P3. Assessment of potential sources of funding

PLNANNING
FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1. Important considerations for analysing growth opportunities..........................................3
P2. Evaluation of opportunities for growth. ..........................................................................6
TASK2.............................................................................................................................................7
P3. Assessment of potential sources of funding.....................................................................7
TASK3.............................................................................................................................................9
P4. Design a business plan for the growth.............................................................................9
TASK4...........................................................................................................................................12
P5. Assessment of exit or succession options for the company...........................................12
CONCLUSION..............................................................................................................................13
REFERENCE.................................................................................................................................14

INTRODUCTION
Planning is a very crucial concept because every business is required to set the definite
steps for being successful in the present business world. The business which has reached at the
level of success in growth and profitability will regularly concentrate on reviewing and
monitoring the business plan in order to ensure that the plan is able to meet the business
requirements effectively and efficiently (Wynn, 2017). The company which is to be considered
for this report is Vectair Holdings which has started its business from the year 1989 in UK and
deals in providing technological innovator and supplier of air care and hygiene products. This
report will concentrate on analysing the important considerations which must be considered by
SME in evaluating the growth opportunities. It will assess the numerous methods through which
organisations access funding and the time of using different types of funding. The report will
focus on developing business plan and later part will evaluate the succession options for a small
business in order to explain the benefit and drawback of each option.
TASK1
P1. Important considerations for analysing growth opportunities.
The business world is highly dynamic and fluctuating in nature which places emphasis on
considering the various crucial aspects that are necessary in order to measure the growth
opportunities. For this the Vectair Holdings will consider the assessment of external business
environment, internal capabilities and industry attractiveness.
PESTLE Analyses
The term PESTLE stands for political, economic, social, technological, legal and
environmental factors which have crucial impact on the Vectair Holdings. The framework of
PESTLE analyses will focus on identifying the external opportunities and threat for the business.
Such factors are generally uncontrollable and business will have negative or positive impact
which needs to be handled properly and effectively. Thus, the following is the PESTLE of
Vectair Holdings discussed below:
 Political factors: The political factor is concerned with the intervention of the
government rules and regulations (Sarin, 2019). It consist of factors like taxation policies,
terror attacks, subsidies, etc. Therefore, Vectair Holdings will get affected and have
negative impact on the operations and functions of the company if the taxation rate

increases in the country. This is because, when tax increases then in order to maintain the
level of profitability, the company will either have to increase the prices or minimise the
quantity of products and services offered.
 Economic factors: These factors are related to the identification and analyses of the
profitability and financial stability of the business. It contains factors like recession,
inflation, etc. Therefore, during the period of inflation, the price of goods and services
increases to the greater extent which results in disruption of the products sale because
customer prefer to spend their disposable income on useful products and services. Thus,
this will affect the Vectair Holdings probability negatively.
 Social factors: The social factors are concerned with the attitude, behaviour, buying
pattern, lifestyle, etc. of the individuals. The needs and preference of the customers
changes very quickly and this will have crucial impact on the company. For instance, the
customers are becoming health conscious day by day which will have positive impact on
the Vectair Holdings and provides them an opportunity to increase the sale of their
hygiene products and services.
 Technological factors: The technology is the most ongoing factor and this induces the
focus on innovation, research and development department, etc. So, this will have
positive impact on Vectair Holdings as they can increase their sale of products through
digital technology by adopting the concept of online sale (Pallagst, 2017).
 Environmental factors: The factors which are concerned with protecting the
environment and helps in maintaining the sustainability like wastage minimisation, use of
renewable source of energy, etc. Therefore, this will have positive impact on the Vectair
Holdings as they will adopt the solar power plant, in their operations and functioning.
 Legal factors: This is related to the law and regulation which helps in protecting the
certain rights of customers, employees, organisations, etc. Therefore, the company will
adopt the employment legislations in their work which will have positive impact on
Vectair Holdings as the employee of the company will feel safe and secure and this will
keep them motivated.
Competitive advantage
The competitive advantage is concerned with the business situations which will allow the
business enterprise to produce the goods and services which are of equal value compared to that

