Planning for Growth in Small Business: Key Considerations, Opportunities, Funding Sources, and Risks

This report discusses the planning for growth for a coffee shop situated in London, including key considerations for evaluation of growth opportunities, Ansoff's growth vector matrix, potential sources of funding, and associated benefits and drawbacks.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
P1 key consideration for the evaluation of the growth opportunities and their justification
according to organisational context............................................................................................4
P2 Evaluation of the Opportunities of growth by applying the Ansoff's growth vector matrix 7
M1 describe the option for growth by using the analytical framework to understand the
advantage in the organisational context......................................................................................8
D1 evaluation of specific option and pathways which help in growth and consideration of
associated risk with it..................................................................................................................8
P3 describe the potential sources of funding and their associated benefits and drawbacks........8
M2 Evaluate the potential source of funding and their adoption with respect to the
organisational context.................................................................................................................9
D2 critically evaluation of the funding source with the proper justified arguments regarding
their adoption in organisational context......................................................................................9
P4 designing the business plan for growth of business and includes the strategic objectives for
scaling the business...................................................................................................................10
M3 develop the business plan for growth and securing the investments for achieving the
objectives...................................................................................................................................11
D3 describing the depth of business plan for applying the business objectives successfully...11
P5 Explaining the merits and demerits of the business in order to access or succession for
small business............................................................................................................................11
M4. Evaluation on the exit of succession options and Comparison on the options with valid
recommendations......................................................................................................................12
D4. critical evaluation of the exit or succession option and the appropriate course of action..12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for growth is defines as the group of strategic process which increase the
business performance and enhance the growth in the revenue of the business. The planning for
growth is very important key in the business development because it provides the overview of
the business and focus on growth area for increasing the growth targets and accountability. The
planning for growth is helpful in management of business and review the the strengths and
weakness of the organisation. The planning process is very important for every business for
generating the more opportunity for positive outcomes (van Hove,and Regeer, 2021). The
planning process in any business is very beneficial because it increase the coordination and
integration of employees towards their common goals. The planning for growth includes the
various process like planning, managing the time efficiency, allocate resources and controlling
the situation in the time of needs. The advantages of the planning for growth is to maximize the
resource, enhance the viability, attract the investors and help in setting the objective and
benchmarks. The given report has discussed the planning for growth for coffee shop which is
situated in London. The name of the coffee shop is New London Cafe which provides the
organic coffee to their customer and increase the refreshment power of their customers. The
report has focused on various key consideration for increasing the opportunities, and also
describe the Ansoff matrix for the evaluation (Hozack, 2018). The report has also include the
strategic objectives which describe the discussion on exit of small business.
MAIN BODY
P1 key consideration for the evaluation of the growth opportunities and their justification
according to organisational context
The external factor is very important in business organisation for grabbing the
opportunities which is available in market and it help in the planning for growth (Tiffany and
Peterson, 2022). In context of New London Cafe , the few model which are described as below
focus on evaluation of growth opportunities. The chosen model is PESTLE analysis, Porter's
generic model and Boston Consulting Group matrix.
PESTLE analysis: It is the external key factor which influence the performance of the
organisation by tracking the marketing principles. It is important in establishing the external

factor of the organisation in increasing the impact of decision in the organisation for the growth
and development of the organisation. The factor of PESTLE analysis which is helpful in
evaluating the growth opportunities are as follows:
Political factor: The political factor includes the government rules, regulations and
policies which impact on the business of any organisation and company. This factor includes the
fiscal policy, excise duty and tariffs. The government has started various policy for health safety
measure in the food industry (Tucker 2019). For meeting the political factor and increasing the
growth of business the New London Cafe provides the organic tea and meals.
Economical Factor: The economical factor includes the economic growth patterns,
exchange rates, inflation rates which determines the economical performance. The rise in
inflation rates will increase the price of the menu in the cafe which ultimately decrease the sales
of product because customer do not prefer the coffee and tea with high prices.
Social factor: The social factor focus on the identifying the needs of the customers by
identifying the lifestyles, behaviour, attitudes and culture etc. Nowadays the peoples are more
health conscious so cafe has also increased the organic food and coffee in their menu for
increasing the positive response of the people towards the cafe.
Technological factor: This factor includes the new technologies, innovation which
influence the business. The technological factor includes the automation, research and use of
new machines and websites which is beneficial in the development of the organisation. The New
London Cafe has effective security by placement of CCTV camera in different corner of the cafe.
The Owner of the cafe has developed the technique to track the cafe in their mobile when they
are out of city.
Environmental factor: The environmental factor includes the impact of climate change,
carbon footprint and natural resource, weather change, natural disaster etc. The New London
Cafe focus on the recycling of waste material and proper sewage treatments. The cafe properly
follow the policy of waste management and food wastage. The cafe provides their leftover
snacks and coffee to the needy people.
Legal factor: The legal factor includes the laws and regulations which impact on the
business environment. The legal factor consist of safety standard, consumer law, labour law etc.
The New London Cafe follow the laws of food and safety department and maintain the hygiene
and quality of food. The regulatory authority of the New London Cafe also check the kitchen

