Laynes Espresso: Business Plan for Growth and Expansion Strategies

This report provides a comprehensive analysis of Laynes Espresso's growth strategies. It begins by evaluating key considerations for business expansion, including technological advancements, globalization, and Porter's Generic Strategic Model. The report then applies the Ansoff Matrix to explore market penetration, product development, market development, and diversification strategies for Laynes Espresso. Furthermore, it examines various funding sources available to the company, such as own capital, bank loans, and crowdfunding, along with their respective advantages and disadvantages. The report also includes a business plan for growth, incorporating elements like executive summary, business concept, and vision/mission statements. Finally, it addresses succession options for small businesses, outlining their benefits and drawbacks. The report concludes with a summary of the findings and recommendations for Laynes Espresso's sustainable growth.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1. Explain key consideration for evaluation of growth opportunity.........................................3
P2 Ansoff Matrix Of Laynes Espresso........................................................................................4
P3 Source of Funding for Laynes Espresso................................................................................6
P4. Explain business Plan for Growth.........................................................................................7
P5 Succession options for small business and their benefits and drawbacks...........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Growth is the word used for the advancement of the business. This report explains the key
consideration for evaluating the growth of the business. Further this report explains the sources
which can help the business in getting the Fund and also shows the business plan for the growth
and which also includes the Financial information and in the end report explains about the
success option for the small business explaining the benefit and drawbacks.
MAIN BODY
P1. Explain key consideration for evaluation of growth opportunity
Growth Opportunity of Laynes Espresso
When it comes to start a new business, business opportunity plays a very important role in it.
Before starting Laynes Espresso, Company study the market, like what is in trending, or what is
the demand of the market, which age group persons are more in that market, and many more. By
analysing all this factors about the market, owner comes to the conclusion to start a cafe. Now
again after starting the business of cafe, company requires growth opportunities so that Laynes
Espresso can earn profit in good amount (Wu, 2015). So Laynes Espresso decided to follow
following methods for more opportunity:
Technological Advancement- Technological Advancement means company is boarding up the
growth through various technologies. Now in case of Laynes Espresso, they are using the
help of Facebook, twitter, and google, because of this social media, Laynes Espresso is
reaching more people at the same time, company is being able to express their services and
the products to the market. Even company has created its own blogging facility through
witch their customers are telling other people about their own experience in the cafe. Witch
is again very help full for the company for their image or reputation in the market.
Technological Advancement also includes using new and updated technology for the
company, like Laynes Espresso uses the latest tools and machineries for coffee making. And
in restaurant to company is using the latest technology in gas, or for making fries or for milk
shakes, and many more. Basically all the instruments and the tools with in the kitchen of
cafe and the restaurant they are using the latest tools, which helps to cook fast and easily
(Mason, 2015).
Globalization- After promoting through technology, Globalization is the major factor through
witch a business can growth. Basically Globalization means to spread the business at
3

different cities or country. By globalising, the company is entering into global market which
can leads to name and fame of the company which can again leads to the growth of the
company. People will recognise your firm, and that is a very positive point for the company.
Laynes Espresso is also looking forward to globalize its business by opening the same firm
in different city (Bridge and Dodds, 2018).
Porter's Generic Strategic Model-
Porter's Generic Strategic mainly focuses on 3 things i.e., Cost Leadership, Differentiation, focus
1. Cost Leadership- Company is already running the cafe successfully,but for the growth of
restaurant Laynes Espresso will follow the cost leadership method. Cost Leadership basically
means company has to lower their prices so that every age group or every class group of the
market can try the service or the product of the company. And then if the company gets positive
feedback then they increase the price slowly and accordingly.
2. Differentiation- Now again every here and there are restaurants then what new can Laynes
Espresso can do so that people will attract more to the company. This is what Differentiation
means, To introduce something new or different to the market. Restaurant is already being
introduce into the market but for better growth very soon Laynes Espresso is going to introduce
something different to the market.
3. Focus- focus basically point on narrow competitive scope within the company. Focus includes
both cost leadership and differentiation, present the product or the service in different way and
also at low cost(Kim, 2017).
Laynes Espresso follows the first strategic model to enter into the market. The company first
started the cafe with very low price, and when people gets attracted towards the cafe and getting
positive reviews from the customer then they increase the price accordingly (Denton, Forsyth
and MacLennan, 2017).
P2 Ansoff Matrix Of Laynes Espresso
Ansoff matrix is a marketing planning that helps a business determine its product and market
growth strategy. Ansoff matrix suggests that a business attempts to grow depend on whether it
markets new or existing market. The Ansoff growth matrix assists organization to help strategic
product market growth. Through matching product development and market position four
alternative growth strategies based on the Ansoff matrix as follows:
Market Penetration
4

