Business Growth: Analysis, Funding, Planning & Exit Strategies

This report provides a comprehensive analysis of growth planning for Small and Medium Enterprises (SMEs), focusing on key considerations for evaluating growth opportunities, applying frameworks like Ansoff's growth matrix, and discussing competitive advantages. It assesses various funding methods, including bank loans, and evaluates their benefits and drawbacks within an organizational context. The report also includes the development of a detailed business plan for scaling up a business, incorporating financial information and strategic objectives. Furthermore, it examines different exit or succession options for small business owners, weighing the benefits and drawbacks of each. The document, contributed by a student and available on Desklib, offers valuable insights and practical recommendations for SMEs aiming for sustainable growth and successful business transitions.

Planning for Growth

Table of Contents
LO1). Analyse the key considerations SMEs should consider when evaluating growth
opportunities....................................................................................................................................4
P1). Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context..........................................................................4
P2) Evaluate the opportunities for growth applying Ansoff’s growth vector matrix..................6
M1). Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context.................................8
D1). Critically evaluate specific options and pathways for growth, taking into account the risks
of each option and how they can be mitigated.............................................................................9
LO2). Assess the various methods through which organisations access funding and when to use
different types of funding..............................................................................................................10
P3). Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source..........................................................................................................10
M2). Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context.................................................................12
D2). Critically evaluate potential sources of funding with justified argument for the adoption
of a particular source or combination of sources, based on organisational needs.....................13
LO3). Develop a business plan (including financials) and communicate how you intend scaling
up a business..................................................................................................................................14
P4). Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business...........................................................................................14
M3). Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving objectives.

....................................................................................................................................................16
D3). Present a coherent and detailed business plan that demonstrates knowledge and
understanding of how to formulate, apply and achieve business objectives successfully.........18
LO4). Assess the various ways a small business owner can exit the business and the implications
of each option................................................................................................................................19
P5). Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option...........................................................................................................19
M4). Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations..............................................................................22
D4). Provide critical evaluation of the exit or succession options for a small business and
decide an appropriate course of action with justified recommendations to support
implementation...........................................................................................................................23
Conclusion.....................................................................................................................................24
Reference:......................................................................................................................................25

Introduction
There are various business organisations which operate in the business environment of the
United Kingdom which includes small as well as medium enterprises. It is essential for the
effective growth and the enhancement of the business that adequate strategies or plans are
adopted by the organisation so that it can survive for a long period of time by establishing
recognition in the market and providing satisfaction to the customers. The aim or objective of
this assignment is planning for the growth of the business of the organisation. This assignment
provides the information regarding the opportunities available with the organisation, evaluation
of these growth and enhancement opportunities is done by the adopting various models. This
also includes the methods and the opportunities which are adopted by the management of the
company for having the competitive advantage over the competitors in the market. This
assignment also provides the overview of the sources available with the organisation for raising
funds and this also includes the strength and weakness of the sources. Under this assignment, a
business plan is formulated which includes the strategies for financial aspects and for the
development and enhancement of the business of the organisation. In this regards, an
organisation is selected i.e. Norsk European Wholesale Ltd., which operates its business in the
United Kingdom and provides the services of transportation, storage, specialisation in different
sectors and other technical services.

LO1). Analyse the key considerations SMEs should consider when evaluating growth
opportunities.
P1). Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
There are various factors which are considered and help in the evaluation of the opportunities for
growth. It is essential that all the factors are taken into consideration while evaluating the growth
opportunities for the company or the organisation. These factors also contribute and provide
assistance in formulating the plans and the strategies for growth of the company. These factors
are as follows:
Products and Services of the company: This factor is considered one of the most important or
significant factors for the survival of the company and its business. It is essential that the new
and effective products and services with new features and the characteristics must be introduced
in the market so that the company is able to enhance or develop its business and the quality of
the products and the services. This means that innovative and creative ideas are necessary for the
continuous growth of the business (Storey, 2016). There are various employees which are
employed in the company based on the creativeness of the individual. This also includes the life
cycle of the product which consists of different stages which are growth, maturity, and decline.
However, it is also stated that this life cycle of the product is dependent on the current scenario
of the market and influences the strategies for marketing as well.
Availability of Resources: It is well known that scarcity of resources is one of the major
problems faced by the organisation all over the globe. It is necessary that the proper resources
are available with the organisation so that it can work towards the accomplishments of the
organisational goals or aims i.e. the growth of the business (Barber, et. al., 2016).
Capabilities and Skills: For effectively achieving the goals or the objectives of the organisation,
it is necessary that the company is capable of performing the task or the operations which are
essential for growth of the company as well as having competitive advantage over the
competitors of the company operating in the market (Burns, 2016). For making sure that the
workforce of the organisation has required skills and capabilities which are required for the

growth of the business of the organisation and having a competitive advantage, training sessions
are organised by organisations.

