Planning for Growth: Key Considerations, Ansoff Matrix, and Funding Sources for Little Portland Cafe

This report discusses the key considerations for evaluating growth opportunities, such as PESTLE analysis, Porter's analysis, and BCG matrix analysis. It also evaluates the opportunities for growth applying Ansoff growth vector matrix and assesses the potential sources of funding available to businesses, including government funding, bank funding, own funds, and equity finance. The report focuses on Little Portland Cafe, a small coffee shop venture in London.

Planning for Growth

Introduction
Business is the function of making one's life better and creative, it is the process of
merchandising in the market, it is the plan which means that any of the company is entering into
a new venture or buying and selling in the marketplace and the company which are entering in
business for getting profit, as it is evident that profit is the main motive for all the businesses and
they are formed to earn the profit and having good amount of investment turnover and high
revenues is there priority. Some of the small businesses which are taking place in the market in
the coming time and they are also known as the private owned ventures which are there to set the
standards. In the respective report of Little Portland cafe which is the small coffee shop venture
which is there in London and they have coffee as their speciality in their menu list of the
cafe(Bryson, 2022).
1.1 Analyse key considerations for evaluating growth opportunities.
Growth is the main and important that is the part of the organisation in the market, it is
the function of interpreting the research of the market and the data of the client and to find out
the opportunities for the growth and expansion of the company also make some of the important
strategies by which the cafe can grow(Poleon and Thompson, 2022).
There are some of the major models which can assist in analysing how the business is working
and what are the alterations that can be made in the cafe.
Pestle analysis It is the analysing tool which is helpful to interpret the extrinsic factors to unify
the problems and the chances for the business of cafe and some of those factors are as follows:
 POLITICAL FACTORS: This factor is mainly concern with the political environment
wherein the company operates. It includes the government interference, political stability
and many others. It is about the modification in the functioning of the coffee shop sue to
the intervening of the government bodies and their judgements. The most critical political
factor for the little Portland cafe is the Brexit which refers to the crisis which were faced
in the market when England was declared as not a a part of European union, and this
issue also lead to the major problems in the productivity of the coffee in the cafeteria
sector(Chen, 2022).
 ECONOMIC FACTORS: It is concerned with the economic factors such as inflation
rate, employment rates, etc. There are some of the consequences in which the coffee rates

are getting affected and some of the rates that are fluctuating are exchange rates, inflation
rates and with the rise in inflation rates and income growth be the the constant and then
the need for the coffee in the marketplace will definitely rise as comparing with the
various cafes in London.
 SOCIAL FACTORS: It includes the factors such as consumer behaviour, taste and
preference of customers, cultural of the state where consumers are targeted and many
others. These are some factors which do rely on the behaviour of the customer like
income of the consumer, his study level ad so many more. Little Portland cafe involves
large part from the sales of the brewed coffee. But with the rising time, consumers are
more inclined towards choosing what they like and make the choices accordingly
(Paramaguru And et. al., 2022).
 TECHNOLOGICAL FACTORS: It is concerned with the technological advancement
in the state which the company can use. This is the factor which is viewing the operation
of the coffee shop and the interaction of the coffee company with the people who are
visiting the cafe on the daily basis and are preferring the coffee of little Portland cafe as
their favourite. This processing also involves some f the skills like marketing, production
techniques and online transaction dealings.
 LEGAL FACTORS: It is concerned with the legal environment of the state wherein the
company operates. It includes the laws and regulations to which the organization is
required to compile with. Some of the human actions are limited by some of the laws
ordered by the government body. So the cafe is not allowed to do its activities with full
plans as they need to make sure that they have some of the obligations like quotas,
resources, import and export. With the outgrowth of sugar tax in UK all the coffee shops
including Little Portland cafe need to avoid those taxes on the goods and services and do
save the monetary amount with them.
 ENVIRONMENTAL FACTORS: It includes the ecology and the environment which is
being affected by the activities of the business. It is the factor which means that there are
some of the changes and alteration in the weather conditions and people are also getting
some changes in their health condition and due to these changes they sometimes do not
prefer to go out and buy the coffee of the cafe and then the demand for the coffee

