B5 Innovation: Business Plan and Exit Strategy Analysis

This report analyzes B5 Innovation's growth strategies, focusing on key considerations for evaluating growth opportunities and utilizing the Ansoff Matrix for market penetration, development, product development, and diversification. It explores potential funding sources such as debt equity, venture capital, crowdfunding, and share capital, crucial for securing a £96k project with only £20k in hand. The report also covers the design of a business plan, emphasizing the importance of setting goals and strategies for achieving growth. Finally, it assesses exit or succession options for a small business like B5 Innovation, providing a comprehensive overview of business development, financial planning, and strategic decision-making for sustainable growth.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key consideration for evaluating growth opportunities...........................................1
P2 Evaluate the growth opportunities through Ansoff Matrix....................................................2
TASK 2............................................................................................................................................4
P3 Potential sources of funding...................................................................................................4
TASK 3............................................................................................................................................6
P4 Design a business plan...........................................................................................................6
TASK 4............................................................................................................................................8
P5 Assess exit or succession options for a small business..........................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Growth for businesses is a level where it reaches at the point of expansion in operations
and processes. The primary goal of every business is to enrich its functional areas in one or more
economies thus to accomplish high growth and success. Enlargement of working activities can
be done through obtaining economies of scale for small entities. In this relation, business
associations are required to consistently plan its working activities with a specific time frame
thus it can carry out effectively (Barbour and Deakin, 2012). B5 innovation is the chosen
organisation in this present assignment which works in making new technologies to customers
with an aim to provide some new and innovative to local groups and organisations of UK. The
firm works on contract basis and its bidding ability is £20,000. Apart from this, the report is
going to be described various key consideration which evaluate growth opportunities; for this
purpose Ansoff Matrix will be used.
TASK 1
P1 Analyse key consideration for evaluating growth opportunities
Growth and development are the key factors to every business organisation which has
take into consideration by management. Business expansion supports a business to grow and
diversify at large level, it leads enhancement of sales revenues and profitability. While
formulating growth strategies, B5 innovation has decided to ascertain all external factors which
can affect their future viability and market position. Therefore, it is necessary for small
businesses to plan all these activities and align them to suitable for a specific time and resources
(Beatley, 2014). There is defined certain key considerations to measure and attain high growth: -
In-depth competitive analysis- It is one of the impressive strategy that can be acquired by
any business so as to analyse all those factors which may affect its market position and upcoming
growth. Analysis of external rivals also supports companies who will be competitors of the
company and which kind of strategies are applied in order to deal with them in an effective
manner. It also helps in creating a distinct image of the company at marketplace and helps
managers to recognise that which kind of products should be offered for obtaining high
competitive edge.
Incorporation of digitalisation in business – Implementation of digital tools and
techniques helps a business organisation to improvise the efficiency of its working activities and
operations. Although, small businesses does not give much preference to digital platforms due to
1

their low budgets. Therefore, to capture customers' eye B5 innovation needs to introduce certain
technologies, such as – creating own website, mobile applications, pay per click advertisements
so as to reach large group of customers' in a certain time period. This aspect equip corporate
associations to grab better future opportunities. Additionally, in present scenario customers are
also getting attracted towards innovative products they can fulfil their needs and wants in more
ideal manner. Henceforth, transformation of digital working environment helps in providing
effective outcomes to B5 innovation.
Profitability – Assessing those areas from where firm will gained more profitability and
revenue. Small businesses are tend to merge with other multinational companies so as to enhance
their market areas. B5 innovation can join hand of other existing companies of UK market
through – franchising, joint ventures, strategic alliances. For example – by effective franchising
small entities enables to sell their products with big brands in international markets. As B5
innovation works on contract basis so strategic alliance will be beneficial for it to gain success of
any specific project or contract (Chens and et. al., 2014).
Market share – It is most common aspect while planning because every new and existing
business wants to attain high market share by remain competitive among customers. In order to
measure growth, firms are needed to assess their market share and how it can be improved by
applying various tactics. Build a comprehensive market image companies must assess certain
features, like – who will be the target audiences, what are their needs and wants etc. It can be
done by making research of customers who are benefited with cloud technology, high speed data,
bandwidth network and further IT facilities.
P2 Evaluate the growth opportunities through Ansoff Matrix
In respect of business entities, opportunities are the chances which helps a firm to expand
its operations at marketplace. A corporate association get diverse chances to grow and diversify
in their target market but it is based upon the nature of area which provides fruitful outcomes in a
minimum time period. While identifying future opportunities determination of certain factors is
also crucial. This aspect supports to do thing in better way which ensure growth and success of a
small business organisation. Therefore, management is required to prepare an action plan and
apply certain strategies. The chosen organisation, i.e. B5 innovation has numerous opportunities
in UK market to enrich its business area by acquisition of digital equipments in its processes. For
this purpose, firms can utilise Ansoff Matrix which has four quadrants of growth, they assists to
2

