Eat & Treat Restaurant: Business Plan and Growth Strategy Report

This report provides a comprehensive analysis of Eat & Treat restaurant's growth strategy. It begins with an introduction outlining the restaurant's current situation and objectives, which includes expansion via catering services. The report then analyzes key considerations for evaluating growth opportunities, including Porter's generic strategies and PEST analysis. It evaluates growth opportunities using Ansoff's growth matrix, assessing market penetration, product development, market development, and diversification. The report assesses various funding sources, detailing their advantages and disadvantages. A business plan is formulated, incorporating financial information and strategic objectives for scaling up the business. Finally, the report addresses succession and exit plans for the small business, discussing their advantages and disadvantages. The report concludes with an overview of the restaurant's growth prospects and strategic recommendations.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis and justification of key considerations for evaluating growth opportunities .........1
P2 Evaluation of growth opportunities using Ansoff's growth matrix .......................................4
TASK 2............................................................................................................................................5
P3 Assessment of sources of funding along with advantages and disadvantages.......................5
TASK 3............................................................................................................................................6
P4 Business plan for growth including financial information and strategic objectives for
scaling up a business...................................................................................................................6
TASK 4............................................................................................................................................9
P5 Succession and exit plan for small business with its advantage and disadvantage...............9
CONCLSUION..............................................................................................................................11

INTRODUCTION
Planning is defined as an advance thinking and formulating a marketing procedure for
different activities so that aims and objectives of an organisation can be achieved in a desired
manner. Planning for growth is referred to preparation of plans and strategies so that a business
firm can achieve high growth and success in marketplace (Lasso, Carter and Unrelenting, 2011).
This assignment is written in context with Eat & Treat restaurant which is a small restaurant in
London employing small number of people and earning limited revenues. This restaurant offer
healthy food and drinks to their customers. restaurant wants to increase their growth by offering
catering services in Birch wood Community school in England. This report is going to evaluate
different growth opportunities, various measures to access funds by mentioning their advantages
and disadvantages for the company. Beside this, a business plan is formulated including strategic
objectives and financial status of company. At last, ways of succession and business exit are
mentioned.
TASK 1
P1 Analysis and justification of key considerations for evaluating growth opportunities
Eat & Treat restaurant is a small scale restaurant in UK that offers healthy food and drink
to their consumers. Along with this, restaurant is also planning to initiate catering services for
colleges and schools. As they are offering healthy and delicious products, restaurant has a wide
opportunity to enhance their growth in a considerable manner. People in UK are very health
conscious, this is the reason offerings of Eat & Treat restaurant can gain wide popularity among
customers and marketplace (Dixie and Kumar Pander, 2011). There are some key considerations
to evaluate the growth opportunities of business organisation are stated beneath:
Porter's generic strategy
Porter's generic strategy states the manner by which an organisation can attain its
competitive edge against competitors in the marketplace. According to porter, there are four
different kind of strategies which can be used by a restaurant to attain an upper edge against the
rivals along with implementation of right strategy so that growth and expansion can takes place
in a proper manner.
In cost leadership strategy, an organisation offers high quality services and products to
the customers at less prices. This benefits the restaurant in increased sales and gaining
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competitive edge against the rivals. For example, with the use of this strategy, Eat & Treat
restaurant can enhance their market shares and sales. This is only possible if restaurant will
reduce their operational costs by implementing cost effective procedures. In differentiation
strategy, a firm is required to offer innovative and unique services or products to their clients
which are not currently offered by rivals. This will benefits the restaurant in enhancing their
market shares in a considerable manner. To achieve high output from this strategy, Eat & Treat
restaurant is required to introduce a unique innovative idea or concept like organic and herbal
drinks so that attention of customers can be grabbed desirably (Love and Roper, 2015).
