Growth Opportunities and Funding Sources for Beacon Coffee

This document discusses the evaluation of growth opportunities and justification in an organizational context, along with potential sources of funding available to businesses and their benefits and drawbacks. It also includes a business plan for growth that includes financial information and strategic objectives for scaling up a business. The subject is business management and the document type is an assignment.

UNIT 42
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Table of Contents
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1Evaluation of growth opportunities and justification in organisational context......................1
P2 Evaluation of opportunities by applying Ansoff’s growth matrix..........................................2
LO2..................................................................................................................................................4
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................4
LO3..................................................................................................................................................6
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.............................................................................................6
LO4..................................................................................................................................................8
P5 Options in relation to exit and succession of business...........................................................8
REFERENCE................................................................................................................................10
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INTRODUCTION
For running a business and increasing performance planning is important that increases the
organisational performance and profitability. Planning is consider as process of thinking,
managing performance, activities and growing the business by attaining the business goals for
the purpose of increasing market share. This is important for all organisation to have a good
plans and strategies by making plans and developing activities which can help to deliver the best
quality of products and services (Stanciu, 2019). Small business are those which are starting and
running in small areas that helps to increase the organisational productivity. To understand about
this, Beacon coffee has been selected that is small café, providing coffee and refreshment to
customers as per their choice that increases business performance and deliver the best services.
This assignment is covering consideration point which affected the business, sources of funding
and business plans that can help to increase the working. Exit and succession option for business
that can help to maintain the performance.
LO1
P1Evaluation of growth opportunities and justification in organisational context
Small business are running in small areas which needed growth planning that can help to
increase the working and maintain the good performance. Growth means, a process of
developing physically, mentally and spiritually activities that can help to increase the
organisational productivity. Beacon coffee is small organisation that is selling the different
flavour of coffee to customers and increases the performance. This organisation is evaluating the
opportunities by applying the PESTLE analysis that are as defined:
PESTLE analysis – Such framework is related to business activities that are important for
maintaining the activities and organisational functions in challenging environment (Pennino,
2019). This can help to manage the performance and related activities by introducing new
policies and rules. The PESTLE analysis in relation to Beacon coffee organisation are as defined:
Political factor – The coffee organisation is heavily dependent upon tax regulation.
With globalization and internationalization, growing numbers of brewers are finding new
markets, while government has taken advantage of that fact by imposing high taxes on coffee
beans imports. Taking such factors into account helps Beacon coffee grow and develop in the
future.
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Economical factor – Factors such as exchange rates also affect the company's overall
revenues, particularly in the US. Dollar, guy. In addition , other factors, such as the recession, are
rising the buying power of consumers is reducing due to lack of unemployment. As a result ,
people would now choose to look for a cheaper option. Evaluation of such factors allows Beacon
coffee to take an intelligent choice on future growth and developing the business (Jin, Qu and
Bao, 2019).
Social factor – Customer expectations and desires are evolving faster forcing Beacon
coffee manager to deliberate a number of factors in order to growing and developing business
successfully. For example: Now-a-days not only youngsters enjoy drinking coffee but old ages
people are also enjoying the taste of coffee beans as well. So demand of coffee is growing
tremendously in changing environment.
Technological factor – For establishing and enhancing its supply chains, the food and
beverages industry is heavily dependent on advanced technology. Recent advances in technology
have opened up large markets for Beacon coffee to access the population of the world without
obstacle or barriers. c In fact, the organization can achieve a high competitive edge by using
digital technology that helps to grow the business continuously (Komninos and et. al., 2019).
Legal factor – The operation of the firm also gets impacted by legal considerations.
Beacon coffee manager must uphold by all laws and regulations in which company sells or sells
its products and services to expand operations in other emerging economies. In addition,
implementation with each nation's laws and regulations makes it much easier for Hook Norton
Brewery to conduct its operations effectively.
Environmental factor - This aspect hardly placed any influence on Beacon coffee 's
overall activities in expanding company operations. Yet the organization must follow these
business practices which do not affect the environment and which which improve humanity and
its members. Taking these factors into account allows firm to achieve strong brand image in the
industry (Alpermann and Zhan, 2019).