match up existing products and new products with current and new markets. Basically, the tool
highlights potentials risks and uncertainness that might be occurred while planning of growth
strategy; it may expose firm through moving out from one section to another over the grid in
order to gain high competitive edge (Eddleston and et. al. , 2013).
Ansoff Matrix has given several strategies of expansion to a business organisation which
are under beneath: -
Illustration 1: Planning tools and techniques
(Source: Ansoff Matrix, 2015.)
Market penetration – In this grid, firms are allowed to sell its products and services to
same customers in existing market. For doing this in an ideal manner, small business require to
determine certain ways which supports in raising customers' loyalty and customer' lifetime value.
In order to penetrate its existing market B5 innovation has decided to improve its order process,
making it its facilitate for clients, extend working hours and applying certain modifications in
order to boost up long term appeal of their offerings.
Market development – Not all the time but best approach is to enlarge market area by
drawing new towards towards a specific product or service. Firms can discover new clients
through geographical areas or locations, i.e. new region. If B5 innovation introduce a new
3

technology which will provides flexible and low rate innovative products or services to
customers, for this it can organise new campaign by using various sales channels so as more and
more people can know about it (Galland, 2012). However, at this time it must be also determined
that there is untapped demand of products and whether or not business will support such
demands.
Product development – This strategy focus on creating new products and making
variations in existing products to sell them existing clients. Most of the clients of B5 innovations
are local people of UK as it can easily determine their desires and implement the same so as to
satisfy market needs and wants. Sometimes, companies find other ways to enrich products'
aesthetic appeal or improve it in other ways. Such developments can be made through customers'
viewpoints or feedbacks.
Diversification – In this element products and services sold in new markets, the main
reason behind this is to raise profit margins of the company. Diversification is quite risky
strategy because in this firms does not have experience of new markets and customers
preferences as well. Even after this, if firm wants to enter into new markets then it is essential for
it clearly assess current market trends thus to obtain high cutting edge. Although, diversification
is one of the best strategy for innovative companies, like – B5 communication and supports it to
grab better future opportunities. In order to get success of this strategy, company is required to
establish an equal balance between rewards and risks.
TASK 2
P3 Potential sources of funding
Finance constitutes is an imperative element for small business associations. It helps to
carry out all business operations and activities in error-free or smooth ways. Basically, financial
sources are not only assists in doing day to day working activities but also helps management to
avail future opportunities. This also improves decision making process of the company and make
it goal oriented (Levy, 2016). By considering B5 innovation, the firm takes various contracts or
projects that are both rewarding and demanding in market. The firm is bidding for a contract
named 2007/JN - High Resolution Thermal Imaging Cameras so as to create an integrated
mobile sensing platform mounted on a vehicle that captures high resolution thermal imagery
while in motion to characterize building facades and calculate its thermal performance. For this
purpose, four identical area scan thermal cameras will be required. The overall worth of this
4

