Abica's Growth: Opportunities, Funding, and Business Plan

This report analyzes the growth strategies for Abica, a Glasgow-based IT and business telecoms company. It explores key considerations for evaluating growth opportunities, including competitive advantages, market research, profitability, and external factors like political, economic, social, and technological influences. The report utilizes the Ansoff matrix to assess market penetration, market development, new product development, and diversification strategies. It also examines potential funding sources available to businesses, such as personal funds, investors, bank loans, and government support, along with their respective advantages and disadvantages. Furthermore, the report outlines the elements of a business plan for growth and assesses exit or succession options for small businesses, considering their benefits and drawbacks. The report emphasizes the importance of strategic planning and financial analysis for ensuring long-term growth and navigating the competitive business landscape.

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key consideration for evaluating growth opportunities.........................................................1
P2. Opportunities for growth applying Ansoff's growth vector matrix......................................3
TASK 2............................................................................................................................................5
P3. Potential sources of funding available to business with their benefits and drawbacks........5
TASK 3............................................................................................................................................6
P4 Business plan for growth.......................................................................................................6
TASK 4............................................................................................................................................9
P5 Assess exit or succession options for small business with benefits and drawbacks..............9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
In the modern era of business the competition has increased considerably which has
hampered the growth potential of the firm. It is important for the organisations especially small
and medium to find ways for their considerable growth. There are several opportunities at are
available for the growth of the firms, they need to find these and develop plans accordingly.
There are many potential sources from where company can arrange funding for their various
growth projects (Barbour and Deakin, 2012). Strategic planning is important for ensuring long
and short term growth. Increasing market share with limited amount of resources is an difficult
task that too in front of some of the bigger brand names in the industry. Abica is the Glasgow
based company that deals in the business of IT and business telecoms. They provide
technological solutions to every time of firm. This report describes the opportunities that are
present with small and medium sized enterprises. It also showcases that there are several forms
in which organisation can utilise these to grow at faster rate. There are various sources of
funding which can used by firms to ensure growth.
TASK 1
P1 Key consideration for evaluating growth opportunities
There are many chances that are available with small and medium sized firms for their
growth. It is important for the firm to make sure that they utilise it for achieving success.
Stagnation in the growth has several demerits (Beatley, 2014). Managers and leaders have to
make the effective plans so that they can ensure long term growth of the firm. There are various
key considerations which has to be taken care of while evaluation potential for growth. Some of
these are as follows:
 Competitive Advantage: There are various attributes of the organisation that helps in
having competitive advantage. Abica is known for its high quality services which is
important for gaining advantage over other competitors.
 Market research: Abica provide services in all over UK. Every firm wants to gain highest
of market shares and in every planning this is the only thing that has to be cited. Some of
the things that has to be taken care off are like what is the competitive strategy of the firm
as well as image of the company in the market, who are there targeted consumers etc.
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 Profitability: It is also necessary for the firm to analyse their profit making chances as
well as what is the need of the firm to ensure future growth. They can franchise, use
partnerships to ensure that they gets inputs at lower cost and they use it smartly to
achieve highest of profits.
 Political: The rules and regulation made by the government influences the performance of
the company and hence they need to take of these so as to endure higher growth. In
context to Abica Brexit is the decision that will effect the business of theirs.
 Economic: In last few decades there had been many news of economic glitches in several
parts of the Europe. The economic instabilities and the decline in the UK economy has
effected the business of the smaller and medium sized firms as they do not have enough
enough resources to tackle such situations (Chen and et. al., 2014).
 Social: Society is changing and so is there needs and hence the companies have to make
plans according to its so as to grab the opportunities of their growth in the field of new
needs.
 Technological: This is one of the most important things that empowers company to grab
the opportunities available to them. Since the Abica belongs to technology sector firms
hence they ave to especially consider this factor. Some of the basic advantages that
technology provides for SME is that it reduces the cost of operations, It helps in
expanding their reach to larger market place, it helps in making the working process
easier.
