Planning For Growth

This document discusses the key considerations for organisational growth opportunities, including a PESTEL analysis. It also explores potential sources of funding available to businesses and provides a business plan for growth with strategic objectives and financial information. The case study focuses on Lily Communications, a communication and IT solution company in the UK.

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key consideration for organisational growth opportunities...................................................1
P2 opportunities for growth applying Ansoff’s growth vector matrix.......................................3
TASK 2............................................................................................................................................5
P3 Potential sources of funding available to businesses with benefits and drawbacks .............5
TASK 3............................................................................................................................................6
P4 Business plan for growth with strategic objectives and financial information to scale up a
business-......................................................................................................................................6
TASK 4............................................................................................................................................8
P5 Assessment of succession or exit option of business with their benefits and drawbacks-....8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Growth is a vital to very business for survival and profits. Every business whether small
or large plans to grow. Small businesses strives to become medium, medium enterprises strives
to become big and big enterprises plans to become bigger. For successful growth very business
makes plan and strategies for it. Growth strategies is the framework of plans and tactics which an
organisation makes for the purpose of its growth. Growth strategies are decided by the top people
of management which are further divided into sub-plans, that sub- plans are act as a goal for all
the department (middle and lower level of managing people). With reference to this, the report is
taking a small business enterprise, lily communications, for better understanding and references.
Lily communication is a communication and IT solution company in UK (Bell and Bearden,
2014). The business provides all sort of IT and communication services to other organisations. It
was was established in year 2009 and still continues to grow. This report will cover the
opportunities available with the company for growth, potential sources of funding which this
business is available for, strategic planning framework for growth which includes strategic
objectives and financial information and lastly, exit and succession options which are available
with business.
TASK 1
P1 Key consideration for organisational growth opportunities
The growth opportunities which are available with any business can be determined by
PESTEL analysis. PESTEL analysis is the evaluation of external factors which directly and
indirectly affects the operations of business. All these factors are out of reach of any business,
means they can not exercise any control on them. PESTEL analysis of lily communication is as
follows-
Political- Political factors includes the policies and rules which are formed by the ruling
government of that country. These policies include political stability, corruption, foreign trade
policy, tax policy, trade restrictions and the like. Political factors tells about to what degree the
government exercise control on industries or businesses. As in the case with Lily
communications, the business was established in UK where there is good political stability, the
policies which are made by the government encourages the growth for SME's by supporting
them through delivering them high- quality business support to them. The government also took

an initiatives such as government's business growth service and UK trade & investment which
also proved to have a positive impact on SME's. Apart from it some banking services such as
The British Business Bank's also encourages SME's in their growth by providing easy banking
services to them (Birkin and Clarke, 2017). All these government initiatives and banking
services did help Lily communication to establish themselves successfully. Apart from this, the
exit of Britain from EU had a great impact upon the business working within UK. Brexit brought
confusion among businesses about how they need to operate now, it also put curb in the
migration of people for work. This creates problem for whole business industries, and so also for
lily communications.
Economical- Economic factors include economic growth, exchange rates,interest rates,
inflation rates, disposable income, unemployment rates of an economy. This factor entails that
how an economic condition of a country can affect any business. With regard to lily
communication, the company is establish in UK which is a developed nation and opportunities
for growth is very high. The company grabs great opportunity of telecommunications services
which taken as an essential component for every business their, as all the firms uses information
technology systems in their management. Also after Brexit, the business did face some issues
which resulted into slow profits for them.
Social- Social factors include the trends, perspective, behaviour, career attitudes, safety
emphasis, lifestyles attitudes, cultural barriers, age distribution and so forth in an economy. From
social factors any business can make assumption about the trends and behaviour of people living
into the region. Similarly, lily communications gets up-to-date with the recent technology trends
and innovation running in the market and making them available to their clients. This brought
them to take first advantage for opportunity and win the market.
Technological factors- Technological factors includes technology incentives, level of
innovation, automation, R&D activities, technological change and awareness. This factor tells
about the technological advancements of an economy i.e. is it technological backward or
technologically advanced (Hawkins, 2014). As in case with lily communicates, the company
itself is highly technological because it deals with innovative telecommunication services.
Therefore to gain share in the market it needs to bring new innovation and creation in its
products and services.