of competitors by the company provides it at considerable lower prices. Thus, it will focus on
Vectair Holdings internal resources and core competencies. The internal resources are concerned
with the strength and weakness of the company. The Vectair Holdings has strong workforce who
has the ability to produce innovative and good products which will meet the requirements and
demands of the customer effectively and efficiently. Furthermore, the company has strong brand
recognition in the market of UK which helped in sustaining it for the last 30 years. The core
competencies of the company is concerned with determining the specialise attributions like the
company has key competency of expertise in hygiene products and services, they makes use of
advancement in technologies through which most effective products are produced effectively and
efficiently.
Porter Generic strategies
The strategies are developed by the Michael Porter for the purpose of gaining competitive
advantage in the business market. Under this, there are three different strategies which are to be
adopted by the Vectair Holdings and they are discussed below:
 Cost leadership: In this strategy, the business enterprise will concentrate on setting low
price or cost for the producers. It is possible by the way of determining the source of cost
by taking into consideration the different organisational structure of the industry.
Therefore, Vectair Holdings will adopt this strategy in order to achieve the high level of
productivity, better utilisation of capacity, proper use of technologies, etc. Thus, this will
help the company in exploiting the various sources which will provide them cost benefit
and achieving cost leadership (Levy, 2016).
 Differentiation: In this strategy, the organisation aims to attain the uniqueness in their
offerings which are highly demanded by majority of the customers. Therefore, the
Vectair Holdings will have the unique attribute of serving its customer with proper
hygiene products and services. They will provide unique and most likeable taste in their
products through which they can also be rewarded by premium prices. This uniqueness
can be advantageous because customers are becoming health conscious and wants unique
products which have good taste and healthy in nature. So the company will concentrate
on packaging of their products to make it unique, its marketing strategies which will
easily tap the customers, etc.

 Focus strategy: Under this strategy, the business organisation focuses on the quality of
the products in order to attain competitive advantage in their industry. This will help the
Vectair Holdings in focussing on the respective group or segment of the market (Lambert
and Oatley, 2017). The company will emphasis on two focus strategies namely, cost
focus which will enable the company to get the cost advantage in a particular segment of
the market and differentiation focus which will allow the company in establishing
differentiation in order to attain the business goals and objectives of smaller segment of
market. So company will target the smaller group of customer by way of online business
where they will sell their products through online mode in the areas where the physical
stores are not yet set up.
The BCG matrix is designed by the organisations in order to help them with long term
strategic planning which will support the business in considering the growth opportunities by
consider the different products and deciding that where to invest and divest. There are four
different strategies which can be adopted by the Vectair Holdings, namely, dogs, question mark,
stars, cash cows. GE Mckinsey matrix is the another strategic framework that consist of nine cell
portfolio matrix with business unit strength and industry attractiveness. It helps the Vectair
Holdings in knowing that which products are contributing in growth of the company and which
are need to be divested.
Apart from this, the Vectair Holdings can collaborate with other companies by using the
way of mergers, acquisitions, joint ventures and strategic alliances which will help in enhancing
the growth and development of the company. With this, the company is able to bring in new
technologies and innovative products. Furthermore, there are vertical and horizontal integration
which help the Vectair Holdings in expansion of the business.
P2. Evaluation of opportunities for growth.
The Vectair Holdings will adopt Ans off matrix model in order to assess and evaluate the
different growth opportunities for the company. This model or matrix is used by the company
because it helps in determining the product and market growth opportunities for the business. It
also helps in improving the sale and market share of the company. Therefore, there are four
strategies which are discussed below:
 Market penetration: In this, the Vectair Holdings will sell the current products in the
existing market. This is because, it will bear less risk and by maintaining the market

share, the business enterprise will focus in improving the growth. Apart from this, there
are various opportunities which exist in the market to improve the market share in order
to stay competitive.
 Market development: Under this, Vectair Holdings will focus on selling current
products in new market. This will induce the company to search for the new region or
location for selling the product (Kumar, 2016). It will provide growth for the company, if
they have core competencies which can help them in experiencing the new target market.
Apart from this, it is a risky strategy as well because the result of expanding the business
in new market is uncertain.
 Product development: The Vectair Holdings, will new products in existing market. This
is one of the most suitable strategy for growing the business because the brand is already
known to the people so the new products will be easily marketed with low cost of
promotions. The customers can be easily tapped but there is risk involved regarding the
response to the new product.
 Diversification: This is the most risky growth strategy for the Vectair Holdings because
the company sells the new products into the new market where the customers are neither
aware of the brand nor of the products (Kouba, 2017). It requires lot of investment in
marketing and production so that the company can compete in the market.
The ansoff matrix is good for the Vectair Holdings because it will help in developing and
creating certain strategies for the growth of company and sets out the aims and objectives of the
business. But at the same time, this matrix fails to depict the market development and
diversification strategies which are necessary for change to everyday running of the business. It
also lacks to take into account the activities of external business environment. Therefore, the best
strategy for the Vectair Holdings will be product development because customers will be known
to the brand and they will have positive belief regarding the companies products and services.

