Pearson BTEC Unit 42: Investing in the Future and Exit Plan Report

This report provides a detailed analysis of growth strategies and exit planning for a small restaurant, 'The Salt and Smoke'. It begins by explaining the competitive advantages and growth opportunities available to the business, followed by an evaluation of these opportunities using the Ansoff growth vector matrix. The report then assesses various potential sources of funding, critically discussing their benefits and drawbacks. A business plan for growth is also designed. Finally, the report defines various exit and succession options for the company, including an analysis of their respective benefits and drawbacks. The report incorporates elements of market analysis, competitive advantage, and financial planning, offering a comprehensive overview of strategies for business expansion and long-term sustainability. The report uses Porter's Five Forces, and other strategic management tools to provide a practical approach for future growth and expansion of the restaurant. The report also discusses the importance of market penetration, product development, diversification, and market development strategies for the restaurant.

INVESTING IN THE
FUTURE (PART 1)
DEVELOPING AN EXIT
PLAN (PART 2)

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explaining the competitive advantage and the growth opportunities available to the business..3
Evaluating the opportunities for growth applying Ansoff growth vector matrix........................5
Assessing the potential sources of funding available to businesses and discussing benefits and
drawbacks of each source by evaluating critically......................................................................6
Business plan...............................................................................................................................9
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Planning for growth mainly helps in growing the company as by attaining all the
revenues and profits as for increasing the sales and attracting large target market with identifying
key opportunities for expanding the business .this report provide detail about the small restaurant
as the salt and smoke mainly established for offering dinner , drinks and day time beverages to
large number of Audiences in the dynamic market. This report provide detail about explaining
the competitive advantage with explaining the key considerations for evaluating the growth
opportunities. Also, evaluating the growth opportunities with using the ans off growth matrix.
Further evaluating the options for financing the growth and sources of funding for the company .
Moreover designing the business plan for growth of the business. Lastly defining about the
various exit and succession options for th company with explaining the drawbacks and benefits.
MAIN BODY
Explaining the competitive advantage and the growth opportunities available to the business
Competitive advantage is mainly defining about the factors which mainly helps the
business for addressing and achieving the better competitiveness by producing various goods and
services. The salt and smoke operating with limited employees less than 100 for serving with
wide services including the dinner, breakfast and the beverages. Planning for the growth in the
company is mainly comprising about adopting various strategies which helps in expanding the
business and aids in achieving growth (Dagnino, Picone and Ferrigno, 2021). The growth of the
small restaurant for operating in the dynamic environment aids in adapting and using various
technology for serving an operating the restaurant with providing modern dinning experiences
and serving with addressing all the flavours by expanding the menu option which is mainly helps
in addressing all the diversified consumer needs (Distanont and Khongmalai, 2020). Further,
adopting and acquiring various loyal consumer strategies helps in retaining the loyal consumer
for dine in and also serving delicious menu with offering wife range of services. For growing in
the existing market grasping various opportunities helps the small restaurant by analysing the
five forces model.
With using the Porter five forces analysis helps in analysing company competitiveness and its
position in market:

Bargaining power of buyers: Bargaining power of the consumer is at low level as, the
consumers in the country are not attracted and pleased with the small restaurant services for dine
in and taking various services. Consumer are more attracted to the leisure restaurant and the
standard services. The restaurants which is serving delicious foods and providing safe
surroundings. Thus, for achieving the competitive advantage the company must use the strategy
as for providing the meals at affordable prices and targeting the audiences which is preferring
cost-effectiveness with delicious food products.
Bargaining power of suppliers: The bargaining power is high, as the supplier are
largely providing the raw material to the restaurant for serving various dishes this results in
obtaining less number of order for the small restaurant in serving dishes .
Threat of new entrants: The thereat of new entrant is at high level as, with the large
number of new entrants entering into the dynamic market as by establishing the small restaurant
this aids in impacting the company. Furthermore, the economy for operating the restaurant will
impact the new entrants as the fixed cost and the operating cost impact the new entrants. Thus,
the salt and smoke is adopting the strategy as for serving with providing the dishes with the high
level of discounts and serving at low prices for attaining and retaining the loyal consumers
(Attaran and Attaran, 2019). Thus, by operating with establishing and serving with low cost to all
the consumer helps in maintaining the consumer base for longer period this results in achieving
the competitive advantage for the business .
Threat of substitutes: Threat of substitutes for operating the small restaurant in the
dynamic market is at high level. As with the large number of new entrant the thereat of
substitutes increases. This impact the company when the other restaurant is serving the dishes at
the low cost and better quality results in shifting the consumers to the other restaurants. The
strategy to adopted by the company as for organizing the competitive advantage as of the
providing better quality and special dishes at low prices this results in retaining and establishing
the loyal consumer base for serving various dishes at low prices.
Competitors rivalry: The competitive rivalry is at high level for operating the small
business into the market. This hinders in achieving the competitive advantage as the high level of
competitors establishing the big and small restaurant serving various dishes to the consumers.
The optimum flow for serving dishes by the company is mainly impacted with the large number

