Business Growth Strategies and Funding Analysis for 4Com PLC

This report provides a comprehensive analysis of growth planning for 4Com PLC, a small to medium-sized enterprise (SME). It explores key considerations for evaluating growth opportunities, emphasizing competitive advantages, turnover, market share, profitability, and technological advancements. The report utilizes the Ansoff matrix to identify different growth strategies, including market penetration, market development, product development, and diversification. It also examines various sources of funding available to businesses, differentiating between internal sources such as retained earnings and owner's capital, and external sources like crowdfunding, business angels, and bank loans. The report further discusses the development of a business plan for growth, and considers different exit strategies for small businesses. Through this analysis, the report aims to provide practical insights into sustainable business growth and financial management for SMEs.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key considerations for evaluating growth opportunities......................................................1
P2. Different opportunities of growth by using Ansoff matrix ..................................................2
TASK 2............................................................................................................................................4
P3: Sources of funds available to business ................................................................................4
TASK 3............................................................................................................................................6
P4: Business plan for making growth ........................................................................................6
TASK 4............................................................................................................................................8
P5: Different ways a small business can exits the business ......................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Growth planning is a strategic organisational activity that makes business owners to plan
and overlook organic growth in their revenue. It allows companies to utilise their available
resources towards centred efforts to grab changes in the industry that are impelled by digital
disruption. There are so many effective techniques and tools that can be useful in business in
order to collect maximum benefits (Branch, 2012). In accordance to make their business
operations more effective, small business enterprises select merger and acquisition option. This
project report consists of various information about SMEs consideration and steps taken by
companies in the growth of 4Com plc. Use of Ansoff matrix in order to determine different
growth opportunities and sources of funding will be provided in this report. A well organised
business plan is prepared in relation to growth of business and necessary benefits and limitation
associated with small business are discussed here as well.
TASK 1
P1. Key considerations for evaluating growth opportunities
In any complex organisation, there are many things that can be measured and learned. An
effective assessment is the process that focuses on those aspects that have high influence on the
way organisation operates. 4Com plc is required to make their business goals in more efficient
and effective manner with the available resources (Chen and et. al., 2013). In this context, there
are plenty of valuable techniques that can be used to make business more sustainable. SMEs are
needed to analyse those tools that are associated with creating growth opportunities for company.
It is seen that for any economy growth, small businesses plays an important role in
developing economy system through applying necessary tools. The main objectives of any small
and medium sized enterprise is to make their business functions more effective so that
profitability can be enhanced. 4Com plc cannot achieve growth and success if they are not able
to implement a better plan. It is because; for making any crucial move or step, they need to have
right kind of idea and problem solving ability. It is necessary for 4com plc to make use of tools
that can make business more effective and control future risks.
Competitive advantages: In order to make their product more effective with respect to
other company, they need to make appropriate products and services that can compet there
competitors. The best ways to lower down the prices of services that are set by 4com plc can be
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crucial for taking competitive advantages over other rivals. It can be perfect chances of growth
that are used by the firm with available resources.
Turnover: Every business needs to analyse their total revenue that is taken place within a
set period of time (Eddleston and et. al. , 2013). These particular factors can be assistive in
measuring the total growth of a businesses by which chances of attaining objectives can be
enhanced.
Market share: Some other effective considerations of 4com plc are that they enable
company in analysing the business growth in specific market share. It can arise only by
improving the quality in their products and services.
Profitability: It has been seen that most of the businesses are working in order to attain
effective growth and success in coming future with a motive to gain maximum profit. They
produce a wide range of products at economic level through offering superior quality to its
customers.
Upgraded technology: It has been seen that positive results can only be possible if
company is using the latest technology which can provide quick and appropriate outcomes to
them. It enables them to take corrective actions to gain competitive advantages.
As, IT is now a days, an effective trend that is capturing the market with full force. This
can help people to make their business operations smooth (Galland, 2012). It is a crucial aspect
that represents a vital role of IT in the growth of products. It provides necessary solution to their
issues that are related with the development of products.
Collaboration: It can be done in relation to maximise its total sales as well as scale of
operations. Such as going for merger and acquisition as other entering mode. It will be useful for
the organisation for increasing its revenue and making improvement in market share of company.
Decision making power is required to be shared between various people which is the biggest
limitation of this consideration.
P2. Different opportunities of growth by using Ansoff matrix
4com plc is required to analyse their business by using Ansoff matrix. There are many
sources or tools that can be effectively used by company in order to make their business
functions more superior in nature. This particular aspect is necessary in making things more
reliable in nature that can be beneficial in terms of growth and up-coming development. Growth
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is sometimes more risky that can be only be managed by preparing necessary action plan or
through using right strategies to face all these situations.
Opportunities: It is an individual that recognises opportunities and makes use of
resources to implement plenty of latest innovative ideas in order to planned new venture
(Moseley, 2013). It is a time or set of situations that can make it possible to something new.
