Planning for Growth

This report discusses the key considerations for evaluating growth opportunities, potential sources of funding, and creating a business plan for growth. It focuses on Rise Bakery, a social enterprise operating in London. The report includes an analysis of competitive advantage, political and economic factors, technological advancements, and environmental and legal considerations. It also explores the Ansoff growth vector matrix and provides insights on potential sources of funding for businesses. Additionally, it presents a business plan for growth, including the vision, objectives, industry and market analysis, and segmentation, targeting, and positioning strategies.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analysis of key consideration for evaluating growth opportunities............................................3
Evaluation of opportunities for growth by applying Ansoff growth vector matrix.....................5
TASK 2............................................................................................................................................7
Assessment of potential sources of funding available to businesses...........................................7
TASK 3..........................................................................................................................................10
Business plan for growth...........................................................................................................10
TASK 4..........................................................................................................................................14
Assessment of exit or succession options for a small business.................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................18

INTRODUCTION
Planning for growth can be defined as something in which organisation seek options and
develop planning through which they can increase scope of their operations. Planning for growth
requires consideration of several factors. These factors are that affect growth of the company and
options available for growth. This report will discuss about Rise Bakery it is a social enterprise
operating in London. Rise Bakery is an online bakery producing 5 varieties of brownies and
delivering them to customers and also caters for corporate and special request and wholesale
orders. Social and environmental mission of company is homelessness and housing, social
inclusion, and employment opportunity. This report will involve analysis of key consideration
for growth opportunities by applying Ansoff Matrix. This will also involve potential source of
funding available for business and will also involve assessment of different options for exit and
succession for a small business. This report will also involve designing business plan for growth.
TASK 1
Analysis of key consideration for evaluating growth opportunities
It is important to consider different elements that can affect and influence success of
growth plan of the organisation. Certain elements that need to be considered while evaluating
growth opportunities for Rise Bakery involve-
Competitive Advantage- Competitive advantage can be defined as element that allows advantage
to Rise Bakery over its competitors (Nyamwanza and et.al., 2016). Competitive advantage
mainly is based on elements such as price or premium quality of the product. Concerned with
Rise Bakery its products are of high quality and another competitive advantage to Rise Bakery
compared to its competitors is that it is a social enterprise.
Political- This is an important consideration while evaluating opportunities for growth. This
means that organisations require considering effect of political factors on growth. Political
conditions involve regulations, level of political interruptions, financial policies and tax policies
for small business and Rise Bakery require considering favours and regulation for social

enterprises. Rise Bakery requires considering regulations and impact of UK government and
local government for small business and social organisations.
Economic- This is another consideration for evaluating growth opportunities. Economic factor
involves considering economic growth of the place where Rise Bakery operates, business cycles,
stock market performance, consumer confidence, unemployment trends, interest and inflation
rate. This means that economic factors affecting and influencing Rise Bakery’s financial
performance. Financial growth and stability of Rise Bakery involves considering impact of local
and national economic conditions over small business and social organisation.
Social- This involves identifying consumer factors and elements influencing and affecting
operations of Rise Bakery in terms of its suitability in social environment. Social issues that
affect Rise Bakery also involve population growth, distribution of age, lifestyle and interest and
preference of people towards products of Rise Bakery.
Technological- This is concerned with technology affecting and influencing operation and
functioning of Rise Bakery. This involves technology and technological development of the
industry in which Rise Bakery operates (North, Aramburu and Lorenzo, 2019). Technology for
Rise Bakery involves utilising technology to improve product quality of the company. This is an
important element to consider while evaluating growth opportunities for Rise Bakery.
Technology that is utilised by Rise Bakery is also involved in this and availability of technology
to fulfil growth requirement.
Environmental- This involves considering environmental elements to consider while evaluating
growth opportunities because environment factor has become very important and Rise Bakery
being social organisation requires considering how its growth will influence and affect
environment. Environment factors also involve considering impact of environmental policies
over growth of Rise Bakery.
Legal- This involves considering regulatory factors for growth of Rise Bakery. Regulatory
factors for the company involve those elements that regulate and govern activities and operation
of the business. Rise Bakery needs to consider impact of different laws and regulations that
affect and influence food business. This involves food safety and standards that need to adopted
and applied by Rise Bakery.

