Planning for Growth: Designing a Business Plan and Exit Strategy for Small Businesses

This document provides insights into planning for growth in small businesses. It covers topics such as designing a business plan for growth, exploring exit strategies, and evaluating the advantages and disadvantages of different options. Suitable for students studying business management.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
Covered in Brochure....................................................................................................................3
TASK 2............................................................................................................................................3
P4, M3 & D3: Design business plan for the growth that includes financial information and
strategic objective of a business...................................................................................................3
TASK 3............................................................................................................................................7
P5: Succession or exit plan for small business with its advantages and disadvantages .............7
M4: Evaluation of exit and succession option.............................................................................9
D4: Exit and succession option for small business and course of action...................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning is the core business activity which is associated in the better allocation of
resources by taking the predetermined actions for the overall growth and development. It involve
constant review of performance based on which strategies are prepared to overcome the negative
implications associated with the dynamic environment. Growth planning comprises of the
ongoing business activities which is the driving factor and help to add value by leading to
revenue generation. For the better understanding of report B-Lands consulting firm has been
selected which formulate various contract and work for the defined cause. Currently, the
company has indulged contract with Economic board of UK and the purpose of this contract is to
provide the base to SMEs so that they can plan for the growth and development. This report
involve topics like key growth opportunities for the SMEs and access various methods that can
help the organisation to access funds fort diverse cause. Along with that develop suitable
business plan that help to scale up the business. Further, explanation of exit options in case of
diverse situation are covered in the report.
TASK 1

TASK 2
P4, M3 & D3: Design business plan for the growth that includes financial information and
strategic objective of a business
Business plan encompasses the written documentation that define various elements like
objective and mission of company in order to build the strategy and accomplish the favourable
position of firm (Fahlvik, Elfving and Wikström, 2014). It helps to determine the internal as well
as external processes which possibly helps in better execution of activities.
Executive Summary It involve the detail insight about the company which comprises of the
certain aspect like preparation of vision, mission, conducting market
analysis and fulfil the requirement of resources.
Business Details Company: B-Lands consulting firm
Vision: To plan out the national growth and development of SMEs.
Mission: To fulfil vision B-Lands consulting firm have signed a

contract with Economic Board of UK which together help to enhance
the growth of SMEs.
Objectives: B-Lands consulting firm's objective is to enhance the
economic participation of SMEs by at-least 20% within a year.
Market Analysis Competitive Analysis:
Internal analysis is the effective source of market study that help to gain
core competency based on which opportunities can be explored and
chances of threat can be mitigated.
Strength
The manager as well as staff of B-
Lands consulting is responsible to
effective advise the SMEs in terms
to gain the advantage of fast
mover and establish prominent
image in market (Keough, 2015).
Opportunity
For better accomplishment of
contract respected firm can use
both physical offices and digital
media in order to offer the unique
solutions. Such support can surely
lead to the wide participation of
SMEs.
Weakness
In comparison to large enterprises
the availability of resources for
small businesses is low. This can
affect the cause and objective of
the contract.
Threat
Wide presence of multinational
companies and advantage of
economies of scale act as a threat
for the client of B-Lands
consulting firm.
Segmentation and
targetting
Segmentation: B-Lands consulting firm offers viable solution to the
worldwide organisation. So it segment the market on the basis of
demographical and psycho-graphical that involve the classification done
on the basis of profession, likings, education and income group.
Targetting: The company target market is SMEs of UK that have the
potential to start and need direction in order to accomplish and sustain
business.
Market strategy Product or Services: The company offer consulting services to the

SMEs in order to incorporate their business and effective overcome the
implications caused due to B-Lands .
Price: £150
Place: London, United Kingdom
Promotion: Website, social media and print media
Operations Plan Inventory required: Electronic devices and specialised software to
store clients detail
Suppliers: The company maintain supplier supply relation with the
vendors in order to accommodate their need for smooth business
functioning.
Consulting services: The company have wide experience and contacts
based on which they provide the assistance to firms.
Finance There are various favourable sources of funds like bank loan, venture
capitalist and so on. B-Lands consulting firm understand the market
situation and accordingly advise the most significant source of fund in
order to accomplish the objective.
Financial Projection Income statement projection:
Income
statement
Particular
s
2020 2021 2022 2023 2024
Sales 18 24 26 23 28
Cost of
goods
sold
8 10 11 9 10
Depreciat
ion
0.5 0.5 0.5 0.5 0.5
Advertise
ment
1.5 1.2 1.8 2 1.8
Rent 0.7 5.7 0.7 0.7 0.7

