Planning for Growth

This report discusses the importance of growth for a company and the planning process involved. It focuses on Ella's Kitchen, a small and medium-sized business that produces organic baby and toddler food. The report covers the evaluation of growth opportunities, accessing funds, and developing a business plan. It also explores exit options for SMEs and provides recommendations for Ella's Kitchen.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 & TASK2 ..........................................................................................................................2
TASK 3............................................................................................................................................5
P4/M3 Preparation of Business plan for growth....................................................................5
D3 Demonstrating the knowledge and understand of the business plan formulated above...7
TASK 4............................................................................................................................................7
P5 Assessing exit or success options for SME's along with their advantage and disadvantages7
M4 Evaluation of exit or succession options for Ella's Kitchen by comparing and contrasting
and making valid recommendations.......................................................................................9
D4 Critical evaluation of exit and success options for Ella's Kitchen....................................9
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Growth is one of the most important factor for success of company as it is necessary to
survive and sustain in aggressively competitive market environment. In order grow,
organisations needs to develop plans for exploring all available growth opportunities. Planning is
an an essential stage by which every types and size or business owner go through. These plan are
made for effectively operating of company's activities in order to attain all predetermined
objectives. Numerous plans are developed when an organisation plan to grow and tap into new
market either national or international (Hu, 2016). This report is developed on Ella's Kitchen,
which is a organisation who deals in or make organic baby food and toddler food products. The
company make sales through supermarkets rather than from their retail stores. Ella's kitchen was
established in 2006 by Paul Lindley, have only 62 employees which bring it in category of small
and medium sized business. Ella's kitchen is headquartered in Oxfordshire, UK and serves in few
international markets. This assignment covers, evaluation of growth opportunities, various
methods of accessing funds and development of business plan. Moreover, it include different
ways through which a small business owner can exit their business.
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TASK 1 & TASK2
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3

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TASK 3
P4/M3 Preparation of Business plan for growth
Company overview
Ella's Kitchen is a SME established and headquartered in UK but deals in number of
international markets such as U.S., Sweden, Denmark and many other. Ella's Kitchen produce
organic baby food products and toddler food products. The company make sales through
supermarkets in different locations rather than from their own retail stores. This plan is
developed for the exploring the growth opportunity of the entity and for that a new product is
developed for acquiring new market segment. The product is an organic cereal of oatmeal filled
with required proteins required by children of 5 to 11 year of age for their full growth.
Vision
A vision statement of an organisation highlights the overall vision of company which
comprises of its long term values and ideas by which entity works (Crow, 2015). It comprises the
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objectives of company which are constant while changing business strategies and practices. The
vision of Ella's Kitchen is to serve people with best quality organic food products for their
toddlers and babies.
Mission
The mission statement comprises of small term objective of company which is performed
in aligning with vision statement and keeping up with it. The mission of Ella's Kitchen is to
improve lives of children by providing them organic and healthy food.
Objectives
 To increase sales by 10% in next one year.
 To enhance customer base by 5% in upcoming six months.
 To improve their profit digits by 6% in one year.
Strategy
The growth strategy which is used by Ella's Kitchen is Diversification. This strategy is
given by Ansoff and a part of Ansoff's Growth matrix. Diversification refers to development of
new product for an entirely new market segment. Opting diversification strategy helps Ella's
Kitchen to enhance its market share by attracting an entirely new target customer, by which
company's revenue figures will increase and help in improving its profit margins.
STP
 Segmentation- There are huge population and company can not fulfil the needs of all
people by their products this is why they need to segment their market. This is process of
dividing marketplace into smaller groups which similar or common characteristics or
features and also help in targetting appropriate population. Ella's Kitchen has segmented
its population by demographic segmentation method.
 Targeting- Next stage is of targetting, where Ella's Kitchen will set their targets by
seeking knowledge about their attractiveness, profitability of each segment and size and
growth potential. The company has targeted a higher age group of children and families
having kid of 5 to 11 years of age (Sarver, 2015). A new product is developed for a
higher age group of children. This product is also, organic but for the children of belong
to 5 to 11 year of age.
 Positioning- The last stage is where Ella's Kitchen will make strategy for positioning
itself in from of their targeted audience. Ella's Kitchen make use of their one most
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attractive feature that is organic food products to effectively position itself in target
market.
Financial information
 Budget- A budget is a document which holds forecasted amounts for the plan and which
are assigned for it to complete. Budget is required by company at every stage for
execution of their plans as it holds financial data of how much amount needs to be spent
in specific activities. This is a budget prepared for Ella's Kitchen in order to make
appropriate use of financial resource available to entity.
