Cafe Pod Coffee Co.: Growth Planning, Funding, and Exit Strategies.

This report provides a comprehensive growth plan for Cafe Pod Coffee Co., an independent craft coffee business established in 2011. It evaluates growth opportunities by considering factors like hypothesis, investment, and precedent, and analyzes these opportunities using Ansoff's growth vector matrix (market penetration, market development, product development, and diversification). The report also assesses various funding sources available to the business, including debt capital, retained earnings, and equity capital, discussing the benefits and drawbacks of each. Furthermore, a business plan for growth is prepared, incorporating financial performance and strategic objectives. Finally, the report assesses succession and exit options for the small business, outlining the advantages and disadvantages of each option, and providing justified recommendations for the appropriate course of action. Desklib offers a range of solved assignments and resources for students.

Planning for Growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
P1 Evaluate the main considerations for evaluating growth opportunities and also justify these
considerations according to the organisational context .........................................................3
P2 Analyse the opportunities for growth applying Ansoff's growth vector matrix................4
M1 Discuss the options of growth with the help of frameworks of analytical terms for
demonstrating the competitive advantage in accordance with the organisation ...................5
P3 Assess the main sources of funding that is available to the business and discuss the
benefits and drawbacks of every source.................................................................................6
M2 Assess the significant sources of funding and provide the justification for the adoption
of appropriate sources of funding into the organisational context ...................................7
D2 Assess the significant sources of funding into critical terms with justified argument for the
adoption of specific source ...................................................................................................7
P4 Prepare the business plan for growth which include financial performance and strategic
objectives for scaling up the business ...................................................................................8
P5 Assess the succession or exit options for the small business that explains about the
drawbacks and benefits of every option ..............................................................................11
M4 Asses the succession or exit options for the small business that contrast and compare the
options and also give the valid recommendations ...............................................................12
D4 Provide the evaluation into critical manner of the ex or succession option for the small
business and decide the proper course of action with justified recommendation to support
implementation ....................................................................................................................13
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Growth planning basically refers to the strategic activity of strategic nature which enables
the owners of business to track and plan the organic growth in the revenue. It gives permission to
the business to allocate the limited resources towards the centred effort in order to adapt the
changes within the industry. Cafe Pod Coffee Co. is taken into consideration in the present
report. It is the cafe which is an independent business of craft coffee that was established in the
year of 2011(Adeleke and et.al., 2021). It is basically inspired by the London coffee that they
love to drink and also got passion, creativity and also pushes the boundaries as well. The present
report will cover discussion about the main considerations for evaluating growth opportunities
and also about the opportunities for growth. In addition to this, the report will cover analysis
about potential sources of funding and also about the business plan for growth. Moreover, the
report will cover discussion about the exit or succession options for the small business that
explains about the benefits and drawbacks of every option.
MAIN BODY
P1 Evaluate the main considerations for evaluating growth opportunities and also justify these
considerations according to the organisational context
There are dissimilar kinds of main considerations which has been taken into
consideration for finding out the growth opportunities which has been defined into the following
manner:
 Hypothesis: It is important to have good hypothesis as why there is need of changing the
metrics. They have take into account about the opportunity size that is the number of
users might got affected by the feature. It is not necessary that the idea is fresh or not if
there are small scale number of people got affected at the initial stage. There are mainly
hypothesis who is into the category of increasing or decreasing the intent.
 Investment: Under this head, growth is majorly related to the smart investment and also
it s very difficult that if the experiment got failed then all the hard work got down drain
and the individual has to start from the scratch zero level(Ahmad and Ahmad., 2019).
There are also other parameters
that needs to be taken into consideration is not just about developing this feature but also it is
about maintaining the feature.

