Unit 42 - Planning for Growth

This report discusses the means of growth and directions for small and medium enterprises. It elaborates on key considerations for evaluating growth opportunities, using models such as the Ansoff growth matrix. It also explores potential sources of funding and a detailed business plan for small businesses. The report focuses on Laynes Espresso, a UK-based coffee destination.

Unit 42 – Planning for
Growth

TABLE OF CONTENT
INTRODUCTION.............................................................................................................................4
MAIN BODY....................................................................................................................................4
Analysing the key considerations for evaluating the growth opportunities and justifying in
Laynes espresso.............................................................................................................................4
Evaluating the growth opportunities with using Ansoff growth matrix ......................................6
POTENTIAL SOURCES OF FUNDING AVAILABLE TO THE BUSINESS:.........................7
Explaining the business plan for the small business...................................................................10
EXIT OR SUCCESION OPTIONS............................................................................................13
CONCLUSION...............................................................................................................................15
REFERENCES................................................................................................................................16

INTRODUCTION
The report of planning for growth will comprehensively elaborate the means of growth
and directions for the enterprise. Various key considerations which must be considered by the
small and medium enterprises while considering the growth opportunities will be elaborated in
detail by using various important models such as the ans off growth vector matrix. Also, a range
of framework will be used to analyse the competitive advantage available for the enterprise.
Further various methods and ways which can be used by the enterprises to raise funding for the
organization will be mentioned along with the advantages and drawbacks of the same.
This report will, also illustrate a detailed business plan which will include strategic
objectives, vision, mission, product, situational analysis, budget, monitoring, controlling etc. this
will be a plan for growth as well which enhance the purpose of the business plan. Further various
options a small business has for the exit or succession plan of the business along with the
implication and positive side of the same will b mentioned in detail (Estrin, Gozman and Khavul,
2018). The small business chosen for the repost is Laynes espresso which is a UK based coffee
destination serving variety of food and beverage options in the menu.
MAIN BODY
Analysing the key considerations for evaluating the growth opportunities and justifying in Laynes
espresso
Small scale business is mainly dined as the working and operations for conducting the
business in long run. It mainly accounts and employees the personnels around less than 250
employees and earning revenues less than 55 million per year. Planning for attaining growth
mainly specifies about expansing the business operations, innovating the products or adopting
different growth strategies for earning and increasing profits and revenues. As for the Laynes
espresso adopting different strategies as for serving the consumer with differentiated products by
expanding the menu range with serving different dishes to attract the consumers while serving in
the dynamic market. As for analysing growth opportunities using Vrio analysis for the Laynes
espresso.
Resources valuable Rare Imitability Organised
Tool and
equipments used
✓ ✓ x ✓

Serving
speciality dishes
x x ✓ x
Financial
performance
✓ ✓ x ✓
Human
resources
✓ ✓ x ✓
From the above table it is being analysed that, the human resources working in the
company are rare and not imitable in nature which is valuable and helps company to attain growth
by serving quality dishes (Setiyawati and et.al., 2021). Also, the financial performance of the
company establishes competitiveness and valuable in nature, as the technology, tools and
equipments mainly used for serving consistently coffee drinks helps in establishing its
competitive position while operating in the dynamic consumer market. But the Laynes espresso is
n able to serve the speciality dishes which hinder the company to attain competitiveness and serve
better than their competitors in the market (Chintalapati, 2020). So for this working and producing
differentiated and speciality products with the natural ingredients and introducing new drinkable
options helps in attaining competitiveness while serving in dynamic market.
Further more, With using the porter generic model which mainly helps in defining the
competitiveness for attaining the growth in the business with serving highly dynamic market. It
mainly includes three strategies which helps the company to attain growth which are as follows:
Cost leadership: As for attaining growth in the business it mainly specifies for setting up the low
prices of the products and serving at high quality. As In this it tends to attract high number of
consumers. It results in ever-increasing the profits and revenues by lowering the cost of the
products being sold by the firm with reduced costings to attain growth.
Focus strategy: This strategy mainly specifies about focusing on the niche market and serving by
addressing their need with developing understandings (Ansoff Matrix: 4 Strategies Leaders Use to

