Unit 42 Business Growth, Funding, and Exit Strategy Report

This report provides a comprehensive analysis of business growth strategies, funding sources, and exit options for Gesture Group Ltd. It begins with an introduction outlining the company's focus on retail and charitable contributions. Task 1 evaluates growth opportunities using the PESTLE and Ansoff matrix models, identifying market penetration, product development, market development, and diversification strategies. Task 2 explores funding sources such as personal savings, bank loans, angel investors, and crowdfunding, recommending personal savings and bank loans. Task 3 presents a business plan with SWOT analysis and objectives, while Task 4 recommends exit and succession strategies. The report concludes with recommendations based on the analysis, emphasizing product development and financial planning.

Unit 42

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Critically evaluate specific option for growth by using model....................................................4
TASK 2............................................................................................................................................7
Sources of funding for a business................................................................................................7
TASK 3............................................................................................................................................9
Business plan...............................................................................................................................9
TASK 4..........................................................................................................................................14
Recommendations to company regarding exit or succession option.........................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Planning for a growth is the strategic business activity which enable a business owner
to plan and track the growth in their revenue. In the same way, current report will also help to
gain knowledge with regards to business and its growth. The chosen firm for this report is
Gesture Group Ltd which is deal in retail industry and also promote sales for local business.
Company also share its 50% profit to chosen charities with an aim to become a pain-free way
to support favorite cause. The current study will help to evaluate the growth opportunities
along with identifying the risk factor. Also, study will examine the potential source of
funding with justified argument for an adoption of source. Report will present detail business
plan that demonstrate the knowledge to attain the business objectives. Lastly, report will
critically evaluate exit and succession option for a small business along with justified
recommendation.
TASK 1
Critically evaluate specific option for growth by using model
In order to determine the competitive advantage, external environment of the business
is determine by using Pestle analysis, which is as mention below:
Political factor:This factor deals with the political stability of the country and in the retail
industry, revenue and profitability of retail store affected by the government policies. For
example, due to anti-trust issue, most of the customer did not spend their amount to purchase
the thing. This in turn affect the business profitability in opposite manner.
Economic factor:Sudden fluctuation in the economy of the country will affect the business
performance in negative manner (Wey, 2019). Such that due to inflation, customer are not
ready to pay excessive amount and this in turn creates opposite impact upon business. Further
Gesture Group Ltd offer product to their customer at low rate and this in turn improve the
result of a business at positive manner.
Social factor:Perception of a customer keep changes as per the change in market. This in
turn affect the business performance and their offering as well. Further, to meet the same,
company also offer the best variety of product to their customer and this in turn improve the
result of a business as well. For example, quoted firm raise the fund and then contribute to
50% to charities.

Technological factor:This factor deal with the advance technology and that is why, to
comply the same company has to implement advance technologies. For example, it uses
Artificial intelligence in order to improve the business operations. Hence, it is examine that
company uses best technique to meet the set objective (Ballaro and Polk, 2017).
Legal factor:This is deal with laws and regulation define by the government and it is
necessary for the business to adhere all the essential laws. Such that Gesture Group Ltd
adhere with Employment law in which it pay equal to all the employees without any
discrimination. Hence, it is clearly reflected that through law, company’s operations are run
smoothly.
Environment factor:This factor deal with environment such that company comply with
Sustainability act in which it did not use the material which cause negative impact upon
environment.
Ansoff growth vector matrix
This model suggest that the business attempts to grow and its depend upon the
market. Hence, the output generated by the model recommend the company in which