 Precedent: Precedent is the parameter that looks at the experiments at the level of past
which has been run by the team or industry as well. At the initial stage, there are no
results which is at the previous level that individual needs to look so that they can find
out what works for them within the industry. According to changing period of time, the
individual majorly relies on their own experiments as well(Alotaibi., 2019). When the
experience will trend towards the level of extreme which performs into proper manner for
that metric.
In context to Cafe Pod Coffee Co., there are different parameters which needs to be taken into
consideration from the growth perspective. It is important to have hypothesis because without it
there is no idea where there is need to change the metrics. It is very significant to consider the
investment parameter because on the basis of this parameter the growth can be improved into
positive manner. When the Cafe Pod Coffee Co. have the experiences on the previous level then
it supports into context of taking the further decision into proper manner. When there is large
level of dependency on the single parameter then further steps have been take accordingly for it.
P2 Analyse the opportunities for growth applying Ansoff's growth vector matrix
Ansoff growth matrix basically refers to the tool of strategic planning which provides a
framework in order to support senior managers, executives and marketers devise strategies for
the growth of future. It is basically consist of growth strategies which has been defined into the
following manner:
 Market Penetration: It is a measure of how much the products and services has been
used by customers as compared to the estimated market for that product or service. It is
also related to the number of customers which has purchased the particular product
company instead of the competitor product. It also refers to the selling into successful
terms of the goods and services in a particular market(Bathija and Priyadarshini., 2018),
It is a kind of strategy which is very beneficial for getting attracted towards the new
customers. It will also enhances the sales and profits through penetrating the existing
market.
 Market Development: It is basically the kind of growth strategy which develops and
identifies the new segments of market for current products. The strategy of development
basically focuses on the non-buying of customers in the current target segment. They also
target the new customers into new segments. The Cafe Pod Coffee Co is a cafe who can

use this strategy by having the financial stability into good terms and is also the
capabilities of the risk.
 Product Development: It is also a kind of series of steps which include
conceptualisation, design, development and marketing of newly created or newly
rebranded goods and services as well(Brinckmann and et.al., 2019). It has focus towards
the introducing the new products to an existing market. In context to Cafe Pod Coffee Co.
they can introduce new variety or range in their coffee products in their existing market
of London.
 Diversification: Diversification refers to this concept where they enter into a new market
with all their new products. In context to Cafe Pod Coffee Co., they enter into a new
market along with the new range or variety in this market at international level.
Diversification basically refers to the more number of customers and also act as the great
income security. It also act as in the terms of more consistent demand and also lower
down the production costs.
These are the main parameters of Ansoff Growth Vector Matrix where increment into the growth
opportunities which can be increased with the right kind of approach into result oriented terms.
M1 Discuss the options of growth with the help of frameworks of analytical terms for
demonstrating the competitive advantage in accordance with the organisation
Diversification within the products and services where the best option for growth and it is
a option that supports the Cafe Pod Coffee Co. for growing themselves into result oriented terms.
There is also one more framework which supports for the company in creating the competitive
advantage within the market. There are different kinds of frameworks where it includes Porter's
five forces, SWOT analysis etc which supports the organisation in terms of taking further steps
and actions into positive terms with the right kind of approach(Chikwama., 2018). So the growth
option is very significant which needs to be considered into serious manner so that the
frameworks which can be used into supportive manner at the level of competitiveness.
D1 Assess the specific option and pathways into critical terms which needs to take into account
the risk of every option and in which manner it can be mitigated
At the organisational level it has been observed that it is necessary that the diversification
option which needs to be taken into consideration into serious manner. It is the option that can be

supportive but can't be applicable into every condition so its very necessary to consider the
particular option into serious terms. It is the option that considers a certain risk level because it is
not necessary that the diversified option is supportive into every context and can be attracted
through every kind of customers as well. So its very important that to implement this option
through considering into serious terms at the level of organisation of Cafe Pod Coffee Co.
P3 Assess the main sources of funding that is available to the business and discuss the benefits
and drawbacks of every source
There are different kinds of sources of funding which can help the Cafe Pod Coffee Co.
business into positive manner which has been defined into the following manner:
 Debt Capital: It refers to the funds into borrowed form which must be repaid at the later
stage or date(Eghbali., 2020). It is any kind of growth capital which a company raises
through taking out the loans. Debt capital also comes into the form of traditional loans
and debt issues as well.
Pros of debt capital: The main advantage of debt capital is that they have the ability to pay off
the high cost debt and also reduces the payments on the monthly basis through hundreds or even
thousands of dollars.
Cons of debt capital: The main disadvantage of debt capital is that interest must be paid to
lenders that means amount paid will exceed the borrowed amount.
 Retained earnings:It is the amount of profit of an organisation which has left over after
paying all the in directs costs, direct costs, dividends and income taxes to shareholders. It
is basically about the portion of equity of company which can be used in order to invest
in research and development, marketing new equipment as well.
Pros of retained earnings: It basically contribute into context of increasing the value of stock into
positive manner (Foss and Saebi., 2018). It also holds on to excess profit which also boosts the
corporate liquidity and also act as funding for growth as well.
Cons of retained earnings: At the organisational level, if there is negative retained earnings and
also it has accumulated deficit which means that the company has more debt than earned profits.
 Equity capital: It refers to the funds paid into a business through investors in the
exchange for common or preferred stock. It represents about the core funding of the
business to which debt funding has been added.

