Planning for Growth: Evaluating Opportunities and Funding Sources

This report discusses the key considerations for evaluating growth opportunities and the potential sources of funding available to businesses. It explores the benefits and drawbacks of each source and provides insights into designing a business plan for growth. The report also assesses exit or succession options for a small business. The case study focuses on The Black Cab Coffee, a small size cafe in the UK.

Unit 42
Planning for
growth

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context..........................................................................1
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix....................3
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context.................................4
Task 2...............................................................................................................................................4
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................4
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context...................................................................6
Task 3...............................................................................................................................................6
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.............................................................................................6
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives.....................................................................................................................................8
Task 4...............................................................................................................................................9
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.............................................................................................................9
M4 Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendation...............................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Planning is defined as process of thinking and getting new ideas in a organisation for the
purpose of attaining business goals. It is important for organisation to formulate the planning and
managing the activities of company that deliver best quality of products and services. If
organisation is having good planning and strategies then it will be an opportunity for
organization to complete the task in given time and attain the higher profitability. This involves
creation and maintenance of plan and other activities that develop the business which helps to
maintain the good performance (Ward, 2016). To understand about this The Black Cab Coffee
has been selected that is small size Cafe in UK, providing different products and services to
customers at different prices. The management of such organisation understand the needs and
wants of their customers then formulate planning to provide which helps to attain the business
goals and objectives. This report covers evaluation of growth opportunities, various methods
which uses by organisation to access funding, business plan that uses in scaling up a business,
various ways where small business owner can exit the business and implications of each option.
Task 1
Analyse key considerations for evaluating growth opportunities and justify these considerations
within an organisational context.
Growth is defined as crucial activity for organisation which uses by organisation to
develop their business and increase the profitability. The management of industry should
evaluate the demand of customers then formulate the planning which can help to complete the
task and maintain performance. The The Black Cab Coffee is a small size cafe that prepare
different flavour of coffee and manage the activities. This was converted in to mobile coffee
shop in 2013 and driven to Brick Lane Market where it is operating its business effectively. To
evaluate the growth opportunities of such organisation environment has been analysed that
supports to run a business (Thapa and Murayama, 2012).
PESTLE Analysis – This is a framework which uses by organization for the purpose of
running a business and managing the task effectively. This factor states how external factors
influences the businesses and its activities. The PESTLE analysis in context to The Black Cab
Coffee are as defined:

Political factor: This factor is related to government regulations that consider tax rates,
political stability, changes in trade regulations etc. which affected the business. After Brexit,
government of UK put some trade restrictions on business as no one is allowed to regulate their
business in European country. Therefore, this factor has affected the Black Cab Coffee
organisation as it not operating its business regularly (Valler, Phelps and Wood, 2012).
Economical factor: The involvement of economical factor is with economy, inflation,
interest rate, disposable income and unemployment rates that has wider impacts. In UK, people
are highly skilled and talented who are getting good job opportunities and formulating their
business effectively. This creates the growth opportunity for Black Cab Coffee cafe to establish
their business and run it properly as people are ready to spend money in getting different taste.
Social factor: When number of people are working collectively by knowing needs and
lifestyle of people then it become opportunity for organization to run their business. The
management of Black Cab Coffee enjoying this factor in developing the growth of business as
they understand the wants and make efforts to provide kind of taste that helps to complete task
and attain higher profitability.
Technological factor: This factor is related technology and innovation which is
important to consider while running a business. Black Cab Coffee Cafe is getting business
opportunities by applying this factor as it increases the sales and distributional channel by using
cabs at different location in UK that can help to grow the business and increase the
organisational profitability in challenging environment (Phelps, 2013).
Legal factor: This factor is related to laws and regulations which are important to run a
business and supports to grow their activities. Due to Pandemic or COVID -19 many businesses
has been affected where it become mandatory for organisation to follow social distancing and
proper sanitized place for customers along with business regulation that helps to run a business
and grow it effectively. Therefore, by following this factor Black Cab Coffee is operating their
business efficaciously.
Environmental factor: If all businesses are running in challenging environment then
there is need to focus on internal and external environment that supports to manage the activities.
In context to Black Cab Coffee, various environmental regulation such as reduction in carbon
effect, minimum wastages and reducing pollution following by organisational that helps to
operate and grow the business (Pothukuchi, 2015).