There are various market entry modes by which it can be used by 4com plc to enter in the market
for further expansion of businesses. There are various sorts of planning tools that can be useful
for an organisation in a way to enter in other markets at global level. But before any planning,
they need to do some effective analysis by using:
 PESTLE analysis
 SWOT analysis
 Ansoff Matrix
 BCG matrix
From the above mentioned techniques, any of them can be useful to determine market
analysis of before entering into that particular marketplace. But as per the current situation,
Ansoff matrix is taken into consideration (Schetke, Haase and Kötter, 2012). It is the process by
which necessary decision-making is done by top management in relation to make strategies for
gaining upcoming growth opportunities. This factor provides long term chances of ascertaining
every opportunity in an effective manner in order to gain more accurate and reliable outcomes.
Illustration 1: Ansoff matrix
(Source: Yuvraj Gogia, 2017)
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Market penetration: As per this concept, every business organisation will lead to grow
its current business operations in their existing offering in current market situation by which
market share and profitability can be increased. The main aspects of this is to determine new
customers through increasing suitable products and quality too.
Market development: As per this context, 4com plc tries and targeted to increase its
market share through launching new products and services to the nation. This specific process is
entirely associated with international business (van Assche, Lo and Beunen, 2013). It will help
to attract more customers in order to increase profitability.
Product development strategy: Under this, firm is able to provide an essential
requirements of customers in present market times. It represented through underlying needs and
wants in order to assess new opportunities for latest product. Potential customers where pull into
its market as respond by offering products with superior quality.
Diversification: It can be said that more disputed problems that covers necessary
information about new product those are offered to customers in other areas. There are various
ways through diversification can be done:
 Through similar marketplace
 Unrelated market by using current resources and abilities.
 Diversification into unreal market that require new resources and capabilities.
4com plc can apply various effective planning techniques that be beneficial for the
company in increasing the goodwill and market share of the company. In this process, Ansoff
matrix can be more effective tool that can be best suitable for them. Hence, administration will
need to determine which strategies are more suitable for development of the company.
TASK 2
P3: Sources of funds available to business
Every organization whether small or large scale of operation need to analyse there market
share in order get long term objectives. This factors is necessary for business in order to take
essential decision regarding implementation of new policies (Ward, 2016). Hence, expansion
and growth can be ascertain once by taking essential steps and proper funding. As there are
various sources of finance available to them. There are potential sources of fund that can help
any business operations to formulate necessary plan. Both internal and external sources would
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be right option from which financial needs can be meet out. With every sources of funds has
various advantage and disadvantage at the same point of time. In SMEs there are so many ways
by which they can collect finance in order to make their business more profitable.
Internal sources: According to this particular sources which is generated internally by
4com plc unlike finance such as loan which is externally arranged from banks or other
institutions. As finance is an essential aspects of any business organisation without which it is
difficult to manager their daily operations.
 Retained earning: It is said to be that amount which is kept by organisation rather than
distributing as dividends. If the corporation bears a loss, then that loss is retained and
termed as variously retained losses and other accumulated losses (Karangelos, Panciatici
and Wehenkel, 2013).
 Owners capital: It is known as that investment or owner stakes in the business. They are
responsible for managing company's assets those are owned by the owners instead of
creditor.
 Sale of current assets: It is related with cash or any other sources which can be able to
convert into cash in an accounting period. If the firm required urgent cash then, company
can use them as an effective tools for finance.
 Personal savings: It is another source which is brought for the purpose of staring a
venture with the use of personal savings. It is complete assets of individual those are
working for long period of time to earn that amount.
External sources:
 Crowd funding: It is said to be an effective condition by which finance can be raised.
But they are restricted for some specific projects. In this process, less quantity in relation
to number of individual associated with it.
 Business angel: Under this, capital can be raised for business through angel investors in
accordance with that they receive some part of stake holding right.
 Bank loan: This is considered as most common aspects of finance that is used by firm in
order to meet every business aims and objectives. They are liable to provided sufficient
amount of capital to SMEs and in return they charged certain interest.
 Equity shares capital: It is considered as one of the effective tools that can be used by
large business organisations. Moreover, these are highly risky as it consists of every
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funds which are raised by a company in replace for shares of either common or perfected
share.
 Debenture: 4com plc can uses these resources as an effective sources of finance because
they are said to be long term security yielding a fixed rate of interest. It is mainly issued
by company and secure in accordance with available assets.
After analysing both internal and external sources of funds available to the 4com plc
necessary decision is made.
 Government grants which are provided to SMEs business in order to grow there
businesses is more suitable sources for them.
 Owners capital is also an effective sources by which profitability can be enhances with
the minimum costs.
Investment decision-making: These are basically made by investors and other
managers. Through this necessary information about capital investment and return they are
getting are determine by using investment decision tools. Some of them are:
 Payback period: It is said to be the relation between total cash inflows and outflows
incur by company during the year and total time taken by then to recovery it. As a SMEs
business 4com plc is investment more on electronic products development and total time
required to recover those amount.
 NPV: Net present value is the total amount of difference they are receiving from present
value of cash inflows and outflows. It is more effective for 4com plc to determine its
profitability of a project investment.