decreases and this cafe also concentrate on the carbon foot print in their whole value
chain system.
Porter's analysis: This is the business analysing model which assist in determining and
interpreting the competitive forces of the marketplace. This is used to identify the corporal
strategy and also called by the name of competitive strategy. This modal was publicized after the
Harvard business school by the professor Michael E. porter(Drake, Fabozzi and Fabozzi, 2022).
And the five factors of the porters are as follows:
 Threat of new entrant: It refers to the threat that new competitors offer to an industry's
established competitors. In terms of the cafe, there are high entrance costs to the coffee
industry. As a result, the business is unlikely to face significant risks from new entrants,
and it has a low market presence due to new shops entering the market with novel pricing
methods, new products, and enticing offers for clients(Raley And et. al., 2022).
 Bargaining power of suppliers: It is the impact that suppliers can have on businesses by
raising their pricing. This has a lot of force because the café is in a strong position to put
pressure on the business by employing various strategies such as lowering product
quality, raising prices, and charging a lot of money to switch raw materials. The cafe can
address the issue by improving supply chain management with diverse vendors from
various geographies(Navarro-Ligero and Valenzuela-Montes, 2022).
 Bargaining power of buyers: It refers to the pressure that customers might apply to
cafes in order to compel them to deliver better coffee and customer service. Buyers
frequently have high expectations. They aim to get the greatest deal possible by paying
the least amount of money feasible. This has a medium force because clients have
minimal switching costs and a variety of coffee options. Little Portland cafe needs to
increase client loyalty by providing unbeatable value and amenities.
 Threat of the substitute product: It is the accessibility of other coffee shops from which
clients can purchase coffee. The force is strong here since there are substitutes for the
coffee that Little Portland cafe provides to its customers, so people may easily move from
bold street cafe to another coffee establishment. To address this issue, they can cut the
price of coffee while maintaining the same quality, and customers will be more easily
drawn to them.

 Rivalry among the existing players: It is a metric for determining the level of
competition among current businesses. It has a solid market position due to fierce
competition, since competitors offer more appealing offerings, such as Starbucks, which
offers a wide choice of coffee in franchises and on online delivery platforms. This daring
street should also focus on its delivery service and provide a diverse choice of coffee and
other beverages in order to dissolve it(El-Sherif, 2022).
BCG matrix analysis: This modal is used to approach the current state of the value of the
company squad or commodity department; it allows the organisation to decide whether to keep,
sell, or invest more money in which coffee manufacturing team. Every aggregation has its own
set of characteristics, which are as follows:
 Dogs(or pets): if the company has a small market share and a slow rate of expansion
Because this corporation needs to get rid of that specific commodity, the return on
investment is low. Coffee and beverages are two items from the Little Portland cafe that
can be used to recoup investment funds. The low return on investment is due to the slow
rate of development, which results in low market share.
 Cash cows: Although the component has a substantial market share, it has a moderate
growth rate. These are well-known autumnal commodities with little room for
improvement in advance. Kit kat used to be the most popular candy on the market. Foxes
Cafe has also reaped some significant financial rewards.
 Stars: With a name like this, it's clear that stars see the business in a big picture, as
evidenced by the massive market share and fast growth rate. Coffee from the little
Portland can maintain its high market share targets indefinitely by focusing on ongoing
commodity manufacture, such as the users.
 Question marks: This explains the strong growth rate, yet it does not result in a
significant market share. They change quickly, but they also use a significant portion of
the cafe's resources. Some of the cafe's items, such as brownies, have struggled to
maintain market dominance as their directions have changed. Some commodities do not
reach an economically viable fix point(Fangqin, 2022).
1.2 Evaluate the opportunities for growth applying Ansoff growth vector matrix.
Ansoff matrix is a commodity and marketplace enhancement power system which is used
by the organizations to interpret and execute their plans for being the best in the market. There