By using PESTLE analysis, Black Cab Coffee is developing their business and managing
the all activities in challenging environment. The management of chosen organisation follow all
regulations and make efforts to run their business by growing the opportunities.
BCG Matrix – This can be defined as growth matrix which is designed by management
for the purpose of attaining long term goals. This is important for organization to evaluate the
growth opportunities by reviewing its product portfolio to decide where to invest to develop the
products. If business are running effectively then it will be opportunity to grow and develop their
business. Black Cab Coffee is using BCG matrix that are as explained:
Cash Cows product: This type of product involves low growth and high market share by
investing the amount.
Dog products: This states the Low share and high growth that can help to
maintain the reposition in competitive market.
Question mark: This states high growth and low share in business environment so that it
can develop their business and manage the task effectively.
Star products: This is explained as products which are selling by organization having
higher growth and high market share which can help to grow a business and attain the higher
profitability.
Black Cab Coffee is recognised as question mark products as it is small size business
that is selling better taste of coffee which helps to grow the business in limited area but its
market share remains same that helps to develop a business.
Porter' Generic strategy: This can be defined as important strategy which uses by
organization to know the profitability by taking competitive advantages. Every organization
wants to grow their business and sustain in competitive environment. This model is uses by
Black Cab Coffee to analyse the environment and attain the competitive advantages. The
description of model are as defined:
Cost leadership: This strategy is related to setting the cost of products which can help to
attracts the large number of customers. Black Cab Coffee can use cost leadership approach for
the purpose of setting lower cost of their products and services which can help to increase the
number of customers and attain the higher -profits by becoming lower cost producer.
Differentiation: This strategy is related to differentiation of products in which
organization need to provide products and services with different quality as it can help to

encourage customers to buy products and maintain the higher profitability. By adopting this
strategy Black Cab Coffee can influence number of customers as it manufacture different taste
and flavour of coffee which can help to reach the targeted customers.
Focus: This strategy is related to cost and differentiation in which organization has to
focuses on cost and quality of products that can help to attain the competitive advantages. This
can be use by Black Cab Coffee to attain the competitive advantages by offering their best coffee
at lower cost that can help to manage the effective business.
From the above, cost focus strategy is adopted by Black Cab Coffee that helps to attracts
the large number of customers by delivering better taste at lower prices also provide higher
market share.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Every business and organization is seeking towards growth that is important to bring new
ideas and planning for the purpose of running a business. If all activities and functions are
properly managed then there are chances of growth and business development. The management
Black Cab Coffee Cafe uses Ansoff's growth matrix for the purpose of growing business
opportunities and running it efficaciously:
Market Penetration: The growth strategy in relation to growth is defined as existing
products and existing customers. In this Black Cab Coffee Cafe, management can use this
strategy by selling the existing products in existing market which can help to operate a business
and manage the all activities accurately. In this, organisation has to reduce the cost of their
products and services which are important for customers that attracts them and maintain the good
performance.
Market development: This strategy is related to developing a business by entering in to
market which is new that can help to increase the number of customers by adding new location.
In this, organisation has to select a area and location where it can establish their business and
manage the activities by operating a business successfully. The Black Cab Coffee Cafe can use
this strategy by selecting a new market and location where it can start their business and manage
the all functions which helps to complete the task and attain business goals.
Product development: This strategy is related to products and services which is
important for organisation to introduce new products and services in changing environment as it
helps to operate a business successfully. In case of adopting this strategy Black Cab Coffee Cafe