Under Cost focus strategy, an organisation is required to focus on present industry and
offers their products at minimum possible prices so that high advantage over rivals can be
achieved. By using this strategy, Sales of Eat & Treat restaurant will increase due to which their
Market shares will enhance considerably Whereas in differentiation focus, a business
organisation offers unique products to their customer base for differentiating their services or
products from other companies operating in same field. For example, Eat & Treat restaurant can
take the help of this strategy to retain their customer base for a longer time period.
Growth option appropriate for Eat & Treat
There are different growth options which are available for concerned restaurant. These
options will help the restaurant in attaining desired success and growth along with required
competitive advantage. Out of all the available options, restaurant can go for differentiation
strategy where new and unique products will be given to existing and potential customers so that
their attention can be gained in large numbers. This will benefits the restaurant in increased sales.
Due to this, revenues and profitability of restaurant will increase and they will be able to acquire
strong position within marketplace. This will benefits the company in gaining high competitive
advantage and edge against rival competitors.
PEST analysis
PEST analysis is a strategic framework that can be used by Eat & Treat restaurant to
determine external business factors that can impacts the activities and operations of concerned
restaurant in a considerable manner. In this context, a PEST analysis is mentioned below:
Political factor: This factor is related with the stability of government, tax rates, trade
tariffs etc. As UK is a stable country with stable government and tax rates in UK are quite low. It
will be very beneficial for the Eat & Treat restaurant to operate their operations and business
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activities in UK market. But increment in tax rates or trade tariffs can impacts the working of Eat
& Treat restaurant in a negative manner (Mason, 2015). Economical factors: Due to the great
recession that takes place in 2018 and BREXIT, economy in UK is not very stable but due to
high disposable income of people, Eat & Treat restaurant has an opportunity to increase high
sales and revenues by offering healthy drinks and foods to their consumers. Low interest and
inflation rates in UK will impact Eat & Treat restaurant in a positive manner.
Social factor: Population in UK is modern and well educated due to which they are
highly concerned about their health. This is the reason most of the people have shifted their
preference from junk food and carbonated drinks to healthy food and drinks. This is the reason,
products offered by Eat & Treat restaurant in the market of UK will gain popularity. Due to this,
profit margins of restaurant will rise in a considerable manner. Technological factors: Eat &
Treat restaurant is required to use latest technology for the production of their food and drinks
along with the use of digital platforms like FB, Instagram or Twitter to promote their offerings.
This will benefits the restaurant in gathering the attention of thousands of customers in a limited
time period(Ward, 2016).
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P2 Evaluation of growth opportunities using Ans off's growth matrix
Illust
ration 1: Ansoff matrix
(Source: Ans off matrix, 2018)
Ans off growth matrix
Ans off's growth matrix is defined as a strategic tool which is used by organisations for
strategic planning so that effective growth strategies can be implemented. This will allow the
restaurant to achieve desired growth in a timely manner. This tool focuses on both existing and
potential customers so that high growth can be achieved from different sides. In context with Eat
& Treat restaurant, these strategies are mentioned below:
Market penetration: This growth strategy focuses on increasing market share and
revenues of a firm by selling available products or services in existing marketplace. For example,
with the help of this strategy, Eat & Treat restaurant can offer their food and drinks at low prices
so that maximum number of customers can buy them. This will helps the restaurant in achieving
high profits (Netizen and Bartlett, 2012).
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Product Development: With the help of this strategy, an organisation can offer their new
services or products in existing market. In this strategy, an organisation can either modify their
existing product or introduce an entirely new product so that attention of customers can be
grabbed in a proper manner. By offering new dishes and beverages to existing customers,
revenues of Eat & Treat restaurant can be enhanced considerably.
Market development: In this strategy, an organisation aims to provide the existing
products or services to a new market so that large customer base and market can be targeted. To
implement this strategy, high investment is required and this strategy holds more risk than
market penetration. For example, this strategy will help Eat & Treat restaurant in targeting an
entirely new segment of customers by offering same products due to which high sales can be
achieved.