project is £96k but B5 innovation has only £20k to invest in this contract. Thus, the firm has
decided to collect remaining finance from several sources so as to accomplish all project
activities in the best possible manner. Here is listing down various sources of finance which can
acquire by B5 communication in order to raise its capital, such as -
Debt equity – It is one of the most imperative source of generating income that are
availed by SMEs. The debt investors of the company do not have right in company to make
decisions regarding its functioning; they are called only in situations like – winding up and
bankruptcy of a corporate association.
Venture capital – Start up companies or small businesses having potential to grow in
market need a certain amount of capital for running its in the best possible manner. In UK, there
are certain wealthy investors who are ready to invest their money into these kind of business for
getting long term growth. This is known as venture capital and investors are called as venture
capitalists. Along with this, venture capitalists get certain equity within companies so as to
become an integral part of their decision making process (MacLeod, 2013).
Crowdfunding – It is a fasy way of getting finance with no extra interest. Crowdfunding
is a practice which helps in funding a project thus to increase capital in form of small amounts
from a large group of individuals typically via internet. It is the platform where numerous people
are available to invest in certain project in form of donation and demanding certain profits in
return. Basically, crowdfunding is most popular due to its online nature. The main advantage of
this source of finance is it validates the market because companies and investors do not need to
worry about future market risks. On the other hand, main con of crowdfunding is giving higher
rewards to investors can be risky for company.
Share capital – It consists with all funds which comes from exchanging shares of the
firm, although share capital amount can be changed as per the time. A firm that wants to increase
its capital then it can issue and sell its shares to people and obtain money from them. There are
various types of share capital, such as – authorised capital, issued capital and subscribed capital
(Moseley, 2013). In addition, this source of finance brings wide range of shareholder and equity
rather than debt; it means there is low market risks. But the main disadvantage of share capital is
equaity costs is higher than debt.
5

TASK 3
P4 Design a business plan
For a business organisation, it is necessary to create and develop their appropriate goals
and targets in order to get higher growth and success in easy manner. Such type of activities is an
effective procedure to make and develop proper plans and strategy to reaching with desired
goals. In an organisation, planning process includes various elements such as producing,
designing, controlling, managing and implementing. For this, company can easily get reach with
competitive advantages and profits. A business plan determine accuarte and proper expansion
regarding company and their effective policies.
Business concept:
This is the process which represent an idea for a firm which consider goods and services,
unique selling opinion and thoughts, target area which evaluate the concept of acquiring benefits
or advantages over competitors. The business plan of B5 innovation are described as follows:
 Organisation's goods and services – B5 innovation is new small business start up which
is established with an aim to provide best technology solution to people as they can live
their life in better way. They are provide their customers effective services and facilities
which fulfil their needs or requirements.
 Mission and vision of company – B5 innovation main mission is to reach with desired
goals and target where they can easily gain attention of people through use of innovative
technologies. Another is main vision services which are being offered by B5 innovations
is providing software and hardware of smartphones and repairing them as well,
manufacturing of smartphones accercories, (speakers, lenses, charging cords and
cameras), manufacturing of computer parts, refurburfised sold devices and so on.
Industry analysis -It can be done by SWOT and PESTLE analysis of the company thus
to evaluate all those factors which may affect directly or indirectly business performance as well
as its market position in future (Todes, 2012).
SWOT analysis of B5 innovations
STRENGTH
Low costs leadership and strong interpersonal
relationship with customers & suppliers.
WEAKNESSES
Fear of implode anytime cause people may
lose interest in the idea or market opportunites.
Lack of financial resources create problems in
6

