Succession and Exit Options for Small Businesses

The assignment discusses the importance of planning for growth in a company, using strategic leadership and management to achieve business goals. It highlights the need for additional funds to fulfill business needs, particularly for Complete IT, which is bidding for information technology opportunities from the government. The assignment examines succession and exit options, including liquidation, merger and acquisition, and their benefits and drawbacks.

Planning for Growth
Table of Contents

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analyse key considerations for evaluating growth opportunities ...................................1
P2. Ansoff’s growth vector matrix.........................................................................................4
TASK 2............................................................................................................................................5
P3. Assess sources of funding and discuss benefits and drawbacks......................................5
P4. Design a business plan for growth ..................................................................................6
TASK 4............................................................................................................................................8
P5. Assess exit or succession options for a small business and their benefits and drawbacks8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Planning is an essential part for every business organization without which a company
cannot survive for long term. It is the foundation of every business firm which helps to attain
their objectives or target (Albert, 2017). Creating a plan is the key part of planning for growth.
Business plan can assist in short or mid- term goals with a defining steps of business organisation
to achieve them. In this unit, report will discuss about growth and development of small and
medium enterprises along with planning significance.
This project involve some major considerations for evaluating growth opportunities that
includes porter's generic and pestle analysis of complete IT solution company. This provides IT
supports and services to customers and their client. This report covers a business plan, exit and
succession plan of a business firm as well as highlights sources of financing fund along with
Ansoff's matrix.
TASK 1
P1. Analyse key considerations for evaluating growth opportunities
Planning gives direction to a business operator which leads to most desirable outcomes. It
is an important part to build employee relations to assist in focusing on customer demand and
their needs. This phase includes understanding about company and their environment. This assist
in examining a business firm by their resources and liabilities (Beatley, 2014). Pestle is a
framework of extrinsic environment framework through which complete IT business can able to
analyse their external factors of this company. This also includes porter's generic strategy to
identifies opportunities by expanding their business. These are briefly defined as follows:
Porter's Generic Model
This model assist in describing how an organisation pursues competitive edge across their
selected market scope and helps in determining competitive strategies of a business enterprise. It
is necessary to achieve profitability which help them to sustain for longer duration in this
existing competitive world. This model assist in guiding competitive advantages of complete IT
company, these can be as follows Cost leadership: This can assist in cost leadership by issuing lowest price of a product
into the market. This will helps in increasing profits by lowering their cost of product, as
a result, to increase market share by selling products and services at lower cost from
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customers. It will increase the profit margin by increasing in number of shares in market.
By applying this approach in complete IT company, it will result into generating higher
revenue for employees that implies to sustain for a longer period of time. Differentiation: This approach is used when different products and services are
consumed, therefore, complete IT company offers more attractive price and introducing
new goods related to customers demand (Colantoni and et. al., 2016). By making
variation into existing products through using innovative ideas can bring positive impact
brand image and effective sales and marketing, that will attract customers eyes. This will
helps in product differentiate whether in form of quality or packaging.
 Focus: This approach particularly used in certain market segmentation which result to
less attractions to other competitors. This includes two form of focus approach, these are
defined as:
◦ Cost focus: By applying this approach, company can focus over certain market niche
and understands demands as well as distinct dynamic of market while introducing
new product into a market. This will assist complete IT solutions company to promote
their goods in small budget which increase sales for a specific region at targeted
market. Therefore, it will improves their quality by maintaining rate of standard and
also, effect brand image of product.
◦ Differentiation focus: This approach is used to target a particular segment. It will
assist to exploit specific needs in a special market segment. This portion depend upon
business visual aspect which offers to target customers only.
From the above topic, it can conclude that porter's generic model guides in understanding
competitive advantages of complete IT which able to know which kind of strategy they should
adopt to promote their products (DeMartin and et. al., 2015). By using this, intellectual process
of external environment assist in bringing up possibilities for a market which are helpful in
enhancing business operation. Therefore, complete IT business firm use differentiation strategy,
this will help them to promote their product at new level.
