PLANNING FOR GROWTH.

URGENT

PLANNING FOR
GROWTH
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................3
P4 Build a business plan for growth that includes financial information and strategic
objectives for scaling up a business............................................................................................3
TASK 3............................................................................................................................................9
P5 Options for exit or succession for organisation along with their benefits and drawbacks.. . .9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
2

INTRODUCTION
Organisations will sustain in long run only when they have a proper growth plan. They
strive for growth and can do considerable efforts to achieve that (Hu, 2016). Plans are made to
achieve successive profits over quarters and task which are set for each quarter are monitored in
most of the organisations. Growth is defined as progress in the business activities by both
organic or inorganic way. For this report the chosen organisation is Airdri Ltd., which was
founded in 1974 by two engineers in Oxfordshire, UK. They found that there was a potential
market for air dryers and purifiers for wash room and took it as an opportunity to grab the market
share. They use technology to innovate their products and meet the market expectations. This
report consists of key considerations for evaluating growth opportunities, potential sources of
funding and financial information and strategic objectives for scaling up the business. It also
include business plan which gives the financial information about the company.
TASK 1
(Covered in booklet)
TASK 2
P4 Build a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Business plan is define as a strategy build and develop for business that is how business
is going to function and how it will attain success (Hyde and Fletcher, 2010). The business plan
of Airdri is as follow-
Stage 1 – Concept of Business
Executive Summary Airdri is a manufacturer and designer of
equipments use in wash room that provides good
quality products at affordable prices to
customers. The plan determines the operational
strategy along with USP that will help in
expansion and growth of the business.
Products and Services The company is known as manufacturer and
designer of hand dryers, air purifiers and wash
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room equipments in UK market.
Mission and Vision The mission of Airdri is to manufacturer and
design good quality equipments within the
budget. Also the vision is to expand its business
and to become preferable brand in wash room
equipments.
Strategic Objective The primary objective of the company is to
expand its business with the existing products in
US and South Africa within 3 years in order to
increase its profit volume with 35% .
Operational Strategy The main operational strategy of business is to
offer good quality products at affordable prices
that is to provide value and satisfaction to
customers.
Unique Selling Proposition The USP of the company is to use latest
technology and tools with current market trends
at affordable prices.
Stage 2 – Industry/Market Analysis
The management of company is conducting market study in order to get the accurate
information about the market conditions and so come to know that what strategic techniques it
should use to capture the market (Huber, 2010). The company conducted SWOT analysis-
 Strengths: The company has its own manufacturing units and design products according
to current market trends and customer taste and preferences with latest technology thus
help in attracting new customers.
 Weaknesses: The company is not well known in market as it has present in one market
due to which it has not able to create its image as brand as there are so many competitors
in market established at international level. Hence, company need to create awareness in
market about its existence.
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 Opportunities: The company is dealing in essential products with good quality at
affordable price which will lead into great customer experience and will help in customer
retention.
 Threats: Company has major threat from the competitors like Dyson, turboforce, etc as
they have established their brand name in the market and providing good quality products
and services to its customers.
Stage 3 – Financial Plan
Month Pre-Start month 1 month 2 month 3 month 4
INCOME
Cash Sales 18,000.00 20,070.00 22,378.05 24,951.53
Credit Sales 8,500.00 9,477.50 10,567.41 11,782.66
Business Loans 1,00,000.00
Income from other sources 5,500.00 6,132.50 6,837.74 7,624.08
Opening balance 0.00
Total
£1,32,000.0
0
£35,680.0
0 £39,783.20 £44,358.27
Cash Purchases 10,500.00 9,500.00 9,900.00 9,300.00
Stock 4,700.00 4,700.00 4,700.00 4,700.00
Drawings 1,300.00 1,450.00 1,990.00 850.00
Wages/Sub Con. 6,000.00 6,500.00 6,800.00 6,900.00
Rent 6,500.00 6,500.00 6,500.00 7,000.00
Rates 850.00 870.00 920.00 910.00
Light/Heat/Power 1,050.00 1,050.00 1,050.00 1,050.00
Telephone / Mobile / Broadband 250.00 250.00 250.00 300.00
Stationery & Post 250.00 250.00 250.00 300.00
Insurance PL 3,500.00
5