of competitors. For this the company is adopting the low cost and quality serving strategy helps
in attaining the competitive advantage for swerving the loyal restaurant.
Evaluating the opportunities for growth applying Ansoff growth vector matrix
Opportunities for the business is mainly defined as the advantages and the changes for
gaining the competitive advantages. Using the Ansoff matrix in the company mainly helps in
defining about the strategies Which is used by the business for growing in the future. As for the
small restaurant the growing options mainly defining about attaining better market positions with
serving and launching the new products in the market also expanding the business into the new
market. The fours strategies used for growing the business are as follows:
Market penetration: In this strategy it is mainly emphasizing on growing the business
as by increasing the existing business sales by selling existing products into the existing market.
As by increasing the sales, salt and smoke restaurant is serving various products to the large
number of consumers in the existing market. Various dishes served by the company including
the dinner, beverages, cake, wide range of cocktail, coffee, tea, juices, sweets into the existing
market. This strategy used by the company aids in attracting the loyal existing consumers by
serving the dished and the menu with the quality and standard with providing safe environment.
Advantages : This strategy helps in creating the brand awareness and helps in increasing the
sales of the existing food products which helps in growing the business into the existing market.
Disadvantages: By adopting this strategy in the small business aids in providing the lower
margins and lower profit. Also, it is expensive in nature requires high level of investments for
providing wide range of products in the existing market.
Product development: This strategy mainly aids in developing the new products, as by
introducing the new products range for servings large number of consumer in the market. This
strategy mainly emphasizing as for attracting the new consumers by servings new range of
provides and servings special dishes for attaining the strong loyal consumer base for the salt and
smoke restaurant. Thus, for growing in the market, adding new products for servings and
retaining the loyal consumer base helps to retain loyal consumers. Also, by serving the new
standard dishes with the best quality and various range of added flavors.
Advantages: With adapting this strategy helps in introducing new products an offer wide line to
the consumers. Also, this supports the business by providing the opportunity for growing
business with grasping new latest trends wot serving delicious food products to the consumers.

Disadvantages: Increases the extra cost for the business for offering new range of products.
Adopting this strategy leads to high risk as investing into new products.
Diversification: This strategy for growing the business mainly emphasizes on diversify
the market by introducing new products and entering into the new market. Thus, with this
strategy the salt and smoke must introduce the new products by adding new flavors in the drinks
and beverages (Porter’s Five Factor Model in Hospitality (Restaurants) Essay, 2022.). Also, the
company must serve large number of consumer with using the online platform and producing the
range of different products by adding new range for the children.
Advantages: Boost brand image and helps in providing growth opportunities for operating in the
competitive market.
Disadvantages: Required high investments and It is less flexible in nature and reduces the food
products quality which increasing the risk for operating the restaurant.
Market development: This strategy mainly aims in emphasizing for entering into new
market. As for growing the business the company must enter into the emerging new markets. But
this strategy is not easy to adapt for th small business operations as by entering into the global
market for growing (Cohen and Tubb, 2018). Thus, acquisition, mergers and partnering with
other for entering into the new market adapted by the salt and smoke restaurant as for entering
into the new market.
Advantages: By adopting this strategy helps in increasing the revenues and profit for the
company and expand the consumer base by diversifying into the target market.
Disadvantages: Required large capital investments for entering into new market and if the
investments does nit results in better revenues resulting in the wastage of all the efforts.
Assessing the potential sources of funding available to businesses and discussing benefits and
drawbacks of each source by evaluating critically
Various sources of funding are as follows:
Venture capital: This source of funding is mainly defining about taking funds from the venture
capitals for funding the small business. These are those individuals which are investing into the
business.
Advantages disadvantage
It does not require monthly payments and
personal assets for obtaining loans. This source
Difficult to search investors for obtaining
funds also this is expensive in cost and no