Pestle analysis
This is done to examine external environment which can help in understanding about
perspective in ample environment conditions. It can be explained as:
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Political aspect : This will effect complete IT solution company due to instability of
political leaders which are variable according to change in policies as per government
regulations (Denton, Forsyth and MacLennan, 2017). This will bring an impact to business firm
by adopting and maintaining their own policies at recruitment time.
Economic aspect : This has impact on company's image due to inflation, it bring
outcome as lower profitability which can result into a negative factor for complete IT firm. This
will help in determining analysis of planning data to identify and modify goals, organization
structure and many more. It will being impact on economy.
Social aspect : This factor is co-related to social culture and customer demands. If
Complete IT is not able to focus on consumer requirements and their demand which will effect
business reputation. However, this will support complete IT solutions company which able to
guide them in proper manner.
Technological aspect : This factor effect due to change in technology or adopting
upgraded equipments which can hamper the working condition of workers by using capital
intensive technique. By using high technology in complete IT business firm, they provide
training which involves large amount at one time while commencement of new equipments
(Esmaeeli, Kazemi and Haghifam, 2015). This will help them in sustaining for longer period into
existing marketplace.
Legal aspect : This factor includes legal legislation related to employment and staff
member. If they are not mitigated from business contract, this will led to employee turnover,
absenteeism or job insecurity and many more. Legal aspect also involves health and safety for
employees, equal remuneration, minimum wages act and so on.
Environmental aspect : This factor is used in context of environmental friendly products
which do not harm surrounding it will guide complete IT company's reputation in existing world.
By adopting environment friendly goods and services such as solar and wind energy, thermal
power plant and many more. This will help in contributing towards environment. The major
factor which contribute in achieving the growth by complete IT company. These are as follows:
Resources: This is a stimulation to a production function. These can be in form of
tangible such as assets used by a business firm and intangible things; services which are provided
to their customers.
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Capabilities: This is a systematic approach which assist and guides for long term
profitability. By measuring and evaluating performance of a company, firm can accomplish their
goals by using marketing, financing, operations and many more.
Core competences: This is a combination of resources and includes skills, abilities and
experience for a specific company (Gunder and Hillier, 2016). It involves durability, immobility
and so on.
P2. Ansoff’s growth vector matrix.
Ansoff matrix was developed by H. Igor Ansoff and published in Harvard Business
Review. It is the core of business strategy tool i.e. taught to an individual for the purpose of
growth. It is an effective method that uses two approach to develop a growth strategy i.e. varying
about product growth as well as market growth. It is also known as product or market grid. This
is one of the most commonly used tools to analyse due to simplicity and ease of use. It focus on
firm's presentation, potential goods and services that are related to customers. Ansoff matrix
helps in determining a growth strategy for complete IT company for increasing sales increasing
sales. This will assist business enterprise to grab an opportunity through the assistance of used
model such as pushing existing product in current market strategy. It delivers four systematic
approach options, each has its own differencing level of risk. Ansoff matrix is a series of
suggested growth strategies which set the direction of a business strategy. The marketing
planning tool helps in linking commercial plan of action with a generic strategic direction that
represent into four section (Hess and Sorensen, 2015). These are defined as follows: Market penetration : This type of strategy is used in growth where business enterprise
focuses on selling existing products into competitive world. To maintain and increase
market share of current products i.e. achieved by using the combination of competitive
pricing strategies, advertising, sales promotion and personal selling. Also, this will help
complete IT solutions business enterprise to secure market growth. This strategy is
focused on market and its products i.e. known well. An increased usage by existing
customers may introduce loyalty schemes which help in attracting customers, launch
price or any other special offers for promotions and increasing sales force's activities
which can increase their productivity. Market development : This model often used for growth strategy which seeks to sell
existing products into new markets. It can be used by new geographical markets for their
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product dimensions or packaging, new distribution channels, pricing policies to create
new market segment and so on. These approaches helps complete IT business firm to
develop their market while using these above strategies. Product development : In this type of strategy, business aim is to introduce new products
into existing market. This may require to develop new competencies to modified products
which are appeal to existing markets (Hollenbeck and Gerhart, 2018). It can be done
through using product development at a specific product needs to differentiate in order to
remain competitive into market. This strategy focus on complete IT business enterprise
such as research and development, detailed insight to customer needs, extending product
by producing different variants or repackage through existing products into market for
more competition and many more related to this.
