Growth Opportunities and Funding Sources: Business Plan Report

This report provides a comprehensive analysis of growth planning for businesses, focusing on evaluating growth opportunities and securing appropriate funding. It utilizes the BCG matrix and Ansoff's growth vector matrix to identify potential growth areas for Origin Coffee Roasters, a selected small and medium-sized enterprise. The report assesses various internal and external funding sources, discussing their benefits and drawbacks, including bootstrapping, debt financing, and equity financing. Furthermore, it explores exit and succession planning options, comparing and contrasting different strategies to ensure a smooth transition. The analysis includes a critical evaluation of growth options and potential risks, emphasizing the importance of diversification and strategic pricing to gain a competitive advantage. The ultimate goal is to provide a well-rounded understanding of how businesses can formulate, apply, and achieve their growth objectives successfully.

Planning for Growth
Table of Contents
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Table of Contents...........................................................................................................................2
INTRODUCTION..........................................................................................................................3
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context....................................................................4
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix..........5
M1 Discuss the options for growth using a range of analytical frameworks to
demonstrate the understanding of competitive advantage within an organisational
context........................................................................................................................................7
D1 Critically evaluation options for growth and negate risk................................................7
P3 Assess the potential sources of funding available to businesses and discuss benefits
and drawbacks of each source.................................................................................................7
M2 Evaluate potential sources of funding and justification for the adoption of an
appropriate source of funding for a given organisational context.......................................9
D2 Critically evaluate potential sources of funding with justified argument for the
adoption of a particular source or combination of sources, based on organisational
needs.........................................................................................................................................10
P4 Business plan for growth that involves financial information along with strategic
goals for carrying business.....................................................................................................10
D3 Present a coherent and in-depth business plan that demonstrates knowledge and
understanding of how to formulate, apply and achieve business objectives successfully 12
P5 Assess exit and succession options for business examining their benefits and
drawbacks................................................................................................................................13
M4 Comparing and contrasting exit and succession plans.................................................16
D4 Critically evaluating exit and succession plans for appropriate course of action.......16
Conclusion....................................................................................................................................17
References.....................................................................................................................................17
Books & Journal......................................................................................................................17
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INTRODUCTION
The process of planning for growth involves deciding on an overall growth strategy that aids
in tracking the business's ambitions. Basically, it is referred to as a growth plan with a major
objective to grow the business. In addition to this, it will help the business achieve its
organization goals in the most efficient and planned manner. An effective business plan can
support a company to achieve its objectives in the long run when it comes to the small and
medium sized industry. Growth and expansion of small and medium enterprises are
extremely important, and in order to achieve this, different types of funding are required.
These are discussed in the report. For the purpose of this report, Origin coffee roasters have
been selected. Furthermore, this company is one of the leading small and medium scale
coffee companies which provide coffee to its customers with a maritime view. It
was founded in the year with the aim of serving customers with the best range of
chocolates associated with unique combinations. It will include both the analysis of the BCG
matrix and the Ansoff matrix, as well as the identification of the different growth
opportunities for the selected company in accordance with their analytical frameworks. The
critical evaluation of all the types of funding is also done to find out the best option for the
selected company.
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
Essentially, it's a strategic tool used by organizations in order to determine all the potential
of their business units and to allocate resources accordingly. BCG consists of four
strategies namely, dog, star, cash cows, and question marks. In terms of the role that this
matrix plays, it mainly helps the business in its long-term strategic planning in relation
with the growth opportunities available. It assists the business in deciding whether to
invest more or to discontinue the product from the market in view of the current market
situation. The BCG Matrix of Origin Coffee Roasters is mentioned below:
Dog: Products and services in this category of Dog have low shares of the market with low
growth among competitors. They fall into the category where they are neither making
profits in the business nor investing money in it. Considering Origin Coffee Roasters, their
range of chocolate flavours is quite limited. They have to come up with a wide range of
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flavours so that the customers will be drawn towards the huge variety of chocolates for
every age group.
Cash Cows: In this category, the company's products and services have a large share of
the market, but their business growth is slow. Cash cows usually require low investment,
but they are so efficient that they generate huge profits. Despite the challenging economy,
Origin Coffee Roasters have become more competitive than ever with a large range of
ethically produced flavours that are being served to the customers in the best possible
manner. This has helped them gain a significant share of the market. It is also considered
as the major contributor of profit as well.
