Planning for Growth

This document discusses the planning for growth of Beauty Finesse, a SME operating in the UK. It covers the analysis and justification of key considerations, evaluation of growth opportunities, potential sources of funds, and a business plan for achieving strategic objectives.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis and justification of key considerations...............................................................3
P2 Evaluation of growth opportunities...................................................................................5
TASK 2............................................................................................................................................6
P3) Potential sources of funds................................................................................................6
TASK 3............................................................................................................................................7
P4) Business plan for achieving strategic objective...............................................................7
TASK 4..........................................................................................................................................10
P5) Succession and exit options...........................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Planning is a process which requires thinking and formation of a plan which includes
specific activities which are systematically and strategically organised in certain manner so that
some predetermined goals can b achieved (Alaaraj, Mohamed and Bustamam, 2018). Growth
planning is important for companies so that they can make plans and formulate strategies which
can help them to grow in the competitive market. SMEs are the small businesses in UK which
operate locally in the country and employ less number of employees in company. The chosen
business in this report is Beauty Finesse which is a new salon that operates in London, UK and
provides a range of beauty services to their customers in London. The company is planning on
expanding its business by starting its online application so that customers can book services on
the app and get services at their homes which will increase the sales of business. In this report
various growth opportunities will be evaluated so that the best one can be selected for
companies. Also a business plan is discussed along with the ways from where funds can be
collected which can help in the successful growth of company. in the end the ways to exit or
succeed in market will also be discussed.
TASK 1
P1 Analysis and justification of key considerations
Beauty Finesse is a SME which operates in UK and provide a wide range of quality beauty
services to their customers in London. the com[any is planning on expanding its business by
starting an online app where customers can book their services they want online and can be
provided with beauty services at their homes as per their convenience which will help in
increasing the sales of company. Following are the ways in which company can analyse the key
considerations so that it can grow strategically in market:
Porter’s generic strategy
This model help the companies in selecting a strategy that can help it in gaining a
competitive advantage in market so that it can become the topmost brand among all the other
businesses: Cost leadership: With the help of this strategy a company can become a cost leader in
market by offering its customers products and services at the lowest prices among all the
competitors of company. Beauty Finesse can use this strategy to become the provider of

best beauty services in market at lowest prices thus attracting more number of customers
and increasing its sales. Differentiation: Under this strategy company tries to attract customers by providing them
with goods and services which are highly differentiated and unique making them
different from other companies. This strategy can be used by Beauty Finesse by offering
better quality of services like use of organic beauty products so that the value of services
for customers can increase thereby increasing the sales of company (Bouma and et. al.,
2019).
 Focus: With the help of this strategy company try to focus on a particular target market
by either cost leadership or by differentiation so that the response of customers in a
particular market can be checked. This strategy can help Beauty Finesse in analysing the
effectiveness of using either of the strategies so that it can grow in market and increase its
sales.
Beauty Finesse can use differentiation strategy in order to successfully grow and expand in
the market as the company can attract a large number of customers by the way of differentiated
goods i.e. organic beauty products so that best quality services can be provided to them and sales
can increase.
PESTLE analysis:
It is a strategic tool which helps in analysing the macro environmental factors that affect a
company and its growth in the market which must be analysed so that their positive and negative
impacts can be evaluated: Political: UK is a politically stable nation which means that the rules and regulations of
company do not frequently change which is helpful for Beauty Finesse for its expansion
as the laws regarding use of technology and business expansion will also not change. Economical: The economy of UK is strong which means that people of UK have high
purchasing power which is beneficial for Beauty Finesse as it can increase the quality of
its service without having to worry about the prices and the affordability of people
(Colantoni and et. al., 2016). Social: People in UK have busy lives and are conscious about their beauty which gives
Beauty Finesse a chance to grow in market by offering its products on online app where

