Planning for Growth

This report discusses the key considerations for evaluating growth opportunities, potential sources of funding, business plan for growth, and exit and succession options for small businesses. It includes a case study of Belgique, a European café and bakery.

Planning for Growth

Table of Contents
Planning for Growth........................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO 1.................................................................................................................................................3
Key consideration for Evaluating Growth Opportunities............................................................3
Evaluation of Opportunities for Growth through Ansoff Matrix................................................5
LO2..................................................................................................................................................6
Potential Sources of Funding.......................................................................................................6
LO3..................................................................................................................................................7
Business Plan for Growth............................................................................................................7
LO4................................................................................................................................................10
Exit and Succession Options for Small Businesses...................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for growth refers to an act of organisation and business in which they decide
and plan how they can increase and expand their business. This report includes growth
opportunities and planning for a small business, for this purpose businesses have to consider
various affecting factors and in this those factors have been discussed. Growth of business
definitely require it to invest capital in the business and this is why it is very important to
understand the sources from where company can arrange funding and what are the benefits and
drawbacks of each of the source of funding. Belgique, European café and bakery have been
contextualized in this report.
MAIN BODY
LO 1
Key consideration for Evaluating Growth Opportunities
For every organisation which is willing to grow it is very important that some of the
factors are considered by the organisation while planning its growth. Important considerations
includes determination of competitive advantage for the growth (Morgan, 2018). In this Porter’s
Generic Strategies can help considering various factors for growth of the business. In this
strategies are as follows-
Cost Leadership-
This is strategy used by the company in which competitive advantage is lower cost and
competitive scope is broad target. In this strategy firm set out to become the low cost producer in
the industry. This allows for the cost advantage. Belgique cannot use this strategy because the
café uses high quality input in its products and this is why lowering cost of the product is not an
option available to it.
Differentiation

This includes that that products of the firm are unique and its dimensions are valued by
the company. This is one of the best strategy that Belgique café can use. In this strategy café can
differentiate its products from its competitors (Page and et.al., 2017). This strategy is also by
most of the café businesses. Café can attract its customers by differentiating its products from
others.
Cost Focus
In this café targets small number of people where it applies its strategy of cost leadership
strategy. Café cannot use this strategy as this operates at single place and it cannot use cost
leadership strategy at its only café.
Differentiation Strategy
This includes that business organisation apply differentiation strategy to a limited number
of people (Omsa, Abdullah and Jamali, 2017). Though café can use this strategy but it might be
difficult to operate with this strategy and providing differentiated products to limited and
selected number of people.
PEST Analysis
This includes considering factors which are-
Political
This includes considering impact of political factor. In this café have to consider policies related
to food business and requirements regarding that.
Economical
This includes that economic factor like tax and this will influence pricing decision of the
company adding tax rates (Perera, 2017). High rate of tax increase the price of the products of
the food.
Social

This includes taste and preferences of the people. In this café have to target customers which are
interested in products of the café.
Technological
This includes considering technology required in café. For its growth planning company have to
consider level and type of technology will be required for it.
Evaluation of Opportunities for Growth through Ansoff Matrix
Ansoff Matrix provides some of the strategies that company can use while planning for
growth. The strategies which are provided by Ansoff Matrix are-
Market Penetration strategy
This Strategy includes that café tries to sell more to its existing market with its existing
products (Dawes, 2018). In this strategy café requires to advertise more so that it can sell its
products. Promotion and marketing is one of the important activity undertaken for this strategy.
Benefits of this strategy are that café will not have to change anything and it will be able to stand
strong in competition with existing competitors. The drawbacks that come with this is that café
cannot sustain longer with help of this strategy.
Market Development Strategy
In this strategy café grows its business in other markets with its existing products.
Company can apply this strategy for growth in case its products are liked by its customers and
café is strongly valued by its customers. The benefit of this strategy is that café does not need to
try its products which have been newly developed and is confident about quality and value of its
existing customers. Drawback of this is that it is not necessary that the products which have
valued by existing market and customers will be valued and liked by the new market as well.
Product Development
In this strategy café have to develop new products for its existing market. In this café can
increase its sales in existing market (Schawel and Billing, 2018). This is beneficial as café can
increase its competitiveness in existing market but on the other hand this strategy also come with
difficulties whether new products will be liked by the customers or not. Another drawback of this