 Diversification: It is one such thing that has to be taken care of as the company has to
make sure that they are moving into the new market with the innovated product. More the
diverse range of product available with the people more s the chances of expanding
companies market share and hence garbing opportunities of growth (Eddleston and et. al.
2013).
 Industry: It is also important for the firms to understand the condition of the industry in
which it is operating. Growth opportunities of a firm always depends on the potential of
the industry to grow.
 Self-analysis – It helps in understanding the strengths and weaknesses of an individual
which further assist in planning the future business activities accordingly.
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 Financial analysis – This is another aspect which is important to evaluate the growth
opportunities for group and individual.
 Risk Assessment – This is another factor which plays a crucial role in understanding the
degree of risk involved in different activities. If the evaluation is done well in advance
than arrangements for same can be done on time which helps in reducing the loss that
might cause due to the uncertain event.
 Market trend – in order to choose the better option it is important that the various
options available in the market are evaluated so that the best option for business is
selected.
P2. Opportunities for growth applying Ansoff's growth vector matrix.
In order to understand the opportunities of growth for the company there is are various
techniques that is utilised by the firm. Some of the tools that can be utilised in this regard is
SWOT, PEST, BCG and Ansoff. Growth is always analysed by evaluating he amount of risk a
company has while implementing any plan. Here Ansoff matrix has been utilised for doing the
evaluation of growth opportunities.
Ansoff matrix: It is a matrix that is utilised in strategic planning which provides hypothesis to
management and hence enhancing the effectiveness of working operations. It creates
enforcements within culture of the firm so that employee can work as per their need (Galland,
2012). It is a tool that is generally utilised for comparing the relationship among marketing and
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common strategic directions. Abica uses this to analyse how their new product of existing
product can foster its growth in the market. It assists in gaining high proficiency and growth.
It has four categories:
 Market penetration: In the regards of SME organisations can grow its market base by
offering in its current market by taking use of imperative channels of promotion. Rather
its main objective is to find new range of consumers and felicitate them with qualitative
products. Abica is providing its telecom and IT services in the market of UK. If the
company needs to penetrate more in the existing market then it as to take care of the
sales, promotion, advertisement as well as competitive pricing strategy. For further
penetration they have to restructure their management as well as distribution chain.
 Market Development: In this process business identifies new markets for selling their
products and services. Abica can launch its offerings into new geographical locations in
order reach to larger set of people. For example Abica can use online marketing for
selling their products as lots of people are connected to internet mediums these days.
New market always motivates firm's to increase their productivity as well as it strengthen
the working process to be better (Levy, 2016). There are some of the other things that
need to be taken care of while entering into new market is pricing policy, and has to be
affordable.
 New product development: It is also important for the firms to ensure that there are many
new products are developed from time to time. These can only be possible if the company
adopts the culture of innovation. The product must be developed according to the demand
of the market which is important for the higher level of satisfaction. It helps in achieving
goals and objectives in a better way. In this competitive business environment it is
essential for the smaller firms like Abica to continuously develop their products for
achieving maximum benefits. In the field of communication and IT technology gets
doubled in every six months hence this company has to surpass all others so as to grab all
the opportunities available to them. Any out of the box idea can increase the business of
Abica at a multilevel speeds.
 Diversification: It refers as the variety of products that company offers. When new
products are sold in market the firm can generate larger growth of revenue. It generally
fosters the new trends in the market and may satisfy the needs of many consumers and
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company sale increases (MacLeod, 2013). There is drawback to the companies operating
in IT fields is that they have to compete with the firms at global levels. Since the
technological advancements can be easily accessed as per their requirement.
Diversification must be applied in terms of strategies also which must be done citing
balance between risks and reward.
TASK 2
P3. Potential sources of funding available to business with their benefits and drawbacks.
Growing in the long and short term always depends on the availability of the resources.