customers can make their bookings and get services at their home as per their
convenience. Technological: Technological advancement of UK can help Beauty Finesse in bringing
the online application in function at lower prices which is beneficial for company as it
help in saving its costs. Legal: The government of UK support SMEs by bringing such laws in country which can
be beneficial in their expansion. this help the businesses in getting subsidies making the
expansion for Beauty Finesse cheap (Dierwechter, 2017).
 Environmental: It is important that the businesses which operate in UK do not cause any
harm to environment which can be beneficial for their expansion in market. Beauty
Finesse must use organic beauty products so that chemical usage can be stopped and
environment can be protected.
P2 Evaluation of growth opportunities
In order to determine the best strategy so that a company can grow in market and acquire the
opportunities that are present in market so that sales can be increased Ansoff matrix can help the
companies in planning their growth strategies in an efficient manner. Following are the growth
strategies which can be used by Beauty Finesse: Market penetration: Through this strategy a company can grow in market by offering
existing products in existing market. Beauty Finesse can use grow with this strategy by
either increasing advertising and promotion of its products or by offering discounts and
offers on its sales. Product development: With this strategy new or advanced products or services are
offered in existing market so as to grow strategically. Beauty Finesse can use this strategy
to grow by launching its online application so that customers can book their services at
home (Hu, 2016). Market development: This strategy can be opted when existing company products and
services are offered in new market. Beauty Finesse can use this strategy to provide beauty
services in new markets apart from London so as to grow.
 Diversification: In this strategy company offer new products or services in new markets.
Beauty Finesse can use this strategy and offer its online application services in new
market other than London.

From the above mentioned strategies the best suitable one for the growth of Beauty
Finesse is product development strategy which will help the company in increasing its sales by
offering services at home as per the convenience of customers so that the sales of company can
increase along with improving the value of services for customers.
TASK 2
P3) Potential sources of funds
It is important that companies have appropriate sources of funds so that enough investment
is available with company so that it can grow and expand in market so as to gain a competitive
advantage in market. following are the sources which can help Beauty Finesse in collecting the
required amount of funds:
Internal sources: when funds are collected from within business like selling company assets,
investment from shareholders, retained earning, collection of debts etc. Following are the
benefits of using these funds:
Advantages Disadvantages
 Funds can be easily arranged by the
business owner and can have full
control on these funds.
 These are cost effective in nature as no
interest amount needs to be paid on
these funds.
 The owner do have to deposit any
security in order to arrange for these
funds.
 The internal sources might affect the
operating profit of company.
 These may not be enough as per the
company’s requirements.
 Tax benefits on these funds can also not
be gained (Keller, 2017).
External sources: these are the sources which help in arranging for funds from outside the
company with a promise of repaying them back in addition to the interest amount. There are
various advantages of using these sources of funds which are explained as follows along with
their drawbacks:
 Bank loans: These are the financial institutes which help in arranging for funds for
businesses in return to a security amount. The amount borrowed is to be repaid back in

addition to certain interest which is charged on this amount for the period of time it has
been borrowed. Benefits: These are easy to be arranged and only require certain security
to be deposited. Also the interest charged by bank is less than other external sources of
funds. Drawbacks: The bank loans are to be paid whenever due and failing in making
this payment can affect business. The timely payment and interest rates can create stress
among borrowers (Lambert and Oatley, 2017).
 Crowd funding: In this method the company raise funds from other people or businesses
in return of certain amount of profit. This method involves a large number of investors
who help in raising company funds. Benefits: This method help in arranging funds easily
and also the cost of this method is low. A large number of funds can be raised by this
method which can help companies in expansion. Drawbacks: It is difficult to gain the
trust of people and other businesses so that they can help in raising the funds. The method
is time consuming and the amount which can be collected is uncertain.
 Angel investors: When the investors who have high amount of ideal funds give support to
businesses so that they can grow in market. Benefits: The amount can be gained without
pledging any security and also there is no amount of interest which needs to be paid on
these funds. Drawbacks: It is hard to find investors who can help in arranging for funds
for company. Also it do not help in accumulation of large amount of funds and also there
is an uncertainty in the amount which will be collected by this method (Minakir, 2016).
From the above mentioned sources of fund the most favourable is bank loans which can be
chosen by Beauty finesse so that the required amount of funds can be arranged which can help
the company in effectively applying the growth strategies and grow in market.
TASK 3
P4) Business plan for achieving strategic objective
Business plan is a written document which describes the nature of business, its marketing
and selling strategy, its financial background which also include a P&L statement of company.
The business plan helps the company in analysing its position in market and its capacity to adopt
a growth strategy so that it can expand its business in market. Following is a business plan for
Beauty Finesse so that it can apply the growth strategy effectively:

