Unit 42 - Planning for Growth: Analysis of Growth Opportunities, Funding Sources, and Business Plan

This report analyzes the growth opportunities and funding sources for Sunlight Cafe Limited, a small medium enterprise located in the UK. It includes an evaluation of the key considerations for growth opportunities, analytical framework for growth options, potential funding sources, and critical evaluation of funding sources. The report also covers strategic objectives and financial information involvement in the growth for the business plan, as well as a SWOT analysis and recommendations for the business.

Unit 42 – Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
The key consideration analysis for the growth opportunities measuring....................................3
Analytical framework for the growth options..............................................................................4
Specific pathways and the option were evaluated for the organization growth..........................5
LO 2.................................................................................................................................................5
Business potential funding sources and its benefits and the drawbacks......................................5
Justification for the adoption for the suitable funding and the Evaluation on the funding
potential sources...........................................................................................................................7
Potential funding source critical evaluation.................................................................................7
LO 3.................................................................................................................................................8
Strategic objectives and the financial information involvement in the growth for the business
plan...............................................................................................................................................8
LO 4.................................................................................................................................................8
Small business exit and succession plan and its advantages and disadvantages.........................8
Critical evaluation of the success and the exit plan of the business............................................9
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
There should be an effective planning in the organization process. Proper planning before
the commencement of the project helps the business owners in tracking the revenues and the
expense of business on that project. The growth in every organization depends on the proper
planning of the business. Sunlight Cafe Limited is the small medium enterprise located in UK.
It was incorporated on 28 January, 2021 (Jensen and Creinin, 2020).
The report will analyse the SMEs key considerations and the growth opportunities will be
evaluated. Further, the report will assess the different types of funding and the for the
organization. The report will study the different growth strategies of the Sunlight Cafe Limited.
Further, the report will develop the business plan and the business scaling communication.
Moreover, the report will analyse the various ways of succession and the exit options for the
business. The report will further include the drawbacks and the benefits of the succession and the
exit options. The report will provide recommendation and the justification for the business.
LO 1
The key consideration analysis for the growth opportunities measuring
Companies can generate good return by maintaining the competitive advantage. If the
SME firms position is below or above in the market then adapting the strategy will help the
company in generating better position in the industry. There are some elements:
Competitive advantage – To produce the goods and the service cheaper than its rival in the
market by the company is referred to as competitive advantage (Rahman, Manjang and Ilham,
2018). Compared to the rivals of the market the factor of competitive advantage generate more
profits and the sales. Following strategies Sunlight cafe can adapt are:
 To introduce the new product in the market SMEs can implement the innovation.
 To increase the satisfaction of the customers SME can implement the advance technology
to gain the value in the market.
 Doing the best in the operations of the business will help the organization in enhancing
the activities of operation (Dodds, Dimanche and Sadowski, 2018).
Competitive advantage can be explained through the Porter's generic strategy. The
strategies are:
Cost Leadership – In the industry Sunlight Cafe should focus on keeping lower price in the
industry. Other factors such as the scale of economies, raw material preferential access and the

proprietary technology must be included by the company. The price standards can be sent
accordingly by following the strategies (Dawes, 2018).
Differentiation – Along with some dimensions company can create a unique position in the
industry. To create the unique position in the market SME should fulfil the needs of the
customers and must increase the target customer.
Focus – Industry should focus on the several market segment. To gain the competitive advantage
business should focus on the competitors strategies. In the cost focus company focuses on the
segmented target for the cost advantage while in differentiate focus company focus on
differentiate target segment (Chintalapati, 2020).
Analytical framework for the growth options
To formulate the growth strategies there are two approaches. Igor Ansoff introduced the
matrix model. The strategy focuses on the companies existing products and the market and
provides the importance accordingly. Adapting the four potential market product it will help the
company to generate the profit from the existing product in the new market. The four different
growth strategies of Ansoff are:
Penetration of Market – The strategy focuses on the development of the existing product in the
current market segment. The entity share market can be enhanced by applying it. Through
implementing the market penetration most of the UK food business companies generate a lot of
profit (Dawes, 2018). In front of the customers it helps the organization to introduce the new
product in the existing market.
Development of Market – Targeting the existing market place helps the company in getting the
success. In the respective marketplace some countries seeks advantage in the competitive market.
The strategy can be effectively practised by the SME to gain the competitive advantage.
Development of Product – To achieve the growth in the market these strategy focuses on
introducing the new product in the existing market. The new product was launched in the market
to fulfil the needs of the customers.
Diversification – The diversification strategy focuses on introducing the new product in the new
market. Diversifying the product category will help the organization to boost the sales of the
business (Chintalapati, 2020).

