Planning for Growth - Assignment Sample

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 analysis key considerations for the evaluation growth and opportunities ............................3
P2- Applying Ansoff’s growth vector matrix for the Evaluation of the opportunities for
growth.........................................................................................................................................5
LO2..................................................................................................................................................6
P3 Sources of funding and their advantages and disadvantages.................................................6
LO3..................................................................................................................................................8
P4 business plan for growth including financial information and strategic objectives for
scaling up a business...................................................................................................................8
LO4................................................................................................................................................10
P5 Exiting a small scale business and explaining benefits and drawbacks of each option:......10
REFERENCES..............................................................................................................................12

INTRODUCTION
Planning and growth is a business activity which enables business owner to plan as well
as track the organic growth to grow the revenue(Ward, J., 2016.) .Present report based the Small
Batch Coffee shop which is expanding rapidly and operating in many locations specially in the
united kingdom. Current report explains the overview of planning and growth of the organisation
related to the small enterprises. it basically focused on the learning and also applying techniques
for types identification for the growth opportunities and options for accomplish growth including
the collaboration. it lay emphasis the different types of the organisation funding and business
plan which includes financial information. It also focused on the benefits and drawbacks of the
small business options and considers how small business enterprise to attract investors. This will
provide the succession and appreciation in terms of the making informed choices .while pick out
to growth and have a proper understanding of potential risks and also involved rewards with the
growth(Lockwood, M., 2016.).
LO1
P1 analysis key considerations for the evaluation growth and opportunities
For achieving the sustainable competitive advantage Small Batch coffee shop uses
porters generic strategies given below.
Cost leadership- it includes to target the large demand market and offers the lowest or minimum
possible price. Here the company sells the product at the average industry prices to earn the
profit which is higher than their rivals and also below the average price to gain the market share.

Differentiation strategy- for the development of the product as well as services offers a unique
features and this allows the company to charge as premium price for the product .because of the
uniqueness of the product supplies increases the prices and this leads to pass along the costs to its
consumers who are unable to find the alternative of the product easily. it requires the good
research and the development also the innovation and the capacity to deliver the high quality
product(Bauwens, T.and et.al., 2016.).
Differentiation focus- here the company looking forward to find the cost advantage with the
unique features of the product ,this includes brand loyalty among the consumers. it is very
crucial to ensure about the product
Cost focus-cost focus is also the lower cost strategy which highlights on the narrow market .it
also offers the lowest prices. Here by understanding dynamics of the market and also the wishes
of the costumers ,a company can ensures the low cost of the product.
Small bench coffee shop can uses above generic strategies for the sustainable development of its
business( Kacperczyk, A. and Marx, M., 2016.).
Pestal analysis
Given below are the pestle analysis which monitors the external market and also have influence
on an organisation.
Political factors- it determines the extent to which the polices of the government which can
impact on an organisation. Such as policy and the stability such as trade and taxation policies. In
this coffee shop can expands its business globally, company needs to evaluate the political
stability of that place, as it is small business enterprise insufficient funds to tackle the instability
of that place.
Economic factors- it directly impacts on the economy and its profitability like interest rates,
employment and unemployment rates, foreign exchange rates(Chance, E.and et.al., 2018.). Small
batch coffee shop stared new tastes and options for the customers can expands its business
globally depends on the situation of the people in that country ,if all the peoples have good
purchasing power then it will beneficial for the company. They required luxury coffee shops .
Social factors-focused on the social environment and identify the needs and desires of the
customer. Like educational level, cultural trends, change in attitudes and also changes in the
lifestyles. Small batch coffee shop can affects by these factors like the different age group people

