Fordway Solutions: Business Plan for Sustainable Growth and Funding

This report provides a comprehensive analysis of Fordway Solutions Ltd., an IT services provider, focusing on its growth strategies and financial planning. The report begins with an analysis of key considerations for evaluating growth opportunities, including competitive analysis using Porter's generic strategies and external environment analysis through PEST factors. It then evaluates growth opportunities using the Ansoff Matrix, exploring market penetration, product development, market development, and diversification strategies. The report further assesses potential sources of funding available to the business. A business plan is designed to deliver potential growth and success to firms in a certain time period. Finally, the report briefly touches upon exit or succession options for the small business. The analysis provides valuable insights into Fordway Solutions' strategic planning and financial requirements 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 growth opportunities by applying Ansoff matrix..............................................4
TASK 2............................................................................................................................................6
P3 Assess potential sources of funding available to a business.............................................6
TASK 3............................................................................................................................................8
P4 Design a business plan......................................................................................................8
TASK 4..........................................................................................................................................11
P5 Assess exit or succession options for a small business...................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning is one of vital concept for every business association as it acts as roadmap for
future growth and success of the company. Small businesses usually create a plan which outlines
their business ideas, expected financial return and further pertinent information. In addition to
this, growth plan contains information about how enterprises will expand facilities and acquire
necessary economic resources in order to meet raising customers' demand. While identifying
growth opportunities, business owners are required to conduct a market research (Barbour and
Deakin, 2012). The present assignment is based upon Fordway Solutions Ltd., which provides IT
services, like – data classification, applications, design, testing, IT governance, data security,
service delivery and so on. Apart from this, the report is going to be defined key considerations
which helps in evaluation of growth opportunities by applying planning tools and techniques.
There will be a discussion on different sources of finance which helps business owners by
providing them required funds or capital for their venture. Furthermore, a business plan will
develop that aids to deliver potential growth and success to firms in a certain time period. By
applying succession strategies Fordway Solutions can easily expand its market or functional
areas.
TASK 1
P1 Analyse key consideration for evaluating growth opportunities
In this competitive market scenario, every company want to grow and diversify
themselves at fast pace and to obtain this they focus on determining available/potential growth
opportunities that helps an association to easily survive at marketplace. Most of the firms try to
capture specific markets and some of them want to cover all markets where they will run their
all operations effectively. Selection of target market is based upon size and nature of business
organisations. Therefore, it is essential for small businesses to develop an adequate growth
strategy which supports them to obtain high competitive edge and ensure their long term survival
(Beatley, 2014). In UK, there is rapidly increasing era of SMEs so that entrepreneurs are tend
towards demonstrate growth opportunities and gain maximum returns on investment. As a IT
installation service provider company, the growth plan of Fordway Solutions is to improve its
product line by developing new services and add features in existing ones. It will deliver high
market growth and share to firm in a certain time period. The firm is having experience of 25
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years and provides IT infrastructure solutions which cost effective and secure to all leading
organisations.
Fordway Solution is planning to expand its product portfolio thus it have to assure about
necessary resources, finance, tools etc. In this sense, management has acquired two strategies to
evaluate its future growth opportunity, such as
Competitive analysis – Due to fierce market competition, firms are required to analyse
its competition position and develop strategies and policies accordingly. Porters' generic
strategies are one of the effective tool that aids to assess market competitiveness. It helps
company to plan its growth strategies in effective manner. As Fordway Solution dealing in IT
sectors where as intense competition between existing companies and new entrants also come up
which can affect profitability and market growth of firms who operates in same sector. Hence,
referred company needs to analysis its competitors. Some elements of Porters' growth strategy
are stated as under -
(Source: Porter's Model of Generic Strategies for Competitive Advantage, 2018)
 Cost leadership – Business association apply that tactics to focus on standardised goods
and sell them on lower prices. It will contribute to attain and retain many customers,
specially who are sensitive towards prices. Cost leadership strategy deters potential
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Illustration 1: Strategies for competitive edge

entrants and helps to compete on prices. Here, firms cut down costs by charging average
prices to make profits (Chen and et. al., 2014). In context of Fordway Solution,
management is delivering cost effective IT solutions to leading organisations; it helps
firm to capture eye of many customers and retain their interest within brand for long run. Differentiation leadership – It entails product development by applying unique features
or attributes in them which valued for target audiences. The prime objective of
differentiation strategy is to make products better then competitors and perceive
customers effectively. Along with this, value added or unique products allow companies
to charge premium prices of their products so as to cover entire production cost and gain
high returns on products. Fordway Solutions Ltd., may focus on identifying new
innovation which resolve all IT issues of company in a single click. Cost focus – In this segment, firms are focused to select a niche market where is little
competition and then offer products at lowest possible prices. For example – Fordway
Solution can target only retail sector organisations of UK then serve them IT solutions in
cost effective manner. But for this, there is needed to analyse market trends or dynamics
as well as customers' desire. This will help company to attract all organisations from
same field over the world.