Diversification: This is the most risky strategy in which a new product is offered to the
customers of new market (Chen and et.al.., 2014). For this strategy, very high investment is
needed. This strategy posses more risk than other three strategies but returns after receiving
success is very high. Eat & Treat restaurant can use this strategy to increase their product line
and customer base so that high outputs can be reached.
Growth option suitable for company
In context with Eat & Treat restaurant, manager of restaurant can use diversification
strategy where the unique products of restaurant i.e. healthy drinks and foods will be offered to
the new markets in UK. This will be a risky strategy for restaurant to pursue as products and
market where products will be sold is new. By signing a contract with Birchwood community
school, restaurant will gain wide opportunity to work for another school and colleges. Due to
this, diversification strategy will receive wide returns for restaurant so that high competitive
advantage can be gained. This will allow the restaurant to gain desired amount of success and
growth in an expected manner. This competitive advantage will benefits the restaurant in
achieving desired results against rival companies.
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TASK 2
P3 Assessment of sources of funding along with advantages and disadvantages
Funding is defined as the process of collecting essential funds that are needed by a
business firm so that appropriate activities and operations can be performed desirably. At
present, Eat & Treat restaurant has investment of 25000 pounds so that they can expand their
business presence in UK by signing a contract with Birchwood community school but to expand
its operations in a desired manner, restaurant requires 35000 € (Denton, Forsyth and
MacLennan, 2017). without complete amount, it is not possible for Eat & Treat to perform their
buisness operations in expected and desired manner. In this context, company is required to
arriange the pending 10,000 €. There are different external and internal sources of funding &
finances which can be used by Eat & Treat restaurant to collect remaining 10,000 €. These
different sources are mentioned beneath:
Internal sources: There are some internal sources in an organisation from which required
amount of funds can be collected. These internal factors are reduction in workforce capital,
selling of assets etc. External sources: These kind of sources are different options that are
presented outside the restaurant for generation of sufficient amount of funds like bank loans,
crowdfunding, Angel investment etc. Below are mentioned some external sources which can be
used by Eat & Treat restaurant to manage their finances and funds in a proper manner:
Bank loans: This is the common and easiest way to attain the funds which is needed by a
firm to perform different activities and operations. Bank gives amount for a specific time period
and for this amount, bank charges a certain interest rate. In context with Eat & Treat restaurant,
this is a good way by which organisation can manage its remaining funds as it is a reliable way
to collect money.
Advantage: The main advantage of bank loans is that organisation is fully aware about
the amount and interest which they have to pay in fixed time (Fulong, 2015). Disadvantage:
Major disadvantage with this source of funding is that firm is required to provide any assets or
collateral as security in order to take loan from bank.
Crowd funding: This kind of fund managing source is used by new start-ups and
ventures to collect required amount of finances and funds. Here, an organisation takes small
amount of finances from many people instead of taking large sum of money from a single
institution or person.
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Advantage: This method is an easier way to increase the brand image of restaurant along
with gaining attention from large number of people so that high sales can be earned.
Disadvantage: This is a complex procedure in which Eat & Treat restaurant have to follow many
legal formalities and changes related with idea stealing will be more as concerned restaurant will
not have any patent or copyright.
Suitable source of funding for Eat & Treat
There are different kind of sources of funding which can be used by concerned restaurant
so that shortage of money can be eliminated and business operations can be performed in a
desired manner. In case of Eat and Treat, organisation can take a loan from bank so that their
need of 10,000 pounds can be fulfilled by a simple process. This will allow the restaurant in
performing their work in a timely manner. Bank will provide loan for a specific time and by
charging a fixed interest rate due to which it is easy for firm to pay back loan in timely manner.
But restaurant can also go for crowd funding, where they can arrange loans from different
persons rather than depending upon a single institution or person. This method is good but can
leads to confusion. Due to this, paying back loan can face complexity and relation with loan
givers can disrupted. Hence, restaurant can take loan from back to satisfy the need of 10,000
pounds.