Grow Business, 2022). further more, In this developing low cost unique products for being more
attractive than other helps in attaining growth by serving the consumer market.
Differentiation strategy: With adopting the differentiation strategy it specifies a to produce the
differentiated products with adding new features and innovating the new menu ranges (Porter's
Generic Competitive Strategies (ways of competing), 2022). in this company helps in attracting
the consumers and retaining the loyal consumers market for attaining growth in the business by
earning high profits.
Thus, for the Laynes espresso the best strategy for attaining growth is by adopting
differentiation, which helps in introducing the differentiated and unique product than that of their
competitors. As by adding the bakery products including cookies, brownies, pastries also the ho
chocolate sandwiches for attracting and retaining the loyal consumers market.
Evaluating the growth opportunities with using Ansoff growth matrix
The growth opportunities in the business mainly aims in defining about the adapting
changes for attaining competitiveness with serving the target consumers with introducing the new
and innovative dishes. For attaining growth this model mainly specifies for opting the four growth
business strategies to expand operations which mainly includes:
Product development: This growth strategy mainly aims in specifying about the
introducing new products and services for attracting and ever-increasing consumers to visit the
company as for drinking and having brunch and taking snacks. With introducing the innovating
products other than the competitors mainly helps in adding the new products to the menu
including the chocolate sandwiches, cookies, pastries.
Advantages: With adopting this strategy mainly helps in working with grasping new
opportunities and changing trends in market.
Disadvantages: By adapting this growth strategy it increases costings and leads to high risk.
Market development: In this strategy the company is mainly entering into new market
for attaining growth with expanding its operations for being competitive (What is the Ansoff
Model?, 2022). As for the Laynes espresso the merging and acquiring with the other business
mainly helps in growing its business and workings with expanding the business operations for
serving products.
Advantages: With adopting this strategy it mainly helps in increasing the profits and its earning
capacity by expanding and serving into new global market.

Disadvantages: as in This strategy requires high capital investments for entering and serving the
new target market by expanding the business operations.
Diversification: In this growth strategy it aims in specifying about the diversifying the
business operations by adding new range of product and services and serving into new markets.
Further more, As in this the Laynes espresso is adopting the new products for serving in exiting
market.
Advantages: it boosts image of the company.
Disadvantages: it is less flexible in nature which increase risk.
Market penetration: this growth strategy mainly aims in defining abut serving the
consumers in the existing market for increasing the growth and sales.
Advantages: with adopting This strategy grows brand image and sales of the products by entering
into new markets.
Disadvantages: With adopting this strategy, it mainly reduces the margins and earning with
being expensive in nature.
Thus, from the above growth strategies for Laynes espresso the best suitable option for
company is to adopt the product development as for serving by adding new range of products in
the exiting menu for growing and increasing the profits by attracting large consumers market
mainly helps in improving performance by attaining growth as with serving new innovation
product better than competitors.
POTENTIAL SOURCES OF FUNDING AVAILABLE TO THE BUSINESS:
When business looks forward to the growth planning they need funds to carry out the
growth opportunities. Let's discuss various options available to the business for causing the funds.
BANK LOANS: taking a bank loan is a traditional method of raising funds for the business. Here
bank offers money for the business on a specific rate of interest which needs to paid on pre
decided time intervals (Kgoroeadira, Burke and van Stel, 2019).
Drawbacks:
 It involves very complex paper work.
 Time-consuming and hectic process.
 High rate of interest on bank loans.
Benefits:
 Avails various tax deduction benefits which reduces the tax burden.

 A trusted source of raising funds.
 Bank does not interfere or controls the business activities.
CROWDFUNDING: it is where funds are collected from a large group of people who
contributes a random amount of sum for the business or cause. Laynes can raise money through
this method yet it also involves various promotional activity expenses initially to communicate
the need for funds to the public (Cumming, Meoli and Vismara, 2021).
Drawbacks:
 Incurs cost to communicate the agenda and fund-raising event.
 False validation of the business idea due to mass support.
 Creation of an indirect accountability towards the people.
Benefits:
 Eliminates the stress of repaying the money taken.
 Does not create any liability.
 No control of public over the business affairs.
PEER TO PEER LENDING: it is a debt financing method of novel investment. An online
platform act as a mediator which connects business in need of funds to the investors.
Drawbacks:
 High rate of interest is taken by the investors.
 It is very strictly time bound.
 Moderate level of reporting to the investors regarding business.
Benefits:
 Direct connection between investors and businesses.
 Multiple investors can be on boarded.
 Does not involve any expense initially.
ANGEL FINANCE: Specific type of investors in the market who invest in a start-up who they
think has the potential of being profitable in the future. Here an effective business plan is needed
from the business who needs money in order to attract the investors in terms of the potential of
profitability in business (Pedchenko and et.al., 2018).
Drawbacks:
 Preparing a detailed business plan which is attractive enough.
 Needs a detailed business forecast and future plan.

