Strategic Growth Planning: Evaluating Opportunities & Funding for SMEs

This report provides a comprehensive analysis of growth planning for Small and Medium Enterprises (SMEs). It examines key considerations for evaluating growth opportunities, including competitive advantage using Porter's Generic Strategies and environmental analysis through PESTLE. The report assesses various methods for SMEs to access funding, such as bank loans, crowdfunding, and venture capital, detailing the benefits and drawbacks of each. A business plan, including financial projections, is developed to illustrate scaling up a business. Finally, the report explores different exit strategies available to small business owners and the implications of each option, providing a holistic view of SME growth and sustainability.

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Task 1: Analyse the key considerations SMEs should consider when evaluating growth
opportunities...........................................................................................................................3
Task 2: Assess the various methods through which organisations access funding and when
to use different types of funding.............................................................................................6
Task 3: Develop a business plan (including financials) and
communicate how you intend scaling up a business.............................................................9
Task 4: Assess the various ways a small business owner can exit the
business and the implications of each option......................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
SMEs are the small medium enterprises which consist fewer than 250 members. They
play major role in economy as they contribute to growth, creates employment opportunities and
provide platform for new markets. The entrepreneurs of SMEs are attracting investors as with the
advance technology they are opening new market for these products. Further there aim is to
satisfy the customer and fulfil the needs of the localities, thus they easily cope up with the
changing environment. The companies identifies the opportunities for growth to attain the long
term success and sustainability in the competitive market. Furthermore, the company Don’t-
Look-Further Catering Services adapt the changes in order to sustain in the markets. These
enterprises generally develop the exit and succession strategies in initial business plans.
Sometimes exit strategy is not acceptable by entrepreneur so they face many challenges during
the succession planning. The report examines the planning for the growth of an organisation in
the market.
MAIN BODY
Task 1: Analyse the key considerations SMEs should consider when evaluating growth
opportunities
COMPETITIVE ADVANTAGE
When an enterprise maximise the profits exceeding the average profit earned by the same
industry, thus creates a competition in the market and the enterprise which inherits the advantage
said to gain the competitive advantage (Bae, Lee and Kim, 2018.). The basic advantage which
prevails growth opportunities in relation to Don’t-Look-Further Catering Services are:-
 when an enterprise is able to deliver the same product or service as competitors but at a
low price, gaining cost advantage
 or deliver the product or service exceeds those of competitors, causes differentiation
advantage
Further Margaret Millions utilised its resources and capabilities effectively and
efficiently in order to gain competitive advantage that will ultimately increase the goodwill of the
Don’t-Look-Further Catering Services and its value towards the customers. Also the Don’t-
Look-Further Catering Services has capability of providing the highly specialised catering

service promptly than competitors. Thus, the competencies will somewhere enable the Don’t-
Look-Further Catering Services the efficiency, better quality and customer awareness.
Porters Generic Strategies
Porter formulated four strategies in order to gain advantage in the competitive market. It
also determines whether the position of Don’t-Look-Further Catering Services is above or below
the market average. Don’t-Look-Further Catering Services, a highly specialised catering
business focus on providing services effectively and efficiently (Cowling and Liu, 2021). Thus,
using the above advantages the Porter devised generic strategies so that the Don’t-Look-Further
Catering Services can effectively segment the market and gain sustainability in the competitive
environment. The generic strategies for achieving above the average performance in the market
are as follows:-
1. Cost Leadership: This strategy enable to target the market where the demand of customer
are high and offer them with the products or services at low cost. Thus, it focuses on
keeping the cost of the Don’t-Look-Further Catering Services low. The application of this
strategy results into high performance to Don’t-Look-Further Catering Services as
compared to its competitors in the market.
2. Differentiation: This strategy enable to target the market where the demand of customer
are high and offer them the products or services of unique features, i.e. those products or
services through its unique features distinct its from the competitors. The Don’t-Look-
Further Catering Services while using this strategy requires a proper research of the
market along with the trends and changes in the environment, innovation and ability to
maintain and provide high quality products or services. Such unique product or service is
required to be launched by the Don’t-Look-Further Catering Services Don’t-Look-
Further Catering Services in the effective market so that they can maintain their
sustainability.
3. Focus: This strategy is further bifurcated into cost focus and differentiation focus. The
cost focus to attain the advantage by lowering the cost while the latter attain advantage
through product differentiation in the segment. Prestige of Don’t-Look-Further Catering
Services and its loyalty is formed under the latter strategy. Thus, level of competencies is