are four major strategies that can be useful source to get expanded in the business and also
examine the jeopardy included. It was developed by the well known scientist H. Igor Ansoff and
it was publicized by Harvard review in 1957 it has assisted many manufacturers and
administrators to know the risks that are present in the expansion of the business. In this
respective report of Little Portland cafe the four conceptions of the Ansoff matrix are as follows:
 Market penetration: In this type of concept the cafe authority is gonna sell the
commodities with the new offerings an the totally present market and they are going to
make some of the creating deals and combo offers in the cafe so that the customers are
highly inclined towards visiting the cafe again and again. Also the cafe is promoting their
cafe by advertising and making collaborations on the online platforms which is helping
them to get good responses from the market.
 Market development: In this type of concept the cafe will make the new commodities
and supply them in the presently available market and it will try to grow their business
so that they can have the fluency in the business. The little Portland cafe have also
introduced some of the new schemes that are the betterment in the online business of the
cafe in some of the applications where they are going to sell their commodities online.
 Product development: It is the introduction of new commodity or the enhanced product
in the existing marketplace. The users can be external or internal within the organization.
The motive is to make sure that the advanced products can satisfy a real customer
demand and assist the cafe to complete the goals of the cafeteria. And the strategies of the
company is to make as much profits as they need to enrich their food quality and improve
the servicing skills of the company.
 Diversification: It is the process of making the new product and merchandising it in the
totally new market and it is a bit risky for the cafe as they are on the initial stage of the
expansion and they are also dealing with some of the issue after diversification as now
they are dealing in several sectors of food and beverages. And this has helped the
business to be the best in all the departments and they are also providing all the
commodities which are highly demanded by the customers in the marketplace(González-
García and et. al., 2022).

1.3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
Retained earnings, borrowed capital, and equity capital are the main sources of finance. Retained
earnings from business activities are used to distribute or spread out dividends to shareholders.
Businesses raise funds by taking out private bank loans. The sources of finance for businesses
are listed below:
 Government funding: It is a monetary reward given by a national, state, or municipal
government for a worthwhile enterprise. It's essentially a money transfer. The aliened is
not required to return the money, but is anticipated to be able to use the grant monies for
their stated purpose, which is usually to service a larger product. Because government
grants are paid for with tax dollars, they must adhere to strict guidelines and include
safeguards to ensure that the funds are spent properly. Having a government grant is
highly regarded, and it frequently draws the attention of other helpers or sources of
jurisdiction to an individual or business.
 Bank funding: It is the process of borrowing money from banks and using it to improve
and expand a business. For example, in the case of the little Portland cafe, they are using
bank money to improve their market work and increase their revenue. A large sum of
money can help the cafe venture run smoothly and continue with their cafe dealings and
transactions. These are open equities funds that invest solely in the banking industry;
banks are the major player in the financial services sector, and banking stocks make up a
large portion of these funds' portfolios.
 Own funds: These are funds that are raised via the individual's own capital and self-
saving, and they are distinct from other funds in that there is no commitment to repay
them within a specified time period. They are a reliable source of finances because the
cafe has no contractual obligations. It will be simple to obtain such funds because the
cafe business has no responsibility or pressure(Hao and Wang, 2022).
 Equity finance: It entails selling a firm ownership in exchange for a monetary
investment. Unlike a loan, this sort of financing does not require payback. Instead,
investors purchase stock in a company in order to profit from the firm's profits, either
through dividends or by eventually selling the stock they purchased. This is unlikely to
happen in this coffee endeavour since, as previously stated, it is a small-scaled coffee

franchise that sells some food and drinks, and there are no such shares that would attract
investors to invest in the cafe business.
 Stage payments: As the term implies, providing payments on stage makes it easier for
clients to complete a transaction while also improving the cafe's cash flow. When a
consumer wants to purchase a new item from the café, they usually go to their bank for a
loan or utilise their valuable financial reserves.
1.4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
There are some of the components of the business plans which clears the total business
plans and the strategies which help in the business to grow and expand and they are as follows:
Executive summary
This is the report that summarises all of the necessary plans. It should state the report's
aim, highlight the report's important points, and detail any findings, conclusions, or suggestions.
And the venture will give this report to the investors and others participating in the venture so
that they are aware of the venture's report and have no doubts about the company(Haverly,
2022).
Company description
It is a general overview of the company as well as the entrepreneur; when someone reads
about the coffee shop's description, the consumer should be completely attracted to the venture
and should have a clear picture of the venture and the entire operation of the coffee shop where
the consumer will go to get the commodity.
Product and services
It is entirely up to the venture to supply services and products at a specific time, and the
department's obligation is to provide the highest quality of goods to the client in order to ensure
the user's happiness. Products and services are tangible assets that are placed on the market for
the purpose of acquisition, attention, or consumption, whereas a service is an intangible thing
that results from the work of one or more people.
Market analysis
It is a report that assesses the market quantitatively and qualitatively. It assesses the size
of the market and the number of goods given by the company, as well as the consumers'
purchasing patterns, market rivalry, and the economic environment in terms of entry obstacles