Advertising & Marketing 750.00 750.00 750.00 800.00
Repairs/Renewable 1,120.00 1,120.00 1,120.00 1,120.00
Motor & Travel 3,700.00 3,700.00 3,700.00 4,000.00
Consumables- 1,100.00 1,265.00 1,454.75 1,672.96
Accountancy 4,500.00 4,500.00 4,500.00 4,500.00
Loan Repayments 4,000.00 4,000.00 4,000.00 4,000.00
Miscellaneous 90.00 100.00 80.00 120.00
Tools & Equipment (Capital Items) 95,000.00
Total
£1,41,660.0
0
£46,505.0
0 £51,464.75 £47,522.96
Surplus/Deficit £0.00 -£9,660.00
-
£10,825.0
0
-
£11,681.55 -£3,164.69
Balance @ Start £0.00 £0.00
-
£9,660.00
-
£20,485.00
-
£32,166.55
Balance @ End £0.00 -£9,660.00
-
£20,485.0
0
-
£32,166.55
-
£35,331.24
month 5 month 6 month 7 month 8 month 9
month
10 month 11 month 12 Total
27,820.9
5
31,020.3
6
34,587.7
0
38,565.2
9 43,000.30
47,945.3
3 53,459.04 59,606.83
4,21,405.3
8
13,137.6
7
14,648.5
0
16,333.0
8
18,211.3
9 20,305.70
22,640.8
5 25,244.55 28,147.67
1,98,996.9
8
1,00,000.0
6

0
8,500.85 9,478.44
10,568.4
6
11,783.8
4 13,138.98
14,649.9
6 16,334.71 18,213.20
1,28,762.7
5
0.00
0.00
£49,459.
47
£55,147.
31
£61,489.
25
£68,560.
51
£76,444.9
7
£85,236.
14 £95,038.30
£1,05,967.
70
£8,49,165.
12
8,300.00 47,500.00
4,700.00 23,500.00
1,750.00 7,340.00
7,200.00 7,100.00 7,900.00 7,800.00 7,450.00 8,300.00 7,150.00 8,200.00 87,300.00
7,000.00 7,000.00 7,500.00 7,500.00 7,500.00 8,000.00 8,000.00 8,000.00 87,000.00
820.00 800.00 800.00 800.00 950.00 950.00 1,000.00 1,150.00 10,820.00
1,250.00 1,150.00 1,150.00 1,240.00 1,450.00 1,450.00 1,800.00 1,900.00 15,590.00
300.00 450.00 450.00 300.00 250.00 200.00 400.00 200.00 3,600.00
300.00 300.00 350.00 350.00 350.00 400.00 400.00 400.00 3,900.00
3,500.00 3,500.00 10,500.00
800.00 800.00 950.00 950.00 950.00 1,000.00 1,000.00 1,000.00 10,500.00
1,120.00 1,120.00 1,120.00 1,120.00 1,120.00 1,200.00 1,200.00 1,200.00 13,680.00
4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 47,100.00
1,923.91 2,212.49 2,544.37 2,926.02 3,364.93 3,869.66 4,450.11 5,117.63 31,901.83
4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 54,000.00
4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 48,000.00
140.00 200.00 120.00 150.00 190.00 150.00 150.00 200.00 1,690.00
10,000.0
0
1,05,000.0
0
£48,103.
91
£33,632.
49
£48,884.
37
£35,636.
02
£36,074.9
3
£41,519.
66 £38,050.11 £39,867.63
£6,08,921.
83
7