Environmental- Environmental factors include weather, climate, environmental policies,
climate change, pressures from NGOs and the like. The promotion of environmentally
sustainable activities are not only limited with large organisation but also to SMEs. SMEs has
also started paying attention to these environmental factors. In fact they are the business who
takes sustainable products as their competitive advantage (Keough, 2015). As in regard with
company, lily communications uses sustainable products and green marketing in their business
operations. They opt for that technology method which causes no or minimal harm to the
environment.
Legal- Legal factors includes discrimination laws, anti trust laws, employment laws,
consumer protection laws, copyright and patent laws, health and safety laws and so forth. All the
business has to run their operations within the stated legislation. As in case with lily
communications, the company follows all the legal rights and obligations very correctly. This
even also helps them in gaining public trust. The company truly works under the legal
framework designed by the government (Lu, 2013).
P2 opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff matrix is a tool from which the company's senior executives, managers and other
strategy planning people forms strategies and plans for future growth. This matrix is invented by
an Russian American Igor Ansoff who was an mathematician and business manager. This matrix
got named after his name. The matrix is divided into 4 strategies i.e. market penetration, product
development, market development and diversification which helps the organisation to grow.
These strategies also have risk associated with them. The Ansoff matrix of lily communication is
as follows-
Market penetration- Market penetration focuses on increasing of sales in its existing
market. Increase in sales volume in existing market can be done through increase in demand for
that product or services offered. An organisation can increase the demand by doing promotions
and advertisements (Lu, 2014). Along with this an organisation can also go for offers and
discounts which can result in increase sales. As in case with lily Communications, the company
can penetrate in market through increase in it sales by doing its advertisements and by offering
discounts to their present clients. Offers and discounts relating advertisements can be done
through digital marketing through email sending and SEO's. The company can also go for a
small advertisement in regional newspaper and so forth.

Product development- It seeks focus at introducing new products in its existing market.
In this strategy the company caters its current market by brings new and innovative product to
them. Introduction of new product can be done through the putting investments in research and
development department of the company (Osiyevskyy, 2013). With reference to Lily
communication, the company opts for this strategy by bring technological advancements into his
product offerings. As a telecommunication company new telecommunication services were
developed by the company to cater his current clients. With the continuous technological
advancement, the clients which receives the services are happy and satisfied that resulted in the
maintenance of market share of company.
Market Development- This focuses on entering into new markets with existing product.
Market development strategy is usually used by most of the businesses. In this the company
grows its market by expanding itself through catering to whole new segments of customer.
Market development can be possible through serving to new markets, expanding regionally or
expanding internationally (Ozanne, Biggs and Kurowski, 2014). With reference to the company,
Lily communication can expand its services to whole UK ( domestic expansion) or it can also go
for expanding itself to the countries near or far to UK ( internal expansion). Expansion is taken
as a good strategy to grow for any business because here the customers are increasing for
business. From expansion the company becomes known to vast population which indirectly or
directly increases both the sales and goodwill for the company.
Diversification- Diversification focuses on catering totally new markets by the
introduction of new products. In this strategy both the product and the targeting customers are
new for the business. This strategy involves high degree of risk. But if a company choose this
strategy, they need to do a lot research work. There are two types of diversities, namely related
diversification ( where some synergies are present between the new and existing market) and
unrelated market (where there are no synergies available between existing and new markets). As
in case with Lily communication, the company can cater to the new markets- domestic or
internal, by offering the telecommunication services which are uses by the people of targeted
market.

TASK 2
P3 Potential sources of funding available to businesses with benefits and drawbacks
There are many sources are available for businesses for raising funds, and they are-
Owner's Investment- Owner's investment is also known as bootstrapping. In this the owner puts
his own money and savings into the business capital (Piro, 2016). Apart from cash, it includes
cash at bank and less finances liquid assets such as stock holdings or retirement accounts.
Investment from partners is also comes under owners investment.
Merits- Using own finances relax a person from burden from repayment schedules or
bank mortgage or collaterals. The owner also not need to travel to places for convening and
borrowing of money. It is also considered as fastest and easy way for funding.
Demerits- A person's pocket gets empty if he puts all his finances and saving into his
business. Putting all the savings means gambling all your personal savings. The same holds for
business partners also. If a business does not work as planned then the money invested can get
into a big risk. Personal finances also includes funds provided by parents and family. They might
give the invest to their child business as a gift which is usually very common. But any failure
into the business might develops an ill- feeling between families which can damage the relations.
Funds from investors and banks- There are people who have wealth and are willing to take
risk by investing into other business whether large or small. Such investors are called angel
investors. Angel investors are considered as great acumen for business as they have very keen
knowledge about the operations and investments. Similarly, SMEs can also raise money from
banks by taking loans and to avail them is very much easily (Sharifi, 2014). It is quite easy to
avail loan rather then to go out for reaching to potential investors.
Merits- It helps the business by providing them funds. Angel investors also helps the
business in making or suggesting decisions which are good for business.
Demerits- Locating and convincing these angel investors are very hard. The investor will
put his money only when he finds your business idea very appealing. Whereas taking loans can
charge business with high interest which can be a costly affair for business.

