Softwire: Business Plan for Growth and Funding Strategies

This report provides a comprehensive analysis of Softwire, a UK-based software solutions provider, focusing on its growth opportunities, funding strategies, and potential exit strategies. The report begins by identifying key considerations for evaluating growth opportunities, such as utilizing cloud computing, mobile technology, and big data, and applying the Ansoff matrix to explore market penetration, market development, product development, and diversification strategies. It then explores various funding sources, including angel investors, venture capitalists, government grants, and government-guaranteed lending schemes, outlining their advantages and disadvantages. The report also develops a business plan for growth, incorporating technological advancements to enhance competitive advantage. Finally, it examines the benefits and drawbacks of different exit strategy options available to small businesses, providing a well-rounded view of Softwire's path to expansion and success.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK-1............................................................................................................................................1
Key considerations for evaluating growth opportunities........................................................1
Applying Ansoff's growth vector matrix on opportunities for growth...................................3
TASK-2............................................................................................................................................5
The potential sources of funding and its advantages and disadvantages................................5
TASK-3............................................................................................................................................8
A business plan for growth.....................................................................................................8
TASK-4..........................................................................................................................................13
The benefits and drawbacks for exit strategy option available for small business..............13
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Planning of growth is an important for any business today. As this will help the
companies to increase its ales and more customer-satisfaction will be created with opportunities
of growth. The Small organization can increase its market by planning for growth. When there is
a lack of sales, intense competition the companies often develop a growth plan. The growth of
small businesses can be supported by using digital technology in a business. Today every
organization make use of digital technology in order to make their business more efficient and
accurate (Albon,Iqbal and Pearson, 2016.). The use of cloud computing in an organization have
been beneficial as it has reduced the manual work that have to been done in storing and
maintaining the records of organization.
Softwire is a small organization in UK that provide software solution to other brands.
This report will examine the opportunities for growth for softwire organization. By applying
ansoff's growth matrix model the growth opportunities will be evaluated in this report. The
various resources of funding for this organization will be discussed and its advantages and
disadvantages will also be represented in this report. This report will also develop a business plan
for growth of business.
TASK-1
Key considerations for evaluating growth opportunities
The small business organization such as softwire need to consider opportunities in order
to expand their business and increase its share of market. Today the digital technology have
impact the businesses. It has changes the ways in which business are operating today. With use
of digital technology the company can create innovative products for their customers. The key
consideration of growth opportunities for softwire organization will be as follows-:
Use of cloud computing – This is an important opportunity for growth. Instead of storing
data manually the company can make use of cloud computing storage. The advantages of using
cloud as a storage are numerous (Eddleston and Crittenden, 2013.). . It will help the company to
store all records of company on one cloud. The manual record-keeping is difficult to maintain
and can also consume a lot of time as each record of employees and customers need be search in
order to do an up gradation in it. The update process in a manual system is difficult .But in c;loud
the up gradation is done automatic .The only need of cloud is internet access. With use of
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internet access it can be accessed anywhere and at anytime. The cloud-computing also provide a
great security to data is stored in it. So the company can use in order to store their records of
organization.
Use of mobile technology and social media – In many way's technology has change the business
in many ways. By using mobile technology and social media sites such as Facebook, twitter, e-
mails and blogs the communication in a business have become more effective. With use of
technology one can communicate with other employers who is in another country. Without
meeting face to face the individuals can communicate by using video-conferencing and carry on
business relationship. Softwire can use social media in order to connect with customers .A huge
information about preferences of customers can be known through social media sites
(Dibrell,Craig and Neubaum, 2014)..
Use of big data in business – This can be one of the growth opportunity for this small
organization a innovative and create product can be created due to use of big data. The large
number of data set can be managed with help of big data. When people interact with different
systems the concept of big data was used to understand trends, patterns and references in a huge
database. The organization of business can use analytics and discover the most valuable
customers for business. The new experiences, products and services can be created with use of
big data. In order to compete with rivals and innovate the companies use data driven strategies. A
lot of new growth opportunities can be created .The profile of customers can be checked and
analysed with help of big data. This will help organization to understand the preference of
customers and their desires. So, the relevant products as per preference of customers will be
made by company. The important changes and re-development in a product can be done with use
of big data as it provides ways of collecting data. The social media feeds and newspaper reports
can also be scanned and analysed by big data.
Use of internet of things – With use of internet of things in a business the company can develop
smarter products for their customers. The expense of business will be lowered with use of
internet of things and the entire business will operate more productivity need to hire security
guards will be circumvented.
Thus, all of the above ways can be used by Softwire in their business with the aim to
drive success. By advancement of technologies i.e cloud computing, mobile technology, social
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media and others, it can gain good success. It will drive competitive advantage to the business
which will enable firm to successfully beat rivalry firms and achieve success. For instance, using
advanced technology in the product planning and new product development helps to serve
consumers in the best manner and establish product differentiation from the competitors. As a
result, company will be able to strengthen their competitive positioning in the competitive
market.