area and storage are of the cafe as well as hygiene policy of staff during the cooking and serving
process of the snacks, tea, coffee and meal.
Porter's generic model: The Porter's generic model is based on three strategies which includes
the cost leadership, differentiation and focus which is helpful for organisation in increasing the
competitive advantage (Marković and Furjan, 2021).
Cost leadership: The cost leadership is the way of increasing the sales of the products
and increase the competitive advantage by reducing the cost and increasing the share in the
market. The New London Cafe use the cost leadership strategy for increasing the profits by
decreasing the cost of coffee and other snack items from their menu.
Differentiation strategy: This strategy involve the different product making process
which is more attractive and quality based and different from the products available in the
market. The differentiation strategy includes the good research, innovation, effective sales and
marketing and delivering of high quality products and services. The Coffee which is available in
the New London Cafe has s different taste and made up of herbal materials (Weerasai and
Singsa, 2022). The cafe has also focus on making of pizza, burger and other fast food items
from the organic products. This strategy increase the demands of cafe in the marketplace.
Focus strategy: The focus strategy is the way by which company understand the
different dynamics and niche of the markets for providing the quality based products in the low
cost. The focus strategy is very helpful in building the brand image and increase the loyalty of
the customer towards their brands. By understanding the different dynamics of the business in
the market, the New London Cafe has provided the 10% discounts on the beverages products to
attract the customers to their products. This focus strategy help the cafe in increasing their profits
through the discount and offers.
Boston Consulting Group Matrix: This is the growth planning method of any organisation by
using the graphical representation of data of products. This tool focus on data of products and
service which should be sell, keep and needs investment (Pang and et.al, 2019). The Boston
matrix includes the following parameter which is helpful in managing the internal portfolio of
any organisation.
Cash cow: The products which can give more profitable return are consist in cash flow
matrix. This matrix increase the stability by investing the low amount and generates more cash

for the utilisation. The organic coffee of New London Cafe has faced competition from cafe
coffee day. The new innovation is required for increasing the taste of coffee.
Star: The product and services of this matrix provides the cash and profits by increasing
the investments for leading of the products demand in the markets. The increasing the demands
of organic coffee the company invest more capital to increase the quality of their coffee. With
the help of this matrix the cafe has also launched the organic fast food items for increasing the
demands of coffee in the market.
Question mark: This matrix represent the low market share business of product and
services having the high growth of the industry. This matrix needs large amount of cash for
gaining the market share. This matrix help the business to understand the difficulties in survival
in the market due more competition in the market (Plahotnikova, 2019).
Dogs: This includes the product and service which does not require more investment and
not generate more cash because of low growth in the markets. The products and service which
comes in this graph show the weak market share due to high cost poor quality of products and
services. The coffee of New London Cafe are not included in this matrix because the cafe
provides the good quality in reliable rates.
P2 Evaluation of the Opportunities of growth by applying the Ansoff's growth vector matrix
The Ansoff's model is the helpful in increasing the opportunities in market strategies for
increasing the revenue by tapping in the new markets through launching of products and services
(Hagenbuch and Mgrdichian, 2020). The four quadrants of the Ansoff's model in context of the
New London Cafe are discussed below:
Market penetration: This strategy is the way of enhancing the sell of the products in the
marketplace by using different methods. The New London Cafe has used this quadrant
decreasing the cost of coffee and offering discount. The cafe has also developed the free home
delivery services to their customers for increasing the sells of the products.
Product development: The product development process is the way of introducing the
new product in the market and work on the development of the existing product
(Bhattacharya,2020). The New London Cafe has developed the new flavours in the coffee to
increase the sales of their product.
Diversification: This strategy is the process of entering into the new market by
developing the new products and services. This is the important way of enhancing the business in