£1,355.5
6
£21,514.
81
£12,604.
88
£32,924.
49
£40,370.0
5
£43,716.
48 £56,988.18 £66,100.07
£2,40,243.
28
-
£35,331.
24
-
£33,975.
68
-
£12,460.
87 £144.01
£33,068.5
0
£73,438.
55
£1,17,155.
03
£1,74,143.
21
-
£33,975.
68
-
£12,460.
87 £144.01
£33,068.
50
£73,438.5
5
£1,17,15
5.03
£1,74,143.
21
£2,40,243.
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Client:
Business:
Cashflow Forecast
Date:
Financial Analysis
Profit and Loss
Account
Sales including
Debtors £6,20,402.36
Sales £6,20,402.36
Variable Costs £71,000.00 Direct Costs
Fixed Costs £5,30,581.83
Initial Stock &
Material £-
Drawings £7,340.00 Add Purchases £71,000.00
Less Year End Stock £- Variable Costs
Variable Costs as a 11 4/9 Sub Contract Labour £-
percentage of Sales
Contribution
Margin 89 Gross Profit £5,49,402.36
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Break Even Sales
Value £5,99,149.63 Overheads:
Survival Sales
Volume £6,07,438.19 Wages/Sub Con. £87,300.00
Rent & Rates £97,820.00
Light/Heat/Power £15,590.00
Telephone £3,600.00
Stationery £3,900.00
Insurance £10,500.00
Advertising £10,500.00
Repairs/Renewals £13,680.00
Motor & Travel £47,100.00
Consumables £31,901.83
Accountancy/Legal £54,000.00
Loan Repayments £48,000.00
Bank Charges £1,690.00
Depreciation =
Other Expenses £1,05,000.00
Total Overheads £5,30,581.83 Fixed Costs
Pre - Tax Net Profit £18,820.53
Add Non Trading
income £-
New Business
Support £2,28,762.75
Less Personal
Drawings £7,340.00
Profit Surplus £2,40,243.28
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Stage 4- Monitoring and Controlling
This is the last step of the business plan which focuses on the proper implementation of
the strategies in order to achieve the desire results (Allmendinger and Haughton, 2010). The
monitoring and controlling regulates the performance of employees and activities within
company and take corrective actions in case of wrong implementation of operations.
TASK 3
P5 Options for exit or succession for organisation along with their benefits and drawbacks.
A company faces different situations in the market and in order to survive they need to
take actions according to the present conditions of the market. Exiting market refers as taking
back step as the strategies and decisions are not working for them and they are facing financial
losses and poor profit retention. In such situations company decides to exit the market place that
is to close the company. Where as in the case of Airdri Ltd it will be suitable for them to extent
their market and focus on succession of business. In order to do so, company has various options
available which are as follow-
Joint Venture
A joint venture is a business agreement between two or more existing companies in order
to combine its resources to produce good quality products or services (Hall, 2011).
Benefits – The primary objective of joint venture is to perform activities together which
helps in building good relationship with other partners. This joint venture support company in
minimizing wastage, proper use of resources with relatively low risk and maximise the revenue.
Drawbacks – One of the major disadvantage of joint venture is that every decision is take
with the due concern of other members that is company can not act as individual and more over
they may face increase in liabilities.
Merger
Merger refers to the strategy in which two or more companies combine under legal
agreement and operate as a single business entity.
Benefits - Such mergers help company in extending its product line with the market thus
lead to market extension as with large range of product line they can target more number of
customers. As the tax and financial liabilities get divided and they gain the competitive
advantage over other competitors.
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Drawbacks - As due to merger the expenses within company will increase due to which
the prices of products will increase and reduce the level of competition in the market. This will
lead into reduction of job requirements with the company and increase the level of
unemployment.
Conclusion
From the above study it is preferable for Airdri Ltd to adopt the merger strategy as they
has less market presences and popularity in marketplace as compared to its competitors. This
strategy will help in increasing the brand awareness among the audience and thus lead to
increase in sales and profit volume.
CONCLUSION
The growth plan is important to any organisation as businesses in order to judge its
performance should always compare its result with the trends of an industry. They need to set
objectives of each quarter and evaluate performance based on that. Companies sustain in the
market when they have a plan as it gives the direction to the companies. In this report the
company uses PESTEL analysis and porters generic forces to understand the external
environment of firm. They make a plan to cater into new market and the strategies are formed for
that. It is important that they strategies its operations keeping them in line with competitors and
do risk analysis as the expansion involves cost and it also requires efforts from organisations.
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REFERENCES
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planning involving growth load models by means of genetic algorithm. Archives of
Electrical Engineering. 67(3). pp.667-682.
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beyond growth.
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(1984). Taylor & Francis.
Birkin, M., Clarke, G. and Clarke, M., 2017. Retail location planning in an era of multi-channel
growth. Routledge.
Roy, A., 2011. Strategic positioning and capacity utilization: Factors in planning for profitable
growth in banking. Journal of Performance Management. 23(3). p.23.
Long, Y. and et.al., 2011. Urban growth control planning support system: approach,
implementation and application. City Planning Review. 3. pp.36-62.
Walker, P.A. and Hurley, P.T., 2011. Planning paradise: Politics and visioning of land use in
Oregon. University of Arizona Press.
King, K. and Palmer, R., 2010. Planning for technical and vocational skills development. Paris:
UNESCO, International Institute for Educational Planning.
Hyde, P. and Fletcher, D., 2010. Planning rail grinding using crack growth predictions. Journal
of Mechanical Systems for Transportation and Logistics. 3(1). pp.216-225.
Huber, H., 2010. Planning for balanced growth in Chinese air traffic: A case for statistical
mechanics. Journal of Air Transport Management. 16(4). pp.178-184.
Allmendinger, P. and Haughton, G., 2010. Spatial planning, devolution, and new planning
spaces. Environment and Planning C: Government and Policy. 28(5). pp.803-818.
Hall, J.B., 2011, January. Reliability growth planning for discrete-use systems. In 2011
Proceedings-Annual Reliability and Maintainability Symposium. (pp. 1-6). IEEE.
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