Business Plan: Planning for Growth of Southern Business Technologies

This report provides a comprehensive analysis of planning for growth, specifically focusing on Southern Business Technologies, a UK-based SME. It begins by evaluating growth opportunities, considering factors like financing, cost leadership, and the use of new technology, and then assesses these opportunities using Ansoff's matrix to determine market penetration, development, and diversification strategies. The report also explores various funding methods, including crowdfunding, angel investors, and venture capitalists, comparing their advantages and disadvantages. Furthermore, it delves into the development of a business plan, outlining strategies for achieving long-term success, and concludes with an assessment of succession and exit strategies for the SME, considering the benefits and drawbacks of different options. The report provides valuable insights into strategic planning, financial management, and business development, offering practical recommendations for sustainable growth.

Planning for Growth

CONTENTS
OVERVIEW....................................................................................................................................1
TASK 1............................................................................................................................................1
Analysis to evaluate growth opportunities..................................................................................1
Complete assessment for growth................................................................................................2
TASK 2............................................................................................................................................3
Assessment of methods of funding and their types.....................................................................3
TASK 3............................................................................................................................................5
Development of business plan for growth..................................................................................5
TASK 4............................................................................................................................................8
Assessment of succession and exit strategies of SME................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................12

OVERVIEW
Planning for growth refers to a strategic business plan that management creates and
tracks growth of their revenue and company. It helps in allocating available resources and
achieving goals and objectives of company . This is generally required for small and medium
business that want to grow in the industry or large businesses that want to globally expand.
This report will cover the plans for growth of Southern Business Technologies Limited, a
SME which was founded in 2001 and is located in UK. It will analyse growth opportunities of
the organisation and evaluate it by understanding the risks and advantages. Assessment of
various methods by which organisations access funding and their usage will be done.
Development of a business plan and communication on how to scale up business will be done. It
will also assess benefits and drawbacks of exit or succession options of SME.
TASK 1
Analysis to evaluate growth opportunities
An organisation can only grow when there are opportunities available for them
(Eddleston and et.al., 2013). There are many ways to implement strategies that expand a business
with regard to the financial situation, competition and government rules and regulations.
Southern Business Technologies can take the following key considerations for growing their
business.
Financing: Small businesses asses their company's budget and decide how much finance
is required for growth. If they have the needed amount of budget, then company can start
creating a plan and if not, loans can be taken from financial institutes. This is an important
step for growing a SME.
Cost Leadership: Organisations can aim at becoming low cost producers by finding and
using all available resources. This will depend upon economies of scale, technology and
access to raw materials. If this can be achieved, then company will have an advantage of
commanding prices in the industry.
Determination of competencies: When an organisation finds out its core competencies,
it can work towards establishing themselves and increasing brand recognition. They can
make proper use of available opportunities and put their skills into it (Mitchelmore and
Rowley, 2013).

Differentiation Focus: Opportunities for targeting a market in which company's
products and services have unique features and that can help increase loyalty among
consumers. This helps in being ahead in the competitive market.
Use of new technology: New technologies are introduced regularly, and keep
changing. This can cause delay in achievement of goals and objectives of company.
Southern Business Technologies can upgrade their business facilities by using these new
inventions, which will increase efficiency and help them to grow. If not used
properly, it can become a threat, rather than an opportunity for company.
In addition, it is important to understand that these mentioned factors would help in
laying the foundation for growth and developmental practices of the organization. There would
be requirements and several specifications to meet the expected project factors that would
support in evaluating the business opportunities with considerable feasibility. Herein it is
understandable that market size, management skills, persistence and overall cooperation's from
employees would help in assessing the growth factor in effective manner.
Complete assessment for growth
Southern Business Technologies can evaluate its growth opportunities by applying
Ansoff's matrix. It helps company in deciding their market growth. This covers market
penetration, market and product development and diversification. Whenever company enters into
new market, it has to face many risk. The main danger for business it that it can enhance its
costing. Another danger for the business is that it might get failed to generate revenues and
provide satisfactory product to consumers. This can spoil brand image of the firm to great extent.
Market penetration is the first part of Ansoff's growth vector matrix. It occurs when
existing products are sold in such a way to increase company's market share (Gregor and
Hevner, 2014). There is very little risk in this as only marketing efforts have to be increased to
improve it's market share. They have to ensure that there is leverage on current capabilities and
resources that can help create a growth strategy for company. Southern Business Technologies
sell and caters products that already exist, hence they have an advantage to this.
Market development is the second part of Ansoff's growth vector matrix. It occurs when
companies plan to establish into newer marketplaces in regard to the existing products. Those
with potential capacities in terms of resources, machineries, capital etc. can expand into different