Effective manufacturing capabilities
Good market image.
Having well qualfied and skilled workforced.
Due to their small nature, small businesses are
enable to focus on resources. They have little
hierarchy & bureaurcrcy as well as sticky notes
which helps in effective execution of all
working activities.
distribution of products and performing
marketing activities over the world.
Due to low market experience, small
businesses cannot stay and survive for long
term.
OPPORTUNITIES
Emerging markets and strategic alliances give
opportunity to new start ups in respect of
expand their business.
Most of the customers are shifting their interest
into digital market
Foregin direct investment provide new
opportunities of growth to small businesses
THREATS
Threat of external rivals or new entrants
Political unstability of a country
Risk of economic downturns.
PESTLE analysis of B5 innovations
 Political factors – It involves political condition of a nation, changes in taxes and duties
and trade policies which are made up by Uk government. In order to survive effectively,
it is essential for small businesses to hve strong government relationship.
 Economic factors - Inflation rates, exchange rates, fluctuations in economic growth of
nation and so on all these activities can affect business activities and operations. For
example – cost to borrow money from various financial sources is low in UK economy.
 Social factors – Aging customer base is one of the serious issue of small business
because it is quite difficult to satisfy all needs and wants of customers. There is rapid
changes in customers' lifestyle (Valler, Phelps and Wood, 2012).
 Technological factors – it is essential for small businesses to determine latest
technologies and apply the same within their working processes. But due high costs,
some SMEs cannot implement digitalisation which leads failure of new venture.
7

Operational analysis – It is the method of examining and analysing current performance
of an organisation on the basis of operational approaches. For this, management of B5 innovation
can easily evaluate and measure various areas as how cost of operation can be saved and with
this they can easily reach with potential goals. There are some areas of operational analysis
which are described as under:
 Innovation – It is a specific area of operational analysis in B5 innovation which help in
gaining maximum opportunities while dealing with different technology. An organisation
management require to analyse unique and different type of technology which attract
large number of customers towards firm.
 Customers results – For B5 innovation, it is necessary to analyse and examine
organisation's strategies and its business results which should be in the favourable
condition. They are develop software and hardware as per the demand of customers so
they can easily reach with desired goals and targets.
Marketing Plan:
It is the part of business plan in which management of company create and develop
marketing strategy in order to reach with potential goals and targets in better manner. For B5
innovation, it is required to create and develop effective marketing plan for their organisation
which help n attracting large number of customers.
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year 5th year
Initial money 40000 10000 12000 25000 10000
Investment 20000 12000 25000 25000
Total 40000 30000 24000 30000 35000
Marketing
expenditures
Advertisement 9000 8000 3000 8000 5000
8

Sales promotion 2000 8000 3000 7000 5000
Direct marketing 9000 8000 4000 6000 7000
Total 20000 24000 10000 21000 17000
Available balance 20000 6000 14000 9000 18000
Financial Plan:
This is the evaluation procedure which can be used for determining organisation's
investors whether it is current and future state by using various variables such as cash flow,
withdrawal plan and assets valuation. Cash Flow statement of B5 innovation are described as
under:
Cash flow statement of B5 innovation
Particulars Jan Feb Mar Apr May June Total
Cash inflows
Investment 5000 5000
Credit sales 1000 2500 3600 4000 1200 3200 15500
Total inflows 6000 2500 3600 4000 1200 3200 20500
Cash outflows
Fixed : Equipment’s 3000 2000 2000 1500 1000 2000 11500
9

Variable : Direct
material 200 200 300 500 100 100 1400
Total outflows 3200 2200 2300 2000 1100 2100 12900
Net cash flow 2800 300 1300 2000 100 1100 7600
Opening balance 0 2800 3100 4400 6400 6500
closing balance 2800 3100 4400 6400 6500 7600
TASK 4
P5 Assess exit or succession options for a small business
Earning more and more profits is one of the important element for all businesses. Entire
profitability of the firm depends upon its performance level and market growth. But if it is
unable to effectively deal with external market and cannot yeild high profits then there are
various ways to exit from existing business which are described as under: -
Liquidation – One of the major approach that can be appied by a small venture is
liquidation. It means to sell business as well as its assets to others whereas further items get
converted into liquid form, i.e. banks or cash. Situation of liquidation occurs when company is
lots of credits and it is facing higher losses since many years. Business owners/managers are
only liable to take such kind of decisions.
10