has to introduce the new products and services which can help to reach the targeted customers
and maintain the good performance (Todes, 2012).
Diversification: The strategy is related to product development and market development
which is important to consider while running a business effectively. The management of Black
Cab Coffee Cafe uses this strategy for developing and growing a business by introducing new
products in new market that can help to attracts the large number of customers (Kerzner and
Kerzner 2017).
From the above, Black Cab Coffee Cafe is adopting product development strategy
where it is planning to provide different fast food items, smoothies, and other items which can
help to manage the products and services accordingly and attain the higher productivity. The
organization is collaborating with this strategy which can help to provide the new taste and
flavour of products to customers which can help to maintain the higher performance and
profitability by increasing range of customers. The management can increase the sales and
profitability by introducing new products that helps to develop a business and maintain higher
brand image.
Conclusion
From the above LO it can be concluded that different strategies such as PESTLE, Porter;s
generic and BCG matrix uses to gain the business opportunities by comparing with others. It
provides understanding how Black Cab Coffee organization can manage the activities and attain
the competitive advantages. Moreover, Ansoff growth matrix uses by chosen organisation for the
purpose of developing business and delivering the higher profitability. For instance, by using
cost focus strategy it deliver their products at lower cost and manage the activities.
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context.
From the above frameworks PESTLE and Ansoff growth matrix it has been defined as
such model are uses to run a business by accepting challenges and knowing which factor might
be affect the business. Black Cab Coffee defines political, technological, social, legal and
economical factors supports to operate all activities and run a business effectively by developing
the performance. On the other side, Ansoff's growth matrix uses to grow and develop a business
by selecting a appropriate strategy which helps to manage the business by introducing new
products and services (Schetke, Haase and Kötter, 2012).

Task 2
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
Funds and finance matters a lot for organisation where management and directors are
responsible to arrange funds and increase the organisational productivity. If all planning and
strategies are not formulated regularly then it will be difficulty for organization to complete the
task and manage functions. Black Cab Coffee is small size cafe that wants to grow and expand
their business by using different source that are as explained:
Funding from personal savings: Personal saving is defined as most common type of
business funding which uses to run and operate a business continuously. When people have their
own assets and money then they can make plan to establish a business and increase the
organisational productivity.
Benefits Drawback
By using personal saving management and
owners can run their business and develop the
activities which can help to continue all
activities.
This might be challenging for chosen
organisation and business owner to use their
funds in running the functions and business
activities.
Bank loans: This means borrowing which uses to get funds for continuing and running
the business effectively. If all activities and functions are regulated properly then it become an
opportunity for organisation to run and maintain the higher performance. In context to Black Cab
Coffee cafe, management uses bank loan to get the funds from different financial institution that
can help in further operation (Haughton, Allmendinger and Oosterlynck, 2013).
Benefits Drawback
This provides the funds and borrowing which
can help to operate and regulate the business
effectively. The management can uses different
assets for mortgaging that helps to develop the
funds and money.
This create the higher risk for organisation as
they get loan for arranging funds by paying the
higher interest rate. Risk is associate with bank
loan as there is need to pay high interest
charges.

Angel Investors: This means people who are relatives and small size financial institution
provides the funds and and finance to customers and other people for the purpose of running and
operating a business effectively. This is easy for small size organisation to arrange the amount
from such institution if they are required small amount for the purpose of running and
developing their business.
Benefits Drawback
This relates to arranging the funds and money
from small institution that can be uses to run
and develop the business effectively in
challenging environment.
The drawback of angel investors is it providing
funds for small organisation as it offers short
term loan that can be challenging for
organisation to make repayment in less time.
Friends and family: A business organisation is having such option also that can be uses
to run and continue the business activities by operating and managing all activities. This is
important for organisation to arrange funds so they can get from family and friends that helps to
complete the task and expand the business in challenging environment.
Benefits Drawback
There is benefits for using this as no burden to
pay on time and no high rate of interest change
are levied fund raising.
This create the strained relationship, changing
power dynamic and implied limited legal
protection.
Justification
From the above Black Cab Coffee is using friends and family for raising the funds in
their business which is more flexible and dynamic option helps to attain the business goals. By
using this, management can operate functions and activities regularly and develop the business
activities effectively. This is effective source as there is no risk of paying any higher interest and
debts occurrence. The funds can be use to grow the business and increase the performance in
challenging environment so that each activity can be perform in effective manner.