In order to expand the business a firm needs money. There is large amount of liquid cash which
has to be present with the firm before applying any strategy for growth. Company must check
about their financial sources from where they can gain money. Some them are as follows:
 Personal funds: While so many years of operation company has gathered some amount of
savings as well as assets. It can have utilised for grasping further growth opportunities.
Advantages:
 This is one of the best form of funding as the company is not answerable to any
other entity (Moseley, 2013).
Disadvantage
 One drawback that is associated with this type of funding is that the cash reserves
left with the firm can be utilised at the time of crisis and if they use it for their
growth then at the time of financial depression they have to depend on some
others for their survival.
 Investors: There are some kind of investors that are ready to finance the business of other
small organisations. They generally want share in the company or heavy returns. They
generally become the shareholders in the firms. For the medium sized firm such as Abica
they can find new investors in Europe which will facilitate them in expanding its market
reach.
Advantage
 Major benefit associated with this is that they do not have to fully bear the expenses if
any loss situation arises.
Drawback
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 One major disadvantage associated with it is that investor starts to control the business
operations and decisions of the SME.
Bank Loans: This is one of the most common method of funding that company chooses. Banks
easily gives loans on interests. It is done in more formal ways and hence there is no change of
any imbalance in the deal.
Advantage
 One of the benefit that is associated with it is that they are simpler forms of arranging
money.
Drawback
 It is having a drawback that the interest rates are higher and if any business failure arises
then they are in serious threat.
Governments: UK government supports many of the SME by providing them financial support
for their expansion plans (Schetke, Haase and Kötter, 2012). These kinds of funding are hard to
achieve but has minimum amount of risk associated with it.
Advantage
 Benefit associated with it is that government do not want many things in return.
Disadvantage
 It also has a drawback that their autonomy comes under danger as the government starts
checking its decisions.
TASK 3
P4 Business plan for growth.
It is essential for the firms to create a smart business plan in order to gain higher position
in the market. It helps in reducing all the potential issues that may arise in the business
operations of the firm. It comprises of various strategic planning as well as the finance
management (Todes, 2012). It is also helpful in achieving goals and operations in a better way.
Using which current performance of the firm can be evaluated.
Business plan is a report having a formal structure. It states about all the actions that has
to done in order to achieve mission and vision. Any business plan must be made for a specific
time period only and has to be renewed after particular time period. It is the responsibility of the
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leaders to make a business plan that boosts up the current position of the company in the market.
Business plan for this company is as follows:
 Research and Define the purpose: For any business plan to succeed the very first stage is
to do a rigorous research will helps in formulating purpose for the firm (Valler, Phelps
and Wood, 2012). The research includes influence of various internal and external factors
on the business of the firm as well as market and industry condition. This kind of
research helps to gain relevant and accurate results. Purpose is important for aligning the
activities in a particular manner and communicating them to the employees helps to
gaining better results in future.
 Overview of the company: Abica is the Glasgow Scotland based company. It deals in the
business of providing IT and technological support to its clients. They have customised
technological solutions for each customers. It was founded in the year 2000. its various
services includes cloud solutions, malware protection, setting up communication system
for the firms. It is operating in entire UK.
Vision and mission of the firm
Vision statement states to become the best firm in the industry by using innovative
technological solutions to its clients as per their requirement. Apart form this it shows that
company wants to become dynamic in nature by using best methodologies in the industry.
Mission statements suggests that the firm wants to achieve maximum customer
satisfaction by using most innovative features in their business. It wants to expand its business in
other parts of the Europe by utilising all the growth opportunities available to them.
Situational analysis:
It is important for the management of the firm to do constructive positional analysis of
their their own in the industry (van Assche, Lo and Beunen, 2013). It helps in identifying the
business needs according to which plan will be constructed.
SWOT analysis
Strengths:
 Dedicated employees of the firms helps to make business process easier.
 Innovative approach of doing business.
 It is having large amount of base and satisfied customer in local region.