is that company can grow to only limited number of customers even after developing new
products and cannot achieve extra customers and grow in new market.
Diversification
This strategy includes both new product and new market. This is one of the most difficult
strategy and chances of success are limited. This is because both the things are new. In this café
have to start its another branch and café at a new place with new and different products. This
does not ensure success and also requires much efforts in all its activities like promotion and
marketing.
LO2
Potential Sources of Funding
Funding refers to monetary and capital investment required to growth of business. There
are various sources through which café can get fund for its growth. Some of the sources of
funding are as follows-
Personal Investment
This is the source which is used by most of the businesses specially the small ones. In this
owner of the business uses his own money to fund the growth of the business (Brogi and
Lagasio, 2017). In this owner can either use cash or collateral their assets to grow their business.
There are various benefits of using this source of money such as these does not require owner too
pay any cost of interest which means that this is most cost free source of funding. Responsibility
of payback also reduces as the money belongs to the owner themselves. Drawback of this is that
owner can invest limited money as small business owner does not have much money to invest in
their running business.
Friends and Family
In this source of money investors invest the money which they borrow from their friends
and member of family. There are some benefits in this funding source as friends and family can
take less interest and wait longer for return on their funding. Drawbacks associated with these are

that in case of failure of business personal relations of individual might get ruined because of
money matters (Neubert, 2019). This is the reason that owner of café might feel it inappropriate
about asking money from their friends and family.
Cloud Funding
This is the source of funding in which there are number of groups that will allow you to
pith idea of owner of café to investors and success in this idea will lead to multiple investors
investing in the business. Benefit of this is that there are various investors and café can easily get
as much money as it requires for growth (Brown and Lee, 2019). Drawback associated with this
is that the rules and regulation in this type of funding are very strict and along with that business
owners also have to share secrets and all the detail about their business.
LO3
Business Plan for Growth
Business plan for growth includes various consideration and determination so that
business can increase and grow its operations.
Vision
To provide unique food experience to all the customers.
Mission
High quality food products with flavours never had before.
Objectives
 To increase market share by 10 by the end of current financial year.
 Establish one more branch of the café in current financial year.
 Increase product offerings to cater need of beneficiaries.
Marketing Mix
Product

Products being provided by the café are bakery items like cake and other bakery products along
with this café also provide food and beverages which are offered as per European taste and
flavours (Haludin, Sari and Prihartono, 2017). To grow its business café can increase its products
and food items. Food offering are also associated with services of serving the food and
beverages. Café have to consider all these under its growth plan.
Price
Price of the product is based on cost and competitive pricing strategy. In this all the
products which café sell are based on the cost incurred in the production of the food. In this café
also includes competitive pricing policy and as the products of café are valued by the customers
more than its competitors the price is little higher than the price of the competitors.
Place
The products of the café are available through two channels. In this either customers can
come to café to get their food products along with services of the café. Other channel of supply is
home delivery of the food. In this café delivers the products of the café to the place given by its
customers in London as the café is located at London (Wahab and et.al., 2016). The kind of
products café sell cannot be delivered outside London. In its growth plan café is willing to open a
branch of café at other place, through this café will be able to deliver its products through more
channels.
Promotion
In this café does not undertake any major activity for its promotion but its promotion plan
includes social media advertising and sales promotion. Along with café also includes customers
loyalty program. Under this café provide special offers to its loyal customers. In case café is
planning growth it have to work on its marketing and promotional activities and these includes
promotion through local newspaper and promotion through You Tube to its target market.
Promotion through billboard and local sponsorship are also effective ways through which café
can promote itself.
STP

Segmentation
Segmentation includes segmenting and identifying various customer groups. In this demographic
and psychographic segmentation are mostly used to identify customer group. In this
demographic factors includes age, gender, financial status, educational level and ethnicity and
profession (Ishak, 2018). On the other hand psychographic segmentation includes segmentation
based on attitude, personality, lifestyle and hobbies. For Belgique all the type of people can be its
customers as this sells bakery products and food and beverages product. This means
segmentation of Belgique is based on demographic and psychographic basis.
Targeting
Targeting is based on factors such as Size, Difference in customers, Money, Accessible
and Focus on different benefits. All the type of customers are its customers hence targeting of
Belgique is mixed targeting. This can be used in its growth as well.
Positioning
Positioning refers to position the products and brand in market in such a way that it can
communicate value of the business to the customers. In this Belgique position itself superior in
quality than its competitors and for this it also charges comparatively higher prices than its
competitors (Wuryandani, Ismoyowati and Nugrahini, 2018). The same value and positioning
will be used in the growth of the café Belgique.
Financial Information
The cost that will incur in the growth of Belgique is quite high. This is because café is planning
to open its brand to another place as well. This requires huge investment required in opening a
whole new business and café. In relations with its investment and funding café can arrange
funding from the last idea which was discussed earlier in this topic. The funding strategy that
café can use is funding through pitch. In this café can get all the required amount for investment.
This also have benefit that Belgique café is highly valued by its customers and operating quite
well along with high quality of product and services (Haludin, Sari and Prihartono, 2017). This
can be a basis for pitch to the investors.