direction the business should move. There are four quadrant which help the business to
examine the strategy.
Market penetration:It is the growth strategy where business focus upon the selling
existing product into existing market. Through this method, company is easily increase the
market share of a current products which is attain by improving pricing strategy and
advertisement. Along with this, this strategy is mainly used by the company which focus on
market as well as products (Pathiranage, Kantakumar and Sundaramoorthy, 2018).
Product development:If a business uses this strategy which means company aim is to
introduce the new product into existing market and it also require development of new
competencies that helps to attract the customers towards it. Moreover, with the help of this
strategy company improve its research and development and being first to market.
Market development:In this, business seek to sell its existing product into new market
with an aim to develop new distribution channel with new geographical markets. Hence, it is
examine that it is quite risky strategy among above two strategy because there is no surety of
getting product and that is why, it affect the business in negative manner (Faraji, Hashemi-
Dezaki and Ketabi, 2020).
Diversification:it is one of the most risky method and majority of the company did
not uses the same because business is moving into market in which they have little or no
experience. Hence, with the help of this strategy, business develop new product in new
market.
Among all, Gesture Group Ltd uses product development strategy because it is one of
the most successful method that helps a business to determine the growth. In this method,
company is improve its packaging material used to offer product and this in turn take a
business at further level of success. Hence, it is not possible in the case of other methods that
is why it is suggested to the quoted business to take a direction by using product development
strategy that helps to minimize risk and improve the brand image of a firm as well.
Risk
 While using market penetration option company face issue of cost because it is all
about to improve the existing product and it is possible only when the business have
enough fund. This to mitigate the same, it is recommended to the business to use

personal saving which in turn improve the existing product and directly cause positive
impact upon profitability as well (Dierwechter, 2017).
 If Gesture Group Ltd uses product development strategy company may face risk of
not having an experts who has a knowledge of entire process. In the same way to
improve it is recommended to the company to hire the trained management staff
which in turn support to successfully launch the business.
 It is not easy to offer the product into new market and that is why, by using market
development strategy, company face issue of selecting target market. Thus to
minimize the risk, it is recommended to the firm to make effective research that
support whether the market is better for offering product or not (Weiss and
et.al.,2020).
 Diversification is quite risky strategy and if company use this growth option then
company must have a clear idea about customer expectation. This in turn improve by
using situational analysis and different model which determine the exact need and
then implement the same.
TASK 2
Sources of funding for a business
Every business wants to stay ahead in the business and for that company may require
fund that helps to improve the business operations. Such that there are range of sources of
funds available for the company that support the business to run in effective manner some of
them are as mention below:
Personal saving: It is one of the most simple method through which the company
generate fund and meet the demand in better manner. Such that with the help of this method,
investor may also take a risk and achieve the set target for the firm as well (Personal saving,
2020).
Advantages:
 It gives much more control than other source of finance option.
 Company’s owner retain full ownership of a business which in turn improve the
overall business.
Disadvantages:

 Sometimes due to use of personal saving may lead to lose home and their personal
possessions as well.
Bank Loan: Another common method that assist to provide fund to company for all
small and medium business. With the help of this method, bank provide amount at particular
interest that assist owner to meet their requirement. In this company may take long term or
medium term in order to attain the specific needs as well.
Advantages:
 This source of option has a strong control of company and it is one of the highly used
method among all.
 Company has to return the amount as per specified period and this in turn improve the
results (Room, 2016).
Disadvantages:
 Due to high interest rate, most of the company did not use this option
 Taking loan from bank is quite tough process and it is not possible for the company to
qualify the same.
Angel Investor: This are the wealthy individuals who invest in small firm which is
owned by other. In this they provide amount to their customer with transparency and they
also provide advice so that business will run in better manner. Apart from this, angel investor
also support the company without getting any advantage.
Advantages:
 Funding range is the best option for the company that support to generate the fund.
 There is no debt financing option and that is why, it is suitable for the company
finance.
Disadvantages:
 There is less control of the company because most of the decision are taken by angel
investor
 It is less transparent option for the company.

Crowdfunding: This is another best method that help the company to get a finance
from the large number of individual to finance a new business venture. They are available
online, but without proper checking they did not support the business to get best outcome.
Advantages:
 It is one of the fast way that helps to raise finance with no upfront fees.
 With the help of this method, company take a guidance from their experts and then
improve the same (Poole, Fallon and Sen, 2020).
 Also, there is no much financial risk and that is why, most of the business owner uses
this method.
Disadvantages:
 Fail of the project may cause negative impact upon business performance.
 It is not easy method to identify the crowd funding source easily for the company.
Among all,it is recommended to Gesture Group Ltd uses personal saving and bank
loan from all the source of funding because assist to take own control. Also due to implement
new product within a business, it is necessary for the company to take a decision by their own
and this in turn improve the overall business performance as well. Hence, these options are
considered best because owner exactly know how much money they need in order to run a
business and determine the spending. While other source did not support and assist to
examine the best results as well.
TASK 3
Business plan
Aim
To invest in increasing the quality of packaging of the products of the company in order to
increase consumer attraction.
Objectives
The major objective of the company is to increase sales of company by 20 % till March 2021.
To increase the investment by 20 % in order to attract the consumers to purchase the product
and services of company