of funding helps in raining large amount of
funds for investing and funding business.
negotiations of funding by the venture capital
in operating the business.
Financial institution: This is mainly the company which is dealing into financial and monetary
transaction (Manelli A., Pace and Leone, 2022). This source of funding provide various services
as of the insurance service, banking services, loans to various individuals.
Advantages disadvantage
This funding source aids in loan repayment
with establishing easy instalments also it
supports the business by providing long term
finance.
Granting funds to the company and various
business institution with following rigid rules.
Private investors: These are the source of funding for the small business (Ryu, Webb and Yu,
2022). As these individuals are mainly investing into the business as for earning some part of
profit as a part of share by funding the restaurant business.
Advantages disadvantage
Obtaining funds from this source aids in
securing the position of the business as it helps
in obtaining the creditability with no dates
obligation to pay the funds back
Creates pressure for reaching the expectations
as the part of share is owned by the investors ,
also reduce the earning and revenues for the
business as by sharing the art to the investors
(Butticè, Di Pietro and Tenca, 2021).
Bank loans: The loan taken by the business mainly from the SBA. This mainly helps in
providing loans at the flexible trams (Álvarez and et.al., 2019). This is the best source of funding
the small business as it aids in providing loan with small amount of interest rate for operation the
business and growing into the market.

Advantages disadvantage
Obtaining the funds from banks as for growing
its operations it helps in providing the relax
requirements for granting the funds and
supports the small business for repaying the
amount of loan with longer period.
It aids in slow processing and required
additional and various paper workings for
granting the funds to the small business and it
requires no personal guarantee by the business
for obtaining loans.
Thus, for the salt and smoke restaurant the best source of funding is obtaining loan from
the SBA banks, as this helps in providing the longer period for repaying the loan to the business.
Also it will support the restaurant by charging the low interest and aid in resulting in increasing
the profits and earning more revenues for operating the small business in the dynamic market
conditions.
Business plan
Overview and scaling up of business: The business plan is made on the Salt and Smoke
which is the small enterprise. The organization used to provide the variety of dishes to their
customers in the market. The cited organization wants to scale up their business activities by
bringing some new product or services. Scaling up of the activities of the business is so
important as it helps them to support the company.
Mission: The mission of the company is to provide the best coffee with best services.
This mission statement makes the company to attract more customers in the market. They used to
provide the good quality of dishes by having the proper services to the customers in the market
(Tipu, 2018).
Vision: The vision statement of the company is to make the customers have the best
experience beyond just having the cup of coffee. The company must provide the customized
coffee as per the taste of the customers that makes them to visit the coffee shop.
Marketing plan: The company must make the marketing plan that helps them determine
the target market and make them to attract more customers. As the company is bringing the
Chocolate Sandwiches that will help them to attract more customers. This new product brought
by the company will help them attract the children and adult people of the UK.
SWOT analysis:

Strengths
The strength part for the company is that the
have the good location in the UK market.
The company can also do the marketing of
their products which makes them more
profitable.
Weaknesses
The weak part for the company is that they
are not aware about the flow of customers in
the cafe. They also not used to provide the
online delivery of the products.
Opportunities
The best opportunity the organization has is
that they can start taking the online orders
from the customers. This will help them to
have more profits in the market.
Threats
In order to produce new product there will be
increase in the cost of raw material. This will
create the high competition in the market.
PESTLE Aanlysis
Political factors
There is less interventions of from the
government side as it is the small enterprise.
The organization should comply with the
rules and policies of small enterprise.
Economic factors
The company can increase its share in the
market by having the god profitability. As
the company is producing new product so it
must focus on the economic situation of
market.
Social factors
As there is continuous changes in the
lifestyle and taste and preferences of the
customers. It is advised to the company that
they must do the innovation.
Technological factors
as the company is launching the new product
so it must have and use the new technology
that helps to have fast making of sandwiches.
Legal factors
As there is changes in the laws and policies
so the company must comply with the legal
changes. This will help them to survive in the
market.
Environmental factors
This is also the affecting macro factor as this
affects the profitability of the firm.
Marketing Mix