Specific pathways and the option were evaluated for the organization growth
Market penetration – The strategy of market penetration is less risky as it focuses on the firm
capabilities and the existing resources. There will generate a growth for the SME by maintaining
the share market. There will be an opportunity for the business to generate the position in the
market compared to its competitor.
Development of the market – Throughout the geographical area and the extra market sections it
can develop the product in the market (Dawes, 2018). To develop the new product in the market
this strategy is the most appropriate and effective strategy. Expanding the new product in the
market is riskier for the companies as failing the new product will lead to loss the position in the
market.
Development of the product – To satisfy the customer this strategy is suitable for the company
to strengthen. The products can be enhanced through the increase of the firm's strength. To
increase the share market the strategy is the riskiest for the company.
Diversification – Both the development of market and product required in the strategy and it is
the riskiest strategy (Chintalapati, 2020). Diversification of the business helps in generating the
position in the market share and helps in reducing the level of risk.
LO 2
Business potential funding sources and its benefits and the drawbacks
The finances are categorized under the debt and the equity financial sources.
Organization can assess with various types of funding sources. Against the finance the equity
describes the interest of ownership in the offerings. Small businesses have fewer options of
access the funding compared to the big companies (Eniola, 2018). For the growth of the SME
business there are some available sources of funding:
Crowd Funding
Benefits -
 To raise the fund it is considered as the fastest way of raising the source of funds. It does
not require any upfront fees. When an individual shares the ideas of the business it will help the business to get the
feedback, it helps the business in improving the function (Lesakova, 2019).
Drawbacks -

 The concept of crowd funding can be stolen by the business if it was not protected under
the patent.
 To launch the project it requires the lot of research in the initial stage.
Bank Finance
Benefits -
 The business owners can take the loan for the lifetime against any assets. The loans are available on the term loan thus it does not require repaying on the demand
(Chick, 2018).
Drawbacks -
 If the loan was not paid timely it will be risky as the loan was taken on the assets.
 If the loans were paid before tenure than the business has to pay the interest to the banks.
Peer to Peer lending
Benefits -
 Compared to the other types of investments the source of funding help the business in
gaining higher returns. The rate of interest is lower in peer to peer lending compared to other source.
Drawbacks -
 The bank loan can be obtained by the borrower thus the P2P consists higher credit risk
(Lesakova, 2019).
 If the borrower fails to pay the amount of loan then the government will not provide any
protection to the lender.
Business angles
Benefits -
 The decision can be made quick and free for the investments in business angles. Interest or repayments were not involved in it.
Drawbacks -
 It is the longer way for the business to find the suitable business angles.
 Taking the loan taken from the business angles firms has to exclude the business shares
(Chick, 2018).

Justification for the adoption for the suitable funding and the Evaluation on the funding potential
sources
For the SME business like Sunlight Cafe the business angles and the crowd funding
investments are the best funding source.
Business Angles – Quick and free investment decision business can take through the business
angles. It also does not require any security deposits. There was an easy accessible of contacts
and the knowledge of the investors sector. Interest or the repayment does not require in the
business angles (Eniola, 2018).
Crowd Funding – To the network business can be promoted and it can be easily tracked by the
investors. Business can be improved through the feedback taken while sharing of ideas. It can
tend to increase the attention of the market by marketing the business on the online platforms.
Through sharing of the idea it will help the business to get the public reaction (Chick, 2018). The
reaction of the public will get to identify the business success.
Potential funding source critical evaluation
Bank Finance – To the lenders the business does not require to pay the profit percentage. Owner
only requires to pay the interest in the bank finance. Throughout the life it does not require to
pay any arrangement fees it only requires in the beginning. If the loan was not used by the person
then also it has to pay the interest on the loan thus it does considers as the flexible. The person
paying the loan amount before the tenure period then it has to pay the charges on it to the bank.
Peer to Peer Lending – The owners of the business generate higher return on the investments
compared to the other type of investments. As the credit source was lower, thus it is considered
as the easier source of finance.
Business Angles – This is considered as the cheapest kind of source of funding as the investment
decisions can be created quickly (Chick, 2018). The protection deposits does not require in this
funding source. It also does not require any repayment of loan. There is easy access of the
contacts and the sectoral knowledge of the investors.
Crowd Funding – Through the internet funds can be sourced for the project. People can
contribute the small amount of money which will help the SME. The internet was the major
dependence of crowd funding in the today's era (Eniola, 2018). The business reputation can be
decreased if the project was failed earlier. Thus, the concept can be stolen if the idea of raising
fund from the crowd is not protected.