This discussion outlines that while evaluating growth opportunities there are several
factors that Rise Bakery needs to consider. These factor provide both opportunities as well as
threats for Rise Bakery. Rise Bakery needs to become more considerate while evaluating these
factors because Rise Bakery is a social organisation and effect and impact of these factors
differentiate for Rise Bakery (Sen, Ozturk and Vayvay, 2016). Difference mainly involved in
political and economic policies and legal environment in relation with operations of the
company. Rise Bakery has favours in these factors and these are opportunities for growth of Rise
Bakery.
Evaluation of opportunities for growth by applying Ansoff growth vector matrix
Ansoff Matrix
Ansoff Matrix is a model that outlines that different strategy for growth that an
organisation can consider. These strategies are based on product and markets in terms of new and
existence of the product and market. Evaluation of these strategies are important for considering
while growth of Rise Bakery.
Market Penetration
Market penetration strategy involves existing market and existing product for the Rise
Bakery. This is concerned with growth of business in existing market with existing product of
business. This involves different strategies with which Rise Bakery can increase sale in existing
market and can increase its market share (The Ansoff Model, 2020). This involves strategies like
sales promotion, price adjustments, increasing distribution channels and with help of these
strategies business can utilise these strategy in growth.
Advantages
 Promote quick adoption of product in existing market
 Using this strategy company can quickly increase its sales
 Discourage competitors from entering the market
Disadvantages
 Is useful for short term success of business

 Negatively influence brand image
 Might attract wrong audience
Product Development
This strategy involves developing new product for serving needs and requirements of
existing market customers. By product development Rise Bakery can provide more options to
existing customers in terms of product availability. Rise Bakery can increase options and variants
in brownies. This can be done by research and development, updating packaging is also a
strategy in this.
Advantages
 Utilising opportunities
 Attracting customers by increasing product choices
 Keeping pace with changing demand and choices
Disadvantages
 Increase cost of business
 This strategy has high risk involved
 If not inimitable can be copied by competitors
Market Development
This strategy involves development of new market in terms of customer segment or in
terms of geographic regions (Osei and et.al., 2016). This strategy can be utilised and firm can
develop market when core competencies of the business are related to specific product rather
than specific market.
Advantages
 Business can realise highest potential of its existing competencies
 This strategy helps in increasing customer understanding
 Help in growing market share
Disadvantages

 Cost of marketing
 Cost of developing new market for Rise Bakery
 Is highly riskier than simply increasing market share
Diversification
This is another strategy is matrix as per which Rise Bakery requires to develop new
market as well as new product. For example Rise Bakery considers setting up a restaurant in a
completely new geographical region.
Advantages
 Helps in maximization the use of potentially underutilized resources
 Sustainable business growth
 Help in realising mission and vision of social organisation at bigger level
Disadvantages
 It contains highest risk in diversification
 Requires generation of new customers in new market
 Becomes difficult in quick adoption of changes
This discussion outlines that there are different strategies for growth that Rise Bakery can
adopt for the purpose of growth (Viltard, 2019). These are based on existing and new products
and market. This discussion suggests that market development along with market penetration is a
strategy that Rise Bakery can utilise. This is because its competencies are specific to product
rather than specific market and this is why market development is suitable option for Rise
Bakery.
TASK 2
Assessment of potential sources of funding available to businesses
Importance of Funding
Funding can be defined as act of providing resources to finance business and this takes in
form of money in organisation. There are several reasons because of which funding are

