Planning for Growth: A Business Plan for New Car Deals, UK

This report provides a comprehensive business plan for the growth of New Car Deals, a family-run car leasing business in the UK. The report begins with an introduction to SMEs and provides an overview of the company. Task 1 focuses on identifying growth opportunities by analyzing competitive advantages, Porter's Five Forces, and the Ansoff growth vector model. Task 2 explores various sources of funding, including bank loans, crowdfunding, peer-to-peer lending, angel finance, and venture capital, along with their implications. Task 3 details the business plan, including mission, vision, aims, objectives, marketing budgets, projected balance sheets, and successful owner strategies. Finally, Task 4 discusses exit strategies and succession options, including their benefits and drawbacks, along with reasons for business failure and prevention, and exit routes for successful businesses, concluding with a discussion on growth and succession in family businesses. The report aims to provide a strategic roadmap for New Car Deals to expand its van business and increase its market presence.

Running head: PLANNING FOR GROWTH
Planning for Growth
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Table of Contents
Introduction:...............................................................................................................................3
Company overview:...................................................................................................................3
Task 1:........................................................................................................................................3
Key considerations for analysis of growth opportunities:......................................................3
Task 2:........................................................................................................................................6
Sources of funds and their implications to business:.............................................................6
Task 3:......................................................................................................................................10
Business Plan including Financial Information and Strategic Objectives:..........................10
Mission.................................................................................................................................10
Vision...................................................................................................................................10
Aim.......................................................................................................................................10
Objectives.............................................................................................................................10
Marketing Budget.................................................................................................................11
Estimated Budget for Advertisement...................................................................................11
Projected Balance Sheets.....................................................................................................13
Successful Owner Strategies................................................................................................13
Task 4:......................................................................................................................................19
Exit strategy and Succession Options with Drawbacks and Benefits of Each Strategy:.....19
Major Reasons for Business Failure and its Prevention.......................................................19
Exit Routes for Successful Businesses.................................................................................20

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Growth and Succession in Family Business........................................................................21
Conclusion:..............................................................................................................................22
References:...............................................................................................................................23
Bibliography.............................................................................................................................25

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Introduction:
SMEs are those organisations, which are initiating businesses and/or they are small
and medium-sized organisations. They generally tend to have below 250 employees having
average revenue of £50 million. Moreover, the average balance sheet could not go beyond
£43 million in a year (Abdelkafi and Täuscher 2016). This paper contains four different
aspects. Various significant considerations are evaluated to identify growth opportunities for
New Car Deals. After this, various sources of funding are analysed in the second segment.
The third section would emphasise on designing the business plan for growth of the
concerned organisation. Finally, different exit opportunities and procedures are discussed.
Company overview:
The chosen organisation for this assignment is New Car Deals. It is a family run
business based on West Yorkshire in UK. It is a car leasing organisation having proud history
of supplying new cars as well as vans across the nation, which is accessible and affordable
for its customers (McKeever 2016). It is intending to diversify its van business by introducing
specialised commercial vehicles. With the rise in customer awareness and personal leasing,
the organisation is planning few new shops or offices with concentration on personal leasing
along with advertising its services. This would help the organisation in developing reputation
in the UK market.
Task 1:
Key considerations for analysis of growth opportunities:
Competitive edge:

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This is the situation, which takes the organisation to favourable business position. If
the owners of New Car Deals could develop competitive edge for small business, they would
be able to trade products and services easily and profitably. However, sound competitive
edge ensures future growth and success of the organisation (Muratovski 2015). As New Car
Deals is a small business, it contains few features and from them, it is possible to be turned in
competitive edge. Such features constitute of the products, business, customers and
competition. However, at the time of embracing digital and new technologies, New Car Deals
would encounter different challenges and opportunities. However, it has an opportunity to
undertake protest on its rivals by maintain agility in implementing new solutions
(Nieuwenhuis, Vergragt and Wells 2017).
Porter’s five forces:
This model consists of the following:
 Bargaining power of the suppliers: This implies the amount of power exchanged for
the prices of the products. If New Car Deals manufacture products with rare inputs,
which are retailed by other organisations, the bargaining power of suppliers is high.
For instance, the suppliers of Honda have limited bargaining power, while the case is
different for small car manufacturing organisations (Nurhadi, Borén, Ny and Larsson
2017).
 Bargaining power of the buyers: This is similar to the above force; however, it is
applicable for the customers. The identical products are difficult to be obtained, in
which the buyers have lower bargaining power. New Car Deals has the buyer
bargaining power as well.

