American Food Store: Business Plan for Growth and Funding

This report examines the growth strategies for American Food Store, a small online grocery store. It begins by evaluating growth opportunities using a PESTLE analysis and the Ansoff growth vector matrix, focusing on product development through the introduction of organic food. The report then explores various funding sources, including personal savings, angel investors, bank loans, and government grants, recommending a combination of bank loans and personal savings. A business plan is outlined, including vision, mission, and SMART objectives, with a focus on expanding the organic grocery range and leveraging digital marketing. The plan aims to increase profits through competitive marketing and enhanced customer reach. The report also discusses potential risks associated with each growth option and the importance of careful financial planning. Finally, it critically evaluates the chosen funding sources, highlighting their advantages and disadvantages.

Planning for growth

INTRODUCTION
In the recent time, businesses are focused upon their growth and expansion methods that
helps them to improve the overall performance of the company. For that, effective planning
should be done that helps to meet the defined aim and objectives. The chosen firm for this study
is American Food Store which is one of the small grocery store deal online and offer range of
products to their customer at minimum rates. The study will evaluate the key consideration for
evaluating growth opportunities and by using Ansoff growth vector matrix, study will evaluate
the opportunities. Further, it determine different sources of funding that business can use to
expand its business and then design a business plan in order to meet the strategic objectives.
Lastly, it identify the ways through which business may take exit and succession.
TASK 1

Planning for growth
Presenting the key consideration for evaluating growth, opportunities
In order to evaluate the growth, different key consideration should be used by applying Pestle
framework. Like
Political factor: Growth of the company is depend upon the political situation of the company and that
is why, it is essential for the business to determine the same. Due to Covid-19, entire business
especially retail firm is affected adversely, so companies should consider the competitive advantage
and come up with new and innovative products (Emmaru, 2021).
Economic factor: The economic stability support business to evaluate numerous growth options.
Therefore, it is necessary for the American food store to consider the economic fluctuation like,
inflation may affect the price of products and decrease the spending power of customers as well.
Social factor: Perception and views of people changes as per the market need updated. That is why, it
become difficult for the businesses to consider the changing need and meet the defined aim as well
(Chen, Hung and Ma, 2020). For that, American food store may also revive back by offering
innovative products like organic food, expand business with new product in new market.
Technological factor: With the emerging digital era, it is necessary for the company to comply with
new technologies. As American Food Store is already offering online products that assist to increase
the customer base and enhance the overall performance in positive manner. This in turn also assists to
increase the competitive advantage and grab attention of customers.
Presenting the option for growth using framework
By using Ansoff growth vector matrix, it has been analyzed that American Food Store should consider Product
development as a growth opportunity. Under this, company may offer organic food products because it is the
basic need of all the people within UK due to Pandemic. Also, in London there are limited organic stores
available and that is why, considering this as a growth opportunity will be beneficial for the business and
improve the brand image as well (Mazzarol and Reboud, 2020). Moreover, it has been also analyzed by key
considerations that the political and economic situation of UK is not appropriate and that is why, there is a need
to proceed with the chosen growth option among all which is not more risky and assist business to improve the
competitive advantage as well.
Describing the risk for each option
Applying the Ansoff growth vector matrix, it has been analyzed that there are different risk associated with each
option which need to be consider before making any valid decision. Such that under market penetration,
company might face a risk of stable sales performance because if innovative products are not offered then
customers do not invest upon such item. Further, under market development, company face a risk of not
evaluating external factor that causes adverse impact upon the business performance (Robinson and et.al., 2020).
Legal factor: It is necessary to adhere with defined laws and
legislation while expanding a business at new phase. In this,
employment law, consumer protection act and data privacy act must
be strictly followed that helps to meet the defined aim.
Environment factor: Business should comply with sustainability act
and that is why, it is necessary for the business to make steps that
helps to protect the environment from any harmful gases like use of
plastic etc
Evaluating the opportunities for growth by using Ansoff growth vector matrix
By using Ansoff growth vector matrix, American Food Store will evaluate the growth opportunities and this in
turn also causes positive impact upon the brand performance. Such that:
Market penetration: It is all about offering existing product within current market in order to enhance the sales
of a business (Salvador and et.al., 2020). With the help of this strategy, company makes competition intense and
as a result it grows its business along with increase market share.
Market development: In this, firm target new market with its current products or service. Through this,
company is able to sustain the brand image at international market. Also, for small business, this strategy helps
in expansion from the current market to another where products may easily compete.
Product development: With the help of present growth opportunity, company is able to introduce new product
for the expansion in its existing market. Through this, entity is able to increase the customer base and also may
easily enhance the market share through its new offerings (Klein, Schneider and Spieth, 2021).
Diversification: It is one of the most risky strategy in which company has to offer new products within new
market. It is generally used by large organization because they have strong competencies in order to maintain a
strong market share and take a risk in market. Sometimes, it helps a business to grow at further level of success,
whereas sometime decline its overall performance as well.
Further, risk associated with product development is
changing need of customer might decrease the sales of new
offering at particular time and causes opposite impact. Also,
diversification requires enough capital and human resource
which is not possible for small business enterprise

