An Analysis of Growth Planning and Funding for Checkout.com

This report comprehensively examines growth planning strategies, utilizing Checkout.com as a case study. It begins by outlining key considerations for evaluating growth opportunities, including Porter's competitive strategies and PESTLE analysis. The report then applies Ansoff's growth matrix to assess market penetration, market development, product development, and diversification strategies. It further explores various sources of funding available to small and medium-sized businesses, such as SBA loans and angel investors, detailing their advantages and disadvantages. A business plan for growth is developed, incorporating financial planning, monitoring, and control measures. Finally, the report analyzes exit or succession options for small businesses, evaluating the benefits and drawbacks of each approach. The analysis provides a holistic view of the challenges and opportunities associated with business growth and development.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P 1 Key considerations for evaluating growth opportunities......................................................1
P2 Applying Ansoff's growth matrix for the evaluation of opportunities for growth.................3
LO2..................................................................................................................................................5
P3 sources of funding and their advantages and disadvantages.................................................5
LO3..................................................................................................................................................8
P 4 Business plan for growth .....................................................................................................8
LO5................................................................................................................................................11
P5 Assessing exit or succession option for a small business and the benefits and drawbacks of
each option................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Growth planning is an economic activity that every organization adopt whether it is a large scale,
medium or small scale organization. It allows to keep a track record on company's growth and
development. It help an organization in allocating the limited resources in such a manner that the
focus and efforts are centralized toward the change in the business that is influenced by new
digital technology and differentiation from competitors. Checkout.com founded in 2009 by
Guillaume Pousaz (CEO and founder). It is a medium scale enterprise. And in the past 6 years
the company's journey from a start-up to an international company that deals in processing
billions of payment. The study includes techniques for evaluating growth opportunities, further it
evaluates the growth opportunities by using Ansoff Matrix Model. Sources of funding available
for a business, business plan prepared for growth with all the financial planning and monitoring
and control. In last study analyse the exit option from the business.
LO1
P 1 Key considerations for evaluating growth opportunities
The goal for every business irrespective of their sizes is working for profit maximization.
Growth can be achieved through effective planning and then monitoring and controlling the
growth.
Porter's competitive strategies-
 Cost leadership- This strategy target price-sensitive customers and by targeting their
market. The company will lower the price of its products in the target market. To be
successful in offering this low price and still have high return on investment and achieve
the desired profit, the company should able to have low operating cost of their product
compare to their rivalry firms. If an medium or scale size organization aim to achieve the
competitive advantage over other firms, the company should implement this strategy by
lowering the cost of production and it can be be done by having the latest technological
up-gradation, bulk purchasing,economies of scale and by exploring all other means of
cost advantage. Checkout.com being an medium scale organization focuses on this
strategy to capture the target market, to achieve growth and earn higher profits and thus
converting in an large scale organisation.
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 Differentiation Strategy – This strategy focus on capturing the market by offering
something different and unique. It can be applicable and successful when the target
segment is not cost conscious, customers have specific demands, market is competitive
and the organization has some new or unique resources and capabilities which help it
fulfil the demand those are possibly served but are unsatisfactory and are hard to copy.
The differentiated product will help the company in getting the competitive advantage.
Checkout.com adopted some new and unique techniques to grab a bigger market share.
 Focus Strategy – This strategy is not for large scale organizations due to small market
situations. Focus strategy is divided into two parts:-
Cost focus- If company wants to have an cost advantage and capture the target market, this
strategy is adopted.
Differentiation focus- This strategy is followed by the company's when they offer differentiated
products.(Duncombe, 2017.)
P.E.S.T.L.E. Analysis -
 Political factors- Government intervention are included in political factor like labour law,
environmental law, tariffs and political stability. Political factors also involve some goods
and services which are provided by government(merit goods) and some goods that
government does not want to provide. Government has a high influencing power on
health, education of the nation. The political factors, mostly the government policies
influence small scale and medium scale enterprises. These policies can either affect
directly or indirectly. Governments taxation policy, rules & regulations and import export
duties are major factors that affect SME business adversely.
