IB Business Management 1.5 Growth and Evolution Questionbank

CleanCurrent Ltd.

CleanCurrent Ltd. is a renewable energy start-up that installs solar panels for residential and small business clients. Initially formed as a sole trader, the business recently transitioned into a private limited company (Ltd) to scale operations and attract investment. Its primary business objectives are to increase market share in suburban regions, reduce customer acquisition costs, and achieve positive monthly cash flow by the end of the fiscal year.

The business recently launched a referral programme and expanded into two new districts. While customer inquiries have increased, installation capacity has been strained, leading to delays in payments and project backlogs. This has created tension with certain stakeholders, including installers and suppliers, who are now facing late payments.

The finance manager has prepared a simple cash flow forecast for August 2024 to assess the immediate impact of CleanCurrent’s growth and financial decisions.

Table 1: Cash Flow Forecast – August 2024

FreshBurst Ltd.

FreshBurst Ltd. is a rapidly expanding company that produces natural fruit juices. The company began as a small family business but has experienced significant internal growth over the past three years. Its long-term business objective is to increase market share in the premium health drink sector.

Recently, it invested in new equipment to transition from job production to batch production, aiming to improve efficiency and meet rising demand.

The finance team has created a break-even chart to support a proposal for further investment in production facilities. Senior managers are also considering how the expansion may impact stakeholder groups.

Figure 1: Break-even chart for FreshBurst Ltd.’s new product line

Elevate Health Tech (EHT)

UrbanSpice Café is a private limited company that operates a single café in the city centre. It is owned by two siblings who each invested $25,000 to start the business. Their aim is to provide a cosy environment with high-quality, locally sourced food and drinks. The café has become increasingly popular, and the owners are now planning to open a second location. As part of this growth plan, they are reviewing financial data and considering how expansion may affect different stakeholders.

Table 1 shows UrbanSpice Café's financial data for the most recent year (2024). Table 1: Financial data for UrbanSpice Café for 2024

FitFuel Ltd.

FitFuel is a partnership that produces healthy, ready-to-eat meals for gym-goers. The business was started by two personal trainers who each invested $15,000 to get the business up and running. FitFuel's popularity has grown through word of mouth and social media, and it is now planning to open a second kitchen in a nearby city.

To fund this expansion, FitFuel is considering applying for a bank loan. One of the partners also suggested asking a wealthy family member to invest in the business.

Table 1 shows a summary of FitFuel's costs and revenue from October 2024.

Table 1: Costs and revenue for FitFuel (October 2024)