Laynes espresso have a good range of products both exiting and new customers and
existing market. The laynes espresso seeks to achieve growth with existing products in their
current market segments, aiming to increase its market share. Their development of completely
new products could be an area of improvement. This is because their main product development
is only available in Leeds coffee shop and therefore the amount of revenue is restricted. Another
way in which market penetration can be increased is by coming up with various initiatives that
will encourage increased usage of the product (Levy, 2016).
Product development
Laynes espresso have a good product development team. They have innovative research
& development team. In product development growth strategy new product are introduced into
existing market. laynes espresso develop their new products. They produce Starbucks card,
ginger tea, ginger ice coffee in Leeds market. They provide better product in the market. Laynes
espresso targeted to existing customers by their new products. The new product gives more
revenue to laynes espresso.
Market development
Market development also known as market extension. In this strategy Laynes espresso
sells its existing products to new market. Laynes espresso have various approaches to market
development strategy. They include new geographical market, new distribution channels, new
product packaging and different pricing policies. Laynes espresso can expound by exporting
their products to other new countries. This way it may attract a different customer base in other
new countries and other hand different pricing policies the company could change its prices so
they attract a different customer base or so create a new market segment. So market development
is much risky strategy as compared to market penetration (Horowitz, 2017).
Diversification
Diversification tries to grow its market share by introducing new offering in new markets.
Diversification strategies requires both product and market development. Diversification being
the riskiest it can be argued that if an organisation diversifies its offering successfully into
multiple unrelated markets its overall risk portfolio is lowered. Laynes espresso to take a step
into diversification they need to have their facts right regarding what it expects to gain from the
strategy and have a clear assessment of the risks involved. Laynes espresso manufacture coffee's
they diversify into a fresh juice manufacture. This diversification is in the same industry which
5

is the food industry this called related diversification. In unrelated diversification there are
usually no previous industry relation or market experience. One can diversifies from a food
industry to a mechanical industry for instance.
So though diversification may be risky with an equal balance between risk and reward then the
strategy can be highly rewarding (Perveen and et.al., 2017).
P3 Source of Funding for Laynes Espresso
Laynes Espresso was started in 2011 by Dave Olejnik. Laynes Espresso start its business
from a small cafe by serving coffee, tea, drinks, snacks, etc. And now they are expanding their
business in restaurants too. And for expanding the business company needs funding. The method
through witch company can get funding are:
 Bank Loan
 Crowd funding
 Own capital
Own Capital- Before borrowing money from any other source, Laynes Espresso can use own to
invest wisely into the business for its growth. Some Business person saves their money for the
future business or for the future investment. In that case they don't need to borrow from other
sources.
Advantages
 As it is own capital hence, there is no need to worry about paying back to the vendors, or
to the finance company.
 Owner know how much more money he\she can invest, or how much money is available
for what use, so it can be use accordingly.
Disadvantages
 Hence, capital is owned by owner of Laynes Espresso, it can affect their personal life,
may be no enough money left for the personal use.
 Any loose in business can cost the owner's house or any of their property (Abolhasani
and et.al., 2016).
Bank Loan- Some business persons don't have their own capital to invest in the start-up, so they
need support, the very first thing that came into their mind is bank loan. For Bank loan, the
owner has to present the idea of the restaurant and if bank is satisfied with the idea or the
6

