Planning for Growth: Evaluating Opportunities, Ansoff's Matrix, Funding Sources, and Business Plan

This report discusses key considerations for evaluating growth opportunities, assesses growth opportunities using Ansoff's growth vector matrix, examines probable sources of funds and their benefits and limitations, and explores the development of a business plan for Stone Builder, a small retail firm. The report also covers exit or succession options for small businesses.

Planning
for
Growth
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: key considerations for evaluating growth opportunities.......................................................3
P2. Assess growth opportunities by applying Ansoff's growth vector matrix.............................5
P3. Assess probable sources of funds their benefits and limitations...........................................7
P4 Development of business plan................................................................................................8
P5 Assess exit or succession options for a small business as well as their benefits and
limitations..................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
Planning for growth refers to the strategic business activity that enables business owners
in order to make better plan or tack appropriate of growth within the revenue of goods and
services. On the other side it allows business to allocate their sufficient resources through
adoption of several changes to gain competitive advantages in an effective manner (Beatley,
2014). There are several forms of making plan in order to attain future growth of business. Thus,
it is important for every firm to follow effective plan or strategies to make business successful
within competitive scenario. This report is based on Stone Builder which is one of the best small
retail firm and deals with so many people in regards of “Replacement roof to listed building” is
called government contract in which firm has been developed £80,000 bid. Furthermore, this
report includes Ansoff's matrix, succession or exit plan for small business along with sources of
funding will get covered.
TASK 1
P1: key considerations for evaluating growth opportunities
Medium and small businesses have ample number of possibilities to enhance profit of
business in order to attain targeted sales and revenue of particular services. Thus, it is essential
for business to have large number of growth and opportunities to achieve competitive analysis
(Denton, Forsyth and MacLennan, 2017). In order to understand for this PEST and Porter's
generic strategies model considered as helpful aspect for Stone Builder so that they can beat
their competitors, those are as follows:
Competitive advantage: Within the competitive scenario there are large number of firms
thus, it is essential for top management to design different types of systems as well as structure to
form best ways at marketplace. Herein, executive of Stone Builders needed to use large number
of strategies by which they can construct edge over competitive firms by which they can attract
large number of customers. Porter's generic model uses by respective firm to gain competitive
scenario, those are as follows:
Cost Leadership: This strategy aids firm to develop their position in marketplace by
rendering services at minimum cost (Grover, Bokalo and Greenway, 2014). The Stone Builders
can opt for such methods or tricks through which market analysis can be conducted and target
audiences can be acknowledged. Here, prices offered will be low but quality as per desired
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standards for attracting more number of individuals toward their services. This strategy aims at
enhancing market shares.
Differentiation Leadership: The services given by Stone Builders cannot be compared
with what other delivers their customers. By making use of such kind of strategies, firm can have
innovation in services rendered (Hollenbeck, Noe and Gerhart, 2018). Like if Stone Builders
provides their customers with creative roof then it will create relevant impact.
Cost Focus: Here, emphasis is laid on niche market where they render services at low
prices. Through assistance of this strategy Stone Builders can have market analysis and identify
needs of their consumers. Like, waste will be minimised if Stone Builders renders services as per
preferences of their customers.
Differentiation Focus: In this context, firms emphasise on target group and services are
designed as per their needs. Stone Builders have to understand what is expected by their
customers at particular instance. By having differentiation, it will become easy to sustain within
market by having competitive edge (Levy, 2016).
Competitive Advantage with Opportunities for Growth
With respect to growth opportunities, Stone Builders have used external environment
analysis, i.e. Pestle. It will assist in understanding different factors which may hamper their
growth within the market. This is mentioned beneath:
Political factors: Stone Builders need to enhance their operations in market of Germany,
for this it is crucial to acknowledge their rules, policies, regulations and various other elements
which may affect their operations. By doing this, firm can identify further opportunities while
rendering their services in new market.
Economical factors: It is important for Stone Builders to evaluate the behaviour of
people in terms of whether they will make investments or not so that relevant outcome can be
achieved (Lewis, 2013). It will enable them to develop strategies as per economic rates. By
evaluating customers spending efficiency, creativity and other aspects Stone Builders can
captivate them by accomplishing their requirements.