the marketplace. The New London Cafe has diversify their process by introducing the new vegan
meal in the breakfast and coffee with new different flavours (Valarmathi and et. al., 2022).
M1 describe the option for growth by using the analytical framework to understand the
advantage in the organisational context.
The market development strategy is the best option for growth of any organisation. The
analytical frame work which is used by small business market involves the capturing and
expanding the market by introducing the new products with the best quality in the reliable rates
(Tolliver, Keeley, and Managi, 2020). This framework is very beneficial for the New London
Cafe because the expanding of market share will generate the more cash flow and revenue and
increase the brand image in the mind of the customers. The New London Cafe has maintained
the good quality in the new product development and it creates the benchmark in the product in
the new market place also.
D1 evaluation of specific option and pathways which help in growth and consideration of
associated risk with it
The specific way which is helpful in the development of business is the diversification
process. This process increase the business plan in the market but it is very risky process. The
risk associated in diversification process is creating the brand image of small business in the
marketplace which is difficult for the small business. The diversification process needs different
kind of new technology for the advancement of their business and some modifications which is
not feasible by the New London Cafe. The cafe has involved the control growth, buying
insurance policy for the business as well as appointment of team for seeking the risk
management process to mitigate the risk of New London Cafe which has developed by
diversification process.
P3 describe the potential sources of funding and their associated benefits and drawbacks
The funding is the main criteria for the development of any business especially the small
business. The different types of source of funding has available for the small business. The
different source of funding which help the small business in planning of their growth are as
follows:

Bank loans: The most common type of funding source for the small business are bank loans.
The bank provides the commercial loan in cheap rates as compared to the financial firms (Wang
and et.al., 2018).
Advantages: The bank loan only needs the legal documents and does not provides the
different kinds of rules and regulations. Bank do not take the equity for providing the loans.
Disadvantages: The bank loan process require some security in terms of property paper
or jewellery for providing the loan which is termed as collateral security. The loan from bank is
time consuming process because it needs verification of paper and legal documents.
Venture capital: The venture capital includes the financial firms and investors for providing the
funding to the small business (Bhanot and Kadapakkam, 2022). It is a private type organisation
which requires the equity for providing the capital to the business.
Advantages: The benefits of this funding is that it provides large amount of capital and
can take several times. The investor take their interest in the form of equity.
Disadvantage: The investors creates the pressure on the company for the better
performance and they also interfere in the company regarding their decision and internal matters.
Angel investments: The angel investor consist of private investor which finance the small
business in their own net worth.
Advantages: The angel enterprise provides the money as well as also give their
expertise, knowledge, contact and skills to the business.
Disadvantage: The angel investment require the more substantial return of their
investments (Yang, Kher and Lyons, 2018). This funding process is less transparent and it takes
away the business control.
M2 Evaluate the potential source of funding and their adoption with respect to the organisational
context.
The funding sources provides the economic strength as well as help in proper functioning
of the small business. The above discussion has described that the best funding source for
London Cafe is bank loan because London Coffee needs the funds in reliable rates without any
involvement of other peoples in their business. The interest rate of bank loan is low so London
Cafe can take loans from the Bank in the time of needs rather than preferring the angel
investment and venture capital. The funding by angel investor and venture capital demands
ownership in the business of New London Cafe.

D2 critically evaluation of the funding source with the proper justified arguments regarding their
adoption in organisational context
The different kind of sources provides the funds to the small business. The angel
investments provides the funds quickly but these investments involve the interference in the
business. The second way of funding source is bank loan which provides the funds to the small
business in low interest rates (Astrachan, and et.al., 2018). The venture capital is third option
for funding the large amount to the business but it needs the equity in return. The New London
Cafe adopt the bank loan process for their funding because it is easy for cafe to return the loan
through the monthly investments process.
P4 designing the business plan for growth of business and includes the strategic objectives for
scaling the business
The business plan for the growth of New London Cafe with the strategic objectives are
described below:
Executive summary: The New London Cafe has developed their business by maintaining the
quality of foods and provides the good experience to their customers.
Business overview: The New London Coffee has given their service since the 2011 and they
provides the healthy food and snacks item. The organic coffee of cafe has introduced the
different flavours for increasing the customer demands (Warni and Puspokusumo, 2021).
Mission: The mission of the New London Cafe is to provide the food which is healthy as well as
tasty. The purpose of the cafe is to attract the customers with the vintage experience.
Vision: The vision of the New London Cafe focus on the creating the brand image of products in
the mind by developing the taste and flavours. The vision of cafe also work in maintaining the
proper hygiene to increase the customer base.
Growth Strategy: The growth strategies include the market development which increase the
capturing of the market and expanding of the market by different process for creating the brand
image in the marketplace (Muttaqin, 2022).
Marketing mix: The marketing mix is the way of developing the business by promoting the
products and services. The 4P used by the New London Cafe for enhancing their business are as
follows:
 Product: The new London Coffee has developed the organic coffee by adding the
different kind of flavours (Yayla and et.al., 2018).

