Planning for Growth

Planning for Growth

TABLE OF CONTENTS
INTRODUCTION...............................................................................................................3
TASK 1...............................................................................................................................3
Key considerations for evaluating growth opportunities................................................3
TASK 2...............................................................................................................................7
Potential sources of funding:..........................................................................................7
TASK 3 ..............................................................................................................................9
Potential sources of funding available to businesses ...................................................9
TASK 1.............................................................................................................................12
Exit option for small Business......................................................................................12
CONCLUSION.................................................................................................................14
REFERENCES................................................................................................................15

INTRODUCTION
Small medium-sized enterprises are companies which establish their new
business in form of legally independent company with not more than 500 employees.
These emerging new companies are the backbone of an economy, primarily
responsible for economic growth, job creation and prosperity (Al-Tit A, Omri and
Euchi,2019).Their capacity for inducting innovation and flexibility in a fast changing
business environment makes them crucial for success. In this report, the key
considerations taken by a SME company for evaluating growth and opportunities in
economy is explained. Prufrock cafe has been taken as the SME from UK serving wide
food and beverage options to the customers with friendly atmosphere. In this report key
analytical frameworks to demonstrate the understanding of competitive advantage,
pathway taken for growth and the risk mitigation steps taken by company are explained.
The potential sources of funding available to business, with the benefits and drawbacks
of each source and when to utilize different funds. This report explains an elaborative
business plan for Prufrock cafe explaining the market analysis, competitive market
analysis and the various operational strategies company can take in future for mitigating
the risks. This report also explains various exiting strategies for SME, which one is
appropriate for the company and also appropriate course of actions company can adopt
with justification towards business goals are explained.
TASK 1
Key considerations for evaluating growth opportunities
It is important to considerate on various key areas for small medium-sized
companies while evaluating the growth opportunities for establishing a firm position in
the market place which can be understood as.
Market size: One of the most important factor in evaluating a business opportunity is
analysing the market size, the number of competitors in same industry. It involves
determining the target customers, estimating the growth in the market share. Prufrock
cafe need to work on the market size for justifying the consideration as an important tool
to evaluate the growth opportunities.

Management skill sets: Management skill sets can be understood as having good
communication skills and organizational awareness which enables the company to grow
by providing quality services in comparison to other competitors. SME by increasing the
investments in management can enhance the management skill sets of employees and
diversify the services and products. Prufrock cafe should aim to build the management
skill sets for enhancing the services and attain growth in market(Al‐Jinini, Dahiyat and
Bontis, 2019.)
Passion and Persistence: Small sized enterprise owners need to have the passion
and persistence in talent to attract the potential target customers in economy. It is an
important consideration which can assist companies to evaluate the business growth
opportunities and to take further course of actions to grow on a large scale. Prufrock
cafe owners need to work with passion and persistence to justify this consideration for
evaluating the growth potentialities.
Ability to manage the cash flow :Small sized enterprise need to keep the cash flow of
companies in a positive state with large amount of cash reserves to use in crisis
situations and keep the productivity levels in accordance with the profit margins. It is an
important consideration for evaluating the growth opportunities in the market-share.
Prufrock cafe needs to focus on the ability to keep the cash flow in a good shape for
justifying the consideration to evaluate growth opportunities.
Pestle analysis : SME need to analyse various external factors for increasing their
market share which are political, economical, social, technological, legal and
environmental factors. Prufrock cafe needs to analyse the external factors properly, how
they affect the working structure. It is an important considerate to evaluate the growth
opportunities as by working on the management strategies to mitigate the external
factors, company will be able to achieve enhanced performance standards.
Porter 5 forces : This model identifies the five competitive forces that shape the market
growth of industry which are analysing the competition in the industry, potential of new
entrants in the industry, power of supplies, power of customers and threats of new
entrants. It is an important considerate for Prufrock cafe to evaluate the growth
opportunities as it enables management to formulate strategies for growing in the
competitive market and mitigate the risks related to it.