Executive summary: Beauty Finesse is a SME which is located in London, UK and
provide high quality beauty services to its customers. The company is now aiming on launching
its online application which can help customers to book their slots whenever they want so that
they can be given services at their homes which also increase their convenience and value of
customers.
Vision: The company aims at becoming the best beauty service in London and increase
its brand image to become the best in its industry.
Mission: To satisfy customers by giving them high quality beauty service so that their
customers in company can be maximised (Minto-Coy, 2019).
Objectives: The company is aiming at increasing its sales in market by attracting a large
number of customers by giving them high quality services. Thus it aim at increasing its sales by
35% in the next 6 months by launching an online app where customers can make booking for
home service.
STP framework: This framework is used by companies so that the target market can be
attracted along with identification of the most attractive segment of market which can help in
increasing company sales. It includes following three elements:
 Segmentation: Under this framework company divides or segments the complete market
into various segments which help it in identifying the segment where it can find its target
customers. Segmentation can be done on various characteristics like geography,
behaviour etc. which can help in identifying the best market segment for company.
 Targeting: At this stage the company targets the selected market by attracting them
through various strategies of marketing so that the target market can be efficiently
reached. Beauty Finesse can target the market by marketing on social media, through TV
advertising etc. Positioning: In this framework the product or services are positioned in market by giving
offers, discounts etc. to customers so that more number of customers can purchase their
products. Beauty Finesse can under this strategy position its services in market by
offering various discounts and offers on their purchases (Sell and et. al., 2018).
Resource allocation: It is important that the resources of company are allocated
appropriately to all the activities which are carried out in company so that all the activities can be

performed in an efficient manner and there is no lack of funds. Also it is important that each
activity has required amount of resources which are required to complete these activities.
Budget: It is a financial plan which is designed for a defined period so that appropriate
amount of funds can be maintained in company:
Particular 31/12/20 (£) 31/12/21 (£) 31/12/22 (£)
New technology implementation 15000 10000 7000
Promotions 10000 9000 7000
Shops 8000 8000 8000
Training charges 7800 6700 5600
Total Cost 40800 33700 27600
Cash flow statement: It is a financial statement which help in determining the flow of
cash in and out of business so that the fluidity of business can be determined and also the total
cash which is spent by company can be evaluated.

From the above cash flow statement it can be said that the company is able to earn profits
through the years which gives a positive view about the company's ability to grow in market and
also shows the liquidity of company.
Monitoring and controlling: It is important that all the activities of company are
controlled and monitored effectively by the management of company so that all the activities can
be carried out in an efficient manner. It also help in improving the performance of company in
market (Siedentop, Fina and Krehl, 2016).
TASK 4
P5) Succession and exit options
Companies can grow and expand in market through various succession options so that they
can increase their market share and reach to a wide range of customers by offering them with
goods and services that help in satisfying their needs. The succession strategies must be applied
by companies so that their brand recognition can also increase. Following are the options which
can be chosen by Beauty Finesse in order to succeed:

Merger: In this strategy two or more companies come together and form a new company having
a different name. These companies share their resources and perform their operations and
functions together.
Advantages Disadvantages
 The companies gain larger share of
market of all the companies who have
merged together.
 Better economies of scale can be gained
by merged companies as the resources
of these companies can be collectively
and efficiently utilised.
 Overall the productivity can increase
and better results can be achieved.
 Coordinating employees in merging
companies can become difficult as
there can be difference in work culture
and structure.
 The market priced of company shares
might also fluctuate which can lead to
losses for company.
 Complexities might be faced while
making decisions.
Acquisition: Under this strategy a company can increase its stake in company by more than 50%
so that the acquiring company can get the ownership of the company acquired. this help the
acquiring company in getting rights over the company’s assets and also the liabilities and
decision making also come under the power of acquiring company (Sung and et. al., 2017).
Advantages Disadvantages
 The market share of organisation can be
increased as the market of acquired
market can be used for the benefits of
acquiring company.
 The availability of resources and funds
can increase for the acquiring company
which help the company in easily
achieving its objectives.
 Decision making can also be made
efficient as more number of
professionals will be involved in taking
these decisions.
 There can be difficulty and complexity
in managing the management of both
the companies.
 There can be differences in work
culture of both the companies which
can create problem in managing the
work in company in an efficient
manner.
 The cost of acquisition can increase the
expenses of company thereby affecting
its profits.

From the above mentioned strategies the best one which can be chosen by Beauty Finesse is
Acquisition with the help of which it can increase its market share under its own name which is
not possible to do in merger.
CONCLUSION
From this report it can be concluded that in order to grow and expand in market it is
important that appropriate growth strategies are applied by companies so that they can capture
the market and increase their market share. There are many strategies which can be used by
companies like Ansoff’s matrix, Porter’s generic etc. so that the best possible strategy is selected
by company so that growth opportunities in market can be efficiently selected. Also it is
important that the sources of finance are wisely chosen so that requires amount of funds can be
arranged. Also companies can apply various succession strategies so that they can expand their
business in market in an efficient manner.

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