TASK2
P3. Assessment of potential sources of funding.
For the growth of the business, every company will require the sustainable amount of
funds so that proper manufacturing, processing, marketing, etc. activities can be done in order to
accomplish the business goals and objectives. In same manner, the Vectair Holdings will also
require the funds and some of the potential sources of funding are discussed below:
Bank loans: The bank loans are the way through which the business organisations
approaches to the bank and ask for the funds and they are the lowest cost loans which are
available in the market but the approval of this loan is very difficult. Thus, a loan is an amount

which is given to the borrower and needs to be repaid within a certain period of time with
principal amount and interest rate. The Vectair Holdings can adopt this method because through
this they can get funded at comparatively lower rate of interest.
Advantages Disadvantages
It has the benefits of low cost loan which have
fixed interest rate that is to be paid as monthly
instalment for a fixed period of time.
Furthermore, this helps in establishing the
relations with the professional banker.
The Vectair Holdings will need the collateral
or security which is to be mortgage in order to
take loan. Apart from this, it is a lengthy
process and requires strong credit support.
Crowd funding: This source of funding is increasingly become popular for the start up
businesses. In this, the small amount of capital are being used in order to finance the newly set
up business organisation (Denton, Forsyth and MacLennan, 2017). This small amount is
gathered from large number of individuals. This will help the Vectair Holdings in making proper
use of easy access to the large network through social media.
Advantages Disadvantages
By this source, Vectair Holdings will
experience low risk due to little investment and
also enjoys the increased exposure. It makes
proper use of technology and tap large amount
of people easily.
Apart from benefits, the source of crowd
funding also has some drawbacks through
which Vectair Holdings will experience the
problem of time consuming and majority of
campaigns fail under this.
Angel financing: This the form of funding which is done to the start up companies by
those investors who have interest in the project start up and they have strong contribution in the
development of the company with their advices and personal experiences. With this, the Vectair
Holdings will be able to experience or track the records of founders, viability of business plan,
plan for existing strategy, etc. Apart from this, the company will be to get the help for their new
business plan because such investors normally invest money in new business plans, start ups, etc.
Advantages Disadvantages
With this, the Vectair Holdings company will The Vectair Holdings will face the problem of

be able to experience the quick decision
making within shorter time period. And this
has higher level of potential in generating the
returns.
higher level of risk under this source of
funding. Furthermore, the main decision will
have strong influence from the angel investor
and the company will not be able establish the
total control.
Venture capitalist: The Vectair Holdings can use this source of funding where the
investor will concentrate on rendering the capital to the company but in return they want to the
equity stake (Daniels and Lapping, 2016). It will be good source of fund for the companies like
Vectair Holdings where they want to expand the business but does not have proper access of the
market. Such financing helps in enhancing the long term potential of the growth and
development of the business.
Advantages Disadvantages
The venture capitalist have strong and very
good connections with the community and
society which will help the Vectair Holdings in
getting various societal advantages.
But with this Vectair Holdings will experience
the loss of control and lack of discipline due to
the improper spending of money. Apart from
this, there is lack of attention which can create
problem for the company in attaining the
business goals.
After considering all the above options, the best source of fund is bank loan, though it is
difficult to get it but this is most secure form where the company cannot be cheated.
Investment decision making are the criteria through which the Vectair Holdings can take
decisions by forecasting the present future values of the amount of money which is to be
invested. The different options are pay back period which provides a total estimation to the
Vectair Holdings regarding the project which is to be launched and the return which it will
generate after being executed. Whereas net present values is the another method which will help
Vectair Holdings in examining the cash flows including positive and negative and to know
whether to pursue a project or not.
Classification of source of funds

The funds can be classified into different sources which Vectair Holdings can consider
and they are discussed below:
 On the basis of period: Long term, short term and medium term.
 On the basis of ownership: Owners funds and borrowed funds.
 On the basis of generation: Internal sources and external sources.

TASK3
P4. Design a business plan for the growth.
Situational analyses: Before implementing any business plan, it is important for the
organisations to properly analyse the business environment in order to evaluate the internal
capabilities and resources of the company. Therefore, for this purpose, the SWOT analyses has
been conducted of the Vectair Holdings. This will help in identifying the internal strength and
weakness and external opportunities and threats for the company.
Strength Weakness
 Skilled and highly expertise workforce

 Strong brand recognition in the market.
 Effective and efficient use of
technology which helps in producing
innovative products (Birkin, Clarke and
Clarke, 2017).
is required.
 For use of advancement in technologies
huge amount of investment will be
needed.
Opportunities
 The Vectair Holdings has an
opportunity to expand the market base
for the company and serve the products
in untapped areas.
 The company also has an opportunity
to opt for online business through
digitalisation.
Threat
 Threat of external business
environment which is highly dynamic
and changes in technology will demand
quick changes in the company.
 Competitors like Febreze, air wick, etc.