Ansoff growth vector matrix:
Ansoff growth vector matrix can be understood as a strategic planning tool which
can be applied by management to look at opportunities to grow the revenue margins for
a business by developing new products and services in market. It studies the key-points
a business can work on for increasing the market share, customer segments and
geographical locations.
Market penetration: It involves developing new marketing strategies to penetrate in the
existing market share by encouraging people to choose from the existing products and
services (Botelho, Harrison and Mason, 2019).
Benefits- Enables the growth of existing products in company with customers with
increased satisfaction.
Drawbacks – Limits expansion
Market development: It involves developing new strategies to expand the market
share by introducing various online channels to promote about company products and
services.
Benefits- Helps to increase the target potential customers segments by providing new
preferences with the changing dynamic culture.
Drawbacks- Expensive tool for growth in company.
Product development- It involves enhancing the product quality by introducing
different variants of the same product, improving the packaging techniques and
increasing the customer satisfaction.
Benefits- Helps the company to bring new products in market with focus on new
prferences and large number availability.
Drawbacks- Expensive and needs strategical planning to bring new products in
company.
Diversification -It involves the strategies to diversify the market by increasing the
technological advances to achieve new profit margins by introducing new market areas
with different customers segments (Cumming and Zhang,2019).
Benefits- Enables the company to diversify in products and serrvices.
Drawbacks-High risk
Analytical frameworks for growth and competitive advantage

Global reach with unique competencies: It can be understood as the unique
competency in a company with innovative capabilities to serve the customers. With
strong unique competency a company paves out the potentialities for long term stability
in market as it becomes hard to replicate the skills and knowledge by other competitors.
Prufrock cafe by developing unique competence in the products and services of cafes
gain a competitive advantage and expand the cafes to international markets.
Benefits-It will enable company to global market and increase the market spread.
Drawbacks- Needs large capital funds to expand.
Expansion through acquisitions : Company can go for expansion strategies through
Acquisitions with similar cafes in market to expand their market reach through strategic
planning. It involves the key strategies taken by management to increase the profit
margins and enhance productivity in delivering customer satisfied products to grow in
the market share.
Benefits- Cafe can increase in the market spread with acquisitions.
Drawbacks- Elaborative procedure with high risk.
Cost efficiency through mergers : It can be understood as company can go for
mergers through similar cafes and bistros and it can achieve the cost and differentiation
advantage by introducing new range of products on lower costs with larger variety of
services and improved quality.
Benefits-It leads to cost efficiency and increased profit margins
Drawbacks- High rsik and complicated procedures
Differentiation leadership: It aims the companies to target much larger level of
customers with competitive advantage in way of higher quality services and attractive
price ranges to differentiate it from other companies in the same industry.
Benefits -Premium quality service and enhancement in effective marketing tool.
Drawbacks- High capital investment required.
Pathways for growth:
Diversification through partnerships and expanding with dynamic business descions :
 Small medium-sized company need to expand and diversify their presence in the
market-share by expanding large scale marketing about the products and

services. Prufrock cafe through diversification increase its working arenas which
can include various services other than cafes.
 Dynamic business skills help the company to work in a competitive market where
emerging new companies create tough competitive culture and customer
preferences are ever-changing.
 Expanding the market share globally by increasing number of cafes
internationally and analysing new segments of target customers will assist the
company to enable pathway for growth. Prufrock cafe by expanding its presence
through partnerships with various other cafes will enable company to cater large
customer segments market and enhance the productivity levels.
 Diversification and expansion through partnerships has high risk factor involved
as it involves the company to diversify the functions on large level. It can mitigate
the financial investment risks by analysing the funds needed and sources of it.
Proper planning and strategic step by management can help company to mitigate
the risks.
TASK 2
Potential sources of funding:
The potential sources of funding for small business are as follows:
Angel investors: They are individuals who provide financial capital investment funds
for start-ups and small sized company with lucrative ideas of business and services.
Angel investors are individuals with high net worth who look for opportunities to invest in
new projects and help the start-ups to fund for their initial stage funding.
Benefits- Easy source of funding where investment decisions are to be taken quickly.
Drawbacks – They look up-to decision powers in company which can lead t9o
interference in future (Popal , 2019).
Venture capital funds: Venture capitalists are investors look for entrepreneurial talents
by providing finance and business skills in order to maintain long term capital gains by
exploiting business opportunities.
Benefits -Valuable expertise and guidance by the venture capitalist as they have the
experience in building and expanding the start-ups.

