Growth Strategies for Small and Medium Enterprises

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Planning of Growth

Contents
Introduction.................................................................................................................................................3
LO1 Analyze the key considerations SMEs should consider when evaluating growth opportunities..........4
P1 Analyze key considerations for evaluating growth opportunities and justify these considerations
within an organizational context..............................................................................................................4
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.................................6
LO2 Assess the various methods through which organizations access funding and when to use different
types of funding...........................................................................................................................................9
P3 Assess the potential sources of funding available to businesses and discuss the benefits and
drawbacks of each source........................................................................................................................9
LO3 Develop a business plan (including financials) and communicate how you intend scaling up a
business.....................................................................................................................................................11
P4 Design a business plan for growth that includes financial information and strategic objectives for
scaling up a business..............................................................................................................................11
LO4 Assess the various ways a small business owner can exit the business and the implications of each
option........................................................................................................................................................13
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of each
option.....................................................................................................................................................13
Conclusion.................................................................................................................................................15
References.................................................................................................................................................16

Introduction
The planning of growth is one of the most important tasks that have to be performed in an
organization. As the name itself suggests, the main aim of planning of growth is to draft a plan
based on which, the organization can work and achieve organizational growth. This plan is made
based on the earlier performance of the organization as well as the overall growth of the
organization to date. All the growth opportunities that may occur in the organization, the ways to
grab and take complete advantage of those opportunities are discussed in the planning of growth.
In the document that has been created here, the dos and don'ts of the planning of growth is been
discussed. After understanding this report, the learner would be having a basic knowledge of the
planning of the growth of any organization. In the course of this report, several questions have
been answered and it is also tried to make those answers as easy as possible. After going through
this report the learner would also be having the ability to perform the tasks such as analyzing the
main points that are to be considered by an SME at the time when they are having an evaluation
of the growth opportunities, doing assessment of different functions by the help of which the
organizations have access over the funds, developing a business plan, etc.

LO1 Analyze the key considerations SMEs should consider when evaluating growth
opportunities.
P1 Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.
The following are the considerations that must be kept in mind while having an evaluation of the
growth opportunities.
1. Relationship: It matters a lot that how the organizational relationships of the company are
with the customers, clients, partners, investors, etc. There always must be some specific
customers, clients or investors with who the organizational relationship is better than the
rest and at the time of the evaluation of the opportunities of growth, those potential
partners must also be kept in mind. Close friends in business would always be
responsible for getting new opportunities for the organization. Hence it is very important
for the organization to keep a proper relationship with its partners or the potential
partners (Fishbein, 2019).
2. Size of the market: While evaluating the opportunities for growth of the organization. A
small but focused market research must also be done to know the value of the
organization in the market. Sometimes small marketing research brings many
opportunities to the organization which can directly affect the organizational growth of
the company (Marquit, 2018).
3. Accessibility to the Customers: The organization must also be as accessible to the
customer as possible. The company must never miss a chance to convert a potential
customer to a customer and a newbie to a potential customer. The customer feedback
must always be taken by the customer after providing the services and the feedback must
also be valued and if there is any negative feedback, it must be taken care that the
problem that the customer was having is rectified as soon as possible (Fishbein, 2019).
4. Skillet: Whenever there is an evaluation of the growth opportunities that can lead the
company to organizational growth. It must always be kept in mind that the opportunities
towards which the work is being done are also requiring some particular kind of skill set
from the individuals who are working on them. In this case, the organization must be
having the knowledge that whether they are having any employee in the company who
has such skills or if not, then they have to hire someone with the required skill set as soon
as possible (Marquit, 2018).
5. Knowing to say NO: One of the most difficult yet important things in any kind of
business is knowing how to say no. Saying No is considered to be difficult because there
are some opportunities for many organizations that seem to be giving profit to the
organization on an instant basis but may lead the company to loss after some time.
Hence, in this case, it has to be chosen in a very short period that what the company is

willing to give up in that case and such kind of decisions are very hard to make as the
future of the company is completely dependent on it (Fishbein, 2019).
6. Maintaining the Cash Flow: The control of the cash flow must also be an aspect of
thinking while evaluating the growth opportunities for the organization. There must be an
individual or a department who must be having the knowledge about where to invest least
money in order to gain maximum profit and how to keep the transaction going in any
organization so that there always would be a proper control over the flow of cash at the
inside as well the outside of the company (Marquit, 2018).
7. Quality of Work: This the most obvious yet important aspect which must be kept in mind
while evaluating the opportunities for organizational growth of a company. All the
above-mentioned points would be of no use if the organization is failing to provide a
good quality of services to the customer (Fishbein, 2019).