Advancement of technologies improve competitiveness, as a result, it will be able to
acquire the tough rivalry and also merge with the leading company of the industry. It will be able
to give franchise to the others which will help Softwire to develop unique position in the sector.
In despite of this, it can collaborate with competitive firm and take actions for collaborating
business practices that eliminate unnecessary competition. Moreover, working together will help
firm realizing sustainability.
Applying Ansoff's growth vector matrix on opportunities for growth
In order to find out a growth strategy for business the ansoff matrix is a grate strategy
tool .It is also known as the product market grid matrix. In this the four options are shown. The
four starters for growth are as follows-:
Market penetration – In this the same products are sold to existing customers. In order to
increase loyalty of customers and grow lifetime values the business need to discover new ways.
The process of order might be improved .This will make it easier for customers.
Market development - To an existing product the new customers are attracted with this approach.
By geographic location such as country a new customer can be defined. For an instance for
company software in order to sell its services to new customers a campaign can be used to target
new customers (Dibrell,Craig and Neubaum, 2014)..
Product development – In order to sell to current customers the variation in a products and its
services is done. The company's can make its product more innovate and creative to sell it to
customer.
Diversification – It is used when product is new and is being introduced in market for first time.
Existing products New products
Existing market Market penetration
 Selling more in
Product development
 Sell new products to
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existing market.
 Target more software
companies such as
Tatvasoft .
existing products.
 Innovation at software
 Make use of new
technology such as
social media site in a
business.
New market Market development
 Increase in market
share for soft wire in
UK and around the
world.
Diversification
 In other countries of
world provides
services.
 Using big data to
capture the preference
of customers in other
countries.
In this the anisoff's model is applied to opportunities for growth.
Market penetration
Currently the company is providing its services to market in UK .The current products
that are provided by company is related with software and manual process is used by company in
maintaining records of customers and employees that are working in a company .
New product
The new product that will be launched by company in existing market will be innovative
and creative software services and in order to make communication effective with employees the
mobile technology and social media site such Facebook, twitter and blogs will be used.
Market development
In market development the company will provide its services outside UK in other
countries and will target more school and universities.
Diversification
The big data will be used to analyse the customers that are in other countries or are new
for company. The customers' taste and preference will be known with use of big data.
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TASK-2
The potential sources of funding and its advantages and disadvantages
There are various sources that can be sued by business for funding. They can be banks,
government grants own funds, angel investors, government- guaranteed lending scheme and
many others.
Angel investors
This investor of business will have a background in a business and in business they can
invest funds. In return of their investment they take a share in the business. Due to this reason
they are more interested in operation of a business.
Advantages
 Softwire can make quicker investment decisions
 Maintain discipline due to outside scrutiny
 No requirement to pay interest
Drawbacks
 Longer time to find a perfect angel investors
 Gives stake in the business Lack of structural support
Venture capitalists
Within three years of start-up ,in the initial stage of development they chose to invest in
fields of internet ,digital media and clean technology. The development of new products and
technologies is funded by their investment. They also make sure that project succeeds.
Advantages
 It facilitate Softwire in rapid growth.
 It helps firm in expanding business and generate a good market share that build brand
recognition.
Drawbacks
 Some ownership is transfer to the venture capitalist.
 Venture capitalists will have right to part in managerial decisions of Softwire.
Government and European grants
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The grants from UK government are not repayable. As with financial deal there are
advantages and disadvantages of UK grants. Some of its advantages are that over the business
there is no control is taken. There is not need to pay back the grant. In return for the grant no part
of business is taken. The grants that are made available are of different types and the right one as
per requirement of company need to be discovered. For the grants a lot of competition is there.
The process of application can consume a lot of time (Financial funding for a business, 2017). In
to help start-up companies and help them companies in expanding their existing ventures several
loans and grant programs are provided. Free money are provided with grants. A government
guarantee loan is a loan that need to be payed and interest rates are there on these loans.
Government-guaranteed lending schemes
In conjunction with banks of UK this scheme runs in conjunction. The 75% of the loan is
guaranteed with this scheme. Some advantages of using this scheme are that the amount of loan
can both bigger and smaller in numbers. The intensest rates can be both variable or fix that is
preferred by company. With a maximum of ten years and minimum term of 3 years. As per the
needs of businesses the loan or overdraft can be selected (Wolf and Floyd, 2017).
Benefit
 Grants are a available free of cost like interest and others
 No need to repay grants back
Limitation It must be used for specified purpose within the time limit, otherwise, need to be refund.
Commercial finance
In this repayment have to be done in long years and is an effective way of purchasing a
business. Some sort of security is generally needed in this.
Equity finance
The different demands on the business can be place with use of equity finance. It is an
appropriate in comparison with bank loans. Some advantages of equity finance are as follows-:
To the business and the initiated project the funding is committed. If Softwire business is going
well then investors will realize their investment. With the cost of serving bank loans or deny
finance one will not have to keep up with costs.