 Economic factors- It includes economic growth, inflation rate and exchange rates. These
factors affect the operation of business and their decision making. This can help the
organization in achieving an competitive advantage. Lower unemployment rate, tariff
rates, inflation rates will help Checkout.com to gain an upper hand over other firms. The
growth and development of Checkout.com depends on economic period, if the economy
is on boom the business will flourish and if there is depression it will block the ways for
the growth of business.
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 Social factors- This includes population growth rate, health & safety. These factors affect
the demand of a product and the operations of company. The lifestyle of people, size of
family, purchasing power affect the company(Checkout.com).
 Legal factors- Every company needs to comply with legal policies to avoid any kind of
trouble. If the company does not comply with legal rules and regulations , then they to
suffer legal charges or penalties. Through this company name will suffer. Legal laws are
employment law, health and safety laws, consumer protection act should be implemented
strictly by every organisation irrespective of their size to successfully survive in the
market.
 Technological factors- As Checkout.com is an medium scale enterprise, technological
change impact company's operations. Advancement in technology will influence costs,
quality, efficiency and innovation. By using latest technology, an organization can have
low production cost and that gives them a competitive advantage.
 Environmental factors- This factor includes environmental aspect like climate, and
weather change which influence mostly tourism industry. This factors affect how
organizations operate the products. Geographical location, climate are the factors that
affect the business. Companies should find some ways to discharge wastes so that can
minimize their effect on environment. Find a way to recycle the waste. Analysing these
factors and then take mandatory actions will help organization grow.(Rudolf and et.al.,
2018.)
P2 Applying Ansoff's growth matrix for the evaluation of opportunities for growth
The Ansoff's matrix was developed by Igor Ansoff in 1957. It is a planning tool which helps
senior executives, managers and marketers develop strategies for future growth. It process
development with the existing products &new products and existing markets &new markets.
Ansoff's matrix provides four different growth strategies:
 Market penetration: the market penetration strategy is used to develop the existing
resources and capabilities. It is the least risky growth strategy. It is a strategy in which a
company tries to increase its market share using existing opportunities. This occurs when
the competitors reach their capacity limits too (ANSOFF MATRIX, 2013). The growth
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can be increased by selling more products and services to the existing customers or new
customers within the existing markets. The company can increase its sale by aggressive
promotion and distribution of products to its customers. Market penetration by a
company can be done by reducing the price of the product, increasing promotion and
providing good customer service etc. Checkout.com had penetrated market by applying
their service in all domestic markets and in different countries like Hong Kong, USA,
Australia, Singapore etc. The company is trying to launch other payment method also in
future.(Wu, 2015.)
 Market development: Market development means when a firm tries to enter into new
market like in a new country or different area using the resources which it has and with
minimum product development. Market development can be achieved by:
 Different customer segments: When a firm has customers scattered in different markets
or areas, it need to have shops in different places so that it can supply goods and services
easily. Checkout.com has its branches in different parts of the world so that it can have
proper control over all the places where the company works.
 Foreign market: the competition in the market is very high today. If a firm wants to stay
in the market then it should have a place in different areas where people can get good
service related to the company.
 Product Development: Product development means developing a new product or
investing in the old product and making it better. It is done to maintain the interest of
existing customers in the company or introduction of new customers in the company. It
can be done by:
a) Investment in Research and development of additional products: funds are invested in
research and development of new products so that customers are attracted towards the
company. Innovation can be done to the existing products too so that sales can be
increased.(Mason, 2015.)
b) Acquiring rights to produce other's products: There are various goods which are made by
joining two or more items to create a single one. The different items are acquired from
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different places by the company. If the company wants to manufacture all its products at
one place than it has to take rights from the company.
c) Buying product and giving your own name.: The company many time has a excellent
goodwill in the market and it wants to use it for profits, then it purchases goods from
other companies at low price and sells it to on the brand name. This increases profits of
the company as additional sales are made.
d) Jointly doing business and making use of each others strength: Many time companies
come in joint venture to use the strong points of other company like if one business
strong point is good client network and other person's strong point is efficient machinery
then they can come together and manufacture products which will benefit them both.
