Planning for Growth: Financial Strategy for Gordon Street Coffee SME

This report outlines a comprehensive growth plan for Gordon Street Coffee, an SME, focusing on key considerations for measuring growth opportunities, utilizing analytical frameworks like Ansoff's matrix and Porter's generic strategies, and evaluating specific growth options such as market penetration and product development. It explores potential funding sources, including angel investors, crowdfunding, bank loans, and peer-to-peer lending, weighing their pros and cons and justifying the adoption of suitable funding strategies. The report includes a detailed business plan encompassing financial and strategic objectives, along with an executive summary, business description, and analysis of the market, operations, and competition. Finally, it addresses exit and succession options for small businesses, providing recommendations for supporting implementation and ensuring sustainable growth. Desklib provides similar solved assignments for students.

Planning for growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
Analysing key consideration for measuring growth opportunities..............................................3
Options for growth by using analytical frameworks....................................................................4
Evaluating specific options and pathways for growth for organization......................................5
LO2..................................................................................................................................................6
Potential sources for funding in business with pros and cons.....................................................6
Evaluation of potential funding sources and justifications for adoption of suitable funding .....7
Critical evaluation of potential funding sources..........................................................................8
LO3..................................................................................................................................................8
Business plan for the growth within including the financial and the strategic objectives...........8
LO4................................................................................................................................................12
Exit or succession options for small business with advantage and disadvantage......................12
Recommendation over supporting implementation...................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Planning refers to the process where the activities are organized in accordance with an
aim to achieve something. This process clarifies the ways in which the business operations are
directed. Smooth functioning of a firm can be achieved through this. Thus, the report will be
mentioning every step of planning process by analysing various factors and formulating the
plans. SME's will be the basis of the planning process and evaluation. For better understanding,
the report will be based on an SME that is Gordon street coffee. Macro and micro environmental
factors affecting the organization will be enlightened with Swot and Pestle analysis tool.
Moreover, relevant theories and models will be applied that will highlight the important factors
that are to be considered while formulating a planning or strategy. Business plan will be
formulated for the organization after evaluating various factors like strength, weakness,
competitive environment etc. financing options will be stated with its risks and benefits.
LO1
Analysing key consideration for measuring growth opportunities
It is essential for the firm to develop a competitive edge over to sustain longer in the
market. Better position in the sector can be achieved with the help of elements discussed below:
Competitive advantage
Better position in the industry can be achieved if the organization considers competitive
forces in their strategies. The formulation f the plan can be done in such a way that it can
eliminate the rivals. Some strategies for gaining competitive advantage for Gordon street coffee
are discussed below:
 For catching the attraction of customers, company can introduce innovation in the ranges
of product and services which differs from others.
 Quality of the commodities can be improved to target Higher customer satisfaction
leading the firm towards retaining the higher portion of the customer base.
 Strategies can be formulated in accordance to the generic strategies for enhancing the
business and get a boost in profits.
Porter's generic strategies
 Differentiation- this strategy focuses on differentiating a product or service from other
brands. Innovation and uniqueness are the two major focused elements of differentiation

strategy (Alam and et.al., 2020). However, the differentiation has to be limited to an
extent where the product meets the demand.
 Cost leadership-aim of this strategy is to cover wider markets by introducing low cost
goods and services in comparison to other brands. Higher sales volume is the motto of
cost leadership which focus on covering larger customer demands.
 Focus-niche market segment which are specified to the customers with a particular
behaviour or preference. Cost focus and differentiation focus are the two elements of
focus strategy. Differentiation in the product according to the niche market is seek.
Whereas, cost of the products and services focused on the customers with high
purchasing power.
Options for growth by using analytical frameworks
Ansoff growth matrix is a good option which can help a SME to increase its growth and
expand their business. This matrix contains four basic strategies which can be implemented by
Gordon street coffee to maintain competitive edge in the market.
Market penetration
Higher sales in the existing marketplace is aimed through this strategy with
implementation of lower prices and other such methods to increase the volume of sales.
Eliminating competition in the current market is the central element of this strategy which
enables a firm to grab the every possible opportunities in the market (Setyawan, 2020). Strategies
attracting more customers can be implemented by the firm to set a strong hold in the industry.
Market development
This directs the strategy adopter towards introducing their products in the new markets
which provide higher opportunities for growth. This is basically an expansion strategy by which
SME's can increase their size and can fall under the category of large business. Global expansion
comes under this strategy which have abundant demands which can give good returns to the
company.
Product development
This strategy aims to target the customers with unique products and services in the
market to achieve diversification in its customer base. New products in the current market can
make the brand stand out in the crowd where other firms are offering similar commodities.