LO 3
Strategic objectives and the financial information involvement in the growth for the business
plan
Executive Summary
Business plan was formulated in context of the Sunlight Cafe. The business concept was
analysed through the industry and the market performance (Buchan and et.al., 2019). With the
suitable operational plan the projection of the market and the financial plan was reflected.
Business description
Sunlight cafe limited is a business organization that aims to provide best brewed and raw
beverages to the customers. Business commencement of the company falls in the food and
beverage industry. Although, the firm is new in the field but it has managed to attain a
considerable amount of recognition in the market. Filter coffee catered by the cafe is their star
product which has played a major role in gaining a attractive amount of profit.
History of the company
The organization was established almost 1 year ago in on 28th of January 2021 in
Croydon, England. Since its establishment the cafe has been highly recognized by the customers
by its finely brewed beverages served along with the snacks. This reputation in the market helped
the firm toe stablish a stiff foot in the market and compete with other players.
Business concept
Concept of business commencement of sunlight cafe directs the firm towards
maintaining the quality of the beverages with the help of technological enhancement that to
achieve higher customer satisfaction.
Aim
Sunlight cafe limited has aimed to achieve higher position in the market by flourishing its
outlets in different parts of the country. This aim is depicted by the mission of the company to
become most preferred brand in the industry.
Objectives
Objective of the company is to enter every aspect of the beverage industry that means to
deal in raw beans, packed beverages etc. to become more diversified brand.
Market analysis
Porter's five forces

 Bargaining power of suppliers- suppliers experience low bargaining power in the
industry as the necessary raw materials can be availed easily from other suppliers. Bargaining power of customers- customers enjoy high bargaining power in the industry
as there is a wide range of options available to them that can provide same goods and
services. Existing competition- intense amount of competition is faced by the firm as there are so
many companies providing similar commodities at different prices. Both the small and
big players in the market give a tough competition to sunlight cafe limited. Threat of substitute goods- sunlight cafe limited have a low threat from substitute goods
as they don't provide equivalent amount of satisfaction in comparison to the offering of
the organization.
 Threat of new entrants- Trend shift towards the beverages has increased the threat of new
entrant in the industry which is very viable also because of the low operating cost and
high revenues.
S.W.O.T Strength- beverage is a product that is highly demanded in the market because the
consumers prefer to consume these drinks in a fancy place which can give a good
ambience. So, the ambience that is reflected by the cafes infrastructure and interior is
their biggest strength. Weakness- experience of sunlight cafe limited is comparatively lower which is counted in
one of major weaknesses of the company. Opportunity- providing free snacks with the minimum order value can be a great offer
which can attract more customers. The word of mouth advertisement can be one of the
outcomes of these offers. Threat- inflation in the prices of raw materials is a major concern for the firm as it
increases the variable cost that effects the prices offered to the customers.
Marketing plan
Marketing mix Product- the organization provides their customers with good quality of beverages and
snacks.