presentation then the bank approve the loan, and bank pass the loan at a particular interest rate
and for a particular time period.
Advantages
 For paying back loans there is a procedure, so there is fear of paying all of a sudden, there
is a particular time which is being set by discussing at the very first moment, so the
company has enough time to secure the amount.
 Laynes Espresso will not have to share its ownership with any third person (Zhou and
et.al., 2017).
Disadvantages
 If Laynes Espresso is in loss and didn't secure the amount which has to be pay to the
bank, then it leads to major loss, and sometimes it happens that company took loan by
putting their assets as guarantee.
 When it comes to long term loans, there are few terms and conditions which can leads to
more damage to the Laynes Espresso.
Crowd Funding-Besides taking huge amount from single person, Laynes Espresso can opt this
option to take small amount of money from different persons. That will overcome the burden of
the owner. In this funding source firm gathers amount from large individuals by using social
networking sites. This attracts many investors and raise interest of people in the business.
Advantages
 When Laynes Espresso borrows small amount of money from different person then it is
easier for company to pay back.
 Laynes Espresso will not have to pay any kind of upfront fees in order to get funds.
 This is beneficial source as company can get attention of buyers which may help in
generating more revenues in the future (Krueckeberg, 2018).
Disadvantages
 Too much sharing of data can lead to lose in business.
 Crowding of Laynes Espresso can be lead to greed in the vendor's eye, and can lead to
stealing the company's name, if Laynes Espresso is not patent.
P4. Explain business Plan for Growth
Executive summary
7

This Plans show the Mission and Vision of the Laynes Espresso to grow in the market, after that
this mission shows the Aim and objective organisation is having for the coming future and the
internal and external analysis of the business by the use of SWOT, PESTLE analysis and 7 p's
analysis and also covers the recommendation for the organisation.
Business Concept
Laynes Espresso is a coffee selling organisation based in the Leeds, organisation used to sell the
coffee in their own bag in the small committee near the country station it was opened in the 2011
and in the last past 8 year earned a good name now looking to diversify the business activity by
covering more market area in the local market in the UK.
Vision and Mission
Vision and Mission
The main mission of the organisation is to lead the coffee industry by the leader in the domestic
market first and then in the globe market. Laynes Espresso has the visions to serve the one cup at
a time but that cup should have the best quality of coffee and milk so that customer is able to
remember the name of the company forever (Ward, 2016).
Aim and Objective
The main Aim of the organisation is to improve the sells of the business by 20 percent in the
coming year.
Company is Aiming to open more store of the company in the other cities of the country.
Company is Aiming to increase the production of the company by 30 percent in the coming
years.
Porter's 5 Factor
Threat of new entrant: These is the big factor which will affect the Laynes Espresso as many
new organisation is looking to enter into the market so Laynes has to be flexible about the policy
so that they can handle the competition.
Threats of substitute: This is the factor which will not affect the organisation that much as
increase in production is the main aim of the organisation and will able to serve the organisation.
Bargaining Power of the customer: This is the factor which has to be looked by the
organisation as there will be a good competition so they need to be flexible in price to attract the
customer.
8

Bargaining Power of supply: This is the factor which will not affect the organisation as they are
looking to improve production so they will order more raw material which will eventually help
them in getting discount.
Competition: This is the factor which will affect the organisation as there are many big firms in
the market like Starbucks.
Market Research
SWOT
Originality of the taste is the big strength of the organisation as it has able to gain the name in the
local Leeds market but when it comes on weakness the firm financial position as compare to the
other competitor in the market is very bad and the lack of expertise worker is also a big weakness
of the organisation, but as the market is still growing it is good opportunity for the business to
diversify the business but at the same time the competition from the big firm in the market is the
big threat for the business (Fernández And et.al., 2016).
PESTLE
Entering into the wider market will see many factor affecting the organisation as Legal, Political,
Technological are the factor which will be affecting the organisation as it will prove difficult for
the organisation to adapt the changes and there will be many legal and political factor which will
be affecting the business due to government policy but at the same time the environmental
friendly technique used by the organisation for the production and the culture of the organisation
will help them to defend the Social, Environmental and Economic Factor.
Budget
Company will require allotting a minimum of 50000 pounds as a budget.
Rent 7500
Warehouse 5000
Raw Material 15000
Utility Bills 5000
Employee Wages 10000
Marketing Expenses 7500
Total 50000
9