required to be focused by the Don’t-Look-Further Catering Services Don’t-Look-Further
Catering Services before adapting the strategy.
PESTLE Analysis
PESTLE Analysis focus to give an overview of the external factors which are affecting
the business. Accordingly the organisation formulates its strategies and make decisions regarding
the conduct of the business (.Dowling, 2020). This PESTLE analysis examines the external
factors which the Don’t-Look-Further Catering Services company faces, these are:-
 Political Factors: The management of Don’t-Look-Further Catering Services may face
political issues in the country where the owner is carrying its business. Taxation policy
differs in the country and even the competitor may evolve hindrances before the business.
 Economic Factors: During the pandemic situation many business faced challenges and
accordingly implemented the policy to overcome these changes. Thus, the company
Don’t-Look-Further Catering Services is required to entertain these factors effectively.
 Social Factors: The Don’t-Look-Further Catering Services is required to conduct its
business keeping in view the cultural aspects of the customers. Thus, require better
segmenting, positioning and targeting of the customers while considering their
behavioural aspects.
 Technological Factors: The new innovation may affect the businesses. Thus, the Don’t-
Look-Further Catering Services is required to create a wide aspects for research and
development. For example my offering services through mobile apps etc.
 Legal Factors: The Don’t-Look-Further Catering Services is required to patent its work
so that the competitors cannot misuse the company's work and cause confusion in the
minds of the customers.
 Environmental Factors: Most of the companies focus on eliminating material waste and
make an effort to reuse such waste. Thus, the Don’t-Look-Further Catering Services is
required to make consumer aware about the environment.
GROWTH OPTIONS

Ansoff Matrix
Ansoff matrix aims to increase the market share in the changing environment by
applying its four main strategies. With the help of this Matrix the company will be able to know
their market position and will develop the business strategy to cope up the difficulties in the
changing environment (.Dudley, Banister and Schwanen, 2021).
Market Penetration
Under this strategy, the organisation aims to increase the market share in the current
market scenario by increasing the sales of existing products into existing markets. The Don’t-
Look-Further Catering Services can use the social media to push its existing services as to create
consumer awareness. The Don’t-Look-Further Catering Services may adopt the direct sale policy
and even developed the mobile application for customers convenience. Usage of catalogues will
help to attract consumer towards services. Thus, this strategy involves less risk as compared to
others.
Product Development
This strategy focuses on introducing new products in the existing markets. This strategy
also involves a risk as new products may or may not be liked by the customers. The Don’t-Look-
Further Catering Services during the pandemic situation may add such services like segmenting
tables maintaining distance which will be very helpful during social distancing norms. New
Experiments with the trends while carrying services will help to grow the Don’t-Look-Further
Catering Services in the market. Further Margaret is exploring her services by working with
supermarket to supply lunch meals. In this she may include new service like online booking of
meals.
Market Development
Market development strategy focuses on entering a new markets using existing products.
This involves a risk of company's stability in the new market segments. Under this strategy
Margaret is supplying meals in the supermarket, as she don't want to limit her catering services
for parities only. Further, used the market segmentation to target different groups of people. Also
induced the customers by providing membership services and vouchers.
Diversification
This strategy focuses on entering a new markets with the introduction of new products.
The risk involved in this strategy is more as the business is moving into a market of which it has