like different coffee also different culture like different coffees some like Swiss coffee,
Americans like espresso and some like Turkish people( Murphy, E., 2017.).
Technological factors-depends on the innovation and development which could affect the
market and industry. Through digital or mobile technology Small batch coffee shop can get the
customers' feedback through messages and also informs about the new offers and discount with
the help of emails as well. It also enables to research and development of the new product and
also makes the innovation in the existing product so it can attract the customer with the help of
the internet, it also helps the online order with the help of certain online apps.
Environmental factors-with the rise awareness of the CSR Small batch coffee shop hold the
consumers trust. They worry about the disasters of the environment in countries which produces
and manufactures coffee beans(Mason, C. and Botelho, T., 2018.).
Legal factors- Small batch coffee shop assure\s that it does not violate any rules and regulations
specially from the countries from where they buy raw material. it should always be always about
the caffeine production as well as consumption related policies.
P2- Applying Ansoff’s growth vector matrix for the Evaluation of the opportunities for growth.
It is a tool of a core business strategy for utilisation of the business globally or to analysis
the growth potential it is a decision making tool generally used by the management. .there were
two effectively approaches for developing strategy such as what is sold growth of product)and
also whom is to sold (growth of market) it delivers four strategic approaches(Ruan, Q.Z.and
et.al., 2018.).
Market penetration-
It is the starting point and have less risk to sell the products which are already existing to
the existing customers. Through penetration revenue is increased by the promotion of the product
and finding new customers for the existing products and also winning the heart of the customers
from competitors.
product development
This includes the existing product in a new market but also research who else want the
company product through the strategy called product development. Here the product as well as
the promotion of the product included. Success of the product depends on the organisation

effectively conduct the research as well their market needs and also the own internal capabilities
for the innovation (Mazza, L., 2017.).it lay emphasis on:
 research, development as well innovation
 Detailed overview of the needs of the customers.
Market development
It involves the existing products into the new markets through the market development
strategy. it is been difficult to realize the complexities of new market schemes like place with the
consideration of new market routes as well as promotion to new target segment(Bridge, J. and
Dodds, J.C., 2018).
Diversification
It is the final strategy. it is more risky strategy because the products are moved into the
market with little or without any experience .therefore it must have clear idea about the honest
assessment of the risk and for the right balance between the risk as well as reward diversification
strategy must be highly rewarding.
LO2
P3 Sources of funding and their advantages and disadvantages
There are different sources of finance available to business. They finance the business in its
initial stage and take a small part of their profits(Denton, G.and et.al., 2017.). Different countries
have different sources of finance. Some sources of finance and their advantages and
disadvantages are:
11 Loan from small business administration(SBA): SBA is a government organization which
is made to help the small businesses to grow and develop. The SBA does not lend the
money but it becomes the guarantor of the loans for small business. It develops
entrepreneur by educating them, developing their skills, giving them training etc. They
also give a edge to business by giving 23% of government contracts to small businesses.
Advantages: proper treatment of SBA loans enhances your chances of receiving a loan. It also
improves your relations with local lenders and borrowers(Pugalis, L.and et.al., 2015. ).
Disadvantages: The SBA checks the previous data of the companies and usually the previous
data is bad, so it's tough for a small business to acquire a loan from SBA.11 Angel Investors: These are those wealthy investors who finances a business in exchange
of some share of equity in the organization. The investment done is usually less than 1

million$. They work in groups and find deals which are beneficial from them. They are
more determined to get their investment back with profits in compare to
Friends&Family(Ward, J., 2016).
Advantages: They normally know the working of the company and can offer help and guidance
to the organization.
Disadvantages: They are rigid about the company and you can be sometime forced to give the
control of the company to them.11 Friends & Family: As an entrepreneur, you can convince your friends, family and
relatives for funding which is normally invested because of your personal relationship
with them and not seeing the business point of view. They act as a seed investment and
not a proper investment is done. They just do investment so that the company moves in a
stage where large funding can be done by Angles or VC.
Advantages: Funding is more easily and quickly obtained compare to other sources. There is
more flexibility in terms of repayment of loan(Bridge, J. and Dodds, J.C., 2018)
Disadvantages: There is some pressure to get successful which sometime shear the existing
relations. Friends & Family usually don't have anything other than capital. The frequent advice
of friends & family affects the working.11 Venture Capital: Venture Capital funding is like a dream of every small industry. They
are those investors who can invest a large sum of fund in a business in exchange for an
equity. But they invest only when the business is either acquired by another company or
goes public(Ruan, Q.Z.and et.al., 2018.). They are professional investors and they invest
only in those businesses which can give 6X return, so a business should be prepared for
it.
Advantages: They can invest a large sum of fund at once and can give professional assistance
and expertise to the business which can help it in growth and development in future. Funding by
VC increases credibility of the business.
Disadvantages: There is term called vulture capitalist which exist because of venture capitalist.
VC's are very serious about their investment, they can do anything to get return on their
investment and that means kicking you out also if needed. They also have control of business in
their hands and that means they can go in direction in which you don't agree.

