SANPSE Construction: Planning for Growth and Funding Strategies Report

This report analyzes the growth plan for SANPSE Construction, a UK-based SME specializing in construction, particularly mixed-tenure housing projects. The report begins by outlining key considerations for evaluating growth opportunities, focusing on Porter's generic strategies and PESTLE analysis to assess the competitive landscape and external factors impacting the business. It then evaluates growth opportunities using the Ansoff matrix, exploring market penetration, market development, product development, and diversification strategies. The report further examines various sources of funding available to the business, including bank loans, financial institutions, and small business administration loans, along with their respective advantages and disadvantages. Finally, it discusses the creation of a business plan for growth and considers exit or succession options for the small business. The assignment highlights the importance of strategic planning, financial management, and market analysis for sustainable business growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1.Key considerations for evaluating growth opportunities..................................................1
P2.Evaluate the opportunities for growth apply.....................................................................3
TASK 2............................................................................................................................................4
P3. Various sources of funding available to business along with advantages and disadvantages
................................................................................................................................................4
TASK 3............................................................................................................................................6
P4. Business plan for growth..................................................................................................6
TASK 4............................................................................................................................................8
P5.Exit or succession options for a small business................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning for growth is a function or a process that enables business owners to plan for
growth of the business. It is an activity of business in which business owners involve to make
plan and track organic growth. It permit businesses to allocate their limited resources to adapt
and make change in business industry so that it can run properly (Barbour and Deakin, 2012).
During the implementation of growth plan, the management will investigation about the current
organisational culture. This assignment based on SANPSE construction company and it provided
construction company. This company is going to work on construction of mixed tenure housing.
This company have a bid of £300,00. This assignment will define the growth planning and the
opportunities that the company strives to achieve mixed tenure housing.
TASK 1
P1.Key considerations for evaluating growth opportunities
Starting a small business, the existing company need to take steps to evaluate the
business abilities and potential to make it work. With the evaluation of that factors the company
evaluate its financial, product and human resource analysis. SANPSE is a small medium
enterprise company. It is an UK company which deals in construction. For the growth planning
the company follow porter's model. If the company want growth is analyse every tool of
competition.
Porter's generic strategies
These generic strategies describe that how a company pursue competitive advantage in its
chosen market. These strategic described an industry in multiple segments that can be targeted
by a company. There are two basic types of competitive advantage with the scope of activities in
an industry: cost leadership and differentiation. There are two types of scope brosd target and
narrow target.
Cost leadership
This strategy is use for increasing profits by reducing cost and increasing market share by
charging lower price. SANPSE use it in its services by offer service of low cost base such as
price, labour, materials and facilities for a given period of time and attract consumer and increase
its profit. Here small number of market segments and a business seeks a lower cost advantages. It
focus on cost minimization and on market. If SANPSE constructed a restaurant it offer its
1

customer innovation in its designs so that it can grow its market and earn profit by provide the
service con low cost.
Differentiation strategy
This strategy is a process of making its product or services different from and attractive
than its competitors. SANPSE can make success of a differentiation strategy by doing good
research of markets and consumers needs and desires. It can show the ability to deliver high
quality products or services. It is classic marketing strategy for small businesses for achieving
higher price benefits by undifferentiated products to add value for customers. SANPSE can use
this strategy and gain profit on a large scale by providing superior products such as benefits,
durability and reliability.
Focus Strategy
Companies use this strategy to cover a big market and understanding the dynamics of the
markets or the unique needs of the consumers. By this strategy SANPSE cover small markets
provide advantages to its customers through services innovation such as innovation in designs
and according the customers budget and time.
SANPSE gain growth by cover market segments and fulfil the customers need and
demand by using Poter's generic strategies.
PESTLE ANALYSIS
This model is used for the analysis of political, economical, social, technological,
environmental and legal function of a business. It is a strategic tool for understanding market
growth or business position or operation (Galland, 2012).
Political Factor
It is related to politics that what policy and procedure are made by the government for the
business and other sector. It impact the business most.
Economic factor
This factor impact the economy and the performance. It also impact the profit and the
growth factor of the company. It include economic growth, interest rates, exchange rates,
consumers and unemployment rates. Purchasing power of the customers are effected by this
factor and this effect can make change in demand or supply in the economy.
Social Factor
2