P2 Evaluation of opportunities by applying Ansoff’s growth matrix
Business are seeking towards growth and opportunities for increasing the profits that
increases brand image and high performance. For a business it is important to have good relation
with customers and employees as they buy products and employees are contributing towards
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activities which helps to maintain the high profitability. The Beacon coffee is using Ansoff
growth matrix that are as defined:
Market Penetration – The meaning of market penetration is selling of products and
services in specific market where existing goods are sold out by comparing to the total target
market that increases products and services. The Beacon coffee is focusing on this strategy by
proving existing product at different prices that can attracts customers and increase the
organisational performance by increasing sales. As customers are price sensitive who wants
products at low prices so this strategy can be opportunity for company to sale their product at
low prices (Ehler, Zaucha and Gee, 2019).
Product development – The meaning of product development is introducing g of new
products in market which can fill the customer’s demand and choices that can help to increase
the organisational productivity. The Beacon coffee has an option to grow their business by
introducing new products and services in challenging environment and maintain the high
profitability. In this strategy, company has to provide the products in existing market that create
competitive advantages.
Market development – This strategy is related to market development that helps to produce
the products and services in new market that increase number of customers by entering in to new
market. The Beacon coffee is introducing existing products in new market that will attracts the
customers and increase the business profitability by providing best quality and taste of beans.
The managers should be focuses on business activities and task so all activities can be perform
effectively that increase competitive advantages (O'Hanlon, 2019).
Diversification – This strategy is related to product development and market development
which can be highly risky for organisation to operate the business and increase the profitability.
in adopting this, requirement of high investment and resources which can help to attracts the
customers and increase the sales. The Beacon coffee have option to use this strategy by
providing new products in new market which can help to increase the productivity and brand
image in challenging environment (Bajaj and Singh, 2019).
The above the Beacon coffee is adopting the market development strategy for the purpose
of taking growth opportunities that can help to increase the number of customers by providing
products in new market. This can help to deal with difficulties and activities in relation to
challenging environment which maintain high productivity and profitability. The selected
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organisation is planning to enter in Europe and other country that will help to capture high
market share and brand image. This also helps to sustain the growth of business by selecting
geographical area and collecting the information that improves performance.
LO2
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
In challenging environment in relation to business, funds are important that helps to continue the
further activities and function which helps to increase organisational performance. The managers
who have financial knowledge and skills are managing the activities and growing business. in
context to Beacon coffee it introducing different sources of funding that are as defined:
Venture capital – This is another sources of funding which is form of private equity
finance for arranging the funds to start ups and new organisation that can help to increase the
business performance. In other words, it is defined as financial institution that provides the funds
and investment to organisations which helps to operate the business and increase the
performance (Stoll, 2019).
Benefits Drawback
 Venture capital is providing the
business opportunities by arranging the
capital funds.
 This is source of valuable guidance,
consultation and expertise that help to
operate the business and increase
profitability.
 Venture capital is helpful in building
network and connection that helps start
ops and small business tp grow.
 Dilution of ownership and control that
affected the decision making.
 Start ups cannot operate their business
in lack of venture capital that reduces
organisational productivity.
 This is longer process that take long
time to arrange the funds.
 Venture capital can be undervalued that
can be challenge for organisation.
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Crowdfunding: This involves funding a business by taking by getting a small amounts
of capital from large number of people with the help of internet (Scott, 2019). Beacon
coffee organisation has option to make uses of vast network as they have friends and members. -
Benefits Drawback
 It has potential of expanding a business
by collecting a pool of investors that
can help to raise money.
 By using different network and social
platform a small business can grow
effectively that can help to increase
productivity.
 It is time consuming process and is
required dedications to maintain
networks.
 There is no confidentiality due having
various network connections (Aps, and
et. al., 2019).
Angel Investors: They are consider as wealthy individuals who provides funds in
exchange for share of equity in their business. Such people providing funds to people and get a
share of equity that helps to increase productivity and profitability.
Benefits Drawback
 Such investors offer valuable advice
and guidance since they have
experience in business industry
(Kusyuniadi and Buchori, 2019) .
 This is consider as flexible business
term from whom organisation can get
funds.
 It is less risky than debt financing that
helps to provide finance.
 In this business angel investors can face
loss of complete control as a part
owner.
 It is not suitable for investments below
£10,000 or more than £500,000.
 Giving up a share of of business.
From the above Beacon coffee is using Angel investors that is suitable option to arranging
the funds for further activities and increase the business performance in challenging environment
and increase the business performance. This is less risky option which can be uses to perform all
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activities and functions in order to growing business and maintains the high profits by providing
good taste of coffee.