and new regions for the purpose of growth can easily achieve it. Management abilities are to be
aligned with their products instead of markets where opportunity is highest. This can increase
cost and can impact on brand image of business. This is comparatively riskier because company
will be setting foot in unknown territories. Southern Business Technologies can try expanding
their services to other countries in Europe first and see how consumers respond.
Product development is the third part of Ansoff's growth vector matrix. It happens when
company is interested in launching new products in the existing markets. Present strategy can be
successful when company has already established itself in existing markets and only want to
launch new products and services. This can support the enterprise in improving its brand image
and reaching to mass audience. The strategy is riskier as compared to the above two because
there is no assurance that customers will like the new products.
Diversification is the last part of Ansoff's growth vector matrix. It occurs when company
launches a new product in new markets. This is the riskiest as compared to others because both
market and product are new and company has never set foot in both areas. It is a high risk
strategy and may or may not be liked by customers (Koryak and et.al., 2015). Southern Business
Technologies has not yet done this, as their product is based mostly on telecommunications. But
if they wish to expand their business, they can venture into new ideas and bring them out through
proper planning and strategies.
Mergers and acquisitions: One of the best growth opportunities available can be
mergers and acquisitions, that is the purchase of one company by another or joining of
two companies. These both already have existing customers and when they both come
together, they combine and create more consumers for them. Small business has an
advantage as they acquire great profits (Atkinson and Storey, 2016).
If Southern Business Technologies wants to grow, they have to look out for growth
opportunities and ways to increase market share, which will help them creates value for
stakeholders. With the help of Ansoff's growth vector matrix, company can analyse and evaluate
the opportunities and it can grow well. In order to minimise risk of cost and brand image,
company should take support of product and market development strategies. Both these are
considered as most efficient techniques in order to minimise danger. By developing market
enterprise will be able to increase its sales revenues and by developing product it will be able to
attract new consumers in existing and new market.

TASK 2
Assessment of methods of funding and their types
Businesses can only be set up when funds are available. There are many methods through
which it can be done. Proper planning has to be done for a business to grow and prosper
(Dormann and et.al., 2013).
Southern Business Technologies has taken a loan from the bank of £2 million, which can
be put into good use for growth and expansion of business as it is still available. Other sources of
funding, along with their benefits and drawbacks are as follows:
Crowd Funding: It is a way of financing businesses by asking the public to fund them.. It is a
platform where consumers are pre-purchasing products of company. It is beneficial for Southern
Business Technologies as they come up innovative products and services.
The main advantages are that it is a fast method of funding, investors can get an idea
about company, can keep a track on them and consumers get an idea of products and services
provided by them. It's disadvantages are that this is not an easy process, a lot of building up of
interest is required and sometimes need funding cannot be allocated.
Angel Investors: These are people who invest in an organisation by providing capital for start-
ups or expansion. They generally have spare cash around and look for a higher rate of return.
Groups are generally formed by them, so that they can fund high amounts.
The benefits of angel investors are that it is less risky and helps both company and investors. The
drawbacks are there is loss of total control and owner has to share their ownership with others.
Venture Capitalists: These individuals provide higher funds as compared to angel investors.
They are firms that aim at making large investments and take a significant share of company. It
is hard to find venture capitalists and even more challenging to convince them to invest.
Advantages of venture capitalists are that company has the ability to expand with their help and
repayment is not an obligation. They provide advice and strategies for company as well (Bocken,
2015). Its disadvantages are that ownership will be divided and profits will be share accordingly,
there will loss of control by the main owner.
Smart leasing: Southern Business Technologies can lease their fixed assets and equipment, to
generate funds. This can be done through finance companies. Leases are structured in such a way

that finance companies buy assets or equipment’s and rents them to company by paying every
month.
It's advantages are there is minimum capital expenditure with fixed rate of interest.
Disadvantages are that there can be loss of ownership and assets as well as changes in them.
SBIR: These are referred as the grants which assist the small businesses in growing and
expanding. They help in obtaining capital and providing special programs for them. It does not
require repayment and is very beneficial for small businesses.
The advantages are that Southern Business Technologies can get capital without any expenses
from their side. Loan can increase long term liability of business.
Government grants: These are available to businesses that require funding when there are no
other options available with them.. It is specifically for growth and expansion of businesses.
There is a complete step by step procedure for application of government grants (Dormann and
et.al., 2013).
It's benefits are that it is generally less restrictive. Government grants on the other hand are
riskier, time consuming and there is no guarantee that every business will get it.
Every type of funding has their advantages and disadvantages. Southern Business
Technologies, as mentioned earlier, already has available funds from a bank loan worth £2
million. They can utilize it to expand and grow their business. If available amount is insufficient,
best options that can be recommended to management, is crowdfunding. It is one the fastest
methods of funding. By this way entity can bring positive changes in business sand can grow
well. t will be very beneficial for them. Investors too, get an idea about Southern Business
Technologies' financial statements and position, which can help them to decide whether or not
they would be interested in investing. This can help the company grow significantly.
TASK 3
Development of business plan for growth
Business plans are written documents, created by management, that include detailed
description of how an organisation can work towards achieving its goals through various
strategies. This consists of marketing, financial and operational plans (Zepeda, 2013). Strategies
have to be made and implemented in order to achieve long term success.
Southern Business Technologies analyses its ongoing business plans and has to make
changes so that they can grow and expand. They have evaluated their progress and determined