 High control over the business affairs by the investors.
Benefits:
 A thorough guidance is provided by the investors on business affairs.
 Money is generated in big amount if the business has profit potential.
 Creates a log term liability.
VENTURE FINANCE: venture capitalist are the firms which supports the business in its initial
years by providing financial resources which can get the business started. These investors ask for
a percentage of equity for the money they offer to the business.
Drawbacks:
 Creates a long term liability.
 Hampers the authenticity of the business.
 High control over the business affairs.
 Giving out the part of business equity.
Benefits:
 Guidance & support by the business individuals.
 Easy way to get money.
 Collaboration with great individuals positively reflect on the business.
Laynes espresso needs funding for backing the growth opportunities in the business. It has many
ways which can be used yet the best way to raise the funds is angel financing. Raising the funds
through angel financing will eliminate the interest burden and business will onboard experienced
individuals who can guide and support the business through their ideas and resources. And
furthermore this method of financing will earn the creditability of the business by being
associated with the high profile angel investors. Hence, angel finance is the best method among
the available options for the business.

Explaining the business plan for the small business
Vision: The vision of the company is to provide the bets and fresh roasted coffee by
having the excellent services at the fair price. This helps the customers to produce best and have
better profitability.
Mission: The mission of the company is to identify the purpose of the customers and
provide them best in the market. This helps the company to have better profits and markets hare.
The mission of the company is to provide the best food and beverages services to the customers.
Objectives: The objectives of the company is as described below:
 To maintain the customers' satisfaction at the high level.
 To increase the market share by 25% by the end of 2022.
 To increase the market share by 20% at the end of 2022.
Goals: The goal of Laynes Espresso is to increase the market share and profitability that
helps them to grow in the market. As the company is bringing the new product that is hot
chocolate sandwich that helps them to achieve their goal in the competitive market (Henriques,
Matos and Jerónimo, 2022).
Stakeholders: Stakeholders are the parties that used to have an interest in the company
and can affect or affected by the company. These are basically the finance providers which makes
the company to have better production in the market. The stakeholders of the cited small coffee
shop in UK are customers, employees, suppliers, investors, community, etc.
Capital Funding: There are different sources of capital funding that helps the business to
grow in the market. This includes personal investment, venture capital, bank loans, equity capital,
etc. In order to bring something new in the market Laynes will have use of personal investment
that helps them to grow in the market (Dahir and et.al., 2019). As the company has done some
investment and also have the retained earnings that helps them to sell the products at good rate.
Operational Plan: The operational plan of the cited small coffee shop includes that
activities and target that will help the company to achieve better profits (Hanák and Grežo, 2020).
As in order to plan the new edible product the company must set the time frame, resources and
technology that helps them to grow well.
Resources plan: Although it is the small coffee business but the company is having good
resources that helps them to grow in the market. As the resources planning is essential for the

company in order to maintain the sustainability in the market. The resources required are bread,
chocolate, staff, etc. that helps them to produce the best quality of sandwiches.
Technology plans: In this plan the company will decide th type of technology and
innovation required in the company. As the company is making hot chocolate sandwich so
microwave and sandwich maker is required to serve best. The technology is considered as one of
the important part for the company in order to have better growth in the market.
Risk factor: This is one of the most affecting factor that used to have impact on the
profitability of the company. The risk factor for the company is that there are continuous changes
in the taste and preferences of the customers, which used to affect the market share. The company
must focus on such risk factors that makes them to have better target customers in the market.
Marketing plan: The marketing plan of the company helps them to know about the
product, price, place and promotion of the new thing. The marketing plan for small coffee shop is
as described below:
Product: This includes the new product launched by the company in the market. As the
company adding something new in its menu that is hot chocolate sandwiches. This will help to
have more customers.
Price: The price of the new product is very reasonable as this is the small coffee shop in
England. By having lower prices of the products this helps them to have more target consumers
and better profits.
Place: Laynes Espresso used to sell its foods and beverages at coffee shop only. Now the
aim of the company is to have online orders which makes them to have more customers in the
competitive market. By having the best location it helps the company to have better markets hare
and more productivityy by having increase in the customers.
Promotion: The company must do the best promotion of their new product launched by
them. By using online apps advertisements it helps the company to have increase in the customers
(McCready and Molls, 2018). As nowadays people are more social media oriented so this is one
of the best source to do promotion of the product.
Time frame:
Activities Week1 Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Week
8
Week
9
Week
10