11 Bank Financing: Bank loans are the most common used fiance used by most of the small
scale businesses. There are several types of financing available in banks and they charge
different rates of interest on them. Before going to the bank, it is general saying to know
the type of loan the company wants and the process of same
Advantages: There are different range of loans and different paying back criteria. The funding is
also fast and the main benefit is that the company don't have to give equity(Denton, G.and et.al.,
2017).
Disadvantages: They are difficult to obtain and the entrepreneur has to payback the money
irrespective of the success or failure of the company. There is also a long and tiring
documentation process.
LO3
P4 business plan for growth including financial information and strategic objectives for scaling
up a business.
Executive summary- business plan for growth including financial information gives the
overview of all the developing strategies of business .it is a process of step by step analysis of the
methods which helps in deciding the strategies and also the implementation .small batch coffee is
among the most trustable and small scale entity which implement more innovations in coffee. it
has most luxuries' coffee places(Mason, C. and Botelho, T., 2018).
Company information-it is located on the 17 Jubilee street ,Brighton ,England. net worth is
£90,000 in a year .manufactures different styles of coffee with great innovation.
Vision : to provide perfect as well as delicious coffee products with more innovation. it also
maintains the quality and standard of the coffee. group vision also earn the trust of the customers
as happy customers will come again and again if they are satisfied.
Mission: Mission of the company provides the services from all the age group people,such as
poor and rich also old and young generation.
SWOT analysis:
STRENGTHS:
 Brand image- The company has enhances its brand image as well as the reputation all
over the world(Chance, E.and et.al., 2018.).

 Marketing strategies-these strategies are successful for the growth as well development
of the company. Customer satisfaction- satisfied customers are increased day by day. Small Batch Coffee
shop is spending more number of resources so that it helps in the motivation of the
employees.
WEAKNESSES:
Profitability- the expected profitability below average of the Small Batch Coffee and its net
contribution is average
Financial planning- planning for the finance is not done by the company properly the company. it
does not use its cash in more efficient way. Here assets as well as liquidity ratio are not in
proportionate in right sense(Chance, E.and et.al., 2018).
Promotion activities-the company has the Opportunity to enhance the promotional activities and
also spread knowledge regarding to the small business entity such as coffee shop.
OPPORTUNITIES:
Flexible government- company can enter in the new market and also enter in the another
country's market. Government can helps in free trade as well as the chances to enter within the
new market.
Promotional activities-they have the opportunity to spread the knowledge to customer related to
the small business entity such as Small Batch Coffee. it can also increase promtional activity and
also create more customer in the market.
Transportation: it reduces the cost of transportation while travelling such as ship, flights etc. All
these reduces the income of the business.
THREATS
Consumer behaviour-during the changing habits of the consumers they deal with more online
rather than the visiting the main coffee shop ,sometimes which also decrease they important
terms regarding the company as well conditions of the goods of the coffee shop such as the
coffee beans issues.