P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff is the person who is responsible for introducing the idea of having a balance in the
outside features and traits of a product and marketing plan and along with that process,
developing the interior fitting between the plans and the resources that can be used in the
business (Gianos, 2013). All the work that has been done by Ansoff is on the basis of the
creation of a device that is having the capability of facilitating the capability of a higher-level
manager of analyzing the information with the motive of going through as well as exploitation of
the potential that he information may have in the future and, as an outcome, enhances the
competitive position of the organization (Gianos, 2013). The approach that has been used by
Ansoff is also having the ability to quantify the information in such a way that allows the
management to match their behavioral skills as well as the abilities to the externally operated
environmental conditions (Gianos, 2013). There was an observation made by Ansoff that
managers in every short period of time trying to apply the "one-size fits all" concept without
even having any kind of variation in their plans and behavioral on the basis of the recent
situations of the market or even the organization; instead those managers are having the tendency
to developing the strategies and manage in a manner that is based only upon the historic
information (Gianos, 2013). Ansoff was successfully able to empirically confirm that using the
information to have a record for historical as well as future scenarios and changing strategies and
behavioral skills to match these situations as they have evolved is an appropriate method for the
optimization of the success of the organization (Gianos, 2013).
As a result of all this, in the year 1957, Ansoff introduced a matrix that was having the ability to
be used to be playing are a very crucial role in the evaluation of the growth opportunities that can
be used for the organizational benefits of the company (Navarra and Scaini, 2016). This matrix
consists of 4 basic elements. All of those elements had their importance and role to play in the
evaluation of the opportunities for the organizational growth for the company (Navarra and
Scaini, 2016). This matrix that was introduced by Ansoff is known as Ansoff’s growth vector
matrix which is having 4 elements. The 4 basic elements of Ansoff’s growth vector matrix were
Market Development, Diversification, Market Penetration and product development (Navarra
and Scaini, 2016).

Following is an illustration of the Ansoff’s Growth Vector Matrix.
Here is the detailed explanation of every element of the Ansoff’s Growth Vector Matrix.
1. Market Development: As per the studies that were conducted by Ansoff, in the whole
process of market development, the company tries to enhance their quotation that is
present in a real frame so that better partners can be formed along with providing better
funds to the organization (Navarra and Scaini, 2016).
2. Market Penetration: As per the studies that were conducted by Ansoff, in the whole
process of market penetration, the organization is known to be trying to enter or penetrate
in the new markets to do business with the products that are already available with the
organization (Navarra and Scaini, 2016).
3. Product Development: As per the studies that were conducted by Ansoff, in the whole
process of product development, the organization is completely involved with their
complete focus on the creation of their latest product and also the strategies to make this
product as popular among the people as possible for the organization growth (Navarra
and Scaini, 2016).
4. Diversification: There can be some additional possibilities if the organization tries to
enter a new market for selling their product such as the organization may have to sell or
trade the latest of its product to make their company talked about in the market and then
sell their older products too. Another possibility that may occur in this whole process is
that the company has to make new products that are similar to the existing products to
mark their name in the market a bit properly (Navarra and Scaini, 2016).
The organization that is mentioned here must also do the same to evaluate the growth
opportunities for the organizational benefits.

LO2 Assess the various methods through which organizations access funding and when to
use different types of funding.
P3 Assess the potential sources of funding available to businesses and discuss the benefits
and drawbacks of each source
There are a lot of potential sources of funding and investment that are present and available in
the market if looked carefully. The following are some of the sources mentioned that can be used
to obtain funding and investment in a business along with their drawbacks.
1. CDFIs: The Community Development Finance Institutions are considered to be one of
the most common sources for funding for the small business. There are multiple CDFIs
across the country, which are just there to invest in the micro businesses if the terms that
are set by the owner of the business are reasonable. Like any other source of funding, the
credit score observation is a part of CDFIs too but in this case, the way they look at the
credit score of the business is a bit different than rest of the businesses.
2. Trade Credit: The suppliers of the resources can also result in being a valuable
investment in a business. Though the suppliers would not be able to provide capital to the
owner of the business, instead they can allow the owner to have some delay in the
payment of the resources that are being supplied to the owner by the supplier. This can
only happen if there is trust between the supplier and the owner. That trust also must not
only be in each other but the idea of the business.
3. Venture Capitalist: The venture capital is defined as the source of investment and
funding for a business in which the individual or the organization that is willing to invest
in the business offers the investment only at the condition that they would also be having
a part of the ownership of the business. How much ownership can or should be given to
the investors in exchange for the investment can be decided and is also open to
negotiation. This method of investment is only good if there is a legit potential in the
business idea which would convince the investors to fund the idea.
4. Advance Payments from the customer/ client: This is a very risky method until the
business starts generating actual profit. This is the way of getting investment for the
business in which the potential customers and clients tried to be converted into clients
and customers even before the business started. Once they become the customers for the
business, they asked to give advance money in exchange for the services that would be
provided to them and that payment by the customers can be used as an investment in the
business.
5. Partner Finance: This is the method that is applied in most of the startups and new
business ventures. In this method of getting funding, from the initial stage of the business
itself, it is started in partnership of 2 or more partners who can collectively invest and
amount o the business which would not have been possible for any of the owners of the
business, individually. The organizations that become partners in these types of

businesses are usually large once so to make them put money in the business. It is very
essential to convince them that their money would not be going in loss.
6. Angel Investors: There are a lot of misconceptions regarding the concept of the angel
investors as most of the people think that it is similar to the concept of the venture
capitalist. But in reality, the venture capitalist is generally an organization or a well-
established company, whereas, in the case of angel investors, the investor is mostly an
individual or groups of at max 5 people who are willing to fund startups at the budding
stage.