Researching
the new
product
Designing
the Vision
Designing
the Mission
Making
objectives
Setting the
goals
Knowledge
about
stakeholders
Best sources
of funding
Making
operational
plan
Resources
required
Technology
required
Risk factor
Making
marketing

plan.
SWOT analysis: The SWOT analysis of the company is as described below:
Strengths
 The location of the company is at good
place that helps them to attract more
customers.
 Products brought by company is
profitable.
 Company uses good sources of
marketing.
Weaknesses
 The flow of customers cannot be
predicted.
 The company does not sell its
beverages and food items online.
 Does not use the new and innovative
machines in the market (SWOT
Analysis: What It Is and When to Use
It, 2022).
Opportunities
 The company must start doing the
online delivery which helps them to
have better profits in the market.
Threats
 As there are many coffee shops in UK
so the company used to have high
competition in the market.
Recommendations:
 It is recommended to the company that they must sell the best quality of food items and
beverages to the customers.
 It is also suggested to the company that they must start selling the products online that
helps them to have better profitability.
EXIT OR SUCCESION OPTIONS
In the times of challenges and crisis sometimes business has to come up with the exit or
succession strategy. Let's discuss different options available for the small businesses.
Merger & acquisition: under this option company can either merge (mix) with another company
or being acquired (taken over) by the another business organization in the market (Ralcheva and
Roosenboom, 2020).
Benefits:
 it offers a clean break to the business enterprise.

 Prices can be negotiated and liabilities can be set off by enterprise which is taking the
business.
Drawbacks:
 Business cease to exist in acquisition.
 It is very tedious and hectic.
 It is a time-consuming affair.
Sell to another business:Selling the entire business to another similar business in the industry. It
is fast method where the owner of the business can easily get free of their burdens.
Drawbacks:
 Employees can be laid off in such process.
 Difficult to generate the proper value of the business in short time.
Benefits:
 A fast method where accountability can be easily laid off.
 Disputes in the business can be settled by the fast process of money generation.
Liquidation: when a company just ceases to exist by selling it assets and paying of the liabilities
from the money generated by Selling the assets, and then whatever is left is distributed to the
shareholders of the business (Wendee, Sussan and Chinta, 2018).
Benefits:
 It is a simple exit plan.
 It is a quick sell process of assets.
 Getting free from business responsibilities is easy.
Drawbacks:
 Business totally cease to exit.
 Employee lay off.
 Disappointment to the shareholders.
Passing to the family member: to preserve the business for a long time many people choose to
transfer the business to a member of the family. It is really famous in small businesses. As even
the business is passed on the control still remains. Successor of the business can be groomed over
the years until he becomes the right owner of the business (Rothwell and Prescott, 2022)(Pauley,
2019).
Drawbacks:

 Creates family clashes and issues while deciding the successor.
 One can not detach themselves from the business totally.
Benefits:
 Ability to groom the future owner of the business the way you want.
 Owner still remains a key member of the business even after passing it on.
COMPARING AND CONTRASTING DIFFERENT EXIT OPTIONS
There are various exit options which are available for the small business. It highly depends
on the owner and key member of the business to decide which option thy want to exercise. There
are various factors which needs to be considered such as type of control you want, liabilities that
needs to be paid, time available for processing an exit option etc. as in the short time merger and
acquisition plan can not be exercised due to its long process of transferring the business. Also,
transferring to family member can be done if there is potential in the business to have
profitability. In comparison, if owner is trying to get rid of the business totally as there is no
potential of the profit in future is left then liquidation is the best suitable option.
RECOMMENDATION FOR APPROPRIATE EXIT OPTION
For Laynes merger remains the best option as it is food option which will always be
profitable if ran properly. If the business gets merged with another such business which can
enhance the longevity and profitability, merger seems to be the best option for the business.
CONCLUSION
The above report has looked after each and every aspect while planning for growth of the
business. There are various key consideration points which has been elaborated for the growth
opportunity evaluation of the business. Different Models and frameworks has been used like Ans
off vector growth matrix and SWOT analysis which can help evaluate the competitive advantage
in the business. For the growth and development of the business funding is very crucial and report
has mentioned different fund-raising methods like venture capital, angel finance, bank loan,
crowd funding etc. along with critical drawbacks and advantages associated with each one.
Further, a detailed business plan has been mentioned which highlighted the vision,
mission, objective, SWOT analysis, pestle analysis, competitors analyse, time fame, budget etc.
as a business plan states the detailed map of the business for growth. Also, Business plan has
considered the small business of the coffee shop “Laynes espresso” situated in the leeds, UK.
Which started 11 years ago business making good brand image and profits. At last various exit

and succession options available for small enterprise such as merger, acquisition, liquidation,
passing to family member etc. have been elaborated. Keeping in mind various positives and
negatives of each such option.

REFERENCES
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