable at competitive market place.
Drawbacks:
 Retained earning creates dissatisfaction and negative affect the market value of shares
because of lower rate of dividend.
 The purpose for utilisation and optimisation of funds is not cleared hence it will be
difficult for Chartridge to keep proper records of utilisation of funds because many
activities are included in business.
From above mentioned sources of funds it has been concluded that Chartridge
development should adopt bank loan or retained earning than other sources in order to raise
funds for business activities. By adopting bank loan its credit capacity and goodwill will increase
at repayment of loan amount at time and will helps to expand business.
M2 Evaluating potential sources of funding for Chartridge Development Ltd.
An organization is open to a pool of alternatives to obtain external funding for its
expanding purposes. Internal Funding options include utilising retained earnings, cash flows and
investing personal capital whereas External Funding includes venture capital funding, issue of
debentures or shares, availing bank loans and overdraft facilities (Batabyal and Nijkamp, 2014).
These sources have their own benefits and drawbacks hence it is important to evaluate them
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carefully to use one or a combination of them. Chartridge can opt for venture capital, bank loans,
retained earnings to ensure cheaper source of funds quickly.
D2 Critical evaluation of potential sources of funding for Chartridge Development Ltd.
As per the case study, firstly, Chartridge should opt for utilising its bank overdraft facility
worth £2.0 million. This would help the company in saving a considerable amount of money on
finding investors for its Product Development plan. Apart from this, in the later stages, the
business can also convince venture capitalists to invest by reaching out to them through
seminars, conferences since they are most keen to invest in innovative business models.
TASK 3
P4 Business plan for growth including financial information and strategic objectives for scaling
up a business
Chartridge Development Ltd is a construction company which provides property
development construction services in United Kingdom. Due to huge competition in the market it
is difficult for corporation to survive and generate more profits. With the help of innovation
organisation can grab market share which is helpful to expand the business and maximize the
profits. So company can bring innovation which is smart building concept which can be
automated process and used to control operations such as lighting, air, heating, conditioning,
ventilation and safety. For growth of Chartridge development manager need to make some
planning and solid strategies to run a construction business. For this it will need to arrange more
capital and financial information that will help to collect the funds.
Strategic objectives : The main objectives of organisation is capture more market share
so that its profits can be increase by 50% within 5 years. Manager need to have full information
of new demand and taste of people regarding new homes and construction of building and should
make planning for construct that kind of building.
Problem statement : The main problem which is faced by company is, its profits are reducing
because of high competition in the market. For solving this problem Chartridge should focus on
construction that should provide reasonable homes and helps to reduce losses.
Proposed solution : To conduct market research opportunity and market gap can be
analysed that helps to get solution of financial problems. As a result Chartridge Development Ltd
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can identified the recent demand and trend so it can make future strategy on the basis of
customer demand and expectation.
Executive summary : Chartridge Development Ltd has involved in construction
business in UK. The main aim of organisation is to survive for a long run and capture more
market share so that revenue can be maximized (Bettinger and et.al., 2016). For this purpose it
wants to bring one innovative concept which is smart building so that more number of
consumers can attract towards the corporation which is helpful to increase the profits. Innovation
is the need of today's dynamic environment and it contribute the growth and success of company.
Need : To build smart buildings as per the need of consumers so that their needs can be
satisfy and organisation can maximize its profits. It is the first duty of Chartridge to analysis the
market and get information about what customer wants as according to income level, status,
choices etc. therefore need to construct buildings as customer wants.
Research on consumes and clients : To achieve growth and success it is essential for
the company to analyse the need, preference and buying behaviour of consumer so that it can
introduce the innovative products and services as per recent market demand.
Design and development plan : To make an effective plan it is necessary to frame the
outline of whole plan which is helpful to guide the workers that how they have to perform so that
objectives can be accomplish as per the desire. Chartridge need to develop new design of
building at low cost that helps to attract customer.
Access funding : To run the business funds are required so that organisation can continue
and expand its business operation. It is the backbone of an industry and for construction business
there are huge requirement of finance. There are various sources of finance which are as:
Bank loan: It is the most common source of funding for the corporation which provide
loans so that business can be continuously run. In return organisation have to pay interest.
Chartridge can raise funds from bank loan in order to run a business effectively.
Angle investors : Angle investors & crowd funding tend to be more focused on aiding a
budding entrepreneur and developing a great idea than making money out of funding like a bank
and venture capital.
Venture capital : These firms invest in the business of company and in return they can
fix the percentage of share in the profits which can be earned by the organisation through
business expansion.
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So the main benefit is that Chartridge Development Ltd can get the funds when they face
the problem of shortage.