Presenting the appropriate source of funding for company
There are different sources off funding available for the American Food store which helps a
business for its growth. Some of them are as mentioned below:
Personal saving: It is one of the simplest ways of funding that helps in the long term
commitment for the invested project. Along with this, if an owner of American Food Store has enough
personal saving then they are ready to take risk (Loredana, 2017).
Advantages: It is easy to access and allow individual to retain full ownership that provide 100% future
profit. It also offer much more control as compared to other finance options.
Disadvantages: If the business will be failed then individual might lose personal possessions. It may
decrease the amount saved by people during a time of an emergency.
Angel investor: They are those people who invested their amount directly to small business
and also shared their experience in order to help business for their growth. In return they require
ownership of a business in which they have invested.
Pros: the chances of risk is decreases by using such type of source of funding, also individual do not
have to pay in return as of bank loans (10 pros and cons of Angel Investors, 2019). There is minimal
amount of paperwork that helps to save time. Along with this, individual may use the experience and
Pros: the chances of risk is decreases by using such type of source
of funding, also individual do not have to pay in return as of bank
loans (10 pros and cons of Angel Investors, 2019). There is minimal
amount of paperwork that helps to save time. Along with this,
individual may use the experience and contact people to increase the
sales.
Cons: The company’s growth might not increases as expected.
Also, funding can be slow and all the terms and condition are
negotiated that affect the ownership of individuals.
Bank loans: One of the commonly used sources for small business and a good idea that
assists to get the required loan easily (Bessière, Stéphany and Wirtz, 2020). Moreover, it is
also helps the individual to repay the amount and also track the record with an excellent
credit.
Benefits: it helps to keep control of a firm and also business may repay the amount in
installments. Along with this, it is also analyzed that interest is tax deductible and that is
why, company may increase its ownership.
Drawback: Due to high interest rates, company did not uses such form of sources of
funding. Moreover, it will be difficult for the individual to repay the amount if the sales of a
company is decreases.
Government grants and subsidies: Now a days, government also provide funds to the
small business and also develop different subsidies that helps business to improve their
overall performance. For that different criteria should be matched that helps to provide the
grants and run a business effectively.
Pros: Government grants is related to free money and that is why, business may uses the
money for their own purpose. It is accessible by all kind of people and there is no pressure
Pros: Government grants is related to free money and that is why,
business may uses the money for their own purpose. It is accessible by
all kind of people and there is no pressure to repay the amount because
it is free of cost.
Cons: Government did not provide grants to all kind of people because
they have to provide specific proposal that must be approved from
grant (Mallinguh and Zoltan, 2020). Also, government agencies who
provide loan have as specific and strict criteria which needs to be
fulfilled before applying for a loan
Presenting the appropriate source of funding for American food store
Among all, it is suggested to use bank loan and personal saving by American Food Store
because it helps a business to improve the overall performance and minimize the chances of decline in
its sales. Through such source of funding, quoted firm is easily retail its full ownership and this in turn
causes positive impact upon the sales and overall performance. Such that through personal saving,
owner invest maximum amount whereas from bank it took small amount of loan which can be repay
within minimum installation period (Gasparin and et.al., 2021). This in turn causes positive impact
upon the business performance.
Critically evaluate the sources of funding with justified argument
It has been examined that American Food Store uses personal saving as a first source of
funding which helps a business to enhance its sales. However, it has been critically argued that if the
sales of organic products will nit increases then it becomes difficult for the company to use the amount
in any future emergency. On the other side, bank loan is the second source of funding which is also
used by the company that helps a business to invest within new products. Whereas, it is also argued
that due to change in the bank interest, company’s financial performance got affected. That is why,
American Food Store must select the funding option by considering its positive as well as negative
aspects.