DrawbackS- It involves long and complicated process for venture capitalists and a long
time to decide.
Debt financing: It is a source of funding where company raises capital expenditure and
the working capital by selling bonds to financial institutions or individual investors.
Benefits-It gives company complete control over the business as one need not answer
any outsiders.
Drawbacks-Business suffering from low cash flow may find it difficult to repay the loans.
Crowd funding : It can be understood as the practise of funding a project or venture by
raising capitals through internet by promoting on online platforms. Crowd funding is a
fast and efficient way to finance a business or project by proper marketing the company
goals and ideas.
Benefits-attractive way to promote about the business and how it aims to serve the
customers.
Drawbacks- Needs large level strategic planning to implement.
Appropriate source of funding with justification
From the above sources of funding available for the company, It can use Angel
investors. This is one of the best source of funding options available for the company as
it this business is looking for expansion and these investors are willing to invest in high
performing companies. Another sources available for the company is crowd funding, as
it is the easiest way for collecting or raising funds for the company. Company can also
use another option which is debt financing as company can have control over this
funding source
Evaluation of potential sources based on organization needs:
Crowd funding source - Prufrock cafe can use combination sources of funding
which are appropriate ways according to the various organization needs it needs to
focus on. The company aims to cater to a large level of promotion and advertising about
the cafes with the large variety of products it offers to customers (Ramona and
Alexandra, 2019).Crowd funding is an effective source of funding as it enables the
company to introduce perspective loyal customers by sharing the ideas and customer
goals to public on a large level. The business owners by crowd funding have the ability

to engage the crowd in company's services and allow pre-selling of products. Prufrock
cafe by adopting the crowd funding strategy promote about its cafes, services and
products to large audience with the help of internet. It will enable company to share
about the business goals and attract the customers through proper marketing.
Angel investors - Profruck cafe needs funds from potentially rich investors who
look for investing in companies with enhanced performance levels and companies
whose growth looks stable. Angel investors also contribute in training the employees by
enabling large level of capital into company flow, which gives great opportunities for
company to increase the skill sets and work ethics in management teams (Taghizadeh-
Hesary 2019). It is one of the best source of funding which also justifies the company
goals and ensure company a long term stability in industry.
TASK 3
Potential sources of funding available to businesses
Financial sources is needed by every organisation for establishment or
expansion of business so it is responsibility of financial manager to find appropriate
source of finance and ensure their effective utilastion utilization in business for
achievement of objectives.
Angle investors: These individuals are those who have high net worth or sound
financial condition are interested in providing finance to small scale industry for a share
of equity in the business.
Benefits: Investors provide valuable advice to businesses as they have experience and
knowledge of industry thus, help in effective performing operation of business.
Drawback: The owner losses its control over business to some extend.
Crowdfunding: By using internet, the business acquire fund from large number of
people in small amount and aims to attract large number of investors.
Benefit: It provides better option of fund-raising, reduce risk and refined ideas of the
company thus help in growth and success of business.
Drawback: It involves lot of time and effort of the company to acquire funds from
this source.
Business Plan
Executive Summary: This plan discussed about how a company can expand in UK

markets which involved a goal and SMART objectives for the plan. For this company
conducted a market analysis and developed a strategy for business operations and
acquiring a proper source of funding.
Goals: Company goals is to increase its market share and profitability within the
markets of UK.
Smart objectives:
Specific: It is the objective of Prufrock cafe to expand its business within the markets of
UK in order to increase its markets share.
Measurable: Success of this plan can be measured if company is able to expand within
the markets of UK and is also able to gain higher profits.
Attainable: This objective can be easily attainable by developing proper marketing
strategy for generating awareness which can help in meeting the objective of the
company.
Realistic: This objective is quite realistic as there is a huge opportunity for the company
available in the market.
Time bound: This objective can be achieved within 1 year.
Company description: Prufrock café offers large café and large café school in
Clerkenwell. This company has also become a huge resource of coffee education and
serves finest coffee to its customers.
Products: Company is coming up with its new flavoured coffee in the market and which
will be offered at its restaurants.
Market Analysis:
Industrial outlook: Restaurant industry of UK is quite profitable for this business as
this industry have seen a exponential growth in recent years. So, current position of
industry is suitable for the growth of the company.
Target market: Target market for the company is the people of all age groups.
Competitive analysis: There various competitors available in the market for the
company like Kaffine, Colonna & Small’s.
Marketing and sales strategy: Prufrock café can make use of social media marketing
in order to promote its products. Also, products will be sold at its retail shops.
Organisation and management: In order to expand its business company should