Local agents-the local agents charge the customer high rates in the name of the company. this
reduces the image of the company in minds of the customers( Kacperczyk, A. and Marx, M.,
2016).
Financial planning
Month Jan Feb March April May June
sales 15000 16000 17000 18000 15000 20000
total cash inflow 15000 16000 17000 18000 15000 20000
cash outflow
rent 2000 2000 2000 2000 2000 2000
salaries 5000 5000 5500 5500 5500 5500
administration cost 1500 1500 1000 1000 1200 2000
total cost 8500 8500 8500 8500 8700 9500
Net profit 6500 7500 8500 9500 6300 10500
Monitoring and controlling- from the above table, managers can check the annual report of the
coffee shop. By analysing and evaluating the report it can check the performance of the company
and find the deviations and taking corrective actions.
LO4
P5 Exiting a small scale business and explaining benefits and drawbacks of each option:
There are different ways an entrepreneur can exit a company. He can either dissolve the business
or can give it to other member. Various ways of exiting are:
1. Legacy: There are many entrepreneurs who wants that their business should be in the
family for long and which means at the time of exit the business is transferred to a family
member or relative(Mazza, L., 2017). It feels good to see your name in the legacy, but in
practicality the person should know whether he can run the business or not. He should try
and find out the best person for running the business. There are various benefits of
keeping the legacy and some can be the loyal customers of the business, the professional
know how of company, the feeling of superiority etc. Some drawbacks are also like the
person running the business is not professional and capable to run the business. The

current owner is not interested in running the business but just because of his forefathers
he is continuing it.11 Mergers and acquisitions: When a company is not able to earn sufficient profits and are
incurring losses then it either merges with other company or is acquired. Merger means
when a company merges with another similar type company whose goals are same.
Acquisition means to sell your company to other company. It very much depend on the
person whom you merge or sell your company to, as it decides the flexibility of your
involvement in the company. Some benefits of this are, that you are allowed to fix the
price of your company whereas in IPO the value will be decided by the industry. Some
drawbacks are only a few companies actually merge or are purchased( Murphy, E.,
2017).11 Acquihire: This is a unique type of acquisition in which a company buys out the business
just for the sake of acquiring its talented or skilled employees. The legacy does not
continue in this case but it will help the employees. The benefits is that the employees
don't have to suffer due to the company dissolution. Drawback can be that the employee
may not want to work with the other company or other business.(Chance, E.and et.al.,
2018).11 Liquidate: This is the final stage of closure of the company. This is the stage of business
where all the assets of the company are sold and the liabilities are paid off. The remaining
amount or the difference between the two is kept by the owner as his share. The benefits
of liquidation are that the company is free of all the debts and it is relieved of all the
responsibilities.11 Bankruptcy: It is a situation when the owner is not able to pay the debt of the creditor.
The debtor files the petition in the bank about its bankruptcy. All the assets of the
company are measured and evaluated and they are used to pay off a portion of debt(Ruan,
Q.Z.and et.al., 2018).
conclusion
From the above study it can be summarized as planning as well as growth of an organisation. For
achieving growth and development this report focused on the porters generic strategies as well as
the Pestal analysis which determines the external factors such as political factors, economic
factors, social factors and also economical and legal factor. affecting the small batch coffee shop.

This report also focused on the ansoff matrix for the planning and growth which includes the
development of the product, marketing of the product also included. it also laid emphases on the
funding process advantages and disadvantage such as loans from the investors, riends and
families and also focused the small business benefits and drawbacks such as Bankruptcy,
Liquidate and Mergers and acquisitions.
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models.Clean Technologies and Environmental Policy.20(5). pp.1113-1118.
Denton, G.and et.al., 2017.Economic planning and policies in Britain, France and Germany.
Routledge.
Kacperczyk, A. and Marx, M., 2016. Revisiting the small-firm effect on entrepreneurship:
Evidence from firm dissolutions. Organization Science.27(4). pp.893-910.
Mason, C. and Botelho, T., 2018. Early Sources of Funding (2): Business Angels.
Mazza, L., 2017.Explorations in planning theory. Routledge.
Murphy, E., 2017. Sources of Funding for the Voluntary and Community Sector.
Pugalis, L.and et.al., 2015. Planning for Growth-The Role of Local Enterprise Partnerships in
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Ruan, Q.Z.and et.al., 2018. Identifying sources of funding that contribute to scholastic
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