important for small business. Funding help in facilitating marketing research, it fulfils monetary
requirements for business development this is important for purchasing asset and funding for
growth of the business. Different sources for funding involves-
Bank Loan
This involves obtaining loan from bank, this is one of the widely utilised source of
funding for small businesses (Brogi and Lagasio, 2017). This source of funding for small
businesses is difficult to use because obtaining loan. This difficulty is because of complexity of
the process for obtaining loan from bank.
Advantages
 Low interest rates and advantage for social organisation
 Encourage and motivate for effective operations of the organisation
 Negotiate a repayment holiday
Disadvantages
 Not suitable for growth of business
 Highly complicated process
 Strictness of repayment
Loan From friends and relatives
This is another source of funding in which Rise Bakery can fulfil its financial
requirement for different requirements. In this source owner of Rise Bakery needs to collect
financial resources from friends and relative. This source is very easy to collect if friends and
relatives of the owner are capable of sourcing finance.
Advantage
 Easy to obtain
 Feasibility and cost friendly source of financing
 Flexibility in loan
Disadvantages

 Lack of clarity
 Social awkwardness
 Needs relatives and friends who can provide finance
Venture Capital
Venture capital is form of private equity financing and this is provided by venture capital
firms or venture capitalist (Lopes and Costa, 2017). This form of financing is provided by
venture capitalists. This source is provided by capitalists on the basis of potential success of the
business and expected returns from businesses.
Advantages
 Valuable guidance and expertise
 Helpful in building network and connection
 Venture capitalist are trustworthy
Disadvantages
 Long and complicated process
 It is difficult to convince venture capitalist
 Loss of control
Personal Savings
This is another source of funding in which owner of the Rise Bakery needs to use their
personal savings for fulfilling requirements of the business. This is one of the easiest source to
obtain if owner has enough savings to utilise for the business.
Advantages
 Ensures and give idea about available finance and capital for running business
 Enhances control over financial and business decisions
 Cost effective
Disadvantages
 Limited funding

 Put personal finance at risk
 Limit support from others in other elements like intelligence and support as well
Above discussion outlines that there are several sources from which business can get
funds and all the resources has their own advantages and disadvantages (Cecere, Corrocher and
Mancusi, 2020). Analysis of these sources suggests that as a social organisation Rise Bakery
should adopt bank loans and capital from venture capitalists. This is because these sources might
allow advantage to Rise Bakery as a social organisation which are not provided by any other
source of funding.
TASK 3
Business plan for growth
Executive summary
Growth of business is a phase in which business expand and increase its scope for
operations and functioning. Following is a plan for growth for Rise Bakery, this involves vision
and mission for the growth and options using which company can expand its operations.
Business details
Rise Bakery is an online bakery producing brownies and delivering to customers. Rise Bakery is
part of homelessness charity Providence Row this means that Rise Bakery is a social enterprise.
The bakery is part of the charity’s training scheme programme which offers accredited training
and employment support for people affected by homelessness.
Vision
“Homelessness and housing, social inclusion, employment opportunity “
Objective
 To increase market share by 5%
 To reduce cost of operations by 10%
 To increase people involvement
 To improve overall customer service
Industry & market analysis

 Industry size for brownies is large as everyone is a customer for this product.
 Growth potential is also significant in this industry that is likely to grow at a rate of 3.5%
 Market trends in Brownies industry involve Gluten Free and Organic brownies.
Strength
 High quality of products
 Positive and strong brand image
Weakness
 Lack of promotional and advertisement efforts
 High cost of operations
Opportunities
 Expansion in geographical as well as customer segments
 Opportunity in healthy food choices
Threat
 Intense competition
 Recession
Concerned with competitors Rise Bakery does not have any direct competitors because it is a
social organisation and its key strength high quality at low prices allows to competitive
advantage in industry.
Segmentation, Targeting and positioning
Market segmentation
Market segmentation is a practice in which potential customers of the company are
grouped on the basis of their similar characteristics. Segmentation is done on the basis of
demographic, psychographic, behavioural and geographic basis (Shamsudeen, Keat and Hassan,
2016). Segmentation of customers helps in identifying segment that business wants to target.
Targeting
Targeting is concerned with targeting a group or segment in which business is willing to
provide its products. Customer segments that has been targeted by Rise Bakery involves upper-
middle class customers and corporate.
Positioning