areas in which growth is required. The design and development of a new business plan require
strategies, execution, milestones and metrics as well as essential business numbers. It is
important as potential investors would want to take a look at company's plans before making any
kind of investments. This also helps in monitoring performance and determining how much goals
have been achieved. It can walk the company towards the area where they would like to grow
and help meet targets and priorities. The main aim of company is to achieve a high position in
the telecommunications market by providing quality products and services as well as provide
them in low costs, and create one of the best customer services in UK.
Southern Business Technologies' Cash flow statement
Particulars
Investme
nts at
starting Jan. Feb.Mar
Apr
. My. Jun.Juy.
Aug
.
Sept
. Oct.
Nov
. Dec.
201
7
Total sales % per
month 6.25%
2.22
%
2.08
%
1.85
%
1.69
%
1.49
%
1.43
%
1.35
%
1.25
%
1.12
%
0.98
%
0.87
%
Total number of
customers 16 45 48 54 59 67 70 74 80 89 102 115 819
Sale services Products
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Prod
ucts
Selling price
(average) 24000
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
288
000
Total generated
revenue 384000
108
000
0
115
200
0
129
600
0
141
600
0
160
800
0
168
000
0
177
600
0
192
000
0
213
600
0
244
800
0
276
000
0
196
560
00
Total sale % per
month 2.22%
2.04
%
1.79
%
1.56
%
1.43
%
1.33
%
1.25
%
1.16
%
1.11
%
1.02
%
0.89
%
0.63
%
16.4
4%
Total number of
customers 45 49 56 64 70 75 80 86 90 98 112 160 985
Sales services Services
Selling price
(average) 8000
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
960
00

Total generated
revenue 360000
392
000
448
000
512
000
560
000
600
000
640
000
688
000
720
000
784
000
896
000
128
000
0
788
000
0
Total cash inflow 744000
147
200
0
160
000
0
180
800
0
197
600
0
220
800
0
232
000
0
246
400
0
264
000
0
292
000
0
334
400
0
404
000
0
275
360
00
Cash outflow
Plant and machinery 22000
Purchases 18000
165
00
190
00
150
50
185
70
142
50
130
00
157
50
185
00
170
00
210
00
245
00
211
120
New machinery 28000
220
00
150
00
120
0
382
00
Advertisement
expenses 420 420 420 420 420 420 420 420 420 420 420
462
0
Salary
500
00
500
00
500
00
500
00
500
00
500
00
500
00
500
00
500
00
500
00
500
00
550
000
Rent
242
50
242
50
242
50
242
50
242
50
242
50
242
50
242
50
242
50
242
50
242
50
266
750
Phone bills
142
50
142
50
142
50
142
50
142
50
142
50
142
50
142
50
142
50
142
50
142
50
156
750
Interest (Loan)
206
00
206
00
206
00
206
00
206
00
206
00
206
00
206
00
206
00
206
00
206
00
226
600
Total cash outflow 50000 18000
126
020
128
520
146
570
128
090
123
770
137
520
125
270
129
220
126
520
130
520
134
020
145
404
0
Net cash flow 50000 726000 134 147 166 184 208 218 233 251 279 321 390 260