Social factors: It involves attitude, belief and values of people along with elements like
age distribution, health, growth, etc. For expanding operations, Stone Builders needs to identify
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buying behaviour of people as it will lead them to have opportunity whether to deliver services in
this market or not. But with creativity in their services firm can attain their objectives.
Technological factors: Stone Builders can make use of technology for making people
aware about what services they are delivering and by uploading pictures of work done by them
may lead to captivate more of customers towards their services in a new market. Furthermore,
digital marketing can be utilised by them (MacLeod, 2013). This will minimise time required in
marketing that can be utilised in other operations. It will enable to enhance their profit margin.
Environmental Factors: This is related with working surroundings like pollution,
climate and weather. Stone Builders need to ensure that while delivering their services they do
not create a negative impact on environment. For an instance, if waste is eliminated then it has to
be decomposed in an appropriate manner so that carbon footprints can be eliminated. This will
have a affirmative impact on their goodwill.
Legal Factors: This comprises of laws to which firm have to adhere to while delivering
their services in international market. They are employment law, consumer law, health & safety
and various others (Mason, 2015). Stone Builders must abide to German laws so that they can
furnish their functions as per required standards.
It will aid Stone Builders to carry out their operations within a effective and efficient
manner through which it will be easy to attain their goals as well as objectives.
P2. Assess growth opportunities by applying Ansoff's growth vector matrix.
The matrix is liable for furnishing effectual guidelines to management as well as executive
when designing strategies are being formulated for growth as well as expansion (Mitchelmore
and Rowley, 2013). This matrix was proposed by H. Igor Ansoff. The Stone Builder has opted
for this matrix for development of their strategies which has been illustrated beneath:
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(Source: Ansoff Matrix, 2019)
Market Penetration: This strategy demonstrate that when firm grows by taking small
risks then to attain amplified results they must deliver their services in existing place. In context
of Stone Builder it is important to identify new customers as it will lead them amplify their
profitability (Moseley, 2013). Furthermore, they can carry out promotional activities for bringing
in awareness about their products in market.
Market Development: It implies conditions where firm opt for possessing market
segments in geographical areas. With respect to this, organisation will make use of existent
offerings with minimised development (Porter's Generic Strategies, 2018). In context of Stone
Builder, they have to make sure that unique product technologies are being used through which
output attained by them can be amplified. Furthermore, they can deliver their services within
new market of Germany through existent products.
Product Development: This implies strategy where firm can bring new products in same
market for growth and expansion. It comprises of extension of product range which is available
with existent business market (Pred, 2017). Management of Stone Builder have to make
appropriate investments in R&D for furnishing new products. This is only attainable when firm
can identify market requirements by acquisition of new technologies and methods.
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Illustration 1: Ansoff Matrix

Diversification: It implies strategy where firm can enhance business in new market by
bringing in new services. This is regarded as complicated as products as well as services are new
which will lead to high possibilities that success may not be attained (Ward, 2016). For this,
Stone Builder has to furnish adequate research in context of market, products, needs of
customers along with other aspects.
Therefore, Stone Builder need to utilise market development strategies for expanding
their business in other markets by opting for existent products along with services. This will lead
organisation to attain higher profits as this involves less risks.
P3. Assess probable sources of funds their benefits and limitations.
For attainment of growth, firms are dependent on wide range of sources for collection of
funds. Thus, it is important to make sure that individuals identify all the available options they
have within peculiar time interval. Sources of fund refer to broad options that are available with
business entities which enable them to render their services as per desired standards by
accomplishment of their financial requirements (Beatley, 2014). When firm, look towards
growth then it becomes mandatory to predict future needs in context of both benefits as well as
loss which may occur. Furthermore, a feasible level of liquidity in terms of cash flow is
maintained. Resources which can be utilised by Stone Builder are mentioned below:
Bank loan: This kind of a financing is very common form where loan can be attained
from financial institutes. Medium-size banks provide loans in the form of overdraft which can be
availed on current account. Merit: This is lithe in nature as people do not go via any kind of hassle or restrictions
from bank. It will allow Stone Builder to modify amount which is being borrowed in
peculiar limits.
 Demerit: This option is not appropriate when capital needed is large and flexibility
becomes infliction in long period of time which will lead to hinder growth of firm.
Crowdfunding: This implies utilisation of capital from unlike individuals for making
finance in new business ventures (Denton, Forsyth and MacLennan, 2017). Generally, it involves
funding project via assistance which are made from distinct groups instead of substantial sums
from investors.