This factor include population growth rate, age distribution,career attitudes health
consciousness, cultural barriers and income distribution. In this factor company make change by
adapting social trends (Goodfellow, 2013).
Technological factor
In this factor all technologies are include such as related to computer, R&D activity and
information of new applications. It is helpful for the company growth.
Environmental Factor
It include environmental aspects weather and climate. This element is more important fir
the company. The business growing awareness impacts on climates change is affecting the
companies products which they create for new markets.
Legal Factor
In this factor discrimination law, cinereum law, employment law and health and safety
law include. These factor affect that how can a company operates its cost and demand of the
products.
P2.Evaluate the opportunities for growth apply
Ansoff model is used for the growth of company and organisation. So, it can be used by
companies as Product Market Matrix. This model is given by Igor Ansoff for bushiness growth.
It is a strategic marketing planning tool that connects with a firm's marketing strategy for
presenting alternative growth strategy. It is used for SANPSESANPSE growth opportunities
through alternative combination for new markets. There are four stages of this matrix such as
market development, market penetration, product development and diversification (Grover,
Bokalo and Greenway, 2014).
Market Penetration
With the use of this approach, SANPSE trying to sell more of their same services in same
market. But it is not easy because of competitors. The company develop a strategy of attract
consumer to encourage more to choose its services. For example If SANPSE doing work in such
as bridge construction and road construction, it can provide home and restaurant construction.
Market development
In this approach , company targets a new market with existing products. Through product
development. In this approach the risk is higher than penetration because the product or services
and the market both are new for the existing. By example if the SANPSE work in bridge and
3

road construction. If the market is new then it make strategy of provide offer such as one month
construction will be completed in Rs. 100000 etc. to develop new market and attract new
customer.
Product development
It is necessary for the organisation has better consumer base and get information about
the market that it is existing to reach saturation. It is not a longer practical. In product
development, SANSPE can design new products fro its targetting customers in existing market to
achieve business objectives of the company. It make investment in research and development of
additional products. SANPSE provide new services such as home and restaurant construction for
product development.
Diversification
In this approach a company tries to grow its market by introducing new offering services.
This strategy apply when the product and the services both are new in the market and the
consumer are not aware with them. By using this strategy SANPSE provide new services in
market on offer and discount. It provide offer to customer on low price for a period of time and
customer attract and accept its services.
is completely new and is being introduced in the market (Kim, 2017).
The Ansoff matrix is used for the marketing planning process for the growth of the
organisation. This model force market planners and management to think about the expected
risks. It is useful to measure the risk of strategies and identifies opportunities and threat in the
different markets.
TASK 2
P3. Various sources of funding available to business along with advantages and disadvantages
SANPSE is an construction company which provide construction services in United
kingdom. It provide services according its customer demand. This company have a bid of
£300,00 but its have only £200,00. So it will be collect this money by using others source of
funding. There are various sources of funding such as loan from banks, loan from financial
institution, debentures and by issuing shares.
Loan from banks
4