Diversification
This strategy focus on complete diversification in the business by introducing new
product in new markets. This strategy pertains the highest risk as the company is don't possess
experience in any of the aspect (SABBENA and JAMES, 2018). However, these markets can
give higher profits to the firm as they have the least competition.
For an SME like Gordon street coffee It has been recommended to focus on the product
development strategy to get a good hold in the market.
Evaluating specific options and pathways for growth for organization
Product marketing strategy
Marketing plays a vital role in boosting sales by delivering the specification of products
and services in different way though various sources. Marketing helps an organization to gain
recognition in the market and gives a glance about the offering of the firm.
Penetration
This is one of the easiest and least risky strategy as it focus on volume of sales. The
organization can work on enhancing the supply chain to reduce the cost incurred on raw
materials. Reduction in variable cost affects the total cost. Hence, the low-priced commodities
can be offered to the customer which increase the demand of the brand in the market.
Developing market
This is a slight risky approach for the small business as it involves the threat of new
environment. However, following this strategy Gordon street coffee can enter the untapped
market which can provide abundant opportunities of growth to the firm. Although, adaption to
the environment may seem to be a difficult task because of the sociocultural barriers (Cavaleri
and Shabana, 2018). For avoiding the failure due to such barriers the organization first need to
thoroughly study the consumer behaviour for sustaining in long run.
Developing product
While developing a product in order to make it unique the organization has to consider
the relevance of the commodity with the needs and demands of the consumer. It is essential that
the product should match the preference of the customer and not extended the limits of
innovation.
Diversification

This strategy of business commencement is most risky and most beneficial as well. Risk
involved in this strategy is the lack of knowledge of both market and industry which may result
in failure (Slavik and et.al., 2020). Benefit associated with the diversification strategy is that it
can give unimaginable profits to the firm and such markets have comparatively lowered or no
competition.
LO2
Potential sources for funding in business with pros and cons
There are two types of funding options available for organization that is equity and debt.
Equity refers to the ownership of the firm and debt refers to the loan which has to be repaid. In
equity funding the company avail funds by giving a percentage of ownership in return (Lee and
et.al., 2021). There are various sources under equity and debt which are thoroughly discussed
below:
Angel investors
Pros:
 It provides a credibility as the businessmen may be known to the investors and it builds a
trustworthy relation between both the parties. These are majorly retired business persons which can support the firm by providing their
knowledge that comes with experience.
Cons:
 These investors may take hand on actions on business and the real owners may lose
control of the organization.
 Higher return investment of the investors from the business.
Crowd funding
Pros:
 One of the fastest ways to raise funds if the firm have proper and authentic paperwork. Higher funds can be availed through this source as there are many such investors in the
market.
Cons:
 It is not easy to avail funds through this source if compared to the traditional sources of
funding.