Pros of equity capital: There is no requirement of repayment and also have lower risk as well.
They also bring into the equity partners.
Cons of equity capital: They have the ownership dilution and also act as the higher cost as well.
In addition to this, it takes lots of time and efforts as well.
In context to Cafe Pod Coffee Co., they have best option regarding the debt capital which can be
used at level of organisation in order to get the best source of funding which has been available
in the environment of business(Globocnik and et.al., 2020). So in the overall manner, it has been
observed that these are the main sources of funding which are very significant that can be used
by the Cafe Pod Coffee Co. for growing themselves into positive manner.
M2 Assess the significant sources of funding and provide the justification for the adoption of
appropriate sources of funding into the organisational context
Within the business environment or at the organisational level, there are different kind of
sources of funding which can be used into result oriented manner. There are different sources of
funding which include equity capital, retained earnings, debt capital etc. With reference to Cafe
Pod Coffee Co., they can adopt or use the option of debt capital as the source of funding so that
the organisation can grow themselves into positive manner. It is the beneficial option because
interest on financing is tax deductible and interest cost is also lower down the different sources
of capital. It also contribute in terms of enhancing the credit score and also the profit sharing
which is also not necessary for it. So its very necessary that to consider this option into desirable
terms with the satisfactory approach.
D2 Assess the significant sources of funding into critical terms with justified argument for the
adoption of specific source
Within the business environment, the significant sources of funding basically include
retained earnings, debt capital and equity capital as well. At the organisational level of Cafe Pod
Coffee Co., these options can be used but can't act as into the supportive terms into every
situation of the business (Haleem and et.al., 2019).When Cafe Pod Coffee Co., has used the debt
capital then it is beneficial for them and also does not got affected from the perspective of long
term manner. That's why it is the best option which can be used by the organisation from the
view point of future growth and development as well.

P4 Prepare the business plan for growth which include financial performance and strategic
objectives for scaling up the business
According to the business plan, there are different kinds of parameters which are included
in it which are defined into the following manner:
Executive Summary: The overall organisation is involved in terms of providing coffee to their
different kinds of customers. The mission statement of the organisation is to provide coffee for
satisfaction and laughter level as well (Howe., 2022). There are certain main products of the
organisation which include different range of coffee, marsh mallows, espresso caramel etc.
Company description: It is the cafe which is an independent craft coffee business that was
established in the year of 2011. For enjoying at home, they conceive the quality coffee for the
adventurous coffee drinkers.
Market analysis: The cafe needs to do the market analysis so that they can find out new
opportunities in order to target the new market and find the competitors into this international
market.
Management and organisation: The cafe follows the hierarchical structure and the
management has organised the people into such a manner that for every department, proper
people has been assigned for it (Huang and et.al., 2019).
Product or service line: The main product line is related to the coffee where services can be
provided either on the online or offline basis.
Sales and marketing: For increasing the sales, they have used different kinds of platforms
where the organisation help in terms of further development and growth as well.
Financial projection: It has been observed that there is already established business basically
include income statements, balance sheets and cash flow statement.