If any company or person have not enough money for starting its business, they can use
this. They can take loan from bank for their business. Bank provide funds for different purpose
and for different time periods. It grants loans according to the size and turnover (Lewis, 2013). It
provide loans in different ways like cash credit, overdrafts, term loans and issue of leter of credit.
The rate of interest are charged by the various factors and characters of the firms and the level of
interest rates in the economy. This loan can be repaid by the company in the instalments and in
lump sum amount.
Advantage
 Banks provide funds easily and timely when the company and the businessman need. If the company want to funding through bank , there are not more formalities such as
issue of prospectus and underwriting are not required (Mitchelmore and Rowley, 2013).
Disadvantages
 If a company take loan from banks, it make detailed , investigation of company's affairs
and financial statements and also can check and ask about personal security and assets of
security.
 It can be slightly difficult for the companies. In bank funds are generally available for
short periods and renewal is uncertain and diffident.
 The funding from banks can be confusing if lack of knowledge or experience.
 For SANPSE, some times it is difficult to take loans from banks because the company
urgently need money and the banks have a time consuming process to provide loans to its
customers.
Loan from Financial Institutions
The government has set up a number of financial institutions to provide finance to
business organizations. These financial institute are set up by state government and central
government. These financial institution proviso both owned capital and loan capital for long term
and medium term requirement according the customers needs. These institution conduct market
survey and provide managerial and technical services to the people who run the businesses.
Advantages
 These institution provide long term loan on less rate of interest which is not provided by
the commercial banks.
5

 These institution also provide technical, managerial and financial advice to business
companies. In these institution the repayment process of the loan is easy. It can be return in
instalments, it can not be not a burden on the business (Moseley, 2013).
Disadvantage
 Financial institution have their nominees on the Board of directors of the borrowing
company and organisation.
 These institution follow criteria for grant loan and make many formalities that are
expensive and time consuming and create barriers for SANPSE to borrow funds.
 Financial institution provide loans for a short term period and SANPSE need it for long
term.
Small Business Administration
It is an administration that is developed by government providing loans to small
businesses. It provide loan for entrepreneurial Department, advise met and training. It will play
act as the guarantor on loan for small businesses.
Advantages
 In SBA loans are easily provided and there are not more formalities to do for customer. The SBA acts to improve the relationship between local lenders and borrowers.
Disadvantage
The SBA has strict guidelines for repayment of the loan so it is difficult for very young
companies to pay (Shi and et. al., 2012). .
TASK 3
P4. Business plan for growth
A growth plan enables to plan and track the growth in business revenue. It can be a
written document that define that how can a business is going to achieve its goals. It is important
for starting a business or exploring ways to expand. It is a road map that provides directions so
that a business can plan its future. In SANPSE, is a construction company and work in this field
at ling time. It has project of constructed a home. It complete its construction of £300,00 but it
had only £200,00 and it make plan to take loan of £100,00. the main purpose of it is to provide
the leadership to the company with as much information as possible about kind of need to reach
6

its goals. SANPSE provide services in bridge and road construction but now it provide its
services for hotels and home construction.
Vision of SANPSE
It is important part of the company's business plan. It is one part of the company's dream
and another is a path laying for the growth of the business in future. For a business plan it is
based on goals and aspirations. It is formally written and referenced in company documents. The
main purpose of it is to motivate existing and attract potential employees (Todes, 2012). It help
companies to differentiate from other competitor companies. The vision of SANPSE is to be
provided better construction services to their customers according their demand and needs. To
provide good infrastructure construction and make it real estate development company for all
customer satisfaction. Enhancing value of shareholder's by building their strengths such as
quality of material, technology, timely completion, innovative designs and highest standards of
workmanship.
Mission of SANPSE
A mission is an important task to take the organisation on the growth. It is a short
statement of an organisation's objective and main purpose of it to identify the goal f its
operations. It communicates primarily to the people who make up the organisation its members
and employees. It is provide direction to the employees to achieve their goals. The mission of
Snapse is to provide good services to the customer and make professionalism, fairness and
honesty in its work and relationships with customers, vendors and employees. By providing
essential and appropriate products and services or solution to market the company can expand
into new areas and build competencies according consumer's interests. (Valler, Phelps and
Wood, 2012).
Objectives of SANPSE
The objective of SANPSE is provide better services to its customers and deliver its
projects on budget an on time. If it do its all work on time the customer take services from it on
large scale and company will achieve its growth.
Financial Information of SANPSE
It consist of balance sheets, sales sheets and income statements that list business profits
and losses along with assets, debt and net worth. It is for tracking the financial information of the
company that how much money a construction company used and how much left. It provide
7