Positioning strategy of Rise Bakery is value based positioning in which Rise Bakery
positions it in its target market on the basis of value that it provide to its customers. This strategy
involves focusing on quality and value of the product.
Customers & value proposition
Value proposition of Rise Bakery is that it is a social organisation and along with this
Rise Bakery also offers high quality brownies in different verities. These reasons make
customers chose Rise Bakery but its competitors.
Growth Option and strategy for Rise Bakery
Growth strategies were discussed above and on the basis of discussion it has been
outlined that Rise Bakery will adopt market development strategy for growth (Shamsudeen,
2017). It will increase its market in geographical segmentation and will establish another Rise
Bakery in London.
Marketing Mix
Product- This is concerned with offering of the business to its customers. This involves
brownies of different types they are hand-made and are of high quality.
Price- Price strategy of Rise Bakery is value based price strategy in this strategy Rise Bakery
charge customers on the basis of perceived value by the customers. Being a social organisation it
is an important element for Rise Bakery.
Place- This is concerned with point where buyer and seller come in contact and this is of two
types offline and online. Offline place is when order is made and delivered on the place of
business and online is when order is made through website of the company. Place for Rise
Bakery is online, in which customers make order and they are delivered product at their home.
Promotion- promotion is an practice through which Rise Bakery encourages individuals to buy
products of the company by communicating its value. Promotions of Rise Bakery are done
online through social media. This is a cost friendly way to promote products of business.
Operations plan

Key operational activities involve creating brownies and this also involves activities like
inventory management. Market development of Rise Bakery will require extra inventory for
organisation.
Rise Bakery source its resources and raw material directly from manufacturers.
Manufacturing process of Rise Bakery involves process through which brownies are
manufactured and baked.
Management Team and company structure
Rise Bakery is a social enterprise and management team and structure of Rise Bakery is as
follows-
These two are head positions in Rise Bakery and these are followed by peer mentor and those
who are training at Rise Bakery. Other than these, there are two other positions that are
managerial in nature and these are marketing guru managed by ‘Nic’ and employability
coordinator that is managed by ‘Asia’.
Head Baker
Andrea
Head Chef
Simon
Peer mentor
and Trainees
Marketing
Guru
Nic
Employability
Coordinator
Asia

Financing
For the purpose of funding Rise Bakery will adopt two options (Shamsudeen, Keat and Hassan,
2016). These are partially taking loan from bank and partially from venture capitalist for the
purpose of growth of Rise Bakery. Other than this, Rise Bakery will also invest its own capital
for growth.
Resources
 Rise Bakery is located in London and is a small bakery which provide online services
 Machinery and equipments of Rise Bakery involves Bakery Oven, Bakery Equipments,
Baking Pans and Cookie Sheets, Electric Mixer and Food Processor.
 Required staff involve-
o Staff for manufacturing
o Assistants of manufacturers
o Staff to manage business operations
Financial Statement
 Rise Bakery will gain more profit into financial marketplace.
 The sales of business will increase 150 per annum
Investment (in £000)
Manufacturing facility 200
Machinery/equipments 150
Administration cost 50
Marketing cost 20
Total cost 420
Sources of funding
Bank loan 150
Venture capital 200
Own capital 70
Total 420