M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context.
A business requires fund which should be arrange by organisation at the time of running
activities and managing the task. The organisation should analyse the need of funds then select
the best option which can help to operate a business regularly. Black Cab Coffee Cafe has
selected family and friends as a funding resource which can help to operate a business by
arranging the money.
Task 3
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Business plan can be defined as long term plan which is required to grow and increase the
business activities in different location so that high range of customers can be attracted and
develop the higher performance. In context to Black Cab Coffee, management has formulated
the effective plans for the purpose of growing their business and managing the task effectively.
Executive summary Black Cab Coffee is small size cafe that is providing delicious
taste and flavour of coffee to customers that helps to attracts
the large number of customers in London. Now organisation
wants to grow and expand its business by increasing the
product base as number of food items are also planning to
provides in their cab coffee.
Vision and mission The vision of Black Cab Coffee is to expand and grow their
coffee by increasing large number of customers.
The mission is to increase the product line by delivering
variety of fast food items and healthy food that are demanding
by customers while having coffee.
Objectives  To develop and grow the business activities up to 2022.
 To increase the profitability percentage by 60%.
 To attain the high range of customers by offering
variety of products and services up to 2022.

 To reach the urban and rural areas by increasing
number of cabs.
Situational analysis To know the current situation of Black Cab Coffee, SWOT
analysis are as defined:
Strength: The Cafe is providing variety of taste and flavour
of roasted coffee. The bean which they uses come from South
America and Africa. The management recruits skilled and
talented employees who complete make happy to customers
Weakness: The size of Cafe is small that unable to reach the
rural area and other place. Changes in needs and wants of
customers is another challenge for organisation (Pred, 2017).
Opportunities: It attracts large number of customers by
delivering better quality of coffee and beverages. Delivering
better design and structure of coffee that influence people.
Management have good knowledge and skills to manage the
task and operate a business.
Threats: Having many competitor in Cafe or food industry.
Changes in government regulations and trade rates. Changing
in environment.
Market strategy For expanding business Back Cab Coffee uses marketing mix
that is effective strategy:
Product: The new and taste of coffee is introducing by chosen
organization that can help to attracts the larger number of
customers.
Price: Low pricing strategy is adopted by Black Cab Coffee
that can help to provide satisfaction and attain the larger share.
Place: The products are launching at London and near by
areas that can help to manage a business effectively.
Promotion: T.V., newspapers, and social media is using by
chosen organisation that helps to increase customers and

profitability.
STP This means segmentation which uses to targeting the people
and developing a business:
Segmentation: The management of Black Cab Coffee cafe
focusing on geographic and behavioural segmentation where
they increases business at different location by understanding
needs and wants of customers.
Targeting: The management is targeting the 10 years to 50
years people who are interested to take coffee and different
taste
Positioning: By using all activities and operating functions
Black Cab Coffee is maintaining good and higher position in
food and beverage industry.
Financial information and
budgets
The management of chosen organisation prepare the financial
budget for expanding business by increasing the product line
that is:
Particulars Amount
Administration expenses £ 20000
Investment activities £ 30000
Financial activities £ 20000
Total £ 70000
Financial details/ Allocation
of budget
For completing the business plan 60% amount will be
collected from personal assets and 40% amount will be
collected from bank loan that will help to develop the
organizational performance. The administration expenses such
as buying raw material, go down expenses and distribution.
Investment activities such as promotional,and marketing
which is required to attracts the large number of people.
Moreover, financial activities are involves issuing shares,

buying assets and equipment that provides the long term
benefits.
Monitoring and controlling All activities and functions are recording and monitoring by
management of chosen cafe that can help to make the right
business decision and develop the higher profitability in the
changing environment. The management also control over all
actions that helps to make right decision and attain the
business goals (Moseley, 2013).
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives.
A business plan is main document for growing any business as it helps to provide a blue
print for running and developing a business in challenging environment. The management should
understand the needs and formulate planning which can help to operate a business and manage
the all functions effectively (Boserup, 2017).
Task 4
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.
While establishing and starting a business it is not important for organisation to attain the
higher range of customers and profitability. As struggle is pertaining in every business where is
need to take the risk and have passions to grow the business in challenging environment. A
business can failure due to arising internal and external factors in their business. Internal factors
are shareholder, management, and employees which can help to run the business. Such person
can bring change in their policies which can help to operate a business. The external factors are
Political, social, economical, technological, environmental and legal that are important to follow
and impossible to change.
Black Cab Coffee cafe is a small size organisation that was established for providing
different taste and flavour of coffee to customers that aims to grow and expand their business by