Income Statement 2018 (£'000) 2017 (£'000)
Turnover 31,650.00 26,520.00
Cost of sales (26,000.00) (24,280.00)
Gross profit 5,650.00 2,240.00
Depreciation (450.00) (260.00)
Administrative and selling expenses (950.00) (800.00)
Interest expense (400.00) (300.00)
Investment income 500.00 350.00
Profit before taxation 4,350.00 1,230.00
Taxes on income (300.00) (145.00)
Profit 4,050.00 1,085.00
Dividends paid (1,200.00) (200.00)
Retained Earnings 2,850.00 885.00
Balance Sheet 2018 (£'000) 2017 (£'000)
Assets
Cash and cash equivalents 1,230.00 160.00
Accounts receivable 1,800.00 1,200.00
Interest receivable 100.00 -
Inventory 2,200.00 1,650.00
Portfolio investments 2,500.00 2,500.00
Property, plant and equipment at cost 3,730.00 1,910.00
Accumulated depreciation (1,450.00) (1,060.00)
Property, plant and equipment net 2,280.00 850.00
Total assets 10,110.00 6,360.00
Liabilities
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Trade payables 250.00 1,890.00
Interest payable 230.00 100.00
Income taxes payable 400.00 400.00
Dividends payable 1,200.00 200.00
Long term debt 2,300.00 1,140.00
Total liabilities 4,380.00 3,730.00
Shareholders’ equity
Share capital 1,500.00 1,250.00
Retained earnings 4,230.00 1,380.00
Total shareholders’ equity 5,730.00 2,630.00
Total liabilities and shareholders’ equity 10,110.00 6,360.00
2018 (£'000) 2017 (£'000)
Business Acquisitions Values
Inventories 100.00 -
Accounts receivable 100.00 -
Cash 40.00 -
Property, plant and equipment 650.00 -
Trade payables (100.00) -
Long-term debt (200.00) -
590.00 -
Disposal of Property, Plant & Equipment
Cost 80.00 -
Accumulated Depreciation (60.00) -
Book value 20.00 -
Proceeds 70.00 -
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Profit / (Loss) on sale of equipment 50.00 -
Long Term Debt
Loans raised 250.00 200.00
Finance lease acquisitions 900.00 210.00
1,150.00 410.00
Statement of Cash Flows
2018 (£'000) 2017 (£'000)
Cash flows from operating activities
Profit before taxation 4,350.00 1,230.00
Adjustments for:
Depreciation 450.00 260.00
Investment income (500.00) (350.00)
Interest expense 400.00 300.00
Profit / (Loss) on the sale of property, plant &
equipment (50.00) -
Working capital changes:
(Increase) / Decrease in trade and other receivables (500.00) (505.00)
(Increase) / (Decrease) in inventories (450.00) (750.00)
Increase / (Decrease) in trade payables (1,740.00) 200.00
Cash generated from operations 1,960.00 385.00
Interest paid (270.00) (280.00)
Income taxes paid (300.00) (45.00)
Dividends paid (200.00) -
Net cash from operating activities 1,190.00 60.00
Cash flows from investing activities
Business acquisitions, net of cash acquired (550.00) -
Purchase of property, plant and equipment (350.00) (200.00)
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Proceeds from sale of equipment 70.00 -
Acquisition of portfolio investments - (500.00)
Investment income 400.00 350.00
Net cash used in investing activities (430.00) (350.00)
Cash flows from financing activities
Proceeds from issue of share capital 250.00 -
Proceeds from long-term borrowings 250.00 200.00
Payment of long-term borrowings (190.00) (70.00)
Net cash used in financing activities 310.00 130.00
Net increase in cash and cash equivalents 1,070.00 (160.00)
Cash and cash equivalents at beginning of period 160.00 320.00
Cash and cash equivalents at end of period 1,230.00 160.00
It has been analysed that Chartridge development adopt product development strategy
through introduction of smart city building that helps in intends to scale up business by adopting
this strategy. As a result Chartridge is growing continuously through increasing sales by 5000 in
2018 and also increase profits four times that 2017 by applying product development strategy. Its
profit increase than past year like in 2017 at £1085 and in 2018 at £4050.
M3 Develop an appropriate and detailed business plan for growth and securing investment
Chartridge Development Ltd can use smart building concept for the growth of its
business. Smart building concept is based on automated process which is used to control
operations such as lighting, air, heating, conditioning, ventilation and safety. The main strategic
objectives of organisation is capture more market share so that its profits can be increase and it
can grab more market share. Organisation can use appropriate frame which is based on its plans
and strategies so that employees can know how they have to perform so that objectives can be
accomplish effectively (Zhou and et.al., 2017).