 It is not easy for start-ups and SME to avail funds if they don't have a strong brand image
in the industry.
Bank loans
Pros:
 One of the most authentic source of lending money. It gives a considerable amount of time for repayment.
Cons:
 Need of intense documentation to prove the ability of the firm to repay the loan.
 Higher interest rates.
Peer to peer lending
Pros:
 Easy to avail as the investor is known with the business. Good relations with the investor.
Cons:
 Capital of the owner possess risk.
Evaluation of potential funding sources and justifications for adoption of suitable funding
For availing financial support for the expansion or other purpose, Gordon street have many
options. Angel investor, Bank loans and crowd funding can be considered s most suitable options
according to the size of business. The angel investors have a high interest in the new start-ups
according to their investing behaviour. The firm can avail financial and intellectual support from
angel investors (Greckhamer and Gur, 2021). These investors are known for their sound
experience that they have gained from their working tenure. Vision of the firm can be enhanced
as they have higher knowledge of the market. Repayment of the investment is not required to this
source of funding as the equity of the firm is acquired by the investors for a specific time period.
Availing loan from the bank is another best option for getting funds by the organization.
Nowadays, there are many financial institutes that provides loans to the small business on a
considerable interest rate. Organization can apply for the loans from these sources if they have
proper documentation. Moreover, the crowd funding can be considered by the firm only if they
have sufficient resources (Ali and Anwar, 2021). This funding options needs an initial

investment and documentation which may not be feasible for the firm. However, this is an
excellent source of funding as it can be used to generate large amount of funds.
Critical evaluation of potential funding sources
Bank loans- these are the financial institutes that provide funds to the business on the basis of
their credibility score. Fixed amount of interest is applied that is additionally paid by the lender
with the original amount. These are the authorized sources that are highly authentic as they are
monitored by a government regulatory body. Nowadays, both private and public banking
institutes have introduces the beneficial schemes on loans for encouraging start-ups and seeding
firms (Firoz Suleman and et.al., 2019). These schemes can be availed by the firm by just meeting
the eligibility criteria.
Angel investors- these are mostly the retired businessmen who have sufficient savings which
they aim to invest in the seeding business. Also, these cab be the relatives or friends of the
proprietor. These investors encourage entrepreneurship and tends to invest in enterprise with
unique ideas. Angel investors inputs their knowledge of business that they have gained from
experience (Hersperger and et.al., 2020). The firm can approach such investors and avail funds in
exchange for equity.
LO3
Business plan for the growth within including the financial and the strategic objectives
Executive summary
The business plan of the Gordon street cafe has been made which is concerned with the
financial management, market analysation, operational plan and competitive analysation. The
business plan for the café is being formulated within performing the industry trend so, it would
become easy to know where is business exist and what are the requirements to increase the
efficiency of business.
Description of the business
The organization is established at UK; the major aim of the company is to satisfy the
needs of the customers within providing them effective services. The organization is a small café
which operates on small scale. However, services which is being assured to the customers are
comprised of high quality. The café offers different kinds of coffee to the customers within

providing sandwiches and snacks. The taste that is being offered to the customer is of high
quality which supports the increases the satisfaction level of the customers (Gordon Street
Coffee, 2020). Thus, Gordon street has the major aim which is to serve in best possible manner
to the customers.
Company history
The café was opened in May 2014 and it is established in Glasgow Central Station, 79
Gordon street in United Kingdom. The café roasts its own coffee and this is the speciality of the
café. It has been found from various studies that, café has created effective image in the front of
the customers from past years and this us enabling them in creating effective interaction with the
customers.
Business concept
The main concept of Gordon street café is to use the social media marketing is best
possible manner so, the growth of the organization can be ensured. Along with, this organization
us focusing over creating effective interaction with the customers.
Business aim
The main aim of the organization is to grab the big market share in next year and
increasing the customer base in the organization. Also, the business will be more focused on
developing efficient interaction with the customers.
Market analysation
Here is the proper analysation of market which will be beneficial in knowing the potential
opportunities that can be grab by Gordon Street.
Porter’s five forces
Bargaining power of customers- The bargaining power of the customers is high as they can
shift towards the competitor’s products if their likings and not been prioritised by the
organization (Xu, 2020). Therefore, it is important for the business that demand of the customer
must be analysed.

