Comprehensive Growth and Exit Strategy Analysis for CAFEPOD Coffee Co.

This report provides a comprehensive analysis of CAFEPOD Coffee Co.'s growth planning, business plan, and potential exit strategies. The report begins with an introduction highlighting the importance of growth and the tools used for analysis, such as SWOT, PESTEL and Ansoff's matrix. Task 2 presents a detailed business plan for CAFEPOD Coffee Co., covering its concept, market analysis using SWOT, and a financial plan including projected income, expenses, and cash flow. Task 3 critically evaluates exit or succession options for the small business, comparing options like management buyout, merger or acquisition, and liquidation, ultimately suggesting management or employee buyout or merger or acquisition as the most suitable strategies. The report concludes that planning is essential for company growth, emphasizing the importance of regular planning, monitoring, and control for sustainable development.

Planning for Growth for
CAFEPOD Coffee Co.
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................3
P 4 Produce a coherent and detailed business plan ..............................................................3
TASK 3 ...........................................................................................................................................9
P5 critical evaluation of the exit or succession options for small business and decide an
appropriate course by comparing options...............................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
2

INTRODUCTION
Growth is desired goal for every organisation, and to achieve this objective, various
analysis and studies are conducted by managers of that organisation (Bayraktar and et. al. ,
2017). These analyses focuses on conducting investigation on internal as well as external factors
posing opportunities and threats for a business. Studies like poster's generic strategies, PESTEL
analysis, Ansoff's matrix determines the area of focus and also assist managers to take decisions.
In this report, planning for growth has been done in context of CAFEPOD coffee co., based in
United Kingdoms. It is an independent company, which deals in various products like smooth,
intense, ristretto, arabica lungo, decaffeinated, etc. It was founded in the year of 2011. USP of
CAFEPOD Coffee is that they provide strength based coffee products, and this is lacking in other
competitors. This report study of various analysis conducted on CAFEPOD Coffee for analysing
its planning for growth and also explains some of the exit plans in case the growth strategy do
not success.
TASK 1
(Covered in Booklet)
TASK 2
P 4 Produce a coherent and detailed business plan
Business plan is a document that summarizes the operational and financial objectives of a
business. It also describes the nature of business, background information, financial projections
and the strategies it intends to implement to achieve the stated targets (Gabler and et.al., 2017).
Stage 1 – Concept of business
Executive Summary – CAFEPOD Coffee Co. crafts quality coffee. From Nespresso
compatible to ground coffee and whole beans, CAFEPOD Coffee Co. aims to source, blend,
roast and brew strong and exciting coffee for adventurous coffee drinker.
Products and services – Company offers whole range of various coffee and coffee
related products. It has a whole range of Nespresso Compatible Aluminium Pods, Roast whole
bean, ground coffee, supercharger espresso, brunch blend, Ristretto and Decaf Espresso.
3

Mission and vision – Company's mission is to design a range of strong coffee blends for
coffee enthusiasts to enjoy at home for people all over UK. Company envisions to sale its whole
range of blend coffee in all supermarkets and online retailers all around the globe.
Strategic Objectives – The main objective of the company is to develop a range of high
quality coffee blends and sale them all over UK supermarkets.
Operational Strategy – Main operational strategy of company is to provide excellent
quality products to the customers, anticipating their needs and delivering the best service
available.
Unique Selling Proposition – USP of CAFEPOD Coffee Co. is the unusual and new
blends of coffee mix it offers. It keeps on improving its range and delighting its customers.
Stage 2 – Market Analysis
Management of CAFEPOD Coffee Co. decided to undertake an industry analysis and has
chosen SWOT as its strategic tool. SWOT is strategic planning technique used by organisations
to assess its internal strengths and weaknesses, as well as its external opportunities and threats
(Vlados, 2019). SWOT of CAFEPOD Coffee Co. is as below:
 Strength – Its unusual coffee blend range is its biggest strength as it has no identical
competition. It has a highly dedicated workforce which works as an artist to create new
products, producing every range with highest quality and making them available at all
supermarkets.
 Weaknesses – The company has no physical place of its own to offer its products and
completely relies on supermarkets and online retailers. It has a limited workforce and it
works only according to taste of consumers at London.
 Opportunities – It is highly popular in London supermarkets among coffee lovers and
still has untapped markets in other parts of UK which it can target. Company can extend
its operations outside UK. New range of blends will also help company reach new
consumers.
 Threats – New competition is constantly entering into the market with their own unique
products. It stands as a threat to company's USP. Also, different consumers have different
tastes and also tastes of consumers keeps on changing. It is a threat for company's sales
and revenue.
4