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 Merits: It is one of the fastest way through which funds can be raised without any upfront
cost. Along with this guidance from experts can also be taken. Demerits: Interest has to be built up as all the products may not apply within this
platform (Grover, Bokalo and Greenway, 2014). In case, if product fails then it will lead
to creation of adverse influence on firm.
Venture finance: It implies private equity that involves seed funding which is rendered
by distinct investors if they think that business has potential for growth. Merit: This will lead to have surety that new level of expertise will lead business to have
enhanced performance in terms of decision making as well as organisational functions. Demerit: It completely depend on assumptions made by lender but this does not mean
that project may not fail.
Stone Builder deals within retail sector in markets of UK and for expanding their services
it is important for them to have adequate resources or funds which will enable them to deliver
their services as per desired standards (Hollenbeck, Noe and Gerhart, 2018). For this, they can
make use of crowdfunding as it is one of the fastest way by which they can finance without any
additional cost.
P4 Development of business plan
The written document that is developed by management team of firm is referred to as
business plan. This is formulated for developing and growth of business plan in an efficacious
manner that will render appropriate guidance which will improvise the performance of each
individual within a firm (Levy, 2016). Stone Builder have developed effective business plan
which involves mission, vision along with their objectives that aids within carrying out
operations. Major benefit that is laid by this is that it creates a strong impact on interest of their
investors. Business plan of Stone Builder is mentioned beneath:
Executive summary: Stone Builder is UK based firm that renders their customers with
wide range options for Replacement roof to listed building by making bids. They can enhance
their services in other parts of world so that they can grow as well as become a market leader.
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Vision: Stone Builder aims to become a firm of choice for their customers and provide
them with synchronised interactive solutions as this creates a relevant impact on services
furnished by them.
Mission: Stone Builder provides their customers with notch-quality, creative and
synchronised systems through which lifelong relations can be developed by accomplishment of
their requirements. Furthermore, they possess a well qualified team who works in a flow with
mission and vision statements of organisation.
Values: Management of Stone Builder trust in having reliability, integrity along with
transparency in activities that are being carried out by them. They furnish quality services and
ensure that they deal with their customers and employees in a transparent way.
SMART Objectives: “To enhance sales performance of Stone Builder across the world by
near about 15% within next one year by carrying marketing via social media platform”.
STP: This denotes segmentation, targeting and positioning that is liable for rendering
support to business while dividing their probable consumers to distinct groups that will lead them
to attain their objectives and profitability in an effective manner (Lewis, 2013).
Segmentation: This is carried out in regards to demographics like lifestyle, pinions,
consciousness and age.
Targeting: Within this aspect, Stone Builder targets peculiar individuals who have
interest within services that are delivered by firm.
Positioning: Stone Builder can make use of market development strategies for
enhancement of customer base across the world.
Financial information: They are mandatory assets for each and every business as it
enables them to render their operations in market as per desired standards (MacLeod, 2013).
With respect to Stone Builder, firm needs to have fund for carrying out process of expansion in
different nations. They have around £25000 funds and to enhance their operations they need to
have approximately £200000 amount for carrying out process of expansion. In this context, they
need to raise their funds by going for bank loans as it can be easily taken and is one of the most
secured ways. This will enable them to render their services outside UK in an trenchant way.
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Situational Analysis: This can be done by making use of SWOT analysis as it will enable
to analyse different aspects. It is shown below:
STRENGTHS WEAKNESSES
 They have developed a strong working
culture with their customers.
 Stone Builder have a strong customer
base within market of UK.
 The workforce possessed by them is
well-qualified and trained who can
understand different perspectives
related with project (Mason, 2015).
 Declined product demand will lead
them to miss the opportunities they
have.
 Funds are not managed in a relevant
way.
 Challenges and situations that occur in
day to day operations are not handled
by them in effective way.
OPPORTUNITIES THREATS
 They can opt for digital marketing for
expanding operations carried out by
them.
 As per trends prevailing within market,
they can modify ways in which services
are delivered by them.
 Core competencies will lead them to
have success even when they bring in
identical products within the market.
 Changes within regulations or
government policies may hinder their
activities (Mitchelmore and Rowley,
2013).
 Competitors may use evolving
technologies like robots which can be a
huge threat to them.