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Thus, for activities of business the capital can be used. The business is expected to
deliver value .With this the ideas if growth can be explored and executed. The valuable skills,
contacts and experience can be brought by some business angels and venture capitalists to the
business. The assistance in making decisions and strategies can be provided with that. As the
business grows the follow-up funding is provided by investors. In the success of business the
investors have interest .Some disadvantages of equity finance can be that a lot of time can be
consumed in raising equity fine. The focus from the activities of business activities can be taken
away from management.
The comprehensive information about the company can be seek by potential investors. In
order to make management decisions the certain amount of power can be lost. The time need to
be managed in order to give regular information for investor to monitor. When raising finance
there can be legal and regulatory issues (Seyed-Javadin and Safari, 2014). The business can be
expanded by Softwire through raising capital by taking help from a group of investors. In the
business these investors can be active partners.
Advantages
 Dividend is not necessary to be paid every year.
 It does not bring fixed financial burden on the Softwire.
 Listing rules and regulations require to be followed for issuing shares.
Limitations
 The drawback of using investors in s business is that control over the company need to be
given to these investors. The investors need to be kept happy.
 No tax benefits available on equity investment.
Personal savings and assets
A great of source of capital for Softwire to implement technology can be made from
personal savings and other assets. There are minimum acquisition cost are minimum in personal
savings and assets. The interest on bank loans or returns with investors wont need to be payed.
The disadvantages can be that if personal savings which are used in business venture then the
there are chances that all the savings can be lose.
Advantages:
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 There is no requirements to pay fixed payment like interest and dividend
 Assets that are not in use can be sold to collect funds
 It helps in keeping control over business
Limitations:
 In competitive market, there is chance of loss and if Softwire goes into liquidation or
become insolvent, then entrepreneur will not be able to get its saving back.
Bank loans
A good source of funding can be private bank loans. One can secure a personal loan for
small ventures. The money can be kept in hand to use as operating capital .This is one of the
advantage of suing of bank loans. During the time of downfall this money can help for the
company in its survival. By declaring bankruptcy one can secure the most essential personal
assets in case business goes wrong.
Advantages
 On interest payment, Softwire can get tax deductions and minimize tax obligations.
 It does not transfer ownership in business to others.
Drawbacks
 The drawback of this is that the rate of interests need to be payed on the loan. Regardless
the business is good or bad the payment will be due.
 Collateral security like charge on assets and guarantee is required.
TASK-3
A business plan for growth
Executive summary
Enterprise description
Softwire is a small organization in UK that provide software solution to other brands.
This report will examine the opportunities for growth for softwire organization.
Product and service
Softwire offers bespoke software solution to satisfy unmatched consumer expectations.
Industry analysis
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It operates in Information Technology sector, in UK, the sector is growing rapidly
because of rising demand for different analytical software in the corporate field.
Competitor analysis
Bargaining power of suppliers: Softwire requires technical experts and their knowledge
and capabilities enable them to charge for services accordingly. In order to attract specialists,
company pay them at high rate
Bargaining power of customers: Consumers do not have high bargaining power because
Softwire provides customized software accordingly to the user specifications that perfectly
satisfy their requirements.
Entry threats: There are not very high entry barriers, still competition level and the
requirement of experts limit new entry into the sector.
Threats of rivalry: There are number of competitors with whom Softwire is struggling
currently such as IRIS Software, Connaught, Electrolux and others. Although market is intensely
competitive, still, huge market size that is still nascent and future growth prospectus provides a
strong opportunity of growth.
Threats of substitute: Although many companies are producing software, still, their
features differ from each other because it targets specific requirement of the final users which
vary from one person to another.
SWOT analysis
Strengths
 Best quality software solutions
 A team of brightest and high-
performing people
 No debt uses
 Social responsibility towards
community
Weakness
 Funding difficulty
 Internal managerial issues
Opportunity
 Merger and acquisition
 Expansion into new markets
 Collaboration
Threats
 Tough competition
 Regulatory uncertainty
 Decrease currency value as a result of
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Brexit
Marketing plan
In order to marketing its offerings, website marketing and social-media marketing will be
used as a main source that will update information about the new or latest softwares with
distinctive features. Software will be designed exactly as per the technical specification of the
clients. It will not only target only profit-oriented businesses but also target public sector by
designing software solutions accordingly.
Operational plan
All the software will be design according to the technical specification provided by the
client, so that, it will appropriately satisfy their needs and demands. Business will target small
and medium sized organizations who will be charges by an affordable rate considering their
ability to pay and Softwire’s profitability margin.
Human resources plan
Softwire believes in a simple thought that is to create the best surroundings for building
software with a relaxed and informal atmosphere. In order to assure sustainability, company uses
diverse set of technologies to appeal to consumers. Softwire attracts fresh graduates from the top
Universities of UK instead of hiring people from other companies working in the same sector.
Thus, the plan will help to generate latest candidates with new knowledge who can support good
growth through their unique ideas and thoughts. Company’s Managing Director is strongly
committed to build a strong workplace culture.
Budget
Particulars Amount
Revenue
sales 150000
Other income 16000
Total 166000
Staffing costs 68000
Administration expenditures 34000
Marketing costs 16000
Other expense 8000
Total 126000
surplus 40000
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