Cash flow statement
Balance sheet

Profit and loss statement for three years
M3 Produce an appropriate and the detailed plan of business for securing and growth investment
that sets out the strategies for the objectives of business
The important objective of business of Cafe Pod Coffee Co is to provide the right type of
services into qualitative manner so that it basically results into customer satisfaction into positive
terms(Leyva Carreras and et.al., 2018).There are different kinds of strategies which can be
adopted for the business plan execution into effective terms then it is easy to follow those
strategies which has been set by the organisation into result oriented form. So it is the way in
which the business plan has been followed into result oriented form.
D3Present the in depth business plan which demonstrates the understanding and knowledge of
how to apply, formulate and achieve objectives of business into successful terms
With reference to the business plan, there are dissimilar kinds of parameter which needs
to be implemented into effective manner with the right kind of approach (McLean and et.al.,
2018).The effective business plan basically include executive summary, company description,
mission statement, analysis of market, product or service line, organisation and management,
financial projection, marketing and sales as well. So in the overall manner, the business plan

requires to be implemented by following all the types of needed steps with the right kind of
approach. That's why it is very significant to have a deeper understanding about the business
plan.
P5 Assess the succession or exit options for the small business that explains about the drawbacks
and benefits of every option
There are dissimilar kinds of succession or exit options which can be used by the small
business which has been defined into the following manner:
 Continuing the legacy within the family: From the longer perspective, there are
different types of businessman who want to keep their business within the family. It is
mainly about making of plans for transitioning the organisation to an another or child
relative at a certain period of time.
Pros of continuing business within the family: Under this head, there is a possibility of choosing
one person from whom they want to continue their business (Moro Visconti and et.al., 2018).
There is also the requirement of separating the business into complete terms and also be able to
stay in a certain type of transition as well.
Cons of continuing the business within the family: It is that kind of business where it is a kind of
possibility where there is no family member who have enough potential of continuing the
business with the positive aspect. It is that kind of process which brings lots emotions, finances
and stress into general terms to the family as well.
 Employee or buyout of management: There is a kind of possibility where the
individual is ready to exit the business where people also already work for the individual
then they can buy the organisation on the individual basis and from the individual. Within
this kind of business, people know that how to manage the Cafe Pod Coffee Co into
successful terms(Olesen and Hansen., 2020). It is the exit strategy of business where it
basically results into smoother transition where it also enhances the loyalty to the legacy
of the business.
Pros of employee or management buyout: Management buyout are easy and simple to arrange
and within this kind of business option, the factor confidentiality can be maintained. There is
also higher chances of success as well.

Cons of employee or management buyout: Within this kind of option, there are difficulties in
terms of raising funding and also have lack in terms of business ownership experience. It also
has insider trading risks and also manages the current owner's departure.
 Merge or acquired by another business: According to this strategy, the organisation is
either merge or purchased with the company with similar or aligned the goals according
to the business. It is the strategy which depends on this factor that to who the business is
sold or merge with the business to which it also act as the flexibility in terms of
involvement or freedom to talk away.
Pros of Merge or acquired by another business: It act as the break from the business and also
negotiate the price, terms and other details of merger or acquisition.
Cons of Merge or acquired by another business: It is very time consuming according to its nature
, unsuccessful and can be costly from the perspective of the process. The business may get close
down to exist as it once was having the possible range of consequences which is related with this
action.
With reference to Cafe Pod Coffee Co, these are the succession or exit options which can
be utilised by the small business and can be implemented into result oriented terms at the level of
organisation.
M4 Asses the succession or exit options for the small business that contrast and compare the
options and also give the valid recommendations
There are different kinds of succession or exit options for small business which can be
utilised at the level of organisation. It basically include acquired or merge by another business,
employee or management buyout and continuing the legacy within the family. It has been
observed that every option has their own cons and pros as well (Rigolon and Németh., 2018).
When the business has been run by the family members has their own significance where they
can easily identify that who will run the business into successful terms. Thee is one more option
which is named as the merger and acquisition also act as the advantage to the business where
they can transfer the business into total manner to someone else through keeping themselves into
free pace manner into positive manner. Management buyout is also the another option which can
be taken by the business for considering it as the option of exit or succession. It has been
recommended for Cafe Pod Coffee Co, that they can use acquisition or merge option in order to
grow themselves into positive manner.