P2) Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
There are various situations in which the company or the management of the company is
evaluated or assess the opportunities available with the organisation for its growth and
development. Situations like entering into a different market or introducing new products or
services in the market, etc. This is done with the views that which option would be best for the
organisation and will result in best outcome and will give more return on the investment made by
the company. Evaluation of the opportunities of the growth, Norsk European Wholesale Ltd. has
adopted "The Ansoff Matrix". Apart from SWOT and PESTLE analysis, this is the most
commonly used model.
The Ansoff Matrix
It is considered as an effective tool which helps in determining the growth and strategies for the
growth. It is also known as Market/Product Grid or Matrix. There are four options in this model
which is related to the growth of the organisation by being consistent with the new and existing
product in existing and new market. It also includes or highlights the risk in the market which
may influence the growth of the company or its business. It is necessary that the plans or the
strategies made for the growth must include all the four aspects of the model. It is also said that
this model is a strategic tool which focuses on the marketing and the strategies for marketing for
reaching the goals and aims of the organisation.
This model includes the four options which are as follows:
Market Penetration: This aspect of the model focuses on the selling more products and the
services in the market. There are various ways by which a company can penetrate into the market
such as providing attractive offers to the customers, discounts, etc. This increases the loyalty of
the customers towards the company and towards the products or the services of the company
(McDonald and Wilson, 2016). This also helps in establishing recognition to the company and its
products and services. This may also include resolving the issues or the grievances faced by the
customers.

Market Development: This aspect focuses on expanding the business and the sale of the
products and the services that are already introduced in the existing market and to the new
customers (Charles Jr, et. al., 2017). This is done by expanding the market beyond the domestic
boundaries and establishing its business in other countries.
Product Development: It is well known that there is always a scope of development and
enhancement of the products and services. This includes improving the products and services, its
uses, features, characteristics which attracts more and more customers (Tukker and Tischner,
2017).
Diversification: In this aspect of the model, it is considered one of the riskiest plans and it
includes introducing new products and services in the new market. If the customers are attracted
to the products then it will be a success for the company and its business otherwise it will lead to
the failure for the company.
(Source: Mindtools, 2018)

M1). Discuss the options for growth using a range of analytical frameworks to demonstrate
the understanding of competitive advantage within an organisational context.
As it mentioned above that growth of the organisation is dependent on various factors which are
as follows:
In accordance of a model of Ansoff, it is stated that penetration of the market, development of
the products and services, development of the market and unlinked diversification. It is essential
that all the aspects mentioned in this model must be considered while developing plans and
strategies for the growth and enhancement of the organisation.
Identification and mitigation of risk: There are various strategies which are adopted by the
organisation for identifying the risk which affected the growth of the organisation and its
competitiveness (Hopkin, 2017).
Implementation of technology: The growth of the organisation and its competitiveness can be
improved by the application of technology to the operations and the functions of the
organisation.

D1). Critically evaluate specific options and pathways for growth, taking into account the
risks of each option and how they can be mitigated.
There various options which are available with the company for the growth of its business which
is as follows:
Merger: In this option, two different entities with similar objectives or aims are merged together.
This reduces the increase in competition in the market. Moreover, the resources of both the
companies are pooled together and are used properly.
Acquisitions: In this option, one company is acquired by another company, the size of which is
larger than the company getting acquired. This is done with the view to reduce the competition
and increasing the market for itself.
Partnership: In this option, the people of like-minded people work together in order to
accomplish the same aim and to share the profits and losses of the company. This helps in
expansion of business and generates more revenues.