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D3 Present a coherent and detailed business plan that demonstrates knowledge and
understanding
Chartridge Development Ltd can make a business plan so it use smart building concept
which is automated process and used to control operations such as lighting, air, heating,
conditioning, ventilation and safety. The main objectives of organisation is capture more market
share so that its profits can be increase and it can achieve the goals and objectives (Shin and
Shin, 2012). This business plan can be formulate with the help of innovation so that company
can beat the competition in he market and expand its business as a result it can survive for a long
run in the market.
TASK 4
P5 Assessing exit or succession options for a small business :
Exit or succession options create a contingency plan using two case scenarios viz.
Positive and negative. These plans are executed by an investor, businessman or trader to close
their business. Chartridge development has decided to exit the business then they should have
solid strategy to do so. There are some options availabile for it in case it decides to exit business
or becomes successful. They are as follows:
 Liquidation:
This is the process of winding up a business, distributing assets and pay of liabilities. It includes
sale of assets to repay creditors and liabilities. In future it is possible that Chartridge
development is going to incur losses continuously and may decide to exit business in such case
it needs to sell their assets and repay creditors or liabilities.
Benefits:
 Exit strategy gives advantage to written off outstanding debts and legal actions are closed
after liquidation.
 Hire purchase and lease agreement are terminated at the date of liquidation indicating that
need to make further payments.
 For liquidation of company it involves low cost and avoids court process.
Drawback:
 There is personal liability can be arises if director has made personal guarantee for
business debts.
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 Responsible for repayment of liability for overdrawn director's current accounts.
 Sell your Business to Managers:
It involves winding up business or sell your business to managers who is interested in buying
your business. Chartridge development is going to sell its business to interested
managers or employees.
Benefits:
 It becomes easy to run this business for managers and employees since they are familiar
and enthusiastic about it.
 It helps to increase loyalty and motivate staff to work hard to make successful business.
Drawback:
 Some times employees are not suitable to take over the business.
 Customers are not ready to accept the changes in company's management and direction.
 Sell to Another Business:
This is also an important strategy that sell small business to another business. It helps to
expansion of business as well as growth of organisation. In order to understand this Chartridge
development want to sell its own business to another then this strategy can be used to expansion
or growth.
Benefits:
 A business can be greatly motivated and familiar to purchase existing business.
 This is also helpful to make quick sale and increase profit.
Drawback:
 After sell business to another business employees may lose their jobs and increase
unemployment.
 The IPO ( Initial public offer):
This means when company comes first time in the market then it needs to raise funds publicly.
Its not suitable for small size of company. For an example if Chartridge development wants to
exit its business then it can give offer publicly.
Benefits:
 IPO helps to raise capital publicly through issue of shares.
 It also helps to increase profits and reliability of any organisation.
Drawback:
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 It may be long or costly process for public company.
 Sometimes it becomes personally liable for an owner of the company.
Thus, Chartridge development should accept sell to another business strategy for exit .
Through this strategy his business will be continue and also helps to expansion or growth of
business. IPO strategy is a strategy of any successful business.
M4 Evaluating exit or succession options and making recommendations thereof
Exit or succession options depend on the nature and size of the business. Exit options
usually include Liquidation, Selling to business or managers. These are contingency plans by
ascertaining a pre-defined criteria wherein such plan shall be executed (Miguez, Rezende and
Veról, 2014). Success plans usually include Initial Public Offerings (IPOs) where the company
lists out the situations wherein the company may issue its shareholdings to its customers.
Chartridge should opt for Selling business as it is cheaper and an IPO in case of a positive future
scenario.
D4 Critical evaluation of the implications of exit or succession options
Every choice has its implications, exit options may force a company to evaluate its
operational efficiencies and render it paralysed. However, this alternative provides a contingency
plan that saves a company from going bankrupt acting as a buffer (Wang, 2012). On the other
hand, succession options can help in expanding business but also dilute ownership of a business.
Chartridge should opt for a merger or acquisition so that any contingency can be paid off using
subsidiary's or parent's assets and liabilities. This, however, would require Chartridge to give up
certain percentage of its control over company's operations.
CONCLUSION
As from the above report, it has been concluded that for an organisation it is essential to
make plan for the growth so that business can be expand and it can generate more profits.
Ansoff's growth vector matrix can be used by the company to find the opportunities in the
market. There are various sources which provides the finance to the grow of corporation.
Business plan is helpful to achieve the strategic objectives as per the necessity. There are various
ways through which a small business owner can exit the organisation. There are various benefits
to opt a small business and it help to maximize the profits.
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