TASK 2
Business plan
The business plan will be based on bringing new range of products in organic grocery
range within stores , where American Food Store aims to bring on further diversified functional
scale resources being implemented practically. Furthermore, business plan aspects can be
analyzed as follows:
Vision: American Food store has vision to bring on best customers services within drinks, fresh
organic produce among working expertise for larger functional growth rise innovatively.
 Mission: American Food store has mission to further bring on best business
competencies worked on strategically for diverse range competitive marketing, larger
customer reach and higher revenue rise actively (Ghafar, 2020).
SMART Objectives:
 Specific: American Food Store specifically will further head on competitive focus to
bring on new organic food produce within grocery range, innovatively expand on best
digital marketing expertise parameters. Specific aim of business plan is to increase
profits by 50%. within revenue goals. Measurable: The goals will be measured by analyzing best working competencies within
year end business revenue paradigms, for strengthening key larger functional operatives. Attainable: American Food store will be attaining goals by investing strategically,
bringing on new technical rise actively and generate larger vision oriented growth
operatives. Realistic: Goals are realistic and competitively strong for attaining best competent
synergy aspects actively. Time bound: 6 Months will be time target for attaining all goals imperatively within
business plan.
STP:

 Segmenting: American Food store will be segmenting market structure based on
behavioral aspect, where it further strengthens up basis as per varied customers
preferences widely for competent productivity within longer run. Segmenting further
enhances scope to evolve on dynamic industry targets for larger revenue growth and
goodwill benchmarks. People who look for affordable grocery items and imported
products at cost effective range, will be further focused on within segmenting.
 Targeting: The targeting strategies will be based on providing fresh best quality grocery
items and food range for all consumers, where company will be further heading to bring
on stronger range of performance benchmarks. Differentiated targeting on basis of quality
aspects within grocery items and services will further enhance wider scale competent
working synergy goals informatively for bringing on range growth actively (Kakouris,
and Liargovas, 2020). Positioning: American Food store will be positioning business plan strategies, by
bringing on rapid consumers engagement aspects innovatively within marketing plan
fundamental goal operatives. Positioning aspects further will synchronize best scale rise
profoundly on larger functional goals enhanced informatively, and generate best work
innovations actively within retail industry.
Swot analysis:
 Strengths: American Food company has been competently growing to provide best
customer services within retail industry , by bringing on best scale marketing resources
strategies advancing within business. The store also offers customers widely affordable
price structured resources in usage for dynamic growth developed efficacy, which has
enabled goodwill to rise actively. Furthermore, company has been widely growing to
bring on diverse innovation based expertise factors leveraging efficacy parameters
actively. Weaknesses: American Food Company as SME, faces competition and external business
factors impact rise as threat for evolving growth towards building new scope among
consumers growth. Increasing customers preferences dynamically, is also weakness
where company has to excessively invest on programming new range or digital services
and products within company structure aspects innovatively.

 Opportunities: There is opportunity to bring on larger functional rise profoundly within
industry domains by bringing vision oriented growth actively based on new marketing
and business competencies. Opportunity to synchronize new creative diversity within
strategies are also varied for strengthened scope , wider scale competency plans for
strengthened market reach paradigms.
 Threats: There is also threat of uncertain and fluctuating economic situations, where
external business competencies can be achieved by enhancing varied scale new business
strategies diversely within dynamic international platforms. Internal investments also
need to be rise on further rise within company for larger viable new capital outputs
expansion strategically (Alias, 2021).
Financial budget:
Particulars Amount
Technicians and digital marketing experts 15,000
Infrastructure investments 10,000
Training and development workforce 5000
Digital tools and marketing 15,000
Total 45,000
Marketing mix strategies:
 Price: American Food company will be further bringing on affordable price strategy for
all customers which will further enhance stronger market reach actively, which will
technically also primitively strengthen business strategies. The price strategies will
further also evolve on for gaining consumers confidence actively and leverage best
determinants profoundly. Product: The store, American Food company will further strengthen up products range
with varied fresh grocery food items and larger consumer products bringing on larger
scale consumers confident products. It can be further understood that innovation and
creative usage in products, will further enable brand to generate larger scale growth
competitively.