increasing product base. If a business is running then it has two option as exit and succession that
are as defined:
Management buy out: This is relation to existing the business by combining team and
resources to acquire a portion of business and manage by themselves. In this, management
become buyers by putting the assets of company to secure finance for the purchase (Gleeson,
Dodson and Spiller, 2012).
Pros Cons
 This provides immediate personal
liquidity for business owners and
shareholders.
 This also helps to continue the business
by operating by management.
 Herein, requirement of solid business
plan for repayment of debts.
 This create a burden for management to
handle the business on their
responsibilities.
Owner – manager ways : This is kind of exit strategy which can be use by organisation
if its business is facing the losses. In this, the owner of organization can transfer its business to
their managers for continuing their activities and performance as they have ideas and recognised
to business environment and activities.
Pros Cons
 This provides the all role,
responsibilities and decision making
power to management who continue the
business.
 This also helps to increase the business
activities as management are well
known from environment.
 If any debts were incurred then
management is liable to pay such debts.
 This create a burden for management to
handle all activities.
Initial Public offer: For arranging the funds and money in organisation IPO is defined as
another resources which uses by directors and management. The management issue shares in
public at a fixed prices which are getting by different customers by paying the amounts.

Therefore, by using this Black Cab Coffee cafe can raise funds which supports in succession
option (Batty and Marshall, 2012).
Pros Cons
 By using IPO, chosen organisation can
arrange the funds which they utilises in
growing and developing the business
effectively.
 The financial gain to be realized is
considered as potentially far.
 This create the problem for customers
as they does not receive cash or
liquidity in short period.
 This create the loss for customers and
organisation as they face the problem in
selling securities.
Transfer ownership to family: Selling the business and transferring the ownership to
family is simple and most straight forward option which can be use by business owner to
continue their business. In this, whole business is given to heirs in their family which can help to
manage and attain the business goals (Mitchelmore and Rowley 2013).
Pros Cons
 This approach is creating less
disruption in business that become
easy for organisation to run the
business.
 This can help to grow in challenging
environment as heir have knowledge
what their relative are doing and how
they are managing activities that
supports to run by themselves.
 Sometimes it looks like a burden
because heirs may have different interest
and getting this business can create the
problem in handling all activities and
functions which is difficult for
organisation to operate their business.
 Loss of profits and and share proportion
that can be create the low profitability.
Outside sale: This is another source of succession option in relation to a business which
can help to operate a business and increase the productivity. The company who is operating their
business can sale their business out side in case of it is facing loss situation. This can be uses by
chosen organisation while running their business and attain the goals (Mason, 2015).
Pros Cons

By using this option organisation can sale their
business outside that supports to continue all
activities and functions (Chapin, 2012).
This is another function and activity which can
be uses by chosen organisation for running
their business and reaching it succession point.
From the above option as succession and exit Management buy out is recommenced to
Black Cab Coffee cafe which can help to grow and continue the business activities. As
management have worked so they have knowledge and skills to handle the functions and
activities in relation to organisation and complete the task in certain time which helps to attain
the business goals.
M4 Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendation
In the business environment, there are many option of exit and succession such as
Management buy out, Initial Public offer, transfer ownership to family, and outside sale that can
help to exit the business. The selected organisation can select the MBO which is effective
method of selecting the business and running all activities effectively (Dimitriou, 2013).
CONCLUSION
From the above report it can be concluded that planning is necessary for all organization
as well as every place. It helps to achieve business objectives effectively by setting the plans and
implementing them within business industry. Company should analysis the macro environmental
factors that helps to grab the opportunities for expanding a business and control them. Porter's
generic strategy is also useful for companies that helps top gain competitive advantages by
optimizing resources, capabilities and core competencies. Business plan is a strategic structure
which is prepared by managers for the purpose of growth and securing investment. Appropriate
strategies are helpful for organization that helps to achieve business objectives.

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Online
About Black Cab Coffee. 2020. [Online]. Available through:
<https://www.theblackcabcoffeeco.com/>