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.
The following plan is made based on the earlier performance of the organization as well as the
overall growth of the organization to date. All the growth opportunities that may occur in the
organization, the ways to grab and take complete advantage of those opportunities are discussed
in the planning of growth that is mentioned below. The whole process of market development,
the company tries to enhance their quotations that are present in a real frame so that better
partners can be formed along with providing better funds to the organization.
The below business plan is based upon the evaluation of the opportunities for the organizational
growth of the company. Several points are taken care of while making the following business
plan, for example, it was precisely kept in mind that the opportunities towards which the work is
being done are also requiring some particular kind of skill set from the individuals who are
working on them. In this case, the organization must be having the knowledge that whether they
are having any employee in the company who has such skills or if not, then they have to hire
someone with the required skill set as soon as possible.
All the studies that were done till now have come up with the evaluations that are made on the
basis of the creation of a device that is having the capability of facilitating the capability of a
higher-level manager of analyzing the information with the motive of going through as well as
exploitation of the potential that he information may have in the future and, as an outcome,
enhances the competitive position of the organization.
Basingstoke Skip Hire & Southern (Business Plan)
Waste management services
Business Description and Strategies
The basic aim of our business is to manage the waste that is being created by the population of
Basingstoke and spread awareness against the waste product that has been increasing massively
in the city from the last few years. The plan is to plan as many dustbins as possible in the city
and that too at a regular distance so that whenever someone wants to throw some waste, they
always find a dustbin near them. One of the plans that our company has is also to recycle the
waste that is obtained in the dustbin that is planted by us instead of throwing all the items in the
dump. This will decrease the overall waste creation of the city and will also be having monetary
profit for us as recycled products would also be sold by our organization as well (Basingstoke,
2019).
Company Description
Basingstoke Skip Hire is the name of our organization that was started in the year of 1982 when
the founders of the company Mr. Mick Mercer and his wife Mrs. Ellie set up the premise which

was then located in Oakley. At that time the organization was working to provide a cheap local
skip hiring facilities to the neighborhood. The rapid, efficient, and consistent services that were
provided by our company and that too at a cheap cost made the firm popular with local
businesses. An increasing base of consumers who were highly satisfied with the services that
were being provided to them led to the rapid expansion of the organization and it’s reallocation
to the city of Basingstoke. There are currently 68 employees working in the company
(Basingstoke, 2019).
Target Market
The target market of the organization is the areas that are prone to more wastage as compared to
others. Many people are living in that area who complain about the poor waste management
process at their locality but their complaints are being overheard and ignore to an unbearable
extent. If we extend our hand towards them to make their area clean. It can be a lot beneficial for
the organization as well as society. Another target market for the organizations can also be the
stadiums and beaches as they are the places that are attended by a large mass of people are a lot
of waste is left behind once they have left. By having collaboration with the authority of those
places, we can also make those places cleaner (Basingstoke, 2019).
Financial Information
Current Sales of the Organization: 9.89
Previous Sales(m) of the organization: 9.1

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
The following are the methods that can be used as succession or exit options for any business
along with their advantages as well as the disadvantages.
1. Liquidation of the Business over the years: In this kind of the exit option the owner of the
business or the organization as already aimed for the closure of the business hence they
always try to get as much as or all the profits that they can get out of the business and the
services that they are providing without even a thought of reinvesting any of that amount
that has been gained from the business, to expand the business any more (Ward, 2019).
Advantages
a. It maximizes the capital income of the owner of the business to a great level as all the
amount that has been coming out of this business is only profit and no extra
investment is done (Obadan and Ohiorenoya, 2013).
Disadvantages
a. It also reduces the growth value of the business to a great extent which affects the
overall profit potential of the business (Khan, 2016).
2. Keeping the venture in the family only: It is one of the most highly used exiting or
succession options for a small business owner. In this case, the owner of the business
gives the whole business to their children or whoever they feel worthy of the business
with an expectation from the person to take the legacy of the family forward. The
common people in this case to whom the business is transferred are children, heirs,
spouse, younger brother, etc (Ward, 2019).
Advantage
a. A smooth transition can be made from the previous owner to the new one, without
any formalities.
b. It allows the previous owner to still have the right to do any changes in the business if
they will too (Obadan and Ohiorenoya, 2013).
Disadvantage
a. The succession plan development, in this case, can be very difficult as in this case it
must always be made sure that the successor of the business is not willing to do
something else in their life (Khan, 2016).