Stage 3 – Financial Plan
Month Pre-Start month 1 month 2 month 3 month 4
INCOME
Cash Sales 18,000.00 20,070.00 22,378.05 24,951.53
Credit Sales 8,500.00 9,477.50 10,567.41 11,782.66
Business Loans 1,00,000.00
Income from other sources 5,500.00 6,132.50 6,837.74 7,624.08
Opening balance 0.00
Total
£1,32,000.0
0
£35,680.0
0 £39,783.20 £44,358.27
Cash Purchases 10,500.00 9,500.00 9,900.00 9,300.00
Stock 4,700.00 4,700.00 4,700.00 4,700.00
Drawings 1,300.00 1,450.00 1,990.00 850.00
Wages/Sub Con. 6,000.00 6,500.00 6,800.00 6,900.00
Rent 6,500.00 6,500.00 6,500.00 7,000.00
Rates 850.00 870.00 920.00 910.00
Light/Heat/Power 1,050.00 1,050.00 1,050.00 1,050.00
Telephone / Mobile / Broadband 250.00 250.00 250.00 300.00
Stationery & Post 250.00 250.00 250.00 300.00
Insurance PL 3,500.00
Advertising & Marketing 750.00 750.00 750.00 800.00
Repairs/Renewable 1,120.00 1,120.00 1,120.00 1,120.00
Motor & Travel 3,700.00 3,700.00 3,700.00 4,000.00
Consumables- 1,100.00 1,265.00 1,454.75 1,672.96
Accountancy 4,500.00 4,500.00 4,500.00 4,500.00
5

Loan Repayments 4,000.00 4,000.00 4,000.00 4,000.00
Miscellaneous 90.00 100.00 80.00 120.00
Tools & Equipment (Capital Items) 95,000.00
Total
£1,41,660.0
0
£46,505.0
0 £51,464.75 £47,522.96
Surplus/Deficit £0.00 -£9,660.00
-
£10,825.0
0
-
£11,681.55 -£3,164.69
Balance @ Start £0.00 £0.00
-
£9,660.00
-
£20,485.00
-
£32,166.55
Balance @ End £0.00 -£9,660.00
-
£20,485.0
0
-
£32,166.55
-
£35,331.24
month 5 month 6 month 7 month 8 month 9
month
10 month 11 month 12 Total
27,820.9
5
31,020.3
6
34,587.7
0
38,565.2
9 43,000.30
47,945.3
3 53,459.04 59,606.83
4,21,405.3
8
13,137.6
7
14,648.5
0
16,333.0
8
18,211.3
9 20,305.70
22,640.8
5 25,244.55 28,147.67
1,98,996.9
8
1,00,000.0
0
8,500.85 9,478.44
10,568.4
6
11,783.8
4 13,138.98
14,649.9
6 16,334.71 18,213.20
1,28,762.7
5
0.00
0.00
6

£49,459.
47
£55,147.
31
£61,489.
25
£68,560.
51
£76,444.9
7
£85,236.
14 £95,038.30
£1,05,967.
70
£8,49,165.
12
8,300.00 47,500.00
4,700.00 23,500.00
1,750.00 7,340.00
7,200.00 7,100.00 7,900.00 7,800.00 7,450.00 8,300.00 7,150.00 8,200.00 87,300.00
7,000.00 7,000.00 7,500.00 7,500.00 7,500.00 8,000.00 8,000.00 8,000.00 87,000.00
820.00 800.00 800.00 800.00 950.00 950.00 1,000.00 1,150.00 10,820.00
1,250.00 1,150.00 1,150.00 1,240.00 1,450.00 1,450.00 1,800.00 1,900.00 15,590.00
300.00 450.00 450.00 300.00 250.00 200.00 400.00 200.00 3,600.00
300.00 300.00 350.00 350.00 350.00 400.00 400.00 400.00 3,900.00
3,500.00 3,500.00 10,500.00
800.00 800.00 950.00 950.00 950.00 1,000.00 1,000.00 1,000.00 10,500.00
1,120.00 1,120.00 1,120.00 1,120.00 1,120.00 1,200.00 1,200.00 1,200.00 13,680.00
4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 47,100.00
1,923.91 2,212.49 2,544.37 2,926.02 3,364.93 3,869.66 4,450.11 5,117.63 31,901.83
4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 54,000.00
4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 48,000.00
140.00 200.00 120.00 150.00 190.00 150.00 150.00 200.00 1,690.00
10,000.0
0
1,05,000.0
0
£48,103.
91
£33,632.
49
£48,884.
37
£35,636.
02
£36,074.9
3
£41,519.
66 £38,050.11 £39,867.63
£6,08,921.
83
£1,355.5
6
£21,514.
81
£12,604.
88
£32,924.
49
£40,370.0
5
£43,716.
48 £56,988.18 £66,100.07
£2,40,243.
28
-
£35,331.
-
£33,975.
-
£12,460.
£144.01 £33,068.5
0
£73,438.
55
£1,17,155.
03
£1,74,143.
21
7