PRESENTED IN SPREADSHEET
 Cash Flow Statement- It is a document which holds aggregated financial data related to
the cash inflows and outflows of the business operations. Below is a cash flow statement
prepared for Ella's Kitchen.
PRESENTED IN SPREADSHEET
D3 Demonstrating the knowledge and understand of the business plan formulated above
The plan developed above for Ella's Kitchen is a growth plan, which is formulated for
exploring an opportunity for serving a new market segment with new product of oatmeal cereal
for 5 to 11 years of kids. The strategy used by Ella's Kitchen is of diversification as new product
is developed and new market segment is targeted. This strategy will help company to enhance its
customer base as market share of Ella's Kitchen will increase which will result in enhancing their
revenue figures and ultimately profits units.
TASK 4
P5 Assessing exit or success options for SME's along with their advantage and disadvantages
Exit option
This option is used by organisations in the conditions where company is not earning
enough profits and operating effectively, which makes it to thing about exiting the marketplace.
It can be done in many ways such by selling all the assets taking all the money and leaving the
market or by handing over all the power and authority to others and leave, and many other ways
(Olesen and Carter, 2018). It is practised by entity in worst conditions where no profits is earned
and only losses are coming into accounts of entity. These exit options can be used by Ella's
Kitchen to leave the market segment if not successful. Few options are elaborated below:
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Winding up
It is basically dissolving a company, its purpose is to soly sell of all the stocks, pay off
creditors, and distribute any remaining assets to partners. It ceases the entity to do business as
usual and exist in market. Ella's Kitchen is SME which make its owner a sole owner of the entity
therefore, it can be used to leave or exit the marketplace.
 Benefit- The cost involved in winding up business is very low, company just need to
make arrangements for sales of assets if any otherwise no other extra efforts are required.
This make it very easy to be done and less costly.
 Drawback- Once business is loss making and being winded up all its liabilities comes
over the head of the owners of the entity. This a huge drawback as the losses which are
incurred are also their for the owner to cover up (Baschat, 2018).
Selling in open market
It is one of the most common and effective exit strategy which can be used by company
to leave the market. Selling business in open market has a very easy format the owner of
business make sell of its operations entirely to a interested third party.
 Benefit- It is helpful as it do not have any effect on the name of the company and its
operations. In other words the goodwill of the entity and its operations are not hindered it
remains the same.
 Drawback- The employees of company gets demotivated and get redundant, their moral
gets down which affects their performance and forces them to leave the entity. Therefore,
potentials employees leave the company making it ineffective.
Succession Option
MERGERS AND ACQUISITION
This is a succession option suggested to the company Ella's Kitchen where the firm make
arrangements with other entity already established and running in the marketplace. Both the
entities will integrated their objectives, resources and operations while working together.
 Benefits- The resources once integrated will be beneficial for the profitability of both the
firms. As well as for Ella's Kitchen it is beneficial as the entity do not need to conduct
market research can use the knowledge and abilities of the existing company.
 Drawback- Employees, workforce, labours or personnels performances and their
efficiencies can reduce as it becomes difficult for them to adjust with each other. This is
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because culture of organisations were different although both the firm are integrated but
their labour-force is not.
M4 Evaluation of exit or succession options for Ella's Kitchen by comparing and contrasting and
making valid recommendations
The best exit option for Ella's Kitchen out of all discussed above is winding up the
operations and leaving the marketplace. As the discussion conducted above,from the evaluation
it is concludes that if Ella's Kitchen becomes ineffective and start earning losses in their new
business segment company can wind up its operations. The advantage of which is it will repay
the amount of the assets left in the firm and help owners in repaying all losses if acquired any.
Also, by winding up the operations company can reallocate it extra resources in its existing
operations which and make utmost utilisation.
D4 Critical evaluation of exit and success options for Ella's Kitchen
Sometime a business or a operation of company fails and earn losses rather than profits.
This factor arises the need for organisation to exit the marketplace and shut down the operations.
Therefore, in such situation winding up option is suggested to Ella's Kitchen, where company
will sell off all the assets and stop the production. But it has some negaiev impact too that is all
the liabilities comes over the head of the owner. Although, still winding up the operation is the
best exit option for Ella's Kitchen (Perveen and et. al., 2017).
CONCLUSION
From the above report it is summarised that growth is one of the most essential factor
which moves company towards success and higher profit. For this, planning is considered as the
important aspect which is useful in order to achieve success and growth. In regard of this,
various frameworks are used such as PESTLE, Porter's and Ansoff which is useful in order to
determine the most prominent strategy that is diversification as here, new products are launched
into new market. Moreover, various sources of funds are discussed in which crowd funding is
best suited for company. Lastly, business plan is developed and exit option is determined which
is useful in smooth functioning and running of company.
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REFERENCES
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