SWOT analysis
Strength
The major strength of the company is that the
company is having a good set of employees which are
engaged towards the company to a great extent
Another major strength is that company is having a
strong financial position and this assist company in
securing a competitive advantage.
Weakness
The major weakness for the company is that it is not
able to easily adapt to the fast changing needs of the
consumers (McKenzie and Sansone, 2019).
Opportunity
The major opportunity in the market is to increase its
digital marketing presence.
Another major benefit is that consumer has increased
its presence in organic product as well.
Threats
The major threat for the company is the high
competition which is present in the current
competitive market.
Another major threat is the changes in the need and
preferences of the consumers are changing very
rapidly.
PESTLE analysis
Elements Description
Political factors IN the current pandemic the government has put many
restrictions over the inter country trade and this has a
negative impact over the working of the company.
Economic factor This is a factor in which currently the interest rate over
loans is low and this has a positive impact over the
company as they will have to pay less of the interest
and this will save the cost of company.
Social factor With respect to the current pandemic the consumer has
become much conscious relating to the safety and
hygiene of product. Thus, the use of good quality
packaging will assist in attracting more consumers
(McKeever, 2016).
Technological factor In advance working environment the technology has
become more advance and using this new technology

will increase efficiency of the company.
Environmental factor The current new packaging is environmental friendly
and is good for environment and society. Thus this
will increase the efficiency of the company.
Legal factor This includes the laws applicable over the business
and this involves complying with these laws in any
condition. thus, complying with these laws will
increase trust of consumer over company.
STP
Elements Description
Segmentation The company majorly focuses over demographic and
behavioural segment as this involves consumer having
attraction towards the good and safe packaging of
product.
Targeting Under the demographic the major target will be people
belonging to the age group of 20- 45 years. This is
certainly because of the reason that this involves the
people who are more modern and they will get
attracted towards the good packaging.
Positioning For effective positioning of the product Gesture group
will provide good quality packaging as when anyone
will talk about packing then everyone will remember
only Gesture group.
Marketing mix
Element Description
Product The product in this new development is the new and
advance environment friendly packaging of the
product.
Price The price which will the company use is the

penetrating pricing strategy, The major reason for this
is that under this strategy the company will start by
using low price and when the product of the company
penetrates in market then they price will be increased
(Ivanisevic and et.al., 2016).
Place The place provided for the consumer to get the product
with new packaging is both the physical stores and
online with help of websites and the mobile
application as well.
Promotion This is the most important thing for the business to get
successful as if the company will promote its product
and services in the good and effective manner then this
will increase competitive position in the market. thus,
for this the company makes the use of the digital
marketing and the print media advertising.
Financial information
Particulars
Quarter
1
Quarter
2
Quarter
3
Quarter
4
Cash inflows
Opening cash inflow 19982
41155.
8
65525.
6
92055.
5
Sales revenue 30604
32477.
2
34465.
1
36574.
6
Other income 6000 6000 6000 6000
Total cash inflows 56586 79633 105991 134630
Cash outflows
Material 5590.6
4871.5
8
5169.7
6
5486.1
9
Labor 6000 6000 6000 6000
Other expenses 6867.5 7725.0 8689.6 9774.6

2 3 2
Administration expenses 12000 12000 12000 12000
Total cash outflows
30458.
1
30596.
6
31859.
4
33260.
8
Cash deficit / surplus or closing cash
balance
26127.
9
49036.
4
74131.
3 101369
Sources of fund
There are several sources by which company can collect money or fund such as grants,
savings, donation, crowd funding, bank loan and others. Some effective sources of fund that
can be beneficial and have several advantages are:
Crowd funding: It is one of the effective ways of funding in which company can collect
amount from a large number of individuals for running business and performing business
activities. It is free to set up business as by setting up effective crowd funding websites,
campaigns and platforms it can ask for funding from people (Allison and et.al., 2017). One of
the main advantages of this way of funding is company does not require paying high interest.
One disadvantage of it is it is time consuming.
Personal saving: While deciding about finding appropriate ways company should focus on
this source. It should be the preliminary consideration. From personal saving of all partners,
company can collect huge amount or money for running business. It can also help company
in knowing required amount for running business. There is no cost apart from the lost
opportunity to earn interest. Company can also know that how much money it has and rather
this how much exact amount it will require and on this basis it will have to pay lower interest.
Monitoring and evaluation
It is important for company to monitor its business plan or all business activities in order to
know whether it is going on the right track or not. On the basis of monitoring and evaluation
it can take better actions for improvements. One of the best strategy and tool that can be used
in monitoring business plan and performance of its business is KPI. Knowledge process

