Fountain-Head: Business Growth Plan for Event Management Company

This report provides a detailed business growth plan for Fountain-Head, a new event management company launching in the UK. It explores key considerations for evaluating growth opportunities, including competitive advantages, Porter's Generic Competitive Strategies (Cost leadership, Differentiation, Focus), and PESTLE analysis (Political, Economic, Social, Technological, Legal, and Environmental factors). The report applies Ansoff's matrix to evaluate growth strategies, covering market penetration, product development, market development, and product diversification. Furthermore, it assesses potential funding sources, including bank loans and crowd funding, crucial for the company's initial investment needs. The report also includes a design for a business plan for growth, essential for attracting investors and ensuring sustainable expansion. The assignment concludes with an assessment of exit or succession options for small businesses.

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key considerations for evaluating growth opportunities..................................................1
P2 Apply Ansoff's matrix for evaluating growth opportunities.............................................4
TASK 2............................................................................................................................................5
P3 Assess potential sources of funding available to business................................................5
TASK 3............................................................................................................................................7
P4 Design business plan for growth.......................................................................................7
TASK 4............................................................................................................................................9
P5 Assess exit or succession options for a small business.....................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Every organisation in a country seeks to expand its business in an economic manner. To
gain this, employers are needed to make an action plan for growth of business. This planning for
growth includes entire activities, techniques and resources to meet needs of business and
stakeholders. In addition to this, it includes many strategies also which is considered as backbone
for planning as well as laying the foundation of process in a successful manner (Barbour and
Deakin, 2012). This report is made to demonstrate how SMEs develop their business and gain
growth by planning process. To analyse this, a new company is going to launch in UK
marketplace named by “Fountain-Head” which deals in event management sector. It will provide
catering and other services to other organisations in order to organise program and events of
them. This firm will apply for government contract in which employers are needed to have
adequate amount of fund for bidding i.e. near about £300,000. But instead of this, firm have only
£20,000 for investment in business. Thus, entrepreneurs are required to raise funds from different
sources.
TASK 1
P1 Key considerations for evaluating growth opportunities
In today's marketplace, many companies in small sector are opening their business on
daily basis. But before launching business, entrepreneurs are required to grab information of
marketplace first for generating innovative ideas. This would help them in formulating different-
different strategies that provide a specific direction to business. Along with this, it also aids them
in planning business activities properly which lead and drive organisation to gain growth. As per
present scenario, an entrepreneur is going to launch business in event management which will
provide services to other companies in organising their events (Beatley, 2014). The major steps
required in strategic process of planning for evaluating growth process for Fountain-Head are
given as below:-
Competitive advantages: It describes favour-ability of marketplace through which
entrepreneurs of “Fountain-Head” can become able to hold preferences of clients and gain
advantages from competitors who are already established their business. For this process, present
firm needs to design its portfolio in an attractive manner. It helps in gaining attraction of
customers by describing them how parties or events will organise. As this company deals
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business in small sector, so it required to arrange sufficient resources like finance, equipments
and high skilled employees.
Porter's Generic Competitive Strategies: This technique helps a new firm how to
pursue competitive advantage in a particular marketplace (Porter’s Five Forces of Competitive
Position Analysis. 2018). It was founded by Michael Porter in 1980 who describes different
tactics for a company to construct business structure. It includes three/four generic strategies that
are cost leadership, differentiation and focus as described below:-
 Cost leadership: This strategy of porter describes the way through which SMEs can to
overcome from shortage of funds by utilising available resources in a proper way. As
main focus of Fountain-Head's owners is to keep price rate of services low to gain
attention of clients. Therefore, this strategy defines techniques by which they can become
cost leader in described sector. Differentiation leadership: This is an another strategy which describes management of
Fountain-Head how to make its services more unique and different from other event
companies. It is main responsibility of managers to design portfolio in adequate manner
that generate interest in customer's mind and assist them to avail such services. In
addition to this, they should give employment to high skilled and experienced people who
have possessed innovative and fresh ideas in required field (Chapin, 2012).
 Focus: This strategy concern on a narrow segment as well as attempts to gain either
product differentiation or cost leadership. In context with Fountain-Head, currently it
focuses more on cost leadership as product differentiation needs much finance. It will
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help in enjoying a high degree of client's loyalty as well as reduce bargaining power of
suppliers also.
PESTLE analysis: In order to evaluate growth opportunities, PESTLE analysis is
considered as best method which helps a firm in building their strategies as per current situation
of marketplace. Thus, it is necessary for entrepreneurs of Fountain-Head to conduct this analysis
as stated below:-
Political factor: To launch a business, it is required to get license from regulatory bodies
of a country. Therefore, owners of Fountain-Head are required to register business and build
structure as per rules and regulations of government. It will help in carrying out business
activities in legal manner. As small sectors support government of a nation in enhancing
economy, therefore, to open their outlets, Government of UK and Crown commercial services
offers different schemes as well as provide funds for SMEs (Chen and et. al., 2014). It provide
them opportunity to enhance business and gain growth as well.