no knowledge. It creates a question in relation to the position of the business in the competitive
environment. Further Margaret may diversify her catering services creating a cooking school or
engage in partnership with colleges nearby. Thus, the Don’t-Look-Further Catering Services
structure need to be strong in the new market with its new products.
By analysing the above growth strategies, it is analysed that market development is
effective and helpful for Don’t-Look-Further Catering Services. This strategy will help
respective organisation to enter into the new market and expand its services that has positive
influence on the sales and profitability of company. In addition to this, it also helps to acquire
new customers and increase its customer base level that further allow to increase the level of
revenue. Furthermore, it will also assist Don’t-Look-Further Catering Services to upsell current
customers in an appropriate manner.
Task 2: Assess the various methods through which organisations access funding and when
to use different types of funding
For initiating business funds are required and sometimes lack of funds may cause
hindrance in setting business. Thus, various methods can be opted to acquire funds for the
business . Funding can be of two types:-
 Equity Financing: The money funded under this is from investors who acquire shares of
the company.
 Debt Financing: Funding can be done by taking loan and then returning back the amount
along with the interest.
Some common sources of financing business are as follows:-
BANK LOANS AND OVERDRAFTS
It is considered as most common source of financing business. Entrepreneur oftens lends
money from bank for a time period with an condition to return along with the interest up to that
date. Also entrepreneur required to keep security with the bank against the loan. Further another
option is to withdraw money beyond the limit from the account which is called the overdraft
facility. Interest rate of bank loan is low as compared to bank overdraft.
Benefits
 It will help to generate and maintain a good credit score and thus will attract the investors
 The loans with fixed rate of interest, makes it easier for the company to plan budget also
the loans are generally tax deductible.

 No obligation on the entrepreneur once the bank loan is paid.
Drawbacks
 Interest rate is generally high and sometimes the fund acquired remains insufficient for
the company.
 One of the major drawback is getting loan sanction is the biggest task unless the record
of business is small and valuable collateral is available against such loans. Formalities
and procedures are to lengthy to acquire loans from bank.
 Personal assets are forfeited if entrepreneur fails to pay the concerned amount wit the
interest (Jones, 2022.).
CROWDFUNDING
Crowdfunding, the name itself speaks a lot, it is suitable for those who enter the market.
It is the method of funding in which the entrepreneur raises small shares of money from a large
number of people. Mostly people raises money through social media i.e. from the internet
sources. They are the equity based funding and thus, regulated by the law. Further there are
many crowdfunding sites available for the entrepreneur.
Benefits
 It will attract the investors if the business attains success and growth in the market.
 These websites helps to make consumer aware about the brand and products or services
company is offering.
 Also somehow it becomes easier for entrepreneur to create awareness of its brand via
social media marketing
 Considered as cheap funding Encourages the start ups to step into the market with their innovative products.
Drawbacks
 Funds may be insufficient to initiate a business
 Creating websites, legal formalities, advertising and other miscellaneous expenses led to
high cost.
 There involves a risk of business failure and wastage of resources.
VENTURE CAPITALIST

Venture capital is the form of equity and considered as a financing method by the
investors in mostly start up companies and small ventures which has the potential to stand in the
market for a long term.
Benefits
 No interest is applied on such funding
 Impressive and innovative start ups attract such investors
 Offers valuable and expertise guidelines
 These investors are loyal and trustworthy On failure of start ups and business, there is no obligation to repay
Drawbacks
 It is time consuming as it takes time to release the fund.
 Complicating and delaying formalities
 Because of the failure the company takes a lot of time to decide whether they are
interested in investing or not.
 Requires high return on investment which may create tension
ANGEL INVESTORS
An angel investor are those funder who are among the entrepreneur's representatives i.e.
family and friends ( Masood and Sonntag, 2020). Further they invest in exchange of equity
ownership of the company. They may be one time investment in order to support the business
from its difficult phase.
Benefits
 No need of collateral security against the investment No obligation of payment and interest
Drawbacks
 It takes long time for investor to invest in the company
 Such investment involves risk
 Investors contributes less support as compared from other investing company
PEER TO PEER LENDING
Peer-to-Peer lending enable to obtain loans from the individuals other than the financial
institution. It eliminates the middleman and directly connect borrowers to investors. Thus
considered as a traditional bank with better offers.