 Differentiation focus – As same as cost focus strategy, here firms also target small group
of market or a focused market then offer unique products and services. Differentiation
focus strategy often comprises with building strong brand loyalty between target and
potential customers. While acquisition of this strategy, it is essential for Fordway
Solution to remain their products or services unique thus to ensure long term survival.
Therefore, in order to select an appropriate strategy it is essential for Fordway Solutions
to be aware with current competencies, strength and resource requirement. Differentiation Foucs
is one of the best strategy that can be execute by referred firm; in this they will provide effective
or unique products to customers thus to attain and retain their interest (Eddleston and et. al. ,
2013).
External environment analysis – Growth opportunities can be also assessed through
external factors. The analysis dictates what is the impact of external environment on business
growth and success. It can be done through PEST analysis -
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Political factors
It consists with government policies, laws and
regulations liked with information technology.
UK laws always given people broad freedom
to design their own company. As a IT
infrastructure servicing firm, Fordway
Solutions need to follow Information
technology act, 2008 thus to effectively
functioning in UK.
Economic factors
It encompasses with interest rates, economic
growth, inflation or exchange rates,
government spending levels, consumer
confidence index, import or export ratio etc.
As a growing company, Fordway Solution is
enable to provide job opportunities to many
people of UK; it will contribute in boost up
GDP rate and per capita income of Britishers.
Social factors
Due to changing market trends and customer's
need people wants effective and imperative
technology which enables to satisfy their
needs in effective manner (Galland, 2012).
Fordway Solution is always focused on
identifying such trends or dynamics thus to
effectively perform at market place.
Technological factors
In this modern, innovation and technical
advancements are occurring at fast pace in
market. As Fordway Solution is going to
expand, its product line needs to focus on
applying new and innovative technology in its
services which deliver IT solutions to clients.
Assessment of external factors, it is overviewed that Fordway Solutions has great market
opportunity to expand its business in UK market. For example – due to political stability in that
country, laws and legislations aren't changed rapidly which helps in flourishing business
operations and activity. On the other hand, since past years economic condition of the nation is
also growing up which represent that any company can easily obtain high profitability at there. In
this competitive era, all leading association want to transform their functional area by
implementing digital tools and techniques that can be beneficial for Fordway solutions.
P2 Evaluate growth opportunities by applying Ansoff matrix
In this dynamic business world, organisations are emphasised on identifying effective
growth opportunities and try to grab them for obtaining defensible edge. Technical advents and
innovations has provided various opportunities to small businesses by which they can extend
their functional or operational areas. Hence, evaluation of future or existing growth opportunities
can be done through different planning tools and techniques, i.e. Ansoff Matrix and BCG matrix.