598
0
148
0
143
0
791
0
423
0
248
0
873
0
078
0
348
0
348
0
598
0
819
60
Cash balance
(initial) 79000 29000
697
000
648
980
822
500
838
930
100
898
0
107
525
0
110
723
0
123
150
0
127
928
0
151
420
0
169
928
0
119
521
30
Cash Balance
( end) 29000 697000
648
980
822
500
838
930
100
898
0
107
525
0
110
723
0
123
150
0
127
928
0
151
420
0
169
928
0
220
670
0
141
298
30
Southern Business Technologies' Income statement
Particulars Jan. Feb. Mar. Apr. My. Jun. Jul. Aug. Sept. Oct. Nov. Dec. 2017
Generated Revenue
7440
00
1472
000
1600
000
1808
000
1976
000
2208
000
2320
000
2464
000
2640
000
2920
000
3344
000
4040
000
2753
6000
Less: Cogs
4200
0
2600
0
2856
0
2280
0
2758
0
3000
0
1200
0
1545
0
2164
0
1987
5
1488
0
4585
0
3066
35
Profit (gross)
7020
00
1446
000
1571
440
1785
200
1948
420
2178
000
2308
000
2448
550
2618
360
2900
125
3329
120
3994
150
2722
9365
Income from operations
3685
0
2790
0
2572
0
2155
0
3250
0
4165
0
5520
0
6150
0
6825
0
4860
0
8820
0 4200
5121
20
Expenses from
Operations 3600 4250 5500 1400 1250 1760 2500 2654 3100 4500 8525 3500
4253
9
Profit (Operating)
7352
50
1469
650
1591
660
1805
350
1979
670
2217
890
2360
700
2507
396
2683
510
2944
225
3408
795
3994
850
2769
8946
Less: Depreciation
(Machinery and
equipments) 400 120 300 200 250 225 210 180 175 320 260 400 3040
EBITDA
7348
50
1469
530
1591
360
1805
150
1979
420
2217
665
2360
490
2507
216
2683
335
2943
905
3408
535
3994
450
2769
5906
Corporate Tax (30%) 2204 4408 4774 5415 5938 6652 7081 7521 8050 8831 1022 1198 8308

55 59 08 45 26 99.5 47 64.8 00.5 71.5
560.
5 335 771.8
Profit (Net)
5143
95
1028
671
1113
952
1263
605
1385
594
1552
365.
5
1652
343
1755
051.
2
1878
334.
5
2060
733.
5
2385
974.
5
2796
115
1938
7134.
2
With analysis of above income statements and cash flow, Southern Business
Technologies has adopted a proper business plan with strategies that has helped company in
achieving good amounts of profit .
TASK 4
Assessment of succession and exit strategies of SME
Small businesses require extensive analysis of all factors that will impact the owners. Exit
strategies are planned from the perspective of owner's goals and objectives in each area along
with current available resources (Burke, 2017). Southern Business Technologies can select from
a list of exit strategies, when and if required. Once the plan is made, it should be stuck with and
initiated at the time of exit.
 Liquidation: This is the most common type of exit strategy used. Owner sells their assets
and shuts down operations. The amount generated from selling of assets are to be used to
repay creditors or any sort of liabilities, and remaining is divided among shareholders. It
is simple, fast, effective and everything comes to a stop. There are no negotiations
required and transfer of control is not needed.
It generally is a waste and there will be no income or profits received. Clients, reputation and
relationships with other businesses will get destroyed because of liquidation and shareholders
would not be happy with their received amounts. It also has the lowest rate of return on
investments.
 Lifestyle company: This exit strategy, is like liquidation, It is mostly done in private
companies, and all of the money from business can be kept with owners for personal use.
Most profits of company are extracted over time by withdrawal of large salaries and
dividends before winding up.
Some shareholders might be against this strategy, because they may not get compensated
equally.

 Sell to friends, relatives: Owners can sell their business to friends or family members.
this is easier as potential buyers are already available and it is mere transfer of ownership,
to a known person. Proper negotiations and planning should be done to ensure there is
fairness while buying and selling. It is an overall smooth transition and the buyer is most
probably going to take good care of business.
Sometimes, friends and families do not have skills or interest in running a business, which can
cause problems. Clients too, may not like the change of management and company's direction.
Issues can arise among each other due to jealousy or some other factor and there can be
misjudgement while negotiations are done on sales.
 Acquisition and Mergers: This strategy involves the buying of a business or merging 2
businesses into one. It depends on whom company wishes to merge with and how
flexible they would like to make their terms. This can generate high amount of revenue
and get paid more than actual worth. Competition among acquirers can help decide,
whom to sell the business to (7 Exit Strategies For Small Business Owners and
Entrepreneurs, 2018).
Existing employees may not like changes in new management, and if purchaser's motive was to
decrease competition, then many might lose their jobs. They tend to be difficult have have to go
through many negotiations and process is very time consuming. If buyers are less, then company
has to sell at lower prices, which may not be beneficial for them.
 Sell in open market: Small Businesses can opt for this strategy, because it attracts
buyers easily. They do not cost much and people will be willing to buy it. Owner can
earn the required money they want as well, giving them a high rate of return. It can be
very profitable.
But finding a buyer is a long and time consuming process. Evaluation of the business, if not done
right, can end up being sold lower than expected price.
Succession plans are made by companies, when they decide that they want to choose an
individual or company as a successor, when they decide to leave or retire. There are various
ways through which it can be done, with proper planning of specific strategies. The business can
be kept in the family and operations can continue forward. Owners can sell, close or hire outside
management to carry on with the business.