24 68 87
-
£33,975.
68
-
£12,460.
87 £144.01
£33,068.
50
£73,438.5
5
£1,17,15
5.03
£1,74,143.
21
£2,40,243.
28
Client:
Business:
Cashflow Forecast
Date:
Financial Analysis
Profit and Loss
Account
Sales including
Debtors £6,20,402.36
Sales £6,20,402.36
Variable Costs £71,000.00 Direct Costs
Fixed Costs £5,30,581.83
Initial Stock &
Material £-
Drawings £7,340.00 Add Purchases £71,000.00
Less Year End Stock £- Variable Costs
Variable Costs as a 11 4/9 Sub Contract Labour £-
percentage of Sales
Contribution
Margin 89 Gross Profit £5,49,402.36
Break Even Sales
Value £5,99,149.63 Overheads:
Survival Sales £6,07,438.19 Wages/Sub Con. £87,300.00
8

Volume
Rent & Rates £97,820.00
Light/Heat/Power £15,590.00
Telephone £3,600.00
Stationery £3,900.00
Insurance £10,500.00
Advertising £10,500.00
Repairs/Renewals £13,680.00
Motor & Travel £47,100.00
Consumables £31,901.83
Accountancy/Legal £54,000.00
Loan Repayments £48,000.00
Bank Charges £1,690.00
Depreciation =
Other Expenses £1,05,000.00
Total Overheads £5,30,581.83 Fixed Costs
Pre - Tax Net Profit £18,820.53
Add Non Trading
income £-
New Business
Support £2,28,762.75
Less Personal
Drawings £7,340.00
Profit Surplus £2,40,243.28
Stage 4 – Monitor and Control
9

This is the last part and it involves tracking, reviewing and reporting the progress to meet
the performance objectives defined in the plan (Simón-Moya and Revuelto-Taboada, 2016). It
allows stakeholders to understand the scope and prospect of project. Monitoring and control will
help management of CAFEPOD Coffee Co. in identifying weak spots and balancing weaknesses
and threats.
TASK 3
P5 critical evaluation of the exit or succession options for small business and decide an
appropriate course by comparing options.
From the point of view of CAFEPOD Coffee Co., lets take a look at the possible options
to plan out business exit.
A business exit strategy is a plan for how the business owners' will want to leave their
business. These strategies describes and outlines the forms that the transition can take place. Few
exit strategies are:
Management or employee buyout
Owners can sell the business to interested employees or can give up their shareholding in
favour of managers (Blasi, 2016). This changes in shareholding changes the ownership yet, the
business survives. If the management buys the CAFEPOD Coffee Co., the owners can still be
connected in some form with the company. They can still keep some shares of business or can
serve in advisory or other capacity. Advantages – The business can thrive as the familiar employees will take over. With
ownership motivation, employees will be more enthusiastic to work.
 Disadvantages – Clients may not approve new owners or management. This can hamper
the future of the company.
Merger or acquisition by another business –
This is the most popular exit strategy . In it, the business is usually merged with or is
completely purchased by either competitor or some other company who wanted to enter the
business's market (Parola, Ellis and Golden, 2015). Acquisition by another company can reap
good profits to owners of CAFEPOD Coffee Co. and with experience and money in hand, they
can foray in some other business.
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 Advantages – The small business can negotiate the terms to earn the maximum value it
can have out of its business model and then can move on to some new prospect.
 Disadvantages – It is a time consuming, costly and sometimes unsuccessful process as
negotiations between two parties does not come on same ground.
Liquidation –
This is the close up of business by selling all the assets and settling liabilities (Nishihara
and Shibata, 2016). Small businesses are dependent on performance of few individuals. They
have lesser sources of finances and their scope is limited. For CAFEPOD Coffee Co.,
liquidation would not benefit much to any stakeholder. Advantages – Since the small businesses have less assets and less stakeholders. They can
be quickly wound up.
 Disadvantages- Liquidation offers the lowest returns on investment. The only money
source is disposal of assets squared with liabilities, which can be very low even in a non
depressed market, as they will be second hand assets.
The best exit strategy is one that best fits to the conditions of referred small business and
personal goals of owners. So, either management or employee buyout or merger or acquisition
by another business is suggested. But, the finance managers of company shall in advance
position their company in such a way that it can place the company valuation in profitable
positioning in front of target acquirers.
CONCLUSION
From the above report, it can be concluded that planning is essential for growth of
company. It sets standard for how the company wishes to achieve its organisational objectives.
Business Plan lays out the objectives set by company. It gives business an understanding of the
areas they want to explore and analyse market standing of those objectives. Regular planning
combined with monitoring and controlling leads company to sustainable growth and
development.
11

REFERENCES
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Online
Sources of Finance. 2020. [Online]. Available
through:<https://efinancemanagement.com/sources-of-finance>
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