Business Plan for Vectair Holdings

Executive Summary Planning is important for every organisation so the Vectair Holdings
will design a business plan which is considered to be the set of written
documentation that contains all the details of actions and plan which
is to be taken by the company. Therefore, it is road map which guides
the company in adopting the different directions which is suitable in
achieving the targetted objectives and goals.
Business details Overview of the company: The Vectair Holdings is the organisation
which started the business in 1989 in UK and deals in providing
technological innovator and supplier of air care and hygiene products
in various number of products (Colantoni and. et. al., 2016).
Mission: The mission of the company is “To delight the customers and
employees by consistently manufacturing the high quality products
and services through effective innovation.”
Vision: The vision statement of the company is “To be the market
leader in providing air care through effective innovative and
technologies by exceeding the expectation of the customers in terms
of quality and services”.
Industry & market
analysis
The industry and market analyses will take into account the Porter
five forces model. The Vectair Holdings has low bargaining power of
customers because the company provides most unique and extra
ordinary products. It face low threat from substitutes and low level of
rivalry among competitors. Apart from this, the suppliers have high
bargaining power.
Customers & value
proposition
Target market: The target market relates to the respective market for
whom the products and services made by the Vectair Holdings can be
served. Therefore, the target market is the customer of big
organisations, working people, shopkeepers, etc. who will use the air
freshener in order to keep their environment fresh and soothing such
that people will feel comfortable.

Marketing strategy The Market Strategy should explain 4P’s
Product: The Vectair Holdings offers wide range of innovative
products and services like air care, multi care air freshener, vibrating
mesh technology, wash-room products, scents, famine hygiene which
assures safe sanitary, etc.
Price: The prices of the products are kept higher because it targets big
organisations who wants luxury atmosphere and fragrence.
Promotion; The different promotional tools used by the company are
advertisements in newspaper, social media, internet, etc.
And Place. The place of serving the products is both online and offline
where the customer are able to purchase the products through
companies official website as well.
Operations plan The operational plan of the company will consider the aspects
through which the future can be developed more appropriately.
This is a highly detailed plan that provides clear picture of
different teams and sections.
Management team &
company structure
The company follows the functional organisational structure in which
each functional head has different department and the final reporting
is done to executive people by all the departments.
Resources The resources will be assigned to each department as per their
requirements and manpower for the accomplishment of task. The
physical location of the business will be in UK. The staff will be highly
qualified and innovative. It will have strong technological power.
Financing When the Vectair Holdings successfully completes the analyses of the
business situational factors then they will going to estimate the
budget plan because funds are needed to commence each and every
business activity (Arzaghi and. et. al., 2017). The total £10m funds
are required to implement a plan, It can be said that 60% (£6m) of
total funds will be an owner’s contribution and remaining 40% (£4m)

will be sourced from a bank.

Financial projections It may include the following;
Income projections;
Cash flow projections;
Balance sheet projections;
And Key ratios.
Example of a projected income statement is given below;
Projected Income statement for the next five years
2020 2021 2022 2023 2024
£m £m £m £m £m
Sales 20 22 25 27 30
Expenses
Cost of goods sold 6 7 8 9 10
Depreciation 0.5 0.5 0.5 0.5 0.5
Advertisement 1 1.5 2 3 2.5
Rent 0.3 0.3 0.3 0.3 0.3
Salaries and wages 1.2 1.3 1.4 1.5 1.6
Furniture and
equipment
4
Travel 0.1 0.2 0.3 0.4 0.5
Interest expense 2 2 2 2 2
Total Expenses 15.1 12.8 14.5 16.7 17.4
Net Income before
taxes
4.9 9.2 10.5 10.3 12.6
Income tax expenses 0.98 1.84 2.1 2.06 2.52

Risk plan Under this, the Vectair Holdings will implement the set plan and
regularly monitors in order to know that it is going as per the
expectation and establishes proper control (Angotti, 2018). If any
problem arises then proper action is to be taken for correcting the
deviation.
TASK4
P5. Assessment of exit or succession options for the company.
The business organisations are set up for the purpose of accomplishing the desired set of
goals and objectives. For this, the company aims to establish the control over the growth of the
companies so that they can expand and develop themselves. Therefore, the Vectair Holdings will
have certain exit and succession option in order to accomplish the business companies. The exit
strategies are those which helps in winding up the business whereas the succession strategies are
the ones which helps in providing success and growth to the business. The main ways through
which owner and managers can exit the business are liquidation, sale in open market, etc. This is
done because the business fails to generate the profits and fulfils the business objectives. The
main reasons due to which this happens is because of the forces from the external and internal
business world.
Exit options
The business organisation exit when they are fail to accomplish the desired set of
objectives and profitability because no business can sustain for longer duration without proper
earning.
Liquidation: The process of liquidation is concerned with winding up of the business
permanently. The assets of the company are converted into cash and this cash is distributed to
those individuals who have invested in the company (Albert, 2017). The remaining cash is
distributed to the shareholders according to their share in the company.
Advantages Disadvantages
It is good option for the Vectair Holdings if
this is done by their choice and mutual
understanding. Furthermore, there is no
Under liquidation, there is lack of paying
personal liabilities and also the assets of the
business cannot be retained again once they are