Looking at all these benefits of Pitch café can arrange its funding through capitalist and
investors.
Measurement and Control
These are the techniques through which café can measure success and validity of the lan. In this
one measure for café is monetary improvement in café’s financial condition after establishment
of new café.
Return on Investment, this is one of the most important measurement of success of the plan.
This becomes more important when café is planning to get its funding from investors.
Evaluation
This is one of the most important part of the plan which includes evaluation of the plan. In this
plan as it is not difficult to segment and target customers for a café but is important decision of
businesses when it comes to position the café. Though a café but Belgique position itself superior
on the basis of quality of the product. Product line increase is important for café when it starts its
business at new place and for ensuring that it can reach to maximum number of customers and
potential customers and communicate about its growth and new café of Belgique it is important
it gives more attention to its promotions.
LO4
Exit and Succession Options for Small Businesses
Businesses are started with objective that they will and want to run for loner period and
want to sustain in market but there are various reasons because of this businesses might chose to
exit (Afrahi and Blackburn, 2019). Like any type of loss, inability of the owner to run the
business, completion of business cycle etc. are common reasons for the decision of exiting the
business.
Some of the ways in which business can Exit are as follows-
Liquidation

This is one of the most common ways in which businesses exit themselves. In this
businesses close their business and sell all its assets. This is only and most effective and easy
option for a business like café which is operating at small scale. Sometimes this is the only
option for businesses which are operated by single individual. Some of the advantahges which
are associated with are-
 Simplicity
 The businesses can be wound up quickly.
Along with benefits there are some drawbacks too such as-
Lowest Return on investment for owner of the business (Xie, Ma and Lu, 2016). (this is because
assets are sold at less price). This is because assets of business are second hand which reduces its
value.
First claim id had by creditors. In case Belgique café liquidates itself its investors will have first
claim over its assets.
Liquidate over time
In this strategy of exiting the business owner of the business extract most of the profit and
liquidate the business with a pace and does not liquidate all in once. In this owner does not invest
back in business and keep the profit to themselves (Brill, 2017). Benefits of this strategy for
Liquidation are-
 Lifestyle, owner of the business uses all the cash for the lifestyle improvement.
Drawback of this strategy are-
 Reduction in growth potential because of extracting the profit.
 Other partners and shareholders of the profit might object this decision.
Selling Business to Managers and Employees
In this decision owner sell its business to current manager of the business and those who
are working for business might be interested in buying the business. So business can liquidate

itself by selling to managers and employees (Afrahi and Blackburn, 2019). Benefits Associated
with these are-
 Business remain with safe hands as business managers and employees are well versed
with operations of business. They know the value of the business and does not require to
convince to buy the business.
 In case business arrange a long term buy out owner can increase loyalty of the employees
and this also reduces turnover of the employees. Employees perform their best as they
know that they will be getting benefit of their performance and hard work.
 Business when sold to employees and managers it is possible that manager can keep the
share and remain advisory for the employees and managers.
Some of the disadvantages which are associated with this are-
 Employees who are not enough qualified and are less qualified are suitable candidate to
whom the business can be sold. This requires that employees are highly qualified who
can look after the operations of the business by themselves only iin that consition it is
wise tto sell business to employees.
 Clients and customers of the business might not approve the decision of management as
there are many customers who are loyal t business and remain associated with it for long
term because of the owner of the business (Afrahi and Blackburn, 2019). This is the
reason that customers and client of the business does not approve the decision of owner.
Sell the Business in Open Market
This is most popular way and strategy in which small businesses exit themselves. This is
used when business owners are at point of time when they are willing to or ready to retire they
put the business on sale for a certain price. In this business owners get away with the money they
want to get in return of their business (Xie, Ma and Lu, 2016). This keeps the business running
by someone else. Advantages associated with these are-
 Profitable and valued businesses does not have to make much efforts for attracting the
buyer.
 Business can be sold at the best possible price.

Disadvantages of this are-
 Businesses which are marginal profitable do not get sold easily.
 Sometimes it is difficult to value business in monetary terms.
CONCLUSION
On the basis of above report and discussion it can be concluded that for planning business
there are various related factors which have to be considered by the business. This is important
so that business is able to ensure the success of their growth. For this purpose PEST factors and
Generic strategies were evaluated and which was followed by application of Ansoff Matrix to
evaluate opportunities of the growth. Later as finance is most important consideration for
business and investment are required for growth some of the strategies and sources were
evaluated for funding of the business. From all those sources most suitable one for café was pitch
and through investors. Later for the purpose of growth a business plan was included for café.
After this what are the ways in which business can exit were also discussed in the report.

REFERENCES
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