As the company is launching the new product so the marketing mix is consists of 4p's
which is described below:
Product: The cited organization is bringing new variety of sandwich which is basically
Chocolate Sandwiches. As it is good to eat sweet at the time of depression so this will help the
people to have this sandwiches.
Price: The company used to follow the penetration pricing strategy that helps them to
have good profitability in the market (Fichter and Tiemann, 2020). As the product is new so by
having the low margin it will make the company to earn more.
Place: As the organizations situated in market UK so the main location it that shop only.
They can also have the online delivery of the products that will helps them to gain more profits
in the market.
Promotion: The small cited enterprise can have the online advertisements of their
products that helps them to attract more customers. They can also add this dish at the top of their
menu that help the customers to taste new product.
STP approach
Segmentation, Targeting and positioning is the 3 step model hat used to determine the
product and services. The STP approach for the cited organization is described below;
Segmentation: The company used the demographic method which helps them to make its
product profitable. By this the company will be having good selling in the market where it is
operating.
Targeting: As the company is bringing the Chocolate Sandwiches as there new product
so the target customers of the cited organization will be children and young people (Han and
Kang, 2020). They must also do the online delivery which will attract more people to have new
product.
Positioning: This used to make the customers to know about the new product details
which used to attract them. The positioning strategy for the company is “ to have the delicious
and chocolaty sandwiches”.
Budget for the company

Particulars January February March
Inflows of cash
Opening cash flows 4000 5500 6000
Profit from sales 12400 13440 14880
Income from other
sources
1000 1500 2500
Total inflows 17400 20440 23380
Outflows of cash
Raw Material 500 1200 2000
Employees 1000 1000 1000
Petty expenses 1500 1600 2000
Total outflow 3000 3800 5000
Cash deficit/ surplus 14400 16640 18380
Competitors analysis: The main competitors of the company are Waknut Grill and GiftA
Meal. In order to compete with the competitors the company must do the innovation that helps
them to have increase in the market share. By decreasing the prices from the customers will help
them to compete in the market.
Monitoring and controlling: By using the benchmarking KPI it will help the company to
measure its performance. This is one of the best method that will help the company monitor and
control the performance and make them know where they are lacking (Sudiartini and et.al.,
2020). In this KPI it makes the company to check the actual performance with the planned. This
will help the company to develop and expand its shop by having the proper monitoring and
controlling of the business.
Exit and succession options and recommending best for company

Merger and acquisitions: The merger is basically happen when two entities used to pool
their resources together in order to work in the market. The merger and acquisition is basically
done when both the entities are having similar goals and objectives in order to operate in the
market (Widz and Kammerlander, 2022). This will provide the company to get the more
resources in order to get success in the market. The capital and resources are doubled which
helps them to have good competition in the market.
Advantages Disadvantages
 It used to provide increase in the
market share.
 It helps the companies to continue
their business by operating together.
 By merging of companies it used to
have increase in the legal costs.
 By pooling the resources together the
company used to lose the
opportunities in order to grow in the
market.
Liquidation of business: This is one of the best exit strategy in order to stop and close
the existing operating business. This is done by selling all its assets of the business and by paying
of all the debts and funds that taken by the business from various sources of financing (Brand,
2021). This makes the company to exit from the market and this is basically done when the
company is operating in profits.
Advantages Disadvantages
 Helps in closing the insolvent
business activities.
 The creditors of the company has no
option to ask them for money as the
company is insolvent.
 By exit from the market all the legal
requirements are ended.
 By closing the business it looses the
market share.
 As it puts burden as they have to pay
dividends to shareholders of the
company.
Passing succession: Passing the succession option is also the best strategy that the
company can have. In this option the business is continued by passing it to another firm. The re
is passing of all the roles and responsibilities, capital, assets, resources, etc. by the owner to the