Economic factor: This factor will entail economical condition of a marketplace and
nation that helps entrepreneurs to build strategies accordingly. It includes changing rate of
interest rate, inflation or deflation period, exchange rate and more which affect profitability of
business. As presently, economical condition of UK is much good therefore, it gives opportunity
to launcher of Fountain-Head to run business and gain profitability in smooth manner.
Social factor: This attribute states interest level and demand of customers present in a
marketplace that assists organisations to offer services as per preferences of them. For new
entrepreneurs who want to open company, this factor also describes scope of their business. In
context with event management, there is much scope of new business launcher. As today, every
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company or customers on individual basis wants to organise parties or events at high scale. So
they used to spend much money for making parties as per status. This would give a opportunity
to employers of Fountain-Head to attract mind of them and organise events in grand manner on
low budget.
Technological factor: This tactic entails business owners of Fountain-Head to introduce
latest technique in business. This would help in giving giving high visual and 3-D effects in
events. It would attract minds of customers and assist them to give contract to this firm for
organising parties. In addition to this, innovative technologies aid marketing department of
SMEs to promote business through online techniques in a fast manner (Eddleston and et. al.,
2013).
Environmental factor: While constructing products or services of company, it is required
by management to consider environmental laws also. As Fountain-Head works as event manager
and offers catering services also therefore, it needs to focus on that such products will not affect
nature. In addition to that, wastage of production and other parts are needed to reduced and
destroy in specific manner so that environment can keep safe from the same.
Legal factor: This factor states rules and regulations which are enacted by government. It
includes employment legislation that gives certain rights to employees in order to keep them in
an organisation. Therefore, it is necessary for Fountain-Head to provide safe working
environment to employees and give them proper treatment.
P2 Apply Ansoff's matrix for evaluating growth opportunities
To start-up a company at competitive marketplace, it is necessary for entrepreneurs of
Fountain-Head to use different marketing strategies. For this process, they can use Ansoff Matrix
technique to construct unique strategies through which they can examine opportunities for
growth of business.
Ansoff's growth vector matrix: This matrix was given by H. Ignor Ansoff in year 1957
that gives opportunity to entrepreneurs in constructing systematic strategic marketing plan
related to organise business structure as per new trend of marketplace (Keough, 2015). It gives
four different kind of strategies as shown below:-
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Market penetration Product development
It is an initial part of Ansoff matrix that entails
organisation to develop strategies in marketing
segment. It will help in promoting business in
marketplace and assists customers to use
services. This process also boost sales
activities of a company. Therefore, Fountain-
Head required to use this matrix to grab
attention of customers (Levy, 2016).
It is an another matrix strategy which states a
firm to sell different services at marketplace by
creating product differentiation. It helps a
company in how to develop products and
makes the same more innovative so that
customers' expectation can be fulfilled. Thus,
Fountain-Head needs to provide unique
services related to event management.
Market development Product diversification
It suggests a company to target new market
area by conducting PEST analysis. In addition
to this, by internal analysis technique they can
grab opportunities present at marketplace
through which sales performance can be raised.
It is most risky strategy related to enhance
economy of a company. Apart from giving
expansion of business, main advantage of this
strategy is that it helps in selling completely
different and unique services to customers.
TASK 2
P3 Assess potential sources of funding available to business
The basic requirement of every business organisation is adequate amount of funds. As
finance plays an important role in conducting their activities. In case of start-up business,
employers are needed to introduce sufficient capital which they can raise from different sources.
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But before to take loan from money lenders, it is essential for them to evaluate process of them
first which includes advantage and disadvantage in appropriate manner.
Fountain-Head is a small event management company which is going to take a contract
from catering service whose current value is £180k. This time, employers have less capital which
is near about £20k. Therefore, this firm needs to take borrow from money lenders in order to
meet requirement i.e. £160k.
Sources of finance: In UK marketplace, there are various sources are available from
where SMEs can raise funds (Li, Mobin and Keyser, 2016). Thus, in order to meet requirement
of finance, management of Fountain-Head use following source of funds:-
Sources of finance Process Benefits Drawbacks
Bank loan This source is
considered as best
method as it provides
loans on easy terms
and condition. Other
than this, interest loan
of all public banks are
approximately same
and fixed as per
governmental law. In
UK, financial
institutions grant three
kinds of loan generally
that are- Short-Term
for 2 to 3 years,
Medium-Term for 3 to
5 years and Long-
Term avaliable for
more than 5 years.