 Diversification : This strategy is used for growth in a business of complete IT company
by introducing new products into a market. It is more risky strategy because a business is
moving into market which has a little or no experience. In this, referred quadrant of
matrix is also known as “suicide cell”. The other advantages of diversification includes to
expand business or may suffer from adverse circumstances, they may be affected.
By adopting product development strategy will help in accomplishing company's goals
and objectives that will enhance their productivity and able to expand their business. As it
require to develop new strategies to alter their products which are already a part of an existing
market.
TASK 2
P3. Assess sources of funding and discuss benefits and drawbacks
Complete IT solution is a small business they wants to launch a project for which they are
going to bid. The IT solution want to achieve a contract of Princess Royal Hospital. They need to
upgrade clinical computer systems and helps in maintaining ECG and MRI machines, also by
using operating equipment at time of operation (Husain, Patierno and Smith, 2016). For bidding
a contract, they would requited 100k euro and they have only 20k euro. Now it is required to
borrow additional amount of funds i.e. around 80k from different internal and external sources.
Source of funds are referred to an intermediate by which organisation can raise there funds for
business proceeding. Funds is a necessary part for every business whether it is small, medium or
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large business enterprise. There are various sources of funds which are debentures, loan, venture
capital, shares, funds from financials institution and many more.
Bank loan
It is a most important source of finance for small and medium organization. Bank loans
are generally provided to well established and flourishing business in place of commencing
businesses. It also provide on the basis of past credit score of a company along with establishing
track record of earning profitability to repay loan and interest.
 Advantages: The complete IT company can get money for a long period which is
usually for five to thirteen years. Major funds provided by bank which they have to
repay with an interest rate (Olesen and Carter, 2018). The rate of interest is fixed for
which they have to repay the whole amount.
 Disadvantages: The major disadvantages of bank loan is that they provide lack of
flexibility if people need a loan of 20k euro but it do not get business profitability as they
have to repay the whole amount with an interest.
Overdraft
It is a temporary facility of bank under which business or corporate companies provide to
their customers. Overdraft aids organisations to continue withdrawing money even when there is
not sufficient capital available in their account to cover the withdrawal. Basically, it allows
customers to borrow a set amount of money. These are act more as a traditional loan.
 Advantages : Overdraft is a facility that have less paper work and also, used as long term
loans which is very easily to available (Pred, 2017). This hence, provide flexibility to
business as it take any time at any amount that are allowed at allotted time period within
one or two days.
 Disadvantages : Process of over-drafting takes higher charges from organisations.
From the above information Complete IT solution should adopt bank loan as a sources of
funds which is feasible as well as grant easily to their customers at reasonable rate of interest.
P4. Design a business plan for growth
Overview
Business plan can be considered as road map that provides directions so that business
can plan future and helps to avoid bumps in the road. It should contain accepted guidelines
regarding form and content. This works for business to look ahead, allocating resources and
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focus on its key factors while preparing for problems and opportunities. Complete IT business
enterprise is a vigilant on latest technology available to make a positive impact on a company
(Pugalis and Ankowska, 2016). The motto of this company is to fulfil needs by providing
technology, also explain options and recommendations in a clear and concise way. Complete IT
provide services such as hardware, software, network issues, managing services including data
backup or recovery and many more. IT related problems to resolve them.