LO3
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
A business growth plan is a effective strategy which is required to decide the goals and
reaching near by them that can help to attain the business goals and objectives. For operating and
taking the growth of business a plan should be prepared by management that help to increase the
sales and profits by entering in to new market (Colbourne, 2019). The Beacon coffee is small
organisation that is selling the products and services to different customers by entering in to new
market. The Beacon coffee is preparing a business growth plan by involving strategic planning
that increases activities and performance.
Executive Summary – Beacon coffee is small company that is selling the coffee with
different taste, increasing number of customers and maintain the good performance. This
organisation wants to growth their business by introducing new products, services and process of
manufacturing that can attracts the customers and increase the organisational productivity. This
organisation is following the networking organisational structure by connecting with all people
and providing them information which helps to met with organisational objectives.
Vision and Mission – “To become the best coffee making organisation in international
market”.
Objectives –
 To increase the profitability share by 80%.
 To capture market share by 60% by delivering quality of coffee.
 To buy the raw material at lost cost that can help to increase the production.
 To accept the challenges and deliver the best quality of services.
STP analysis – This is an analysis which is important to use by all businesses for
identifying their segmentation, targeting and positioning which helps to run the business and
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increase profitability. By using this, Beacon coffee can attain their decided goals as it is highly
important and develop the good performance that are as defined:
Segmenting – In segmentation management are selecting the demographical areas that
involves age, needs, taste and quality of products that can attracts customers and increase the
performance (Lenski, Dokin and Aletdinova, 2019). The Beacon coffee is focusing on
geographic segmentation by selecting the suitable market and area which can help to increase the
organisational sales.
Targeting – This means for which organisation is introducing new products and
developing the market. Beacon coffee is targeting all ages of people who are interested to take
coffee.
Positioning – The chosen company is providing products for the purpose of maintaining
good and leading position in challenging environment that helps to operate the business
successfully.
Situation analysis –
Strategies –
Pricing strategy – As price is main factor that matters for all people and affected the
business positively or negatively. For organisation it is important to set the right prices of their
products and services that can be easily afford by customers and increase the organisational
sales. The Beacon coffee is adopting this strategy that helps to set the right prices of their
product which they are providing that increase customers and profitability.
Promotional strategy – Promotion is a strategy that should be uses by companies in order
to promote their products and enhance the organisational productivity. With the help of this
strategy, a company can increase the sale and increase the competition in environment. Beacon
coffee company uses news papers, magazine, celebrity advertisement, social media etc. for the
purpose of increasing sales and performance effectively.
Distribution strategy – This strategy is useful for companies who are selling the
products and services that increases performance. In context to Beacon coffee, brining
innovation and new technology in their distribution activity that helps to operate the business
sand increase the profitability (Nekhaychuk and et. al., 2019).
Marketing strategies – Beacon Coffee is using different marketing strategies for the
purpose of reach the customers and providing them information such as:
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Direct selling – the management of such organisation are selling directly coffee to
customers and attracts them by providing best taste.
Social media - Beacon coffee is using social media for the purpose of attracting and
providing information to people who are living outside so they can place order online.
Email marketing – This is uses by chosen organisation by sending message to their
potential customers and others which helps to increase the organisational sales.
Financial projection – This means information in relation to finance which are provided by
organisation in order to perform activities and increase the organisational performance. The
success of company is depends on financial activities that are important to run business. The
Beacon coffee is preparing the financial project that are determined below:
Cash Flow budget
Particulars Jan Feb Mar Apr May June July August September
Cash inflows
Investment 5000
Credit sales 2000 4500 3000 4500 1500 5500 4200 1000 2000
Total inflows 7000 4500 3000 4500 1500 5500 4200 1000 2000
Cash outflows
Fixed: Rent and elexrticity 3000 2500 1500 2000 1200 3500 800 200 300
Variable : Direct material 2500 350 200 3500 150 1200 300 400 500
Total outflows 5500 2850 1700 5500 1350 4700 1100 600 800
Net cash flow 1500 1650 1300 -1000 150 800 3100 400 1200
Opening balance 0 1500 3150 4450 3450 7050 14900 32900 66200
closing balance 1500 3150 4450 3450 3600 7850 18000 33300 67400
October November December Jan Feb Mar Apr May June July
800 1200 1500 3600 3000 3000 4500 1500 3500 4200
800 1200 1500 3600 3000 3000 4500 1500 3500 4200
100 600 300 2000 2500 1500 2000 1200 1500 800
100 100 400 300 300 200 300 150 500 300
200 700 700 2300 2800 1700 2300 1350 2000 1100
600 500 800 1300 200 1300 2200 150 1500 3100
133600 18300 18800 19600 20900 21100 22400 24600 24750 16250
134200 18800 19600 20900 21100 22400 24600 24750 26250 19350
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Evaluation and control – This is ending activity which is performing by management for
measuring and controlling the functions that helps to increase the performance. For evaluation,
KPI tool is uses by Beacon coffee that uses to measure the performance of employees and
provide them proper guidance and assistance that helps to run the complete the task and maintain
the good performance. This can help to control over activities and organisational performance
which helps to maintain the high profitability (Toan and Van Dong, 2020).