 Diversification: In Diversification, the organisation tries to grow its market share by
introducing new product in the new market. Diversification is the most risky growth
strategy because both new product and new market development is required.
Diversification can be a good choice if the company is getting high profit for high risk.
Diversification gives a good space to your in competitive market where there are various
attractive industries. This quadrant of matrix as also been referred as “suicide cell”.
(Pugalis and et.al., 2015.)
LO2
P3 sources of funding and their advantages and disadvantages
There are various sources of funding for small and medium sized organisation. They get help
from different places. It includes government, banks, family, relatives etc. The person should
first decide the source of funding which he will use. He must choose it properly, then approach
the investor with proper documentation. The person should have proper knowledge of the
business that he is going to start so that he can convince the investor to invest in his business.
Various sources of funding are:
1. Small Business Administration(SBA): SBA is a government administration established
to help the small business to achieve its goal. The main function of SBA are:
 It helps small businesses to obtain capital but SBA does not actually lend money but it
acts as a guarantor on loans.
 It helps entrepreneurs by developing their various skills. Eg. education, training.
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 The main benefit of taking loan from SBA is that it ensure that 23% of government
contracts are given to small businesses.
 It stands behind small business to support it in every case.
Advantages: Proper treatment of SBA loan increases the chances of getting bank loan. SBA
also help in improving the relations of the local lender and local borrower.
Disadvantages: The guide lines of small business administration are strict as they look at the
data of 2-3 years and which are normally the distressed years.
2. Angel investors: Angel investors are those wealthy people who are ready to invest their
money in exchange of some share in equity of the company. The investment done is
usually not more than 1 million$. Angel investors generally work in groups and they
choose those projects which have good profit and is known to them. They don't like to
take risk with their money so they do investment in small firms only.(Wynn, 2017.)
Advantages: Angel investors are usually experienced in various fields and so can provide
guidelines related to the business. They are less hard than VC so flexible business conversation
can be done.
Disadvantages: If you are not able to manage the business properly then you may be forced to
give your company to the investors. Due to their nature of risk-free investment, they generally do
investment in less places.
3. Friends & Family: This is the most common source of funding a small business.
Entrepreneur can easily convince their friends, family and relatives to invest money in the
business. They accept because of your relations with them. They generally do investment
just to start their business and so the businesses can get loan from bank or VC.
Advantages: Funding is usually very easily obtained because of your personal relations with him.
The investment terms are more flexible and payback of money is also not rigid.
Disadvantages: There is too much pressure to succeed in the business as many known people
have invested in the business. Due to their stake in the business they frequently gives unwanted
advices related to the business.
4. Venture Capital Funding(VC): Venture capital is the said to be the best finance for
small business. Venture capitalist are those investors who are ready to invest a large
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amount of money in the business in return of equity but they do invest only when the
business is acquired or goes public. Venture Capitalist are professional investors and
know where to do investment. They only do investment in those company which gives
them 6 times return of their investment. The amount invested by them is big but the risk
associated with it is also big. Checkout.com is also funded by venture capitalist. The fund
invested is big but carries high risk too.(Daniels and Lapping, 2016.)
Advantages: Venture Capitalist provide a large sum of money at once and can provide
professional guidelines for the growth of business. The credibility of company also increases if it
gets funded by venture capitalists. The network of VC is very strong and they can also provide
future investors for business.
Disadvantages: They are extremely serious about there money and can force you to quit if you
are not able to manage the company properly. They are also called as Vulture Capitalist because
of there nature for money. They can direct your business in any direction if they feel business is
not going properly as they are more experienced than any other.
5. Bank Finance: Bank loans are the most common source of funds and can be pursued by
lending money from any near financial institution. They are known to be complex
because there are different options available and every option has different interest rates.
It is important that you should know the option you are about to avail before only.