LO2). Assess the various methods through which organisations access funding and when to
use different types of funding.
P3). Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
It is well known that one of the most significant factors required for the managing and organising
the operations and functions of the organisation on day to day basis is "funds or finance".
Finance is one of the resources without which the business activities of the organisations cannot
be performed. However, it is not necessary that finance is available with each and every
organisation, various organisations suffer from the unavailability of finances or the capital.
Furthermore, the organisation has the option to raise the funds required from different sources.
These sources are as follows:
Loan from Banks: It is most commonly used and preferred method for raising funds for the
operations of the organisation. It is considered as a safest option to take a loan from as the rate of
interest are predetermined or fixed by the authorities itself; therefore there is no chance that the
interest rate can be charged more than such determined rates (Rogers, 2016). Moreover, the rates
determined by the authorities are nominal so that it is not detrimental for the organisation taking
loans.
Public offering: Organisations also have the option to offer the shares of the organisation to the
public in general or to the existing shareholders which helps the organisation to raise the required
funds. Most of the organisation raises funds in this way. Due to this, shareholders get the share in
the profits of the organisation based on the holding of such individual.
Peer to Peer Lending: Apart from raising funds through the public or from the institutions,
organisations can also take funds from the individual investors who are willing to lend the
money. This eliminates the middlemen from the equation of taking loans due to which the rate of
interest of the loan is increased as the commission is part of such interest rate (Gospel, et. al.,
2014).

Venture Funding: This type of funding are provided to the organisations which want to
introduce new and unique products and the services in the market. While considering that
whether the funds must be provided for such products and services are dependent on the chances
of the success of such products and services.

M2). Evaluate potential sources of funding and justification for the adoption of an
appropriate source of funding for a given organisational context.
Loan from Bank: As mentioned above, it is the most considered safest source as all the
formalities are done by the appropriate authorities who perform their work as per the norms,
rules, and regulations. Moreover, the interest rate on the loans is also decided by the bank
authorities and interest rates cannot be charged more than specified rates.
Peer to Peer Lending: In this source, funds are raised from individual investors who are willing
to lend money at a particular rate. This removes the middlemen and other authorities which takes
a commission of the issuing the loans.
Public Offering: In this source, the organisation doesn't have to pay daily or fixed interest on the
funds or the capital raised by the company. The dividend is paid when the company has earned
sufficient profits. Moreover, if the company wants to get the shares back, it can do so.
Venture Funding: Capital can be raised by this source as well. However, funding from this
source is dependent on the probability of success of the products or the services of the company
(Jobson, 2017).

D2). Critically evaluate potential sources of funding with justified argument for the
adoption of a particular source or combination of sources, based on organisational needs.
As per the operations and the functions of the selected organisation i.e. Norsk European
Wholesale Ltd., the most suitable source for raising the funds for business activities is public
offering by way of issue of shares and debentures. The issue of shares not only helps in
generating funds for the working of the organisation but also helps in making the working more
transparent as the public itself is the part of the organisation or holds the share in the
organisation. If the organisation is able to generate adequate profits only then the organisation
have to provide a return on the investment made by the public unlike in other sources in which
interest is to be given on regular basis. If the organisation doesn't want to dilute the management
of the organisation by issuing shares, it can also issue debentures which are like a debt taken
from the public and with a promise that it will be paid in full along with certain interest.
However, in debentures, the organisation has to make payment of the interest to the debenture
holders.

LO3). Develop a business plan (including financials) and communicate how you intend
scaling up a business
P4). Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
It is essential that appropriate plan of action is made by the management of the company so that
the operating and the functional activities are performed as per plans formulated and the
accomplishment of organisational aims and objectives. The action plan is prepared to take into
consideration the account an organisation operating its business in the United Kingdom i.e.
Norsk European Wholesale Ltd. and such plan are as follows:
Aims of the Organisation:
There are various aims which are established by the top-level management of the company
which is essential for its growth and enhancement. The aims of Norsk European Wholesale Ltd.
are as follows:
 To expand its business in the global market.
 To provide a vast range of services to the customers along with the quality.
 Adoption of the latest technology for the operations and the functions of the company.
 To generate adequate revenues by providing satisfactory services to the customers
(Norsk, 2018).
 This also includes the services of import and export to the customers i.e. transportation
and storage facilities.
Objectives of the organisation
These are stages which ensure that the aims of the organisation are accomplished. The objectives
of Norsk European Wholesale Ltd. are as follows:
 Making utilisation of the skills and knowledge in order to make optimum utilisation of
the resources.
 To make effective plans so that aims of the organisation can be accomplished.