TASK 3
P4 Business plan for growth including financial information and strategic objectives for scaling
up a business
Business plan is referred as the formal document of companies where policies and
strategies to attain desired objectives and targets in a timely manner. In this context, business
plan for Eat & Treat restaurant is mentioned below:
Executive summary
Eat & Treat restaurant is a small organisation is UK which offers healthy drinks and
foods to their customers. restaurant is going to introduce chocolate cookies so that their product
line can expand that will assists in high sales and revenues (Haaland and van den Bosch, 2015).
Vision
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Main vision of the restaurant is to offer healthy drinks and food to the people in UK so
that nutritious eatables can be provided without compromising with taste.
Mission
The main mission of Eat & Treat restaurant is to provide affordable drinks and food to
the customers as per their demand so that high revenues and profits can be earned against rivals.
Objective: The main objective of Eat & Treat restaurant are mentioned below:
Specific : The restaurant has aim to enhance its market share from 20% to 30% after
launching their chocolate cookie product. Measurable : restaurant is going to measure their
achievement and performance by measuring the results of competitors operating in same field.
Attainable: The objectives will be attainable as manager of restaurant and business owner are
going to guide their workforce so that a unique and tasty product can be formed. Relevant: Eat
& Treat restaurant is planning to increase their market share along with sales so that a stable
position in restaurant can be secured. Time bound :The restaurant has estimated time for success
of new product in near about 6 months.
Financial plan
Success and growth of a business highly depends on the proper function of activities and
operations of business. For these things, sufficient funds are needed. Capital and finance plays an
important role in appropriate functioning of business operations that will benefits in attaining
business objectives in a desired manner (Lu and Yu, 2014). In this context, Eat & Treat
restaurant can arrange their funds and finances from different internal or external sources.
Budget forecast
For this newly introduced product, the estimated budget is mentioned below:
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Production cost 5000 - -
Promotion cost 1000 700 500
Advertisements cost 500 550 600
Technology cost 1500 1700 1900
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Catalogues 250 200 150
Total 8250 3150 315
From above described budget, it is analysed that management in Eat & Treat restaurant is
needed to give close attention to expenses and production cost. Also, restaurant is needed to
invest more in promotion and advertising of services or products so that customers can be
attracted in a desired manner. Eat & Treat restaurant is also needed to invest money in catalogues
which include important information about products offered by restaurant.
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The above mentioned cash flow states that organisation posses sufficient capital which is
needed to pay all pending debts and liabilities. restaurant will be required to pay taxes that will
be different for every year. The cash in hand for year 2015, 2016 and 2017 are $102203,
$200354, $238503 respectively and average income estimated is $72001 for three years.
TASK 4
P5 Succession and exit plan for small business with its advantage and disadvantage
As Eat & Treat restaurant wishes to increase their business in a new market, it is vital for
restaurant to formulate an succession and exit plan so that contingency situations can not impact
business in a negative way. In this context, some succession and exit plans along with their
advantages or disadvantages are mentioned below:
Exit plan: It is defined as a comprehensive analysis of different factors that can impact Eat &
Treat restaurant negatively in achieving their desired goals and objectives. For exit plan, options
posed by contractor is Winding up which is mentioned below:
Winding up: In this procedure, the assets of restaurant are sold so that pending debts and
liabilities can be paid properly. In this method, remaining amount is distributed to shareholders
according to their shares (Whelpton, Campbell and Patterson, 2015).
Advantage: Director of firm became free from all legal compliances and debts. Disadvantage:
Organisation losses its skilled workers and it is a time consuming process.
Liquidation: It can be defined as a close up shop and selling of different assets or
property exit strategy. In case of small businesses such as Eat & Treat, liquidation is important
method as restaurant will not have anything else to sell.
Advantage: This is a simple procedure and include no complications. Exiting from business can
be wound up in a simple manner. Disadvantage: This method has lowest return on investment
to business owner. Money will be gained only by assets disposal like inventory, land or
equipment.
From above discussed option, restaurant can choose winding up as their exiting plan as it
will allow the owner of Eat & Treat to remain free from debts and legal compliances in a
simplified manner.
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