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 Threat of new entrants: This force implies the impediments of entry in the car
leasing sector of UK. For small businesses like New Car Deals, the threat of new
competitors could increase over time.
 Threat of substitutes: It signifies the ability of the customers in choosing to apply
various products. More precisely, the decision of the customers is not crucial for
buying any product. The new entrepreneurs like New Car Deals would frequently
unnoticed this threat entering and saying that they got the latest products in the
absence of competition.
 Competitive rivalry: This force is self-explanatory and it implies to the other
organisation in the market with whom New Car Deals contend.
Ansoff growth vector model:
The Ansoff growth vector model constitutes of product development, market
penetration, diversification and product development. This method supports the organisations
in choosing the appropriate products along with policy related to market growth.
Market penetration is deemed to be less risk, which is focused on selling the current
products in current markets for creating market profitability. This could be obtained by
developing marketing promotions and brand image along with different loyalty programs in
innovative methods.
Product development is observed to be a strategy that has a medium risk degree. It
also encompass introduction of new products within the existing marketplaces. The new
businesses or start-up of New Car Deals also attempts to increase product ranges along with
developing its products in the target market.

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Market development serves as an effective strategy in which the new business of New
Car Deals offers there existing products within the new target market. The new business will
focus on different consumer segments. However, the business success will be ensured
through introduction of new products in their target market places.
Diversification strategy will analyse ample amount of risk in several stages.
Moreover, a company requires accessing the assessment for diversifying with comparatively
more resistant business success approaches (Shaheen, Chan and Micheaum 2015). For
instance, New Car Deals can focus on making technology driven diversification in attaining
huge consumer base.
Task 2:
Sources of funds and their implications to business:
Sources of Finance
Bank Loans
Bank loans are considered as common finance source for all the small and medium sized
companies and the new businesses can implement the same for taking short and long term
loan. The amount of loan that the businesses can attain from the lenders is greatly relied on
business performance (Ransbotham and Kiron 2017). This is the reason or which New Car
Deals requires to show the needed documents on its business performance that encompass
balance sheet, income statement, cash flow statement along with the future plans of the
business. There are advantages as well as disadvantages related with taking bank loans and
these are explained under:
 It is suitable for medium and long term solutions
 Arrangement fees along with interest rates are tax deductible

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 Offering loan repayments in time might develop credit score of the business
 Bank loans are also considered as cheapest option in comparison to overdrafts along
with credit cards in consideration to interest rates
It has also been observed that taking bank loans can also have certain disadvantages for
the business of New Car Deals and these are explained under:
 It is not that flexible for short duration borrowing requirements
 If the borrower does not pay for the loan in given time duration, the financial
condition of the business will be at stake
 Bank offers loans for lending purposes in different forms, for instance, existing and
start-up businesses those have no assets and bank does not offer loan to them
 In case the loan is available for payment and the New Car Deals does not pay for the
same, the money lender might take different actions on the borrower
 It is not suitable in cases in a situation where it is problematic to analyse the funding
amount
Crowd Funding
McKeever (2016) explained that the crowd funding is termed as a process of funding
in situation where a small amount is gathered from several people through online or internet
medium. Moreover, crowd funding i also termed as crowdsourcing and this funding
technique has several advantages those are explained below:
 It is the fastest technique for finance raising without any fees
 It is also an efficient technique in analysing the reaction and public opinions
 The investors can also track the business progress that is funded by them
 Investors might also get loyal to the new business through his financing technique