 To maintain the arrangements between the agents of all over the globe (Norsk, 2018).
 Establishment of effective communication channels in order to maintain relationships
with the customers and dealing with their queries.
Plans or strategies of the organisation:
There are various plans which are required to be made by management and these plans are as
follows:
Marketing Plan
All the plans in this regards are made based on the current market situation. This includes the
cost or fixation of the budget, the forecast of sales, competitors, etc (Finch, 2016). In this digital
era, the marketing of the organisation and its services are done by use of social media as by this
customer base all over the globe can be targeted.
Financial Plan
It is essential that proper plans for finances or the funds are made as it is required for performing
the activities of the business. However, in order to raise funds for the business activities, an
organisation can take a loan from banks, or issue debentures. However, it will be made sure by
the financial manager that the funds are utilised properly (McDonald and Wilson, 2016). As the
main business of the company is transportation services, the cost of the fuel will be controlled by
making an arrangement with the oil companies.
Other Strategies
 This includes the strategies about the maintaining relationship with the customers. For
this, skilled and experienced employees are employed who can deal with the current
clients of the company (Goetsch and Davis, 2014). A digital interface will be developed
so that communication can be established easily.
 This also includes the strategies for the establishment of the distribution channels. For
this, the organisation will get into an arrangement with different agents all over the globe.
This will help in performing the operations properly as agents are appointed for every
respective area.

M3). Develop an appropriate and detailed business plan for growth and securing
investment, setting out strategic objectives, strategies and appropriate frameworks for
achieving objectives.
Key Activities:
 Transportation Services all over the globe
 Storage Facilities
 Labeling the articles of the customers
Value Proposition:
 Quality services will be provided.
 Ensures the safety of the products or articles of the customers in both transportation and
storage.
Customer Relationship
 The proper relationship will be maintained with the customers.
 Experienced employees will be appointed to handle the customers and resolve their issues
quickly.
Customer Segment
 Articles of Households and families.
 Products to be delivered by organisations.
 Articles related to art, music, etc.
 Other Courier services.
Key Resource
 The key resource for the company is customers and their satisfaction with the services
and facilities.

Distribution Channels
 The arrangement will be made with different agents all over the globe so that the cost can
be managed properly.
Cost Structure
 The main cost of the company is the fuel for the transportation and storage.
Revenue Stream
 The cost of the services provided by the company is on par with the market price.

D3). Present a coherent and detailed business plan that demonstrates knowledge and
understanding of how to formulate, apply and achieve business objectives successfully.
The plans made for the growth of the company covers different types of the plans:
Social media has been selected for marketing purpose as it is cheap and it helps in covering huge
customer base all over the globe.
For financial assistance, loans from the bank will be taken as it is a most secure way of raising
the funds and there is no delegation of power as it is an the issue of shares.
For handling the customers and their grievances, skilled staff will be hired as it is essential to
maintain a relationship with customers and it enhances the market recognition of the company
(Goetsch and Davis, 2014).
For establishing distribution channels, arrangements will be made with the agents all around the
globe of the respective region as they will have proper knowledge of the rules to be followed in
this regards.

LO4). Assess the various ways a small business owner can exit the business and the
implications of each option.
P5). Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.
There are various strategies which are available with the company and can be adopted which are
as follows:
Liquidation
It is the most popular strategy which is adopted by the companies in which the assets of the
companies are sold and the liabilities are paid in full out of the proceeds of the sale of assets.
This is considered as the last option as after liquidation, the company ceases to exist (Hawkey,
2017). Another aspect of the liquidation is to sell the company to another person who is
interested in buying the business of the company.
Benefits:
 It is the last option available with the company, the process of which is simple.
 Under this, the business of the company can be shut down very quickly.
 As the assets of the company are sold, the creditors of the company are paid in full.
Drawbacks:
 In this option, the return on investment is very low as limited assets like land, machinery;
inventory, etc. are disposed of in liquidation.
 At the first instance, the creditors of the company have first share on the money of
proceeding of the assets sold.
Transferring the ownership by way of employee or management buyout
In this option, the management or the group of the employed in the company pool their resources
together in order to acquire the part or whole of the company (Wright and Coyne, 2018). This