As paid interest is tax
deductible so, it gives
opportunity to
employers of small
companies to start-up
business on required
capital easily.
While paying interest
to banks, a company
cannot share profit
with lenders.
Crowd funding As investors can track In case of not meeting
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performance of
company's business
which will help in
promoting brand
through network of
them easily.
funding target, finance
that a firm has been
taken will be returned
to investors again that
damage image of
business.
TASK 3
P4 Design business plan for growth
Business plan is a written document that is prepared by management team of a company.
It entails essential information of business like background, vision, mission, set objectives,
products or services, available finance and more (Mitchelmore and Rowley, 2013). In addition to
this, it also describes internal analysis of business, required modifications in system and
strategies in a given time framework. It would help in achieving success of business as per
expectation.
Business plan of Fountain-Head:
Company's Description: Fountain is a small organisation of UK deals in event sector.
This firm offers a wide range of services to clients on affordable price rate. At initial stage, this
firm gives employment to 15 to 20 members only in different-different departments. Other than
this, instead of product differentiation, management currently focuses on cost leadership i.e. to
provide services on less price. As per present scenario, this enterprise is engaged in bidding
process for providing catering and vending services to other companies of UK marketplace
(Moseley, 2013). In this context, Fountain take contract from catering services company in
which the contract value is £180k. As company having personal capital i.e. £20k and they needs
to borrow the rest of money which is £160k which will be lent from banks or other financial
institutions.
Mission and Vision: The main mission of Fountain-Head, “To present exceptional and
unique services as well as extraordinary programs for every customers in catering, events,
tourism and hospitality”. While vision statement of this firm “ Within next few years, Fountain-
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Head will become one of the leading company in event management by outsourcing its services
in different parts”.
Strategic objectives: In Fountain-Head, employers set objectives to enhance value of
business in upcoming years from 20% to 45% in systematic manner. To gain this achievement, it
is mandatory for this company to build objectives by concerning on every aspect of SMART
technique. It defines that objectives or goals should be specific, measurable, achievable, realistic
and time bound.
Objectives:
 To provide best catering and event management services at reasonable and less price
rates.
 To incorporate research & development functions in event management in first three
years.
 To become a company which is known for its values and high standard to all customers.
Products and services: Fountain-Head Company is a party planning vendor that offers
private catering services, organises events in restaurants and hotels of different locations etc.
Corporate event management, entertainment shows, social events, brand promotions and more
are some services offered by this firm.
Internal analysis: This type of analysis help Fountain-Head in grabbing appropriate
information about own strengths and weaknesses (Todes, 2012). It also describes opportunities
through which such weaknesses can be reduced and threats present at marketplace which come
as barrier for success of this company.
Strengths:
 High and special effective service of this company shows its major strengths. It will
provide high dimension sound and visual effects in events which is beneficial in gaining
attention of customers.
 Well-trained and knowledgeable staff members of this firm helps in enhancing good
image of business at marketplace as well.
Weaknesses:
 Focusing on each sectors of events of this corporation create difficulties for management
to maintain product differentiation. Therefore, at initial stage, this firm needs to focus on
some areas only so that better services can be provided.
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 In starting years of operation, this firm needs to reduce high expectation from business.
Opportunities:
 A rapid growth in economy give opportunity to Fountain-Head to outsourcing its
planning activities.
 High status and good income level of customers, give advantage to this firm to grab
attention of them by organising their parties as per standard.
Threats:
 As many competitors are already present at marketplace which use high-technologies in
businesses give threat to this firm. It also demand to create product differentiation and
offer services at low price rates to gain attention of clients who are not able to pay high
amount. Change in economical and interest rates effect profitability of this firm also.
Financial information and strategic objectives for scaling up a business: Entrepreneurs
of SMEs are requires to introduce sufficient finance in business (Valler, Phelps and Wood,
2012). In addition to this, to conduct activities in proper manner, Fountain-Head needs to arrange
funds from different sources like take loan from banks and raise finance through crowdfunding
and more.
TASK 4
P5 Assess exit or succession options for a small business
Since small and medium-size organisations have faced various issues due to shortage of
sufficient resources. Therefore, they need to take proper action plan before expansion of
business. It will also help them in executing strategies as well as utilising available resources in
more adequate way. In addition to this, launching new business in particular field may give
either positive or negative result (Wu, 2015). Therefore, it is necessary for owners of Fountain-
Head to evaluate ways through which they can make improvisation in business and enhance
chance of successful outcomes.
Ways to provide succession of business
Advantages Disadvantages
Use of expertise knowledge In designing structure of Taking suggestion of
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