TASK 3
P4 Business plan for growth with strategic objectives and financial information to scale up a
business
A written document which is made by owner of business to provide financial background and
information regarding sales and marketing strategies is said to be a business plan (Shi, 2012).
Many other factors are included in a business plan such as history of business, vision and
mission statement of business , its objectives, financial statements and some more components.
In context of Lily Communication business plan is as followed-
Company Overview: Lily communication was setup in 2009. It helps with
communication and IT solutions to more than 2500 businesses throughout UK. They offer a
number of award winning products such as phone-systems, calls & line packages, IT services,
business mobiles, energy etc (Siedentop, Fina and Krehl, 2016). It started as a company of
outsourced communication which provided maintenance resellers of telecom services. In 2012 it
formed a partnership with Ericsson-LG. In 2019 it won Best Companies 2 Star Accreditation and
exceeded a turnover of 7 million pounds.
Vision and mission statement: Mission statement of Lily communication is to enhance
its sales and revenue. Vision of Lily communication is to provide customers with personalised
solution to every communication problems they are facing.
Strategic Objectives: In order to form objective and goals senior level executives in Lily
communication uses SMART tactic. This SMART tactic stands for Specific, Measurable,
Achievable, Reliable and Time Bound. The objectives formulated from these are mentioned
below:
 Increase innovations and come up with new products to attract more customers. Attainment or 30% increased revenue and sales in next two years.
Product and Services: Lily Communication provide its customers with a huge range of
products including communication problems related to voice, data, mobile, IT (Cybersecurity,
Dark Web ID, Office 365), utilities (Business Energy) etc. Company keeps on innovating and
launching new solutions to maintain its hold in market.
Situational Analysis: It is important for the managers of Lily communications to have to
have all required information regarding market conditions and capabilities of business systems.

They analyse strengths in order to take best use of market opportunities so that they can enhance
sales volume , profitability etc. and expand its business.
Strengths:
 Lily Communications offer services to its customers which are free, tailor made and no
obligation quote from their advisors.
 The loyal customer base which Lily Communications is also one of its strengths .
Opportunities:
 Lily communication has a great opportunity to expand its business. It is now running as a
small scale business (Sousa and Pinho, 2015).
 With growing use of information technology in every business, Lily communication can
attain the first mover advantage in such case.
Financial information for scaling up of business: Cash flow statement refers to a
statement which mentions information about cash flow in investment , finances and operations.
Cash flow statement of Lily Communications is mentioned below:
Particulars Jan Feb Mar Apr June Total
Cash
Inflow
Investment 6000 6000
Credit Sales 2000 2200 3500 3000 2000 12700
Total
Inflow 8000 2200 3500 3000 2000 18700
Cash
outflow
Fixed:
Hardware 3500 2000 2500 1500 2800 12300
Variable:
Direct
Material 450 150 350 250 180 1380
Total
Outflow 3950 2150 2850 1750 2980 13680

Net cash
flow 4050 50 650 1250 -980 5020
Opening
balance 0 4050 4100 4750 6000 5020
Closing
balance 4050 4100 4750 6000 5020 10040
TASK 4
P5 Assessment of succession or exit option of business with their benefits and drawbacks-
Owners of small business units initiate a new venture, attaining money from different
sources and thus generating profits. Before venturing into market or while existing in market it is
important for business to analyse all the ways in which they can either exit business or succeed it
as per performance of company in its marketplace (Stanilov, 2013). In context of Lily
Communication company chooses exit actions this is because of rising competitors and huge
investment required in order to adopt any new technology.
Exit options for small businesses: Different types of methods for exit are mentioned below:
Liquidation: Liquidation is a process which is used to shut down a business. In this
process executives of company sell all asset of business or auction it in order to receive money
which can be used to pay off debts. Lily Communications can use this method as it is fit for
small businesses. Reason for this is that all functions of small business depends on value of
assets and goodwill of company is derived from sell time of its assets. Benefits- Benefits of liquidation are that it is less time consuming process. Its helps
winding up a business at a fast rate. Sale of asset might take sometime in other methods
which is the final way to determine that firm is shut down.
 Drawback- Major drawback of using this method is that it does not generate any gain.
Many times it is not even enough to pay of its debt. Price of fixed assets such as land,
building and machinery is evaluated very low due to regular depreciation on
them (Wu, 2015).

Sale of business to an employee or manager: There is another option to exit industry i.e.,
through selling business to people already working in it. Executives and managers are people to
whom company is sold. The benefits and drawbacks of using this method are mentioned below- Benefits- In this process business goes to someone who already have knowledge about
company and how business is conducted in it. This also generates good competitive
advantage.
 Drawback- One cannot confirm that whether staff are weak to run business or not. It is
not necessary that they have qualification for it. Also, it is not required that they have
such kind of huge amount to overtake business.
From above specified tools liquidation will be best option which can be used by its
executives in order to exit from business. Using this tool they can sell all the assets and stock of
company . The amount recovered from it will be used to pay off debts. Other than this all those
who have earlier invested in business also get back their fund (Williamson and Parolin, 2013).
CONCLUSION
From the report presented above, it can be summarized that the growth of business is very
much important but also its proper and strategic planning is way more important. There are
various ways in which a business can evaluate its growth opportunities. This report has taken
PESTEL for analysing future growth of Lily Communication. Similarly for growth purpose Lily
communication (SMEs) needs finances which it can avail from various sources example owners
funds, angel investors, bank loans etc. Apart from this the report also conclude ways in which a
business can expand also the report provides an growth planning framework.

REFERENCES
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