 Price- prices of the products and service are reasonable which neither too high nor too
low that ensures the attractiveness and profitability as well. Place- commodities can be availed in the established cafe outlets of the brand which have
a good infrastructure.
 Promotion- advertising through various channels that can help the firm to reach
customers at wider level. However, social media marketing can be one of the best options
for the firm to promote the business.
Business economics
Sunlight cafe limited is involved in the betterment of facilities that can provide good
experience to the customers which can benefit the business economies through higher sales
volume.
Operational plan
In this initial stage the company has focused majorly on development of loyal customer
base with reasonable prices. Hike in prices is the plan of organization ones the customer base of
the firm gets sound and secured.
Securing investments of business
Funding is one of the significant process in the business that provides a mobile support
for the business commencement. Various strategies can be formulated to avail and allot the funds
in accordance with the profit maximization. Accurate allocation of funds can give long term
benefits to the organization which depicts higher sustainability in the industry.
Capital funding
Capital required in this industry is comparatively lower which can be availed through
various sources. There are many options for sunlight to avail funds to allocate the resources that
can help the firm in successful business commencement. $40000 is the required capital funding
that can help in availing the resources and creating reserves for future.
Resource planning
The resource planning refers to the strategic management that can direct the alignment of
resources with the operational plans to achieve organizational goals. Proper resource planning
can help the company to provide effective outcomes that can lead to higher revenues.
Stakeholders

There are two types of stakeholders in sunlight cafe limited that are external and internal.
List of external stakeholders include government, competitors, customers and suppliers, on the
other hand, internal stakeholders include, employees and management.
Time frame
TIME FRAME
Activities Week 1 Week 2 Week 3 Week 4 Week 5
objectives
Aims
Capital
funding
Operational
plan
Resource
Planning
Porter's five
forces
Swot analysis
Marketing mix
Stakeholder
analysis
LO 4
Small business exit and succession plan and its advantages and disadvantages
There is an important role of the succession and the exit strategy for the small business.
Through the exit and the success plan investors can easily able to answer their queries. The
position of the market and the company position. Future business can also be controlled through
the process. Exit and success strategies are:

Initial Public Offering – The shares were offered to public and the institutional investors. It is
the best strategy for some small businesses (Wayland, 2019).
Benefits The approach is very profitable.
Drawbacks
 It consumes lot of time and cost.
 In the approach the capital amount was stuck until the new shareholder does not get.
Business Selling in Open Market – To the small business this strategy is the most popular
strategy for exit plan. The owners of the business sell the business at certain price in the market
and take away the money.
Benefits
 It is very quick and the attractive method for selling business (Flynn and Rutherford,
2018). It gives maximum return to the owners, if there is incorporated of goodwill and the
assets.
Drawbacks
 Due to the low image in the market business may not get expected money.
 This strategy is difficult for the low or the marginal business.
Liquidation – All the assets were sold in the strategy by the owner. To recover and sell the debts
from the market the strategy is considered as the best and the only option for the small business.
Benefits
 With the short time period business can be wind up (Wayland, 2019). This approach is very simple.
Drawbacks
 Owner of the business get low return on the investment.
 Selling of second hand assets of the business generate more assets.
Business Keeping in Family – The legacy of the business can be maintained as the business was
kept in the family. It also does not support the living of the individual (Buckman, Jones and
Buame, 2019).
Benefits There was a coordinated and the smooth business process.

Drawbacks
 To the clients the strategy was not accepted by the new management.
Critical evaluation of the success and the exit plan of the business
The important role for the SME are the success and the exit strategy plan. Through the
plan the investors can easily answer their questions and can also able to identify the business
position in the current market. Keeping business in family is the best exit or succession strategy
for the SME. Selling the business in the open market helps the business to get the expected
money form selling the business in the market (Flynn and Rutherford, 2018). The owner of the
family business must firstly find the right business value for the business selling. The owner sign
the contract with the new owner and sell the business to the owner after processing the payment.
To gain the competitive advantage and sell the business the above strategies are the most
appropriate for the small businesses.
CONCLUSION
It has been concluded from the above report that the planning is the primary step for
every organization to generate the position and the profit in the competitive market. The report
included the source of funding for the investment. Further, the report identified that Crowd
funding and business angles are the most suitable funding source for the Sunlight Cafe. The
report provided the benefits and the drawbacks of the source of funding for the business. Thus,
the report developed the business plan of the Sunlight Cafe including the PESTLE and the
SWOT analysis. Further, the report analysed the growth options for the business through the
Ansoff growth matrix. The report analysed that business can generated profit in the competitive
market through the focus, differentiation and the cost leadership. The report further provided the
justifications and the recommendations for the business to growth. Further, the report provided
the succession and the exit ways to the business. The report also identified the advantages and
the disadvantage of the ways of the exit and the succession plan.

REFERENCES
Books and Journals
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