financial information at a point in time and changes to assets, liabilities and equities. Assessing
the companies policies to improve profitability and evaluate success by comparing its financial
benchmarks to its competitors. Determining companies results to recognizing revenue when it
has matching the corresponding expenses against the revenue at same period. Establishing and
maintaining good supplier to essential for a contractor in the business ( Ward, 2016). Sometimes
it affect negatively because it is a time and fund consuming process so the company hire a person
who have knowledge of finance. There is a risk that the financial information can go in to wrong
hands which can influence the business of the firm in a negative way. The financial report of
SANPSE is given:
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Manufacturing cost 2000 - -
Promotional expense 900 800 600
Advertisement
expense
600 560 580
Cost of adopting new
technology
700 800 850
Catalogues 200 400 300
Total Cost 4400 2560 2330
Budget
Pre launch budget
Post Launch budget
8

Marketing Analysis
It is a strategy that can be used by the companies to analyse the market and consumers
needs. In SANPSE, the management department of the company can do market analysis to
identifying its customers demands and wants such as it is a construction company so it can do
this analysis that what kind of designs and other customer wants.
TASK 4
P5.Exit or succession options for a small business
Every business owner pass through both phase if he gain profit, he will improve and
increase its business and if he going in loss he is try to exit from its.
Various ways of exit
Liquidation
It is a close phase and the businessman sell all the assets exit strategy. In this stage, the
owner of the company extracts most or all of the profits of the business before selling or closing
the business. It is just selling strategy on the open market or to another business. In the company
it is related to finance. It is the process of bring a business to an end and distributing its assets.
Advantages
It is very simple process. If any company which has not enough finance to run its
business it sell itself easily. And the business can be wound up very quickly. Maximizing cash
withdrawal on the basis of personal use.
Disadvantages
It provide lowest return on the investment. The hand business assets values less for items
such as machinery and equipments. The creditors have the first claim on funds from assets sales.
9

The remaining profit in the company increase the value of the business when the business is
sold.
Sell the business in open market
When the company have not enough finance for the business it sell or handover the
business to the market and another company (ZHANG, ZHAO and CHEN, 2013). During the
sell of business in the open market the company should follow some points such as it determine
the value of the company, clean up small business financial, prepare its exit strategy in advance ,
pre qualify buyers, boost sells for sell the business.
Advantages
It is an open market selling so it is a profitable business to be attributive to buyers and
sellers quickly. For the giving reason, a competing business an be highly motivated tom purchase
business and making it for sale and earn maximum profit.
Disadvantages
It is difficult to value the selling price because it can be give that amount which a seller
expect. In this process a competitor only pretend to be interested inn purchasing business in order
to get access to its customers according its financial list.
Various type of Succession
It is a plan in which the owner wants to turn over the running of the company. Having
this planning a succession plan in place help smoothly transition out of our business.
Merger and acquisition
It is a combination of two business to achieve greater efficiencies of scale and
productivity. It is the area of finance, management and strategy dealing (Ziar and et. al., 2012). A
company under acquisition together with divestitures typically for merge with with two
companies.
Advantages
In this process two party are involve and reduce third party involvement. It provide
responsibility of maintaining involvement and influencing the business of the company.
Disadvantages
It can be difficult to identify and trained the right successor. In the business it can be
create financial losses.
Joint Venture
10

It is commercial enterprise in which two or more companies are joined their forces to
gain tactical profit and run the business in proper way.
Advantages
It increased capacity and sharing of risk and costs with a partner. Access to greater
resources for the business and including specialized staff, technology and finance.
Disadvantage
The main drawback of joint venture is that it is partnership of two or more than two
individuals and organisations so the decision are taking by all of them and profit are also divided
in all of them. There is a great imbalance of expertise, assets and investment. This can be a
negative impact on the effectiveness of the joint venture.
CONCLUSION
It has been concluded from above mention report that growth is necessary for
development of business in competitive market. It is helpful in enhancing business activities at
market place. Under this mention report studied about the succession and exit strategies of
business. There has been discussed about the market plan for the development purpose.
11

REFERENCES
Books & Journals
12

13