Salary
and
wages
1.5 1.7 2 2.2 2.5
Furniture
and
equipme
nts
5 0 0 0 0
Travel 0.1 0.3 0.5 0.7 0.5
Interest
expendit
ure
4 4 4 4 4
Total
expendit
ure
21.3 18.4 20.5 19.1 20
Net
income
before
tax
(3.3) 5.6 5.5 3.4 8
Income
tax
expendit
ure
0 1.5 3 1.2 2.5
Income
after tax
(3.3) 4.1 2.5 2.7 5.5

Cash flow projection:
Cash Flow
Particular 2020
(£M)
2021
(£M)
2022
(£M)
2023
(£M)
2024
(£M)
Cash Inflow
Investment 6000
Credit sales 2500 3000 3500 3800 2500
Total inflow 8500 3000 3500 3800 2500
Cash
Outflow
Fixed: Rent
and
Electricity
2500 2500 1500 2000 1500
Variable:
Material
1500 500 300 1250 500
Total
Outflow
4000 3000 1800 3250 2000
Net cash
inflow
4500 0 1700 550 500
Operating
balances
0 1000 1800 3000 4000
Closing
balance
1000 1800 3000 4000 4500
Risk To carry out the operations within external environment businesses
remain expose to various types of risk like competitors or financial risk
that can affect the actual position of firm. So before planning for growth
the availability of risk needs to be identified and measures can be
selected in order to minimise them (Rydin, 2013). Like, SMEs can use
personal saving or take funds from their family in order to avoid the

pressure of financial risk.
TASK 3
P5: Succession or exit plan for small business with its advantages and disadvantages
The business environment is affected by various factors such as political, social,
economical, technological and legal which are important for business concern to focus on them
and increase the organisational productivity (Sousa and Pinho, 2015). To run a business there is
need to have strong strategy and plan which can help to maintain the organisation productivity
and profitability. To start and run a business effectively there is need to face the challenges
where business can get success or make exit plan. If business has not operated successfully then
management make decision to exit their business by using different ways that are as mentioned
below:
Ways to Exit:
Liquidation – This strategy is related with close up shop and sell all the assets, consider
as exit strategy. This is used by business organisation where there is nothing else to sell then this
option can be adopt. B-Lands consulting firm can use this strategy at the time of exist the
business if it is not running properly.
Advantage :The advantages of such strategy are simple to adopt or liquidate the business
if organisation is not able to pay and run business. B-Lands consulting firm can adopt this as it
can be wound up very faster which make easy process. There is no risk to wind up the business
as it depend on selling of assets.
Disadvantage: This has lower return on investment which is disadvantages for owner
and it does not allow business to further trade. It depends on sale of fixed assets where creditors
have firstly claim on funds from assets sales (Wey, 2015). For instance, B-Lands consulting firm
has decided to wind up their business then it need to sale its assets and firstly paid to creditors.
Sell of the business in Open market : This means a business can exit by selling it in
open market. In this, everyone is allow to buy business a a certain prices which helps to continue
the business by other party. For instance, B-Lands consulting firm has decided to exit their
business then they can sell it in open market