and regulation. In the case of this coffee venture, market study is also necessary so that their
concepts and execution plans are obvious.
Strategy and implementation
It is the process of converting plans into actions in order to achieve a specific result. It's
primarily about the art of getting the job done. Every organization's success is dependent on its
ability to make choices and carry out critical activities swiftly, effectively, and consistently. It is
the procedure for putting plans and strategies into action(Herath And et. al., 2022).
Organization and management team
It is a type of process in which a manager, in collaboration with the organization's top
leader, is responsible for establishing plans and strategies and overseeing the organization's
business operations. The management team can get together at any time to talk about the
company or its operations. And, depending on the business style and team, it is entirely up to the
team to meet weekly or monthly.
Financial plan and projection
It is a financial look at a company's financial status, as well as a financial prediction or
estimate of future gains, revenue, and expenses incurred during business interactions and
transactions. There are some procedures to producing a financial projection for a firm that are
fundamentals that must be followed and are an important aspect of the business.
The financial requirements of the Little Portland cafe, which serves coffee and food from several
countries, are shown below:
Equipment’s = £ 2000.
Furniture = £ 1500.
Selling price per unit = £50.
Fixed cost = £ 1500.
Premises (will be acquired on rent)
Security deposit = £ 100.
Advance rent for 1 month = £ 100.
Estimated cost of sales = £10 per unit.
Variable cost = £3 per unit.

1.5 Assess exit or succession options for a small business explaining the benefits and drawback
of each option.
There are some of the plan for exiting the business and succession of business which
defines the advantages and disadvantages and they are discusses below:
 Continuing the legacy of the company: Some of the businesses and companies are still
running for the sake of continuing the family legacy and following the hierarchy of the
business(Li, Ma, Zheng and Xiao, 2022).
 Merge or become acquired by other business: There are some situations where a
venture wishes to join with another company and share losses and income, and this is
referred to as synergy. A merger occurs when one firm buys another company by
purchasing a specific amount of its stock. There is a process for shareholders to vote on
whether or not to merge the company.
 Declare bankruptcy: When a company or endeavor is unable to meet its financial
obligations to its creditors, it files for bankruptcy. A petition is filed in court for the same,
in which all of the venture's outstanding debts are computed and, if not paid in full, paid
out of the company's assets. This is an exit option in which the company becomes an
insolvent and is being declared bankrupt.
 Management and employee buyout: It is the transaction in which the management team
of a firm purchases the products and activities of the company they oversee. This method
of exit involves selling the business to the member of the company or any of the
stakeholder so that they can take the legacy of the business in the future.
 Liquidation of the business: There are times when a firm is at a crossroads in its
operations and is on the verge of shutting down due to losses and mounting debts in the
marketplace, which has a detrimental impact on the business as a whole. It is another
option of exit in which the company goes into liquidation and the liquidator is hired so
that the creditors of the company are being repaid.
 Selling a stake of the company to the partner or investor: If you are not the owner of
your company, you may be able to sell a portion of it to a business partner or another
investor (Kuo and Chen, 2022). This exit option involves the sale of the business to the
investor or partner so that they can take the business forward and the owner takes exit
from the firm.

Conclusion
In this report, it can be concluded that there are some key considerations for the
company's growth and opportunities, and that the Ansoff growth modal aids in the analysis of the
business, and that there are some potential funding sources that help the business expand and
diversify, as well as some limitations. There's also the creation of a growing business strategy
that contains financial data and strategic goals. Finally, the pros and cons of succession and exit
for a small firm are discussed, along with the benefits and drawbacks of each option.

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