Vision: Passionate towards staff and enjoy what they want to achieve.
Mission: It helps in providing the ability to be more accurately assess risk.
Objectives: To develop a follow-up strategy to gauge performance with their clients. Also,
provide quality and services to different target customers.
SWOT
It is a useful technique for understanding company's strength, weaknesses and to
identifying both the opportunities and threats to face by a business firm (Rodríguez and
SánchezEspinosa, 2016). The SWOT of complete IT solutions are as:
Strengths Weaknesses
 Complete IT solution has a unique
selling proposition such as soft touch
pad is only for maker.
 By using patent trademark product that
are able to capture customers eyes.
 Complete IT company has a limited
manufacturing capacity as it is a small
business firm.
 Due to a small business, it do not
survey market.
Opportunities Threats
 By Increasing revenue of employees
will able to expand their business.
 As product is not complex to make and
suitable for high volume manufacturing
of which can bring opportunity to a
business firm.
 Complete IT need outsource
manufacturing thus this will result in
loss of direct control over product
quality.
 It also, need to obtain financing for
manufacturing expansion.
STP
It refers to one of the strategic approach in today's business market. This model one is
useful when creating marketing communication plan that helps complete IT solution business
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enterprise to prioritise and then develop to engage with different clients (Gladkikh and
Bun2017). This model is described in below as:
 Segmentation: This is to identify customer needs and segment market which help them
in defining the purpose of selecting appropriate target market.
 Targeting: It is a proactive selection which is used for suitable market segment such as
upper and middle class in an economy that focus in offers and activities towards related
customers.
 Positioning: It is a a target market perception which helps in garbing benefits, features
and offering the competitive products into a market place.
TASK 4
P5. Assess exit or succession options for a small business and their benefits and drawbacks
There are a number of ways a company can use succession and exit its small business.
These are describe in detailed as follows:
Liquidation refers to a technique by which a firm can exit its business from marketplace.
This can be defined as to a procedure in which a limited business enterprise brought to a close by
professionals. The Complete IT company can sold there asset and realization of revenue as per
the priory (Wey, 2015). By using this technique, present company can gain following advantage
and disadvantage:-
 Advantages : By using this method, company directors, the pressure of mounting debt
can be consumed and extremely stressful, after debts fall due. Outside of personally
guaranteed debts, this will free directors from the pressure of repayment that allow them
to move on. This also, provide advantages to creditors.
 Disadvantages : Company assets will be sold to pay their creditors by using company
property, vehicles and machinery. This also includes personal guarantee clause in a
finance agreement, liquidating own company lead to called in.
Merger and Acquisition
This technique refers to a an agreement which is made between two companies to
combine their businesses. This would help in introducing more resources and finance for running
business as per desired. In context with Complete IT company, the major benefits and loss which
may it gain by merging its business with other organisation dealing in same field are:-
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 Advantages : Merger and acquisition helps in reducing shortage of funds and other
resources in organisations. This helps a business firm by using unique techniques which
their competitive firm. In acquisition process, both organisations can use their resources
to run business effectively (Wu, 2015).
 Disadvantages : The major advantage of merger of organisations is that clashes between
culture and conflicts among stakeholders. Thus, it may create negative image on growth
and success of business.
From the above discussion it is concluded that Complete IT solution should adopt merger
and acquisition which assist them in using as an appropriate decision while using it. Merger and
acquisition is joining two companies to become one.
CONCLUSION
It has concluded from this given assignment that planning for growth in a company, plays
a vital role in a success of a business enterprise, that will accomplish their goals. It is a strategic
leadership and management plan that able to learn more and more experience for business
situation with more focal companies. The complete IT business firm is bidding for information
technology that is given by government as an opportunity for growing business. Therefore, they
require additional funds to fulfil their needs by arranging funds by gathering from banks and
various financial institution to execute their action of plan and sustain for longer duration in
competitive world.
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REFERENCES
Books and Journals
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