Bargaining power of suppliers- In this context, café is safe as it will approach the number of
suppliers. In case, price by the one supplier has been increased the, business can approach
another supplier.
Threat of new entrants- The café does not have threat from the new entrants as the image of
the café in front of the customers is highly effective which creates no threat from the new
entrants.
Competitive rivalry- There are large number of small cafés are being established in UK which
depicts that, there is extreme high competition in the market. Therefore, Gordon street will be
more focused on the strategies of competitors so, proper actions can be taken.
Threat of substitute product- There is no threat of substitute product as café roasts its own
coffee which is a unique selling proposition of café.
SWOT Analysis
Strengths- The organization roasts its own coffee and provide different taste of coffee within
adding deliciousness in it. This is the major strength of the café.
Weaknesses- Café is not aware about the use of technology, traditional method in the
organization has been supported and this is the weakness of the organization.
Opportunities- Creating presence on the social media platform will create numerous
opportunities for café in which business can expand in effective manner.
Threats- The major threat to the company is that, the competitors of the firm are providing
coffee in lower prices. This can impact the profitability of business.
Marketing plan
Marketing mix
Product- Gordon street is assuring wide range of products and services and due to which the
company has gained effective attention of consumers. Along with this organization is assuring
high quality services to the customers.
Price- In this context, organization will focus as the price of the café’s products is high that can
impact the profitability of the company.
Place- Currently, the organization is active on both online and offline platform and delivering of
the products to the customers will be made more effective on both the platform.

Promotion- The organization will prefer social media marketing for promoting the café and this
will contribute in approaching large market share.
Business economics
The café will perform collaborative partnership which will be beneficial for the firm in
long-run. Also, with the help of the reach of the café will be increased
Operational plan
Operational plan of the business will be supported within adopting lucrative strategy.
This strategy is affiliated within making profit for the business.
Securing investment
The investment will be secured within taking proper decision, the decision will be only
taken after analysing the consumer demand. Retained earnings will be kept as secure investment.
Capital funding
The café will approach the collaborative funding and banks in order to gather the capital.
It is important to perform proper finance planning as all the aspects are depends upon the extent
of finance available with the business.
Resource planning
The café will approach technical, human and financial resource as this are the major
resource that will be required by the organization for continuing the growth and success.
Therefore, proper planning will be done by the Gordon street for gathering the resources. Banks
will be approach for finance, skilled labours will be hired and technical guidance will be taken.
Stakeholders
The main stakeholders in the food industry are- Customers, government, employee’s
environment and community members. Gordon street café will provide complete level of
satisfaction to all the stakeholders so, the business scan run in smooth manner within maintaining
its image in the market (Lysenko and Musa, 2020).

LO4
Exit or succession options for small business with advantage and disadvantage
This is the final stage where the business seeks top end its tenure where the stakeholders decide
the method by which the exit will be planed. Exit strategies are evaluated by the stakeholders in
the decision-making process which involves judgment on assets, employees, liabilities and other
aspects of the firm. Planing of exit strategy involves the execution of transfer plans (Hu and
et.al., 2019). Some of the exit or succession options for Gordon street are mentioned below:
IPO
Initial public offering (IPO) is the process of issuing shares to the public in exchange for funds.
In this process private organization becomes public and new stock are issued.
Pros:
 It is a significant exit approach.
 Higher credibility is gained.
Cons:
 Potential control is lost by the firm.
 It is highly expensive.
Liquidation
This is the process of selling the potential assets of the firm and the income earned is used to pay
the liabilities.
Pros:
 The company can get rid of the debts
 No actual cost on restructuring.
Cons:
 It may put liability on stakeholders who have promised personal guarantees of return to
the people.
Giving ownership to the family
The owners hand over the business to the family members in return of equity or can sell it.
Pros:
 This maintains the legacy of the business as it is handover to the trusted member of the
family.
 Fluency in the business operations is maintained.