Benefits
 Lenders are generally the choice of the entrepreneur
 Liquidate the funds on time
 Ability to give high return as compared to others Access funds at lower rates
Drawbacks
 Interest earned will be taxed and is required to furnish the interest earned in the annual
report.
 Lending of funds is time consuming
 need to take measures in order to secure the fund required to pay application fee
Task 3: Develop a business plan (including financials) and
communicate how you intend scaling up a business
Another main motive of the organisation is to enjoy the competitive advantage in the
market. As discussed above it refers to advantage gained by the company on producing goods
and services at low price than its competitors. Further it provides the spirit of competition in the
market and thus, help the organisation to achieve the organisational goals effectively and
efficiently (.Rossiter, 2019).
Marketing Plan helps to formulate the policies and strategies in order to carry a effective
marketing in the business. Further business plan helps to allocate the resources effectively and
also led the organisation to meet its objectives. The Don’t-Look-Further Catering Services
provides the catering services and also expanding its services by availing lunch meals to
supermarket. Margaret had created a strong base of her services and want to explore more with
her services. Also she has formulated the strategies required to achieve the desire goals. Some of
the strategies to increase sales and revenue includes:-
 Properly targeted and segmented the group of people
 Devised strategies like, differentiation services in order to gain competitive advantage
 Promoting its services via use of social digital marketing i.e. use of trending social sites
 Delivering the service with high quality accompanied by reasonable price.
MISSION

Our aim is to provide services of high quality ensuring safety and hygiene and portrays
the values towards the society and environment.
VISION
To be the best chosen catering and food service provider with the best quality standards
through continuous improvements and effective utilization of our resources and capabilities
along with maintaining the commitments made to our clients and shareholders.
EXECUTIVE SUMMARY
Margaret is considering working with supermarkets to supply lunch time meal deals. As
she wants to expand her services keeping in view the quality standards and interest of its
shareholders.
MARKETING OBJECTIVES
The main aim of the company is already stated above in the mission and vision. Thus, the
objectives in respect of new service considered by the Margaret are:-
 The company's objective is to grow steadily and enhance with its resources and
capabilities (.Rossiter, 2019).
 Attract customers for creating long term relations with them.
 Increase in the percentage of sales by decreasing the cost of expenses.
FINANCIAL OBJECTIVES
The financial objectives are required to achieve in order to maintain the budgets of the
company. These are as follows:-
 Main objective is to maximise the profits by making an effective utilization of resources.
 Achieve annual growth rate of 10% or more in a tenure of eight years or longer.
 Focus on reducing the variable operating costs of the company by lowering the use of
unnecessary utilities. As these are those costs which varies according to the business
activity.
Total estimated budget:
Particular 31/12/22 (£) 31/12/23 (£) 31/12/24 (£)
Implementing technology cost 11000 11000 12000
Promotional expense 10000 12000 13000

Installation of machines 15000 16000 15000
Shop expense 10000 12000 10000
Training charges 9800 10000 11000
Total Cost 55800 61000 61000
 Cash flow statement: This statement is helpful in determination of flow rate of liquid
funds in a business that is a factor in analysing the financial position of the entity. Further
a cash flow statement includes the liquid outflow which are paid off by the company in
lieu of liabilities or investments.
2022 2023 2024
Particulars £ £ £
Cash inflows
Investment 8000
Credit Sales 2000 3000 3000
Total Inflows 10000 3000 3000
Cash outflows
Fixed: Equipments 2000 2500 1500
Variable: Direct Material 300 300 200
Total outflows 2300 2800 1700
Net Cash flow 7700 200 1300
Opening Balance 0 7700 7900
Closing Balance 7700 7900 9200
From the above cash flow statement, it is analysed that concluded that Don’t-Look-
Further Catering Services is having sufficient liquid funds present due to which they can pay
of their liabilities and all recurring expenses which is further helpful for the company in
attaining long term sustainability. In addition to this, the company is having cash flow of
$1300, $200, $7700 for the years 2024, 2023 and 2022 which truly reflects the appropriate
financial position of Don’t-Look-Further Catering Services.