Advantages: This helps to operate operation easily as it taken by third party to run it
effectively. It can maintain the goodwill, assets and brand image as an incorporated manner at
the time of selling. For instance, B-Lands consulting firm sale their business to its employees
which increases value as well as profits.
Disadvantages: To sell the business in open market can reduce the profits because
selling of business become difficult according to Biz Buy Sell. Moreover, it can be difficult to
value and profits are less than expected.
Sell to another business: This can be consider as corporate strategy where small
business are allow to maintain their position through acquisition which increases profits. In other
words, businesses buy other business due to some reason, increases business activities, functions,
brand image and profit rate by acquired organisation.
Advantages: This motivates other business in order to purchase the business which also
creates high competition. Business and profitable activities can be increased by B-Lands
consulting firm by selling its business to other party which can help to continue the business.
Disadvantages: This can reduce the competition when organisation is selling the
business to others. In this, employees of existing organisation can lose their jobs. This can
pretend the interest of competitors who is interested in purchasing the business and get success to
get financial information.
IPO: This is another option of exit strategy where organisation invite people to buy
shares and exit the business. It can be consider as viable exit strategy which does not suits small
business. For instance, B-Lands Consultancy firm issue the share publicly in order to exit their
business.
Advantages: This can be helpful for B-Lands consultancy firm as it issue share under
IPO which can be consider as exit strategy. This helps to increase the organisational profits by by
issuing share at listing them at different prices.
Disadvantages: To adopt this strategy B-Lands consultancy has to face long and costly
process which can reduce the profits of organisation. Here, it may be difficult to withdraw any of
capital when new shareholder are interested to see money raised by IPO. Public organisation
have higher compliance and legal standards to use this option (Different ways to exit and
succession option, 2019).

Thus, from the above sell to another business can be appropriate exit strategy which helps
to make succession plan. In this, B-Lands Consultancy firm can sell their business to other
organisation which helps to continue it and increase the organisational productivity as well as
profitability. This also value of business and give opportunity to maximize return. With the help
of this strategy B-Lands consultancy can make right decision by selling the business which
maintain valuable and productive.
Merger and acquisition: Even a successful business can face turbulent situation leading
to huge amount of loss. To carry out successive planning B-Lands Consultancy Company can
adopt the exit strategy of merger and acquisition. This is a kind of win-win situation under which
company can get the opportunity to collide their operation with similar type of company or one
which is larger in size. It helps in re-establishing the operation and strengthens the overall
operations by putting significant amount of resources.
M4: Evaluation of exit and succession option
From the above exit strategy it evaluated that sell to another business is appropriate
option which can help to increase the organisational image and business activities by selling to
others. The growth of any business depends on right decision which are taken by management,
helps to increase the profitability. B-Lands consulting organisation uses sell to other business
strategy which helps in growth and success of existing business. With the help of this chosen
organisation can get profits by selling and reduces the areas of potential conflicts which arises
while running a business (Zhang and et. al., 2013).
D4: Exit and succession option for small business and course of action
For a business exit and succession plan are important which helps to prevent the business
and using different strategy. In context to B-Lands Consultancy firm, management have different
option to exit their business as business is not running properly and systematise due to which
business is in failure situation (Ziari and et. al., 2012). So management has decided to adopt sell
to another business option which helps to solve the problems and continue business by other
person. Moreover, it has recommended that to make any decision there is need to analyse the
information and discuss with employees who are working, helps to take right action.
Income statement

Company is coming profit in all year expect the just one. The last year profit is doubled
as compare to the previous year which is a good sign to carry out the operation and effectively
attract investors.
Cash flow statement
There is lot of risk which business has to be ready to take which are risk of competition
and operating risk. Cash flow of the company shows that net cash inflow of the company is
decreasing year by year. Company need to introduce some technique to improve them.
CONCLUSION
For the better understanding of report it has been evaluated that growth opportunity helps
to enhance the performance of small and medium business as they seek the potential market to
operate routine operations effectively. In involve building up determined strategy that leads to
successful functioning of firm for which certain models like PESTLE analyses and Ansoff
Matrix are used. It further encompasses the advantage of core competencies that leads to
sustainable progress and growth of firm. Thus, the role of producing business plan helps in
effective performance of firm and gain the deep insights about external market. Therefore, in
case of the failure of business there are various exit options that need to be prominently
determined by firm.

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Online
Different ways to exit and succession option. 2019. [Online]. Available through:
<https://www.thebalancesmb.com/small-business-exit-strategies-2947988>