option is most suitable for such business which doesn't have any successor to continue the
business of the company.
Benefits:
 Availability of Due Diligence as per requirement.
 Provides safeguard to the legacy of the business and its independence.
 Reward Management is available for the purpose of long-term survival.
Drawbacks:
 The terms and conditions in this option are influenced by the availability of the funds
with the management or the employees.
 Affect the performance and morale of the business, if this leads to the failed attempt at
buying the business.
Passing the business to the successor
It is one of the most simple methods in which the business is passed to the next successor so that
there can be the continuous growth of the business in the future times. This strategy is most
suitable for the family businesses (Ward, 2016). In order to adopt this strategy, it is essential that
the profile of successor is established and after that proper and adequate candidates are selected.
Benefits:
 Reduction in the involvement of the third party.
 A person owing the business can control and regulate business activities as per its
requirement without the involvement of another party.
Drawbacks:
 It is difficult to find the right or trained successor.
 Chances of the rise in issues or the conflicts at the place of work or in the family.

Initial Public Offering
It is the offering which is made by the company to the public by selling/issuing the shares. This
option helps in the growth and development of the business.
Benefits:
 It generates capital for the company which helps in performing the operations of the
company.
 Provides Recognition to the company.
Drawbacks:
 Control remains with the public which dilutes the power and authority of the
management.
 Involves various rules and regulations.

M4). Evaluate exit or succession options for a small business comparing and contrasting
the options and making valid recommendations.
Most of the businesses focus on its growth and expansion and the management of the company
makes sure that all the operations and the functions go as per the plans and the strategies
formulated by them. However, if the company continuously misses accomplishing the aims, at
that time, it is essential proper exit plans are also made by the management. In regards with
various options available with the business which can be adopted as an exit strategy. In order to
understand the suitable exit strategy, the comparison is made between two options which are as
follows:
Initial Public Offering Passing the Business to the Successor
In this, the offer is made to the public in order
to provide shares to the public.
In this, the business is transferred to the next
successor of the business or of the family.
In this way, ownership of the company remains
in the hand of the public (Gospel, et. al., 2014).
Controls remain with the successor.
This ensures the growth of the company as
control remains with the shareholders.
As the successor controls the company, the
chances of growth of the company are high.
It is recommended that the company must choose IPO as exit strategy as it is possible that the
company may not find the successor for the business and in IPO, the growth of the company is
overseen by the public.

D4). Provide critical evaluation of the exit or succession options for a small business and
decide an appropriate course of action with justified recommendations to support
implementation.
As it is mentioned above that without continuous growth and development, the survival of the
business is not possible. However, the growth of the business is influenced by various factors in
the business environment. Both, successful business and unsuccessful business have the option to
adopt exit strategy. If the business falls under the category of family business, the focus on the
growth of the business sometimes causes conflicts or disputes in the family. Moreover, in case of
passing down the succession of the business to a particular individual, it may also give rise to the
conflicts. Therefore, it is necessary for the enhancement of the business that proper plans and the
strategies are made by the management of the company. On the other hand, if the company wants
to put an end to the business, then it can adopt any option which is mentioned above. However,
the recommendation for the adoption of the exit option depends upon the position of the
company; if the company is running a successful business then it must opt for IPO, passing the
business to the successor, etc whereas, in case of unsuccessful business, the company must opt
for liquidation.

Conclusion
From the study made above, it is concluded that there are various factors on which the growth
and related opportunities are based. In order to evaluate these opportunities which influence the
growth, the Ansoff Matrix have been adopted. To have a competitive advantage over the
competitors, it is essential that risks are identified properly. Study of different sources by which
funds can be raised is also made. However, based on the selected organisation i.e. Norsk
European Wholesale Ltd., it is recommended that funds can be raised by the issuance of shares.
In order to perform the operations effectively, an action plan for the business is made involving
the financial and communication aspects. Different types of option available with the company
are also analysed and it is found that both, successful or unsuccessful businesses can adopt exit
options.

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