 Promotion: The company further aims to invest on digital promotions and marketing
through varied digital channels for reaching out to larger segments among consumers
market share. Promotions will further potentially create on engagement with best
technical domains strategically for reaching out to larger functional growth paradigms, on
which SME has scope to grow competitively. Place: American Food store will further expand focus on expanding new place strategies,
where further strengthened scope will be built on diverse functional strengths for larger
consumers availability. Place factors also holds high significance for connecting to larger
consumers , where central locations will enable brand to expand strategically for wider
scale competitive market reach (Herron, 2020).
Monitoring and evaluation:
SME American Food Store will be further investing to bring on monitoring and evaluation
strategies for strengthening key business goals within longer time periods informatively based on
varied consumers market strategically. KPI formulation will further enable company to keep
profound check on business outputs attained, on which further extended functional rise will
enable company to diversely expand on new benchmarks.
 Revenue rise and expansion among consumers market share evaluation will enable
company to reach on functionally within larger competency industry paradigms actively,
and for this American Food store will be monitoring revenue profitability domains. This
will further also strengthen up key business competencies dynamically , keep check on
inputs and outputs actively commercially for diverse growth rapidly within new arenas.
 The company will also analyze feedbacks of varied new products launched by keeping
check on people reviews, customers re purchase factors and also implement new vision
oriented targets for larger functional pace goals. SME has further scope to keep check on
new customers target expansion actively and strengthen up innovation reach profoundly,
for keeping up with consumer’s goodwill competitively.

TASK 3
Assessing exit and succession options for small business along with pros and cons
Exit strategy within business is an entrepreneur’s strategic plan in which business sell
their ownership to others. American Food company will be able to strategically exit when there
are losses, by heading on functional usage of assessing best competencies and analaysing varie
pros and cons informatively. The brand has to further extensively bring on competitive
commercial growth domains, by investing strategically and also raising up functional abilities
based on plans. Exit options are also strongly operated to bring on keen functional goal rise
based on internal competencies, implementation of new business plans and further competently
bring on ideologies on shape.There are many ways through which company take an exit from the
existing business which are as mentioned below:
Liquidation: It is the method through which business close their operations and also sell their
assets to the creditor and shareholders. Through this, American Food Store can easily takes the
fund out over the time rather than investing them back into the business. This in turn causes
direct impact upon the business and entire operations become shut down.
 Pros: It is the best and simple process to close entire business operations immediately.
 Cons: Procedure is little time taking as per legal formalities are further expanded up
variedly, for bringing on consumers market strengthened scope which may further also
impact new business targets (Pardo-Garcia and Barac,, 2020).
Management buyouts: This exit strategy further holds importance within recent time periods,
where employees and internal staff buys investments done already within company for further
expansion. The usage of this strategy further holds importance for strengthening key
competencies as per planned format, as management holds knowledge of business plans for
technical strengthened engagement targets. Amercian Food company will be able to evolve on
productive engagement expertise by using this exit strategy, for strengthening key connective
diversity goals.
 Pros: It is easier and less time taking option as management is already trained, and
further can take over company business operations goals further innovatively for
strengthened quality rise goals actively.

 Cons: American Food company by using this option, may face uncertainty rise, as per
working competencies expansion it also becomes complicated for managers to trust
employees for new proceedings in company.
Mergers: This aspect of exist further heads on towards collaborating two business ideas and
competencies profoundly for larger time periods, for synchronizing new informative rise
profoundly and to also strengthen up key connective targets actively. Mergers enables company
with less assets, to further extensively bring on rapid functional growth worked on practically,
also where investments are strategically limited for new diversification within industry.
Pros: It is easier for company , who wish to further expand commercially for bringing on larger
functional growth actively as commercial benchmarks are much more easier for SME. American
food company by heading on merger, will further enable new business competencies to be
evolved on strategically for extending new business plans competencies innovatively based on
larger functional growth effectively (Velinov, Ashmarina and Zotova, 2020).
 Cons: It has negative side as mergers are not always successful, as time taking procedure
is widely uncertain for company to further extend up new business plans profoundly and
also determine new strengthened scope goals.
Mergers usage as one of the best strategic plan for exiting and closing up business operations
will enable company to further head on commercially for larger time periods innovatively.
Merger will further also synchronize best developed working efficacy, for larger time periods
goals and bring on new strengthened scope dynamically. American food company will be able to
diversely grow for gaining larger competencies worked on actively, which will evolve on
paradigms growth based on best revenue targets within longer time periods.

CONCLUSION
By summing up above report, it has been concluded that businesses must consider
different growth option in order to increase the brand image. For small entities, it is necessary to
provide innovative products that helps to enhance the brand image at national market. Through
the above, it has been concluded that American Food Store uses product development under
Ansofff growth vector matric that helps to offer new product in its existing market i.e. organic
food products. Apart from this, bank loan and personal saving as a source of funding are used by
the company to enhance its growth opportunities. Through the business plan, it has been
evaluated that company is able to meet the strategic objectives and take an exit by handing over
the business to its management and shut down the business as well.

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