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 It is also positioned as an easy financing source without having to struggle as in case
of bank owns and traditional funding
This funding technique also has certain disadvantages those must be considered by New
Car Deals, these are explained below:
 Not all the new businesses can implementing crowd funding system
 In case the target amount is not attained, the investors might take their invested
amount back disrupting the operations of the new business
 A new business that has limited network, social media existence and lesser products
to offer might find it difficult to get associated with the system of crowd funding
Peer to Peer Funding
McKeever (2016) indicated that peer-to-peer (P2P) is a process of lending in the debt
financing process that supports the individuals to lend and borrow amount devoid of official
financial institution’s use like an intermediate. Moreover, this lending process is also
considered as social or crowd lending. P2P lending is the process of money lending with less
use of credit union or any traditional financial institutions. Moreover, in case of this lending
process there are low interest rates and the borrower also remains anonymous to its lenders
where they cannot contact directly. There are certain disadvantages related with this funding
technique those must be monitored by New Car Deals those are elaborated below:
 High interest rate can be experienced in this finding technique
 There is a lack of liquidity in this lending process
 There is no tax free interest rate in this lending process
Angel Finance
Business investment through angel finance can offer the equity money makers with
the required sum of money along with direction from skilled entrepreneurs. In case any
individual or business is searching for financial advice along with direction from skilled

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investors, angel finance is effective. There are certain advantages of this financing technique
that is explained under:
 The angel investor is effective source of attaining start-up funds in comparison to
capture capital organization
 This financing does not involve any debt financing
 This financing process does not require monthly interest payments
 There are certain disadvantages of angel finance that must be considered by New Car
Deals:
 Angel investors can offer better guidance and most of them might generate demands
on company control
 Angel investors are tougher to contact and research in comparison to venture capital
companies
Venture Finance
McKeever (2016) elaborated that venture capital is the financing process that offers
investors with enough financial support to the start-up and new small businesses such as New
Car Deals those are supposed to have an extended term growth potential. Moreover, venture
capital generally arrives from affluent investors, banks and financial institutions. There are
several advantages and disadvantages related with financing through venture capital and the
advantages are explained below:
 Venture capital financing might offer financial support to the small businesses and
start-ups with considerable consultation along with guidance source
 Venture capitalists are generally better connected within the community of the
businesses
Disadvantages those must be monitored by New Car Deals are elaborated below:
 Loss of control

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 Status of minority ownership
Task 3:
Business Plan including Financial Information and Strategic Objectives:
Mission
New Car Deals is a car leasing organisation having proud history of supplying new
cars as well as vans across the nation, which is accessible and affordable for its customers. It
is intending to diversify its van business by introducing specialised commercial vehicles
(Macaulay 2018).
Vision
Vision of New Car Deals is to increase customer awareness and personal leasing
focused on which the organisation is planning few new shops or offices with concentration on
personal leasing along with advertising its services. This would help the organisation in
developing reputation in the UK market.
Aim
Aim of the business of New Car Deals is to focus on upgrading its small and medium
sized business into international one though offering quality products.
Objectives
Several effective business objectives set by New Car Deals are explained below:
 To boost profit margin by 12% from £12,217,517 in 2017 to £13,439,268 by June
2019
 To meet the anticipations of consumers in offering top quality car products
 To offer a broad range of products through offering varieties of car products

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 To increase consumer base by 11% along with consumer retention and loyalty by the
end of 2019
 To develop good reputation as “one-stop-shop” for the car products
Marketing Budget
Estimate marketing budget for the proposed business- 2018/2019
Sales forecast for 2018/ 2019
Products Sales Forecast
Foods £5,579,756
Drinks £4,460,312
Others £3,399,200
Total Sales Forecast £13,439,268
Estimated Budget for Advertisement
Marketing Areas Estimated amount
Research £60,563
Communication £55,654
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2,250,550
4,539,345
5,076,741
5,658,632
Ades Total Sales Forecast for 2018/2019
Ades Total Sales Forecast for
2018/2019