Formulation of budget: The budget for Stone Builder is developed which is mentioned
below:
The pre-launch cash budget for around six months has been mentioned beneath:
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Post launch cash budget
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In context of statements which are mentioned above in terms of cash flow, this has been
identified that Stone Builder is paying their taxes each year as well as in hand cash value is also
improvising.
P5 Assess exit or succession options for a small business as well as their benefits and limitations.
In case if firm is facing some challenges or problems while delivering their services then
they have to dissolve or close operations carried out by them in the market. Along with this, they
have a chance to merge other successful firms (Moseley, 2013). Stone Builder can go through
distinct issues associated with behaviour, quality or any other aspect. Thus, it becomes crucial
for them to identify the succession that will enable them to sustain in marketplace for longer time
duration. The substitute which they can opt for are illustrated below:
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Joint Venture: This denotes a condition where two firm aggregates their resources for
attaining peculiar work that require some rules, legal laws and regulations. The Stone Builder has
to option to share resources possessed by them with other firms to achieve their goals and
objectives within stipulated time frame (Pred, 2017).
Benefits: These are illustrated beneath:
 The firms who are sharing resources will also be involved within profits and risks that are
associated with that particular project.
 Both the firms will have a probability to possess expertise along with new capabilities.
Drawback: They are as:
 This option will be costly for small firms.
 It becomes difficult to develop effective relation between distinct partners and instead of
finding a solution to problems, new may arise (Ward, 2016).
Merger: This denotes a condition where two existent firms abide to identical legal
documentations. It enables firm to acquire peculiar profits as well as can enhance their business
in marketplace. The Stone Builder firm can merge with other similar firm for gaining a
competitive vantage as well as profits.
Benefits: These are mentioned beneath:
 Market shares and goodwill of firm will be enhanced by having appropriate assistance by
having a merger.
 Functions along with operations of firm will be conducted at huge levels which will
amplify productivity and profitability (Beatley, 2014).
Drawback: They are:
 When firms may merge then many people will lose their job like it will not be feasible for
a firm to have two leaders as this may lead to conflicts.
 Productivity of employees might decline in case if large firm is merged with a small
organisation.
Stone Builder has chosen for utilising merger succession. The reason behind this is that, it
is an apt method through which objectives as well as goals of firm can be attained. Along with
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this, it will enable them to render their services at global level (Denton, Forsyth and MacLennan,
2017).
CONCLUSION
From above it can be concluded that, business can have adequate success and growth in
market when they formulate appropriate plans and work accordingly. To ensure this, models
such as pestle and porter’s generic model can be utilised for analysing market in which they are
delivering their services along with competitors within. For this they can formulate strategies and
accordingly decisions can be made. Appropriate funds are required to carry the operations related
with expansion and marketing plan has to be developed. Furthermore, exit and succession
options can be chosen by organisation as per problems that are encountered by organisation.
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REFERENCES
Books and Journals
Beatley, T., 2014. Habitat conservation planning: endangered species and urban growth.
University of Texas Press.
Denton, G., Forsyth, M. and MacLennan, M., 2017. Economic planning and policies in Britain,
France and Germany. Routledge.
Grover, B. E., Bokalo, M. and Greenway, K. J., 2014. White spruce understory protection: from
planning to growth and yield. The Forestry Chronicle. 90(1). pp.35-43.
Hollenbeck, J. R., Noe, R. A. and Gerhart, B. A., 2018. Human resource management: Gaining
a competitive advantage. McGraw-Hill Education.
Levy, J. M., 2016. Contemporary urban planning. Taylor & Francis.
Lewis, W. A., 2013. Theory of economic growth. Routledge.
MacLeod, G., 2013. New urbanism/smart growth in the Scottish Highlands: Mobile policies and
post-politics in local development planning. Urban Studies. 50(11). pp.2196-2221.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Mitchelmore, S. and Rowley, J., 2013. Growth and planning strategies within women-led SMEs.
Management Decision. 51(1). pp.83-96.
Moseley, M. J., 2013. Growth Centres in Spatial Planning: Pergamon Urban and Regional
Planning. Elsevier.
Pred, A., 2017. City-systems in advanced economies: past growth, present processes and future
development options. Routledge.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Online
Porter's Generic Strategies. 2018. [Online]. Available through:
<https://www.linkedin.com/pulse/porters-generic-strategies-competitive-advantage-
hsint-hsint-sanda>.
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