Recommendation
Company is recommend that company should have a good amount of financial resources before
entering into new market otherwise it will force company profit making outlet to have a more
than capability performance.
P5 Succession options for small business and their benefits and drawbacks
A business exit strategy is a planning to terminate a situation which brings maximise
profit and minimize damage. A business strategy exit, involves the endgame which further helps
in decision making further aids success (Levy, 2016). It provides benchmark and guidance to a
business. The succession options for a Laynes espresso are as follows:
Liquidation:
Liquidation means winding up or dissolution, is the process of bringing a business to an
end and selling it's all assets. This leads to close of shop. In liquidation a company inventory is
sold to generate cash once all assets are sold company is shut down.
Benefits:
 Dissolving debts and it leads to a new beginning, if Laynes espresso director fulfils his
duties while trading insolvent then director wont be liable for debts so responsibilities get
over and further he will get a chance to be director of new company.
 End of legal action, this means that entering liquidation will bring an end to the prospect
of legal action and will further help to Laynes espresso to focus their efforts elsewhere.
Creditors cannot initiate court proceeding against the company as Laynes espresso owner
have personal liability for company debt .
Drawback:
 The brand name and goodwill of the company will be lost and once the liquidation takes
place then Laynes espresso will lose productive and experienced employees.
 Liquidation results in complete dissolution of company, so all efforts which laynes
espresso made for the company will be vanished (Abolhasani and et.al., 2016).
Passing a business to a successor:
This includes the selling of business to other person or successor, where successor can be
a family member or manager of Laynes Espresso.
10

Benefits
 It reduces third party involvement so it creates the opportunity to maintain involvement
and influence in business. And this creates chances of growth of business.
 Financial security: if Laynes espresso properly structure the transfer of business then they
can receive amount of income they need after their exit even the business value does-not
justify that amount. Using taxes strategy the company can minimize the income tax on transfer of ownership
to family member (Zhou and et.al., 2017).
Drawback:
 It becomes difficult to train the successor as they do not bear same skills and sometimes
conflicts may arise at work or in family due to decision making or less involvement.
Selling of assets:
Selling of assets means the sale of entire valuable things of Laynes espresso. The purpose
of an asset sale is to increases cash flow and reduces bad debt risk.
Benefits
 The biggest advantage for Laynes espresso is asset sale brings quick money so they can
use that money for other purpose such as down payment of anything or investing in
property, etc.
 A rapid disposal of assets leads to an auction which brings numerous potential.
Drawbacks:
 Tax consequence:if Laynes espresso buys an asset and later on sale that asset then it
subjects to capital gain tax which means increase in the value of investment so it is a loss
for Laynes espresso.
 If laynes espresso sale an asset then they will not receive full market value and less pay is
done for that asset (Krueckeberg, 2018).
CONCLUSION
After going through above report it has been summarised that organisation is doing well in the
current market but need to have a good resource to enter into the other market. It has also been
summarised that there are many considerations which are need to be taken before evaluating the
growth opportunity and also there are many sources of fund for the organisation.
11

REFERENCES
Books and Journals
Abolhasani, S. and et.al., 2016. Simulating urban growth under planning policies through parcel-
based cellular automata (ParCA) model. International Journal of Geographical
Information Science.30(11). pp.2276-2301.
Baschat, A.A., 2018. Planning management and delivery of the growth-restricted fetus. Best
Practice & Research Clinical Obstetrics & Gynaecology.49. pp.53-65.
Bridge, J. and Dodds, J.C., 2018. Planning and the Growth of the Firm. Routledge.
Denton, G., Forsyth, M. and MacLennan, M., 2017. Economic planning and policies in Britain,
France and Germany. Routledge.
Fernández, M.B. And et.al., 2016. Collaborative planning capacities in distribution centers.
In Theory, Methodology, Tools and Applications for Modeling and Simulation of Complex
Systems(pp. 622-632). Springer, Singapore.
Horowitz, I., 2017. City politics and planning. Routledge.
Kim, K.J., 2017. Inner-city growth management problem in Seoul: residential rebuilding boom
and planning response. In Towards Sustainable Cities.(pp. 267-284). Routledge.
Krueckeberg, D.A., 2018. Introduction to planning history in the United States. Routledge.
Levy, J.M., 2016. Contemporary urban planning. Taylor & Francis.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Perveen, S. and et.al., 2017. Evaluating transport externalities of urban growth: a critical review
of scenario-based planning methods. International Journal of Environmental Science and
Technology.14(3). pp.663-678.
Piro, R., 2016. Parallel patterns of shrinking cities and urban growth: Spatial planning for
sustainable development of city regions and rural areas. Routledge.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Wu, F., 2015. Planning for growth: Urban and regional planning in China. Routledge.
Wynn, M., 2017. Routledge Revivals: Planning and Urban Growth in Southern Europe (1984).
Routledge.
Zhou, Y. and et.al., 2017. A novel path planning algorithm based on plant growth
mechanism. Soft Computing.21(2). pp.435-445.
12