 Merits – It is quite easy and natural process. Liquidation means to end the entire business
and there no implication upon third party to control or handle business activities. Assests
of the firm are sold on their current market value which can be beneficial for it.
 Demerits – Some of things in assests of the company are not measurable in cash, i.e.
brand value or goodwill. It goes down in vain.
Acquisition – Another market exit strategy is acquisition that also can adopt by some
busineses who thinks to exit in market (van Assche, Lo and Beunen 2013). In this reltion, it is
essential for owners to find a suitable acquire who can do justice with enterprise.
 Advantages – If the strategic value of business is high then it will provide high prices at
the time of acquisition to company. Furthermore, if a business has more than one
acquirers then it can charged more prices through bidding.
 Disadvantages – The process of acquisition is quite lengthy because there is an
amalgamation of two businesses may be both does not deal in same field.
Strategies which can be applied while plan succession are as follows:
 Small businesses can opt digital practices in its working processes thus to make it more
effective. The concept of digitalisation will support small busineses to keep up to date
with current and future market trends so that firm will modify its succession strategies
accordingly.
 Another succession strategy is development of employees. It implies that B5
communication can provide training and development to its employees so as to improve
their efficiencies. If employees get aware with new and innovative techniques they are
able to perform in well being manner.
CONCLUSION
From the above mentioned assessment, it get analysed that planning for growth and
success is fundamental aspect for every business organisation. Before developing future plans
and policies, managers are required to identify growth opportunities which helps them to find out
all those factors which can affect firm's market position in future. In order to cope with potential
market risks, B5 has to apply certain strategies, i.e. Ansoffs-matrix thus to survive for long term
at marketplace. Furthermore, the report has stated various sources of funds in order to finance
itself and completion of business activities in a systematic manner.
11

REFERENCES
Books and Journals
Barbour, E. and Deakin, E. A., 2012. Smart growth planning for climate protection: Evaluating
California's Senate Bill 375. Journal of the American Planning Association. 78(1).
pp.70-86.
Beatley, T., 2014. Habitat conservation planning: endangered species and urban growth.
University of Texas Press.
Chen, B., and et. al., 2014. Robust optimization for transmission expansion planning: Minimax
cost vs. minimax regret. IEEE Transactions on Power Systems. 29(6). pp.3069-3077.
Eddleston, K. A. and et. al. , 2013. Planning for growth: Life stage differences in family firms.
Entrepreneurship Theory and Practice. 37(5). pp.1177-1202.
Galland, D., 2012. Is regional planning dead or just coping? The transformation of a state
sociospatial project into growth-oriented strategies. Environment and Planning C:
Government and Policy. 30(3). pp.536-552.
Levy, J. M., 2016. Contemporary urban planning. Taylor & Francis.
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.
Moseley, M. J., 2013. Growth Centres in Spatial Planning: Pergamon Urban and Regional
Planning. Elsevier.
Schetke, S., Haase, D. and Kötter, T., 2012. Towards sustainable settlement growth: A new
multi-criteria assessment for implementing environmental targets into strategic urban
planning. Environmental Impact Assessment Review. 32(1). pp.195-210.
Todes, A., 2012. Urban growth and strategic spatial planning in Johannesburg, South Africa.
Cities. 29(3). pp.158-165.
Valler, D., Phelps, N. and Wood, A., 2012. Planning for growth? The implications of localism
for ‘Science Vale’, Oxfordshire, UK. Town Planning Review. 83(4). pp.457-488.
van Assche, K., Lo, M. C. and Beunen, R., 2013. A perspective on planning, smart growth and
place branding. In International Place Branding Yearbook 2012 (pp. 69-77). Palgrave
Macmillan UK.
ss
12

Online
Ansoff Matrix, 2015. [Online]. Available through:
<https://www.tutor2u.net/business/reference/ansoffs-matrix>.
13

14