Cash Flow
In Rise Bakery, cash flow is based on medium risk and steady cash flow. In order to
identify the sales and cash flow.
Revenue and Cost for the project Year1 Year2 Year3 Year4 Year4
Sales 500 600 800 1000 1200
Cost of sales 300 360 480 600 750
Gross profit 200 240 320 400 480
Fixed overhead cost 100 125 175 225 300
Interest payments 22.5 18 13.5 9.5 4.5
Depreciation 150 150 150 150 150
Net profit before tax (72.5) (53) (18.5) (15.5) (25.5)
Tax 0 0 0 0 0
After tax profit (72.5) (53) (18.5) (15.5) (25.5)
Interest calculation Interest
Year 1 outstanding loan 450 22.5
360 18
270 13.5
80 9

90 4.5
Risk Plan
Risk Involved Risk mitigation
Failure of market development of bakery This involve effective practices for promotion
Increasing cost of ingredients and resources Effective planning and effective suppliers
relationship
Increasing quantity might affect quality This can be resolved by ensuring that quantity
produced by bakery is in limits of available funds
Monitoring and evaluation
This involves monitoring and evaluting success of the plan for growth (Shamsudeen,
2017). In order to monitor and evaluate projected finance and profit along with achievment of
objectives can be utilised.
TASK 4
Assessment of exit or succession options for a small business
Management Buy in
This is a option in which manager or management team from outside organisation purchase a
business. This means that Rise Bakery is purchased by external manager or management team.
This is not a easy as Rise Bakery will have to look for the manager or management who can pay
required and adequate amount to buy Rise Bakery.
Advantages
 Highly suitable when current management is not able to manage the company
 New management teams come with knowledge and higher intelligence of market
 Improves performance of existing staff
Disadvantages

 New management team might fail to ensure growth and success of Rise Bakery
 It can reduce motivation of existing employees
 Many of the times price provided in exchange of management buy-in is very less
Management Buy out
This is a option in which managers and team of managers buys a business or a part of the
business in which they are working (Khan, 2016). This means that managers and management
team of Rise Bakery purchase Rise Bakery. This is a easy option to be adopted when
management is ready to buy business at reasonable and good price.
Advantage
 Simple and easy to arrange
 Helps in maintaining confidentiality
 Existing management is well aware with the processes and success of the Rise Bakery
Disadvantage
 Difficulties in raising fund by management
 Ineffective and less qualified management can fail business
 Management will only buy Rise Bakery if it has potential for success
Closing the business
This is one of the simplest ways to exit business. In this option owner of the business
assets of business in open market and close the business (Piva and Rossi-Lamastra, 2017). This
is easy options for the exit of the business.
Advantage
 Close and break all association with business
 Simple process
 Successful businesses and their assets gets good return
Disadvantage
 If not successful Rise Bakery will not receive right and required amount in return

 Require time in identifying buyers
 Legal cost can increase expenses
Retirement
This is a option in which owner of the Rise Bakery take retirement and become free from
all responsibilities and liabilities of the business. This is one of the easiest option regarding exist
and succession from small business.
Advantage
 Financial gain
 Independence
 Can contribute in business and related decisions
Disadvantage
 Limit financial gains
 Limit additional income
 Does not have possibility to utilise opportunities in business
Floating the shares
This is a option in which business offers its shares for public purchasing. This is a
difficult option for the business (Pickard, 2019).
Advantage
 Best option to collect gain high investment
 Owners get free from responsibility
 Security for repayment
Disadvantage
 Difficult process
 Owners lose control
 High legal cost involved

On the basis of this discussion it can be considered that Rise Bakery owner should
consider retirement as it is simplest of all. Other than this, management buy-out is also a suitable
option for Rise Bakery (Piva and Rossi-Lamastra, 2017).
CONCLUSION
On the basis of above discussion, it can be concluded that planning for growth is crucial
and complicated processes and successful planning requires several considerations for the
company. This report discussed about some considerations along with growth strategies that can
be utilised by firm. Firm contextualised for this report is social organisation and this is why it is
important to consider impact and effect of these factors in context of social organisation. This is
because effect of these differentiate for social organisation compared to other types of
organisation.

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