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Ansoff Matrix is one the best planning tool which classifies business growth strategies in
four parts so that firms can selected target market according to their nature, size and area of
interest (Levy, 2016). Fordway Solutions works with medium to large businesses over all sectors
by offering them complex IT needs. It follows customer'-focused approach by having an motive
to cope and mitigate IT risks as well as plan and manage cloud effectively. Following is given
various growth strategy can be acquired by company for its future success, such as - Market penetration – In this, companies acquire certain plans or programmes to sell its
product or services into current market. The main focus of the strategy is to increase sales
and market share through its current offerings. In order to penetrate in market
successfully, firms prepare different marketing campaigns and promotional events thus
many people can know about the brand. Fordway Solutions mainly provides cloud
services so that it needs to focus on managing all services effectively. Product development – It involves producing new products and services as well as
modifying the existing once related with needs and wants of customers. At this time,
firms can leverage its capabilities or strength through generating new product for their
target audiences. Here, it must be considered that if new product is not able to satisfy
customers' needs in effective manner; then people won't consume them; it raise the
chances to get failure of new products. Fordway Solutions can adopt this strategy to
expand its product line and improve brand image. Market development – Another option available in Ansoff Matrix is market development
which implies to pursuit into other geographical regions or market segments. Market
development may be good strategy for companies only if firms have effective core
competencies to face all challenges of new markets. This strategy is more risky than
market penetration strategy because corporations do not have idea of new market
segments (MacLeod, 2013). At present Fordway Solutions Ltd., is serve its services to
UK organisations and can expand businesses in other nations as well.
 Diversification – It is most risky strategy in grid of Ansoff Matrix as it requires both
market and product development which perhaps outside the core competencies of the
company. Diversification strategy can be acquired by SMEs if they have ability to bear
all losses and having chances to obtain maximum returns. Beside this, advantage of the
tactics is it reduces business portfolio risk.
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As earlier mentioned, the growth strategy of Fordway Solutions is to extend its product
portfolio by executing new and innovative features in it so as to grab high market share and
competitive edge. In this, product development strategy will be appropriate for it in sense of
growing and diversifying over the market. While developing or modifying its existing services
firm should conduct market research and recognise market needs.
TASK 2
P3 Assess potential sources of funding available to a business
While planning growth opportunities, determination of financial availability is one of the
important task for management. Having sufficient finance or funds help companies to acquire
any action plan or strategies thus business can effectively develop and diversify at marketplace.
The chosen expansion plan of Fordway Solutions is development of existing product and service
line; for this purpose the business needs strong capital. Apart from this, Fordway solutions is to
also entered into contract named “Development of a cloud based CRM system, Brand
Development & Marketing and IT Equipment – IVS/035/P0”. The maximum bid of this tender is
£30k but firm has available only £20k; hence it has decided to collect remaining amount from
various sources of finance, such are under beneath -
Bank loans – It is one of the effective source of finance available for business
associations. Business planning starts with expanding operations and for this there is required
substantial amount of capital. Bank loans offer tax breaks and lower interest rates to enterprises
(Moseley, 2013). Loans can be provided to start ups and existing businesses as they easily
accomplish their operations without any interruptions.
 Benefits – Bank Loans usually relies upon value of a business and also provide flexibility
to companies at the time of payment. While making payments, owners only have to
worry regular instalment on time. Banks also does not measure how and where an
individual is using the amount of loan. Another benefit of Bank loans is they are tax
deductible and on fixed rate loan interest rates remain same in duration of loan.
 Drawbacks – There is lengthy process to obtain bank loans unless a SME does not have
record of its payments. Banks are fully careful towards clearly repayment of their loans
and also ensure to cover all losses. It is essential for companies to lease their personal
property to take loan and if a business fail then entire assets of borrowers get seized by
banks to cover up the amount of loan.
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Crowdfunding – It is also known as one of the popular way to raise business or project
funds by calling numerous people to invest in small amount of capital via online. Crowdfunding
is treated as alternative source of finance that implies it doesn't include traditional banks
(Schetke, Haase and Kötter, 2012). Most of the entrepreneurs post their business idea or new
project on crowdfunding websites and there interested people can come up to invest in such
projects by expecting certain amount of returns.
 Benefits – Effective crowdfunding projects enable to get vast amount of attention on
different sites thus to grow beyond by raising capital. Accomplishing of business
activities through Crowdfunding is known as valuable form of marketing. it also helps
owners to get feedback upon business ideas and suggestions how to improve it.
 Drawbacks – If target profits isn't obtain, potential investors get back their interest and
business fall into losses. There is a risk of failed project may damage market reputation of
business and reduces sales revenues or profit margins. Beside this, to gear up in society
businesses need certain time and money, publish their projects, bring innovations which
can be critical and most of SMEs failed into this situation.