adopt hierarchical organisational structure. As there will easy follow of direction of
command in the company.
Daily operations: Each and every products will sold at its stores in the market and
products will sold on the basis of flow of customers in the restaurant.
Financial History and funding:
Prufrock café has been financially stable company and has been able to
generate huge amount of revenue from its business. But in order to expand in the
markets company needs to look for appropriate source of funding which are as:
Angle investors: Prufrock cafe can use angle investors in raising of funds to utilize
experience and knowledge of investors in order to get competition advantage in the
market. It is effective source of finance as it involve less risk as compared to other
loans and effectively arrange sufficient fund for the business. Thus, valuable advice of
experts help in survival and growth of the business.
Crowd funding: Prufrock cafe can raise its finance through crowd funding as it act as
effective marketing tool thus promote help in increasing company sales and
profitability. It facilitates crowdsourcing of brainstorming by raising fund through large
number of people in short time and also help in getting new ideas from number of
people that may promote growth and success of the company. It involves greater risk
as compared to other method of raising fund chances of fraud, lower quality and
security issue for crowd funding. Prufrock cafe can reduce risk by taking small amount
of capital from selected number of candidates.
Financial Plan and Projections: Company needs to gather a huge amount of funds
for expansion in the market. So, company should be able to make appropriate use of
its funds for business expansion and extra funds should be used for future
improvements and developments.
Section B
TASK 1
Exit option for small Business
It is important for the business to plan exit strategies in advance as outsider want
their money invested in their business. So it is crucial for any business to plan its exit

strategies to have control over business in future circumstances (Mole, North and
Baldock, 2017). Various option for exit of business are as follows:
Liquidation: It is the final stage where the business plan to close down its operation by
selling it's all asset and paying the amount to creditors and shareholders of the
company. It is mostly seen in case of small scale business as they want to pay off their
debts and close its operation.
Benefit: It is one of the easiest and simplest way for complete closure of business
operation.
Drawbacks: It adversely impacts on reputation and relationship with clients, customers
and employee, at the same time return on investment is also low.
Acquisition or Merge: It means the company has planned either to merger with some
another company that has similar objectives. It is one of the most effective process for
exit of business as benefit to both company by complementary each other in terms of
skills, resources.
Benefit: Effectively negotiation
Drawbacks: It is expensive and time-consuming method.
Management or employee buyout: Individuals working in the company are interested
to purchase the company as they are well aware about various function and activities
performed by the company. Thus, the owner can preserve corporate culture of the
business by transferring ownership to management or employees of the company.
Benefit: It helps in increasing loyalty and satisfaction of employee and motivate them to
work effectively for achievement of organisational goals.
Drawback: It may result in reduction of potential clients as they are not ready to accept
new changes in management.
Selling of business in open market: In this strategy the owner planned to sale its
business at certain specific price to its customers in the market.
Benefit: Attract large number of buyers easily and quickly.
Drawback: Ascertaining actual value of business may be difficult which result in lower
value of business in the market.
On the other hand small business can also exit by liquidation that means by selling all
its asset and by paying debt to creditors, shareholders close down its operations.

Whereas, it can also sell its business to manager or employee of the company who are
interested in buying the company. It helps in maintaining loyalty and increases customer
satisfaction thus help in achievement of organizational goals. Selling business in open
market is also another method of exit strategy as it help in easy attraction of large
customers to purchase company at specified price. By merging with another company,
both company enjoy each others assets, benefit thus, able to effectively achieve
objectives of business. On the contrary Acquisition is the another process in which a
company purchases other business in order to expand its business quickly and to get
competitive advantage in the market.
From the above analysis, it is recommendation that company if the company
wants to exit it business it can sell its business in open market to attract large number of
customers. It is also able to get maximum price of company asset by selling company in
open market. Purfrock cafe can also transfer its business to its family member to
maintain its legacy thus, provide living to successor generation. It can also end it
operation by merging with another company thus gaining benefited to both organization
in its growth and success of its business.
There are various exit options available for the company one is merging where
company decides to merge with other similar company but on the other hand another
best exit option available for the company is employee buyout. This is the strategy
where company owners decide to sell the company to employees. Out of these two
exits strategies company should adopt employee buyout as this can be beneficial for the
company as it can improve the performance of the employees in organisation and also
increase their engagement. This will result high level of performance of the company in
the future.
CONCLUSION
From the above report, it can be concluded that small scale business should
consider various opportunities for growth, associated risk and the way to mitigate risk. It
can also be concluded that different sources of finance should be evaluated and
analysis in order to get effective source of finance thus reducing cost and increasing
profitability of the company. It also helps in finding suitable sources of financial in
establishment or expansion of business. Business plan helps formulation of various

strategies to achieve objectives of the company successfully. This report has explained
various exit strategies of business from the market and appropriate exit process suitable
for business.
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