 Efficient sales, marketing and customer relations team.
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Weakness:
 Lower brand name in the market.
 Lower market share outside Scotland.
 Lesser number of stakeholders are associated with the company.
Opportunities
 It as a larger scope of expanding its business outside UK.
 It is having a possibility of expanding its market share inside UK.
 Take use of online market for reaching to larger number of people.
Threats
 Presence of bigger brand names with higher amount of resources.
 Threat of new entrants.
 Increasing competition in this industry.
 Larger amount of innovations takes place n this industry and hence smaller firms have to
comply with that.
PEST analysis
Political:
 There are several political changes that are going in the European market and it is
essential for the small firms to check all these as they pose higher impact on the business
of firms.
 Brexit will have greater influence on the performance of this company.
 Increase in the tax slab rates will reduce the amount of revenue that a firm can generate.
Economical:
 Instability in the UK economy has reduced the growth opportunity of the company. In the
period of economic slowdown government will unable to helps such SME in their
operations.
 Lesser revenues may reduce the total expenditure of the company on expansion plans.
Since these firms are smaller in size and hence they have limited amount of resources for
tackling various issues.
Social:
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 Users are demanding for the plans that provides innovative solutions to their problems.
Since the company is capable of delivering versatile solutions to their clients hence it is
having higher scope in the industry.
 Data requirement of the customers are increasing. Larger amount of data on the paths
may lead to congestion which may further lead to disruption in the service and loss of
information.
Technological:
 Companies needs continues technological advancements since the technology in the
industry is changing at much faster speed.
 Adopting technologies may simplify the business operations.
 It help company in reaching to larger set of people which is necessary for the firm.
Budget
A good business plan always need effective budgeting and must include detailed budgeting of
each process.
Activities Amount (pounds)
Internet marketing 9000
Employee training 6000
Resource gathering 10000
New set up 10000
Other activities 5000
Total 40000
Allocation of resources: After deciding budget and resources, management has to allocate them
to their different organisational units so as to work in an effective manner. All the resources
needs to be at the same place where it is needed (Wu, 2015). Some of the resources which has to
be present is financial, human, technical and machineries. This also includes training needs of
the employees.
 Developing strategy: Managers have to develop strategy so that they can adopt the most
suitable out of them so as to gain maximum benefits from its operations. Taking use of
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various tools and techniques helps company in making these strategies. This firm can
take use of limited growth strategy for its future business operations.
 Executing and controlling: It is important for the managers to develop plans but it is more
essential for them to implement in better way. Every firm chooses there own way of
implementing the strategy and the success of strategy depends on this factor only. For
making it a success first of all it is required by the management to communicate it with
their staff members at various levels. When business plan is executed then it is important
for leaders to check its effectiveness and it can only be possible if they monitor the whole
process regularly.
TASK 4
P5 Assess exit or succession options for small business with benefits and drawbacks.
Every organisation owner has devoted some of their time in order to prepare a succession
plan for their business. In this regard management can hire specialist who are capable of running
the business activities in a best possible way. It is also advantageous for the firm to hide issues
and formulate proper strategies that will help in combating negative situations. Business
strategies are connected long term growth hence it takes ample time to achieve success from it.
 Options: At first business owners have to search out for all the choices available to them.
After this proper strategy and plans has to be implemented. Along with this business
owners requires to have clear vision when they are transferring their business to another
that they will be able to take the firm to new height by respecting the values of the firm.
Besides this major drawback is that individual who is taking business may not be able to
run business in efficient manner (Ward, 2016).
 Candidates: In the next part of the planning, all candidates needed to be trained
appropriately those who are able to deal with various market situations. Apart from this
managers must be able to hire well skilled and qualified labourers so that they can take
business to new heights that in a systematic way. Its essential benefit is that firm is
unaffected and chances of expanding has also increased. Whereas the demerit is that
individual who are taking the responsibility may not be able to work in their full
potential.
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