Advantages: Bank finance are easy to acquire and usually take less time to process. There are
different types of finance option available which can help the company. The most important
advantage of using bank as finance source is that you don't have to give your equity share to the
bank.
Disadvantages: The loan is not easily available and the criteria also changes continuously. The
bank does not care if you earned profit or loss, they just want their money back with interest. The
bank is time consuming as it takes time to complete all documentation process. If the chosen
source of fund is wrong then it will create an unfavourable deal which will create problem in
paying back. (Denton and et.al., 2017.)
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LO3
P 4 Business plan for growth
Executive Summary
Checkout.com has achieved new heights in the previous 6 years. So now the company is
planning to expand and grow further so can accomplish new goals and reach their vision as soon
as possible. The company excels in their particular field as in 2018 they tripled their processing
volume as compared to the previous year and it is ranked as the fastest growing FinTech.
Company obtained issuing license for visa and master card. The company has scattered all over
UK, so now the company is planning to cover Asian Market, invest in their security system so
that the minor technical errors that are affecting their operations can be solved. Company wants
to capture Asian market develop the digital payments their like Paytm, Google Pay, Phone PE.
Vision
Company wants to be a leading international provider of online payment solutions. Have a
transparency across the payment value chain.(Trasobares and et.al., 2016)
Mission
Company's mission is to collaborate with smart business of all size to enhance their payment,
maximize revenues and fulfil the demands of their customers.
Objectives
To expand the company's growth by 20% till the end of year 2022 and increase the profitability
of the company by 30% till the end of 2021.
SWOT Analysis
Strength
The company has a well known name in their industry. The firm already has recognition in UK
market. For being an start-up to now being the fastest growing FinTech. Company soon became
the member of Visa. Launched a hub, proprietary authorization. Opened offices in Berlin and
Paris. Used the most advanced technology that competitors can't copy.
Weaknesses
Many competitors come up with technologies that affect the operations of the company. Work
Environment is not flexible as compared to the competitors.
Opportunity
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The company can develop in Asian Market as they are mostly working in UK market. They can
capture the Asian market as they have scope to flourish in this area as well. Let people know the
importance of digital payments.
Threat
Employees due to less flexible working environment can leave the company and it would
difficult for the organisation to retain them. Due to technological advancements company may
fear from being copied by other competitive firms.
PESTLE
Political Factor
The prevailing political factors can affect the growth of Checkout.com as government taxation
policy is changing and that affect the new business plan of the company. The firm has to keep
analyse the situation prevailing and then successfully implement the decisions in the firm.
Economical Factor
This factor affect the company's new business as exchange rates are increasing and decreasing.
The market is not stable so that the company can take any decisions, so in this case the firm has
to focus on analysing the market and then implement the changes in the business plan.
Social Factor
This factor includes the social beliefs, cultures and attitudes followed by the employees in the
organization. This is possible that company's employees don't accept the changes of new
business plan. They don't like the idea or it consists handwork that they don't want. The plan
needs their total support.
Technological Factor
New technological advancements can affect the business plan as the company has to invest in the
new technologies has they want to lower their operations cost so that they can maximize their
profits. It has a benefit also that after adopting the new innovation the working will like smooth
flow. (Pugalis and et.al., 2015.)
Legal Factor
The company has to comply with all the rules and regulations that are compulsory to be followed
as they will help in keeping the company away from any legal penalties.
Environmental Factor
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These factors can affect the new business plan as due to any weather change or any kind of
natural occurrence. The weather forecast department has to analyse and then implement the
strategy.
Financial planning
Control and Monitoring
Key Performance Indicators
Revenue – Increased from GBP 100.41 million to 316.6 million in just three quarter
Profit – Profit before taxes from GBP130.9 million in first quarter to GBP 141.3 million till
third quarter.
Customer Base – With a satisfied customer base company has attained 20000 thousands
customers.
Expansion – Company has successfully established three new plants in western region of the
company.
Services – The services of the company, the company immediately worked on the problem faced
by the customers and try to resolve them as soon as possible.
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