indicators is one of the effective tools and with it help, Gesture group retailer can measure
effectiveness of its performance and progress towards an intended results. This tool also
provides to company a focus on its operational as well as strategic improvements that can
help it out in taking better decisions (Wetzstein, 2016). Other reasons of making use of this
tool and focusing on monitoring and evaluation of business plan is going on the right
direction and accomplishing pre determined goals.
TASK 4
Recommendations to company regarding exit or succession option
Selecting business successor is one of the business objectives of planning an exit
strategy but for this company requires an effective and careful analysis. While deciding and
analyzing it is important for this company to know that what exactly it wants from selling of
its business and who can be best for it and how can it can accomplish selling goals. For this it
requires detailed analysis and knowing all advantages and disadvantages of succession
strategy. Among all exit and succession planning option, it is recommended to the company
to take transfer ownership to family because it is assist to generate the best results and
working together may also take a small business at further level of success. Also, financial
security is another benefit which a firm get while transferring business to family member
(Pros and cons of using transfer of ownership to family, 2020). It this company transfer its
business to its family member then it can be sure that it is going on the right tract and can also
make sure that business is in right hand and they will try to improve image and maintaining
image that is being maintained by this company. So, due to financial and other security this is
called one of the best and effective succession or exit strategy. The successor may be own
child rather than a third party and that is why, it is one of the best option among all that
continue improve the business operations in better manner.
Other effective succession or exit strategy for Gesture group Ltd, it is important for
this company to focus on liquidation or think about it. It may be beneficial for this company
if there is no one to buy it or it does not find suitable company to buy its business. In
liquidation, company requires selling its entire asset, collecting outstanding accounts
receivable as well as pay of its all bills if there is left anything. There are several benefits of
selecting or suggesting this strategy. Among all of advantages and effectiveness one of the
main reasons of recommending this strategy is business lacks sufficient income producing

capacity apart from its owner’s direct efforts. Because no one pays more than the value of its
asset so, by liquidation it can get better amount of its assets and all resources (Chirico and
et.al., 2020). Other main reasons of suggesting this exit strategy to Gesture group Ltd is to
allow this company to produce the smallest return for the owner’s lifelong commitment to the
business. So, overall it can be said that by focusing on both these succession or exit strategy,
it can accomplish it selling goals and can make itself successful.
CONCLUSION
By summing up above report it has been concluded that there are many risk which a
firm face in order to take any step. Therefore, to improve the same it is necessary for the
company to implement the strategy that helps to minimize the risk for Gesture Group Ltd.
Further the study also summarize that by applying Ansoff growth vector matric company
uses product development in which sustainable packaging material is used which are
recyclable and this in turn improve the overall performance of the company. Apart from this
study also concluded that in order to implement the selected idea, company require sources of
fund, for that it uses personal saving and bank loan that helps to implement idea in successful
manner. Moreover,the business plan developed that helps to determine the situation analysis
of a company and target market that helps to attract the customer at wide range. Moreover,
the firm is also use transfer the ownership to family as an exit option in order to take exit
from the current business easily.

REFERENCES
Books and Journals
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Chirico, F. and et.al., 2020. To merge, sell, or liquidate? Socioemotional wealth, family
control, and the choice of business exit. Journal of Management. 46(8). pp.1342-1379.
Dierwechter, Y., 2017. Urban Sustainability through smart growth: Intercurrence, planning,
and geographies of regional development across Greater Seattle. Springer.
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Online

Pros and cons of using transfer of ownership to family. 2020. [online]. Available through:
<https://www.exitplanning.com/blog/5-pros-and-cons-family-business-transfers>.
Personal saving. 2020. [online]. Available through:<https://www.exitplanning.com/blog/5-
pros-and-cons-family-business-transfers>