TASK 3
P4: Business plan for making growth
There are various essential steps are required to be followed before making any planning
for business expansion or growth. It is said that if company is at perfect position they wants to
expand there businesses in other parts of nation (Marchington and et. al., 2016). For this purpose,
they need a well organised plan that can provide them sufficient outcomes in coming times. It
consists of various steps:
Executive summary:
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This business plan summarise various crucial information about 4com plc which is trying
to enter into international level with there products and services. As, it is associated with digital
business with plenty of attractive electronic products such as mobile phones and broadband
services etc. planning is said to be key element for any business to meet its requirements. This is
more sensible action which is existing under present performance on an continuous term so that
proper growth and development can be attain.
Company description:
According to the evaluation it has been stated that 4com plc is dealing in telecom sector
in UK. It is consists of handsets, call recording, voicemail, call reporting, online billing and
much more services. It was established in 1998 in UK (Planning for growth, 2017). They are
analysing performance and estimate proper growth that can help them to attain their set
standards. At this point of time company wants to revisit its amount at the time of business
planning.
Aims: To become one of the largest digital telecommunication sector at international
level through setting qualitative and superior services.
Objective: “The primary objectives of 4com plc is to provided their products and
services at economical costs in order to attain better future”.
Vision: Increasing maximum number of customer though providing better services in
digital terms.
SWOT analysis:
Strength:
It has been seen that 4com plc is providing quality products and after sale services to its
customers in the form of delivering solution to their queries.
Weaknesses:
It has been observed that 4com plc is not having ability to bring continuous change as per
the demand of market.
Opportunities:
With the latest technological changes they have useful change to make innovative
products and deliver it to various customers.
Threats:
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There are having great chance to face their competitors those are producing same
products and services.
Marketing sub plan:
Niche market: In relation to expand their business as well as market share 4com plc
should implementing niche marketing system. Under this marketplace there are less number of
competitors and have great chance of increasing there market share.
Operational data: In this particular information, company used to make plan with
determining total expenditure that going to be incur by company. Certain information such as
name of suppliers, equipments and other necessary assets that are used at the time of business
expansion. Customers related issues can also be resolve by using essentials steps.
Financial budget: It is the more crucial information in business planning. The estimation
of total income and losses, budgeted cash flows, sales budget and other necessary account
information are need to be considered at the time of planning. It has been seen that in 2016,
company is having total cash of £731,000 which is higher than previous year £100,000.
Once business plan is made it is required to be tested by applying appropriate methods so
that mistakes can be solved (Wu, 2015). This need continuous control in relation to achieve
organisational objectives. Such analysis adhere to review its procedure to assess most promising
way to emerge their business. With the proper analysis of business plan, investors an stakeholder
should make their investment decision in order to earn possible profit in coming times.
Growth strategies: This particular method is more useful for 4com plc to expand its
business operation is wide contingent. Few common growth planning in business consists of
market penetration, expansion, product growth and acquisitions. There are various strategies but
only acquisition is discussed under this. Under this planning, management need to face and
frame perfect target to increase there market share in order to gain competitive advantages.
TASK 4
P5: Different ways a small business can exits the business
As a perfect business owner, it is the responsibility to always thing regarding up coming
moves. In some situation, that can be the existing strategy. There are so many effective
variations, that are based on real exit strategies for most business persons. Some crucial types of
exist strategies for small business owners are:
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Shut it down: It has been seen that there are so many small business those are closing
their business as new lease is sometimes for expensive. The owner of 4com plc had a stroke, it
just got tried because of low market growth or profit. Plenty of firms are going out to be huge
loss in every days. Moreover, this seems to be not perfect option for existing strategies it is
applied in more rare situations.
If company is operating for longer period of time. It means that they are well reputed and
higher profitable. It they shut down their units then they are having great chance of loosing their
goodwill (Wynn, 2017). On the other hand, if someone make offer to buy firm in respect of
sufficient amount then it is profitability for them.
Drain it: This particular option is more required to take huge cash so that in order to
came out of the business operations. This kind of planning is integrated where organisation
produces huge cash less and required least hand holding by the owners of the company. Such
kind of business operations cannot make large amount of investment return.
Sell out business: It is the most effective and easy method which can be use by owners if
they don't have any other options. In order to pay off there liabilities such kind of decision-
making is done. The main purpose under this situation is to determine a perfect buyer who is able
to provide more capital for there businesses.
Friendly buyout: This kind of planning under which owners of the business transfer
there ownership to its family members, employees and friends. This consists of various terms
and conditions as per the nature of the business. The fact is that buyer are closely associated with
owner that make the firm more easier and complex to finish the role. Be assure that committing a
professional skills a person can protect rights of the company before selling all necessary assets.
As the above mentioned essential ways of exist businesses do have certain limitation.
Profit cannot be share to any other parties and rate of unemployment get increased. The overall
development gets affected from this exist strategies.
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CONCLUSION
From the above project report, it has been concluded that planning is an essential aspects
of any business operation. They need to make their business more effective before making any
crucial decision. This report covers various information about SMEs business. Different
opportunities for growth and development are discussed with the use of Ansoff matrix. Sources
of finance available to small business are explain under it. In order to make business more
profitable a well organise business plan is made. Various exist business strategies and limitation
associated with it are discussed under this project report.
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REFERENCES
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