 Price: The pricing strategies is cheap and based on demands of the customers.
 Place: The New London Cafe has established their cafe near the colleges for attracting
the youngster towards their products and services.
 Promotion: The cafe has used different advertising tools for the promotion of their
organic coffee by banner, templates and through the audio announcement (Bian and et.al.,
2021).
M3 develop the business plan for growth and securing the investments for achieving the
objectives
The developed and strategic framework is very beneficial in the business development for
achieving the growth and increasing the opportunities for the business organisation. The
business plan with the secure investments increase the profitability. The New London Cafe
expand their business plan by different prospectus by increasing their business in different cities.
D3 describing the depth of business plan for applying the business objectives successfully
The business plan like overview, mission, vision, marketing mix, source of funding,
budgets structure and many more plays very important role in finding the business objectives of
the New London Cafe and make the image of the brand in the minds of the people.
P5 Explaining the merits and demerits of the business in order to access or succession for small
business
Every business have their positive and negative aspects which either help in succession or
increase the chance of exit. The both aspects of New London Cafe are as follows:
Succession: The strategy of the business which provides the way to runs the business smoothly
without any interruption (Turner, 2019). It also includes the new opportunities which increase
the better sales.
The way which help in succession are discussed below:
Franchising: The New London cafe has used the franchising systems for increasing the
purchasing efficiency. This system decrease the risk of failure but the demerit of this system is
that it increase the restrictions.
Licensing: The another way which increase the succession process. The company sell
their copy rights to other company for growth of their business. This develop the geographical

regions and foreign markets. The demerits of licensing is that it decrease the loss of control of
owner in promotion, packaging and selling.
Exit: This is the process of selling of the business by owner or founder due to loss so business
should start in keeping the minds that it can be exit. The various way of exiting are as follows:
Selling the product to the third party: The owner of the business can sell their business
legally to the third party for making the business more innovative and profitable. This process
help the owner in getting some invest amount through the selling . The drawback is that it is time
consuming process.
Dissolved:This is the exit plan of action when the business organization plan does not
work correctly. This is the almost concluding conclusion which can condemned for neutralizing
the business and marketing of all the possession .when this is taken into circumstance, it must be
kept in cognition that all the financial obligation should be cleared. This is one of the
unsophisticated and fastest performing among the all other alternatives and disadvantages
includes that the businessman will not able to get the biggest homecoming on investment funds
with this alternative (Fu, and et.al., 2021).
IPO: It renders the capitalist to take the departure in order to sell the shares in the
organisation. The portion of the capitalist are locked for a peculiar time period. The business
owner gets an chance to sell its portion and can make money. The shares of the capitalist is
locked for a definite period of time.
M4. Evaluation on the exit of succession options and Comparison on the options with valid
recommendations.
As the business organization is designing to increase its market share by processing in
other cities so Succession option is recommended for the New London cafe. So the Franchise
alternative will be more appropriate for the business to spread out its trading operations .
D4. critical evaluation of the exit or succession option and the appropriate course of action.
For identify the problems and their solutions both the exit and succession plan is equally
important for the business organisation. To cover its losses during the pandemic New London
cafe can adopt the succession plan and with the help of this plan, it helps the business to develop
quicker and gain its gross sales which will lead to profits in the business organisation.

CONCLUSION
From the above report it is concluded that it is very essential for every business to
program in order to determine the development possibility. From the above discussion on the
various growth plan of action model such as pestle analysis , BCG matrix , marketing mix ,
Ansoff. The best model which can be taken into thought process is Ansoff for distinguishing the
opportunities in the market to spread out the business of New London cafe. Furthermore there
are several sources of funds accessible for the enlargement such as bank loans, venture capital
and angel investors . The bank loan as a beginning of fund is recommended to the business in
order to meet its objectives and as well as to spread out in different cities with the low interest
rate and make over a brand value for its trade good and services. Also the organisation have a
plan of exit or succession in the case of any issue . The company can way out and also plan for a
franchises when its booming and able to meet its goal and objectives.

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