` Venture capital – It is the method of obtaining funding for a business in exchange of
equity stake. Additionally, Venture capitalists typically spread out their fund over a number of
investments so that returns from successful investments will outweigh the losses from failed
ventures (Todes, 2012).
 Benefits – Having a great corporate experience, venture capitalists are enable to deliver
expertise advise or suggestion for business expansion and market growth.
 Drawbacks – There is a risk of loosing investment and return of venture capitalists is
relies upon the growth of a business; thus most of Vcs do not wish to invest in SMEs.
Therefore, in order to get remaining amount for bidding, i.e. £30k Fordway Solution Ltd.,
can acquire bank loans as it is legal source of finance or funding. UK government has also
reduced tax or interest rates on bank loans of carry out by SMEs.
TASK 3
P4 Design a business plan
A business plan is a written documents which signifies detailed information about
products, leadership, financing, strategies, management, operational models and further aspects
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which are required to obtain market growth and success of a business association. It also
encompasses with necessary resources which carries out working activities or processes of a
firm. Henceforth, firms are required to prepare an adequate business plan that render proper
direction to put efforts and obtain goals (Valler, Phelps and Wood, 2012)
Overview of the company - Fordway Solutions Ltd., working in UK market since 25
years by providing expertise IT solutions or services to leading organisations. The firm has
obtained success through integrity, skills and hard work of staff members. Fordway Solutions
deals in sectors like – central government, commercial, local government, NHS, construction and
engineering. It is also having a partnership with Microsoft.
Vision and mission of the company – The vision statement of Fordway Solutions is to be
more trusted and effective IT service and cloud computing service provider firm of UK. Whereas
its mission statement is to manage and eliminate all future risks or uncertainties related with IT
infrastructure and cloud consolidation that fits in nature of IT services of businesses. In order to
attain its vision and mission statement, the organisation is focusing on teamwork, adaptability of
changes and greater performance results. According to the vision and mission of Fordway
Solution, it gives strength to IT infrastructure of the company which enables to attract large
group of customers in a certain time period.
Products and services of the company – The main service which is provided by Fordway
Solutions is to resolve IT problems and help clients to do business in better way. It develops
effective IT strategy for every business thus to meet long term needs. Another services of
Fordway Solutions is to provide cloud and management from UK data centres to public and
private companies. All cloud services are easily available on G-Cloud's framework of
government. Cloud services of the company can be aligned to businesses and are based on the
ITIL service management framework; that helps in rendering best IT services to firms (van
Assche, Lo and Beunen, 2013).
Situational analysis – In this stage, there is analysed all those factors which have vast
impact on firm's existing and future market situation. Identification of present market situation
can be done by evaluating strength and opportunities of company.
Strength
 Fordway Solutions Ltd., is most
successful and effective company of IT
Opportunities
 Having Partnership with Microsoft is
very greatful for Fordway Solution; as
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servicing by having an experience of 25
years.
 The brand is dealing with many leading
corporation which helps it in obtaining
high profit margins and sales revenues
in a certain time period.
 It doesn't have external investors or
stakeholders who force to recommend
specific course of action that means
Fordway Solutions can work freely. The company identifies its clients by
the size, complexity and significance of
their IT operations or needs instead of
industrial needs; it builds clients trust
towards firm.
it will provide strong brand image to
company at marketplace.
 Emerging markets and innovations in
cloud technology would be another
opportunity for the company.
 After Brexit, UK government has
reduced taxes and duties on integration
of small businesses.
Mapping out budget – After conducting situational analysis, there must be mapped out
an budget which dictates how funds or capital available within organisation for product line
expansion and remaining amount will be covered up by bank loans. A budget refers the amount
that is going to be spend in all working activities and practices (Ward, 2016). Following is
defined cash flow statement of Fordway Solutions, i.e.
Cash flow Statement
Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 25000 32250 31750 29750 26750
Budgeted cash receipts 12400 1600 1100 1000 15000
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Total cash available 37400 34850 32850 29850 28250
Cash distributed
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Overhead 900 600 600 600 600
Selling and distribution 650 700 700 700 700
Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 2515
Marketing budget
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
Sales promotion 2000 8000 3000 7000 5000
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