Business plan Judgement
Therefore, it has been described that business plans is a strategic structure which should
be prepare by all business concerns in order to achieve setting goals in pre decided budget. It
covers different stages that need to follow in order to perform operations properly. Such as
manager of Beacon coffee prepares business plans that helps to expand business and maintain
the profitability effectively.
It is assessed that budget is helpful for financial growth that helps to make planning and
implemented by managers in order to achieve goals. It is a good strategy for Beacon coffee to
prepare a budget work accordingly.
LO4
P5 Options in relation to exit and succession of business
Business is the collection of number of employees and activities that are managed by
management in order to run their business effectively. Small business are those business who are
running at small area with small amount of capital in order to earning for their lives. If such
business are going continuously and making profits then effective strategies are formulated by
managers that help to get high productivity and profitability. While running a business many
challenges are faced by company when it become necessary to take decision regarding exit or
success the business.
Liquidation – This means if organisation is not able to run a business more and getting
losses continuously then it has option to liquidate their business. In liquidation there is need to
sale all assets and payment of liabilities such as creditors, investors, outsiders, loan etc.
Advantages – Simple and short way to that can use by corporation to liquidate their
business. The benefits to any outstanding debt be written off. Investment fund can be used to
focus on new business (Tetiana and Sergii, 2020).
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Disadvantages – In liquidation, directors are having personal guarantees to pay
company's debt. The assets of business cannot be retained that is negative point for organisation.
It can loss productive employees and team.
Sell business in to open market – If a corporation is no longer able to operate a business
due to increasing competition and not focusing on customers demand then it can sell its business
in to open market. In open market, any one is allowed to get business and keep it continue.
Advantages: Sell in to open market helps to continue their business by third party which
helps to retain customers. With the help of this burden of one party can be reduce as they were
not able to operate it more and increases brand image by running through third party.
Disadvantages: To sell business openly there is require advertisement to give
information and for other activity. Therefore, it can be costly for enterprise to sell business by
informing people.
Merger and acquisition – This is relatively term used to merge and acquire a business
effectively. In this, two firms of similar size join forces to go forward as a individual corporation,
instead of remaining separately. Organisation has an option to merge and acquits with other
powerful organisation that can help to operate and run business effectively (Kreitler and et. al.,
2020).
Advantages – Adding more value of business by combining of two enterpises and
maintaining. This can help to continue the existing business in challenging environment and
maintain the business activities.
Disadvantages – In Merger and acquisition it can be difficult for organisation to take the
merger and acquisition that is difficult for company because if Beacon coffee has purchased
small business which is not running and full of debts then merge ring organisation become
legally bound to operate and affected the profitability.
From the above, Beacon coffee is using liquidation that can help to close the business in
case of it is not running properly. This can be help to pay of all debts and creditors by selling the
assets of organisation. This is important for organisation to manage the function and increase the
production by merge with other their brand image can be maintain effectively.
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CONCLUSION
From the above it can be concluded that Project agreements are essential to any
relationship. Therefore they will hold up undeniable presence in ads without much of a stretch in
this direction. Planning is needed at every place which can help to go step by step so all activities
and goals can be achieved in certain time period and maintain the good performance.
Organization executes various ways and techniques with the intention that it will grow in
business without much of a break, such as upper hand, growth, new products and
administrations, and many more. Business plan is referring as activity that uses to set the goals
and increase the performance in challenging environment by delivering better quality of products
and services.
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