Star: As part of the BCG matrix, this segment has an enormous market, along with an
expanding industry. It can be considered that the products and services have tremendous
profits, but at the same time they require a large amount of investments in order to grow
and expand. As for Origin Coffee Roasters, they are known for having a very innovative
approach to their coffee. Their appealing combinations of coffee are bringing in a lot of
customers for them. This has established them as an innovator in the market based on how
they present themselves. Also, they are earning huge profits along with this
Question Mark: An industry in high growth requires heavy investment to re-establish this
segment of the company's business, as it consists of products and services with low market
share and a relatively high growth rate. This segment requires heavy investment to bring it
back on track. There are some coffee products from Origin Coffee Roasters that were
exclusively targeting only coffee loving customers and ignoring the other segment which it
can grab effectively, so the company is at a disadvantage somehow for being rigid to a
specific market only as compared to its competitors in the market.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
As a framework, it assists a business in determining what direction it should take by
analysing its risk and benefits associated with implementing the four strategies that are
present within the matrix. Based on the market and product scenarios, the matrix can
provide insight into future decision-making that will ultimately provide the scope of
growth and development in the upcoming future. In consideration to Origin Coffee
Roasters, all the four strategies are mentioned below:
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Market penetration: This strategy aims to provide companies with access to their existing
products and services within their existing market. To do so, they either increase sales or identify
a new customer base within their established market to increase their overall market share. The
company should focus on expanding their online presence to attract potential customers via
attractive advertisement to penetrate the market by using this strategy. In the case of Origin
Coffee Roasters, this strategy requires large investments in marketing and selling. A competitive
advantage can also be gained in their established market by providing customers with various
offers and discounts, which will in turn increase sales and profits.
Product Development: The company introduces a new product into their established market to
increase sales. The company expands their line of products and services to expand their market.
This strategy relies heavily on research and development to be successful. Considering, Origin
Coffee Roasters in this situation, its management need to come up with some new line of
products which will help in the expansion of the market reachability in new sections. This will
ultimately help the business to grow to new and higher levels efficiently.
Market Development: This is the section of matrix that play a major role in helping companies
to focus on marketing their existing line of products and services in a new market in this region
of the matrix. It is a company's growth strategy for identifying and developing new markets for
its existing products. In the case of Origin Coffee Roasters, the management should grow its
business into new demographics such as Australia, France, and Italy, where there is a significant
demand for coffee, making it a viable investment. This strategy is hazardous owing to the large
investment necessary and the presence of existing competitors, but it will secure business growth
and the addition of new clients. It will enable the company to gain a foothold in the worldwide
market and raise brand awareness.
Diversification: Companies adopt this strategy to enter a new market and focus on the creation of
new products and services. For a chance to obtain competitive positioning in a new market, firms
either start or buy a business that is unrelated to their existing product line and market. In the
case of Origin Coffee Roasters, the management should expand their product line as well as their
business by entering the tea industry. As a result, Origin Coffee Roasters will be able to boost its
total company while also attracting new customers. Although expensive, this shift can be aided
by their extensive knowledge in the coffee sector, which can assure a smooth transition.
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Therefore, from the above discussion it can be concluded that Origin Coffee Roasters should
focus on diversification strategy in order to attract a new potential consumer base, as seen in the
preceding plan. This will also give the company with a new market, which will aid in the spread
of Origin Coffee Roasters while also increasing brand awareness. It will encourage the company
to develop new product lines that will provide it a competitive advantage as it enters a new
market.
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate
the understanding of competitive advantage within an organisational context.
Growth is essential for a company's long-term survival, as well as its performance and
earnings. In the case of Origin Coffee Roasters, its higher authorities use two analytic
frameworks to examine the company's potential expansion choices. In order to attract new
customers, it was suggested that the corporation exploit its star product and enter a new market.
Furthermore, to keep existing clients involved with the firm, companies should make timely
offers and discounts within their established market. In order to promote expansion and boost
profitability while also acquiring a competitive advantage over its competitors, the company
should diversify its product line.
D1 Critically evaluation options for growth and negate risk.
It has been critically discovered that in order for Origin Coffee Roasters to thrive, they
must enter a new market with their star products. Furthermore, they should consider expanding
their product line in order to broaden their total portfolio and give the organisation a competitive
advantage. When entering a new market, a company will encounter a number of challenges,
including current competitors and competitive product price. To prevent these dangers, the
company should concentrate on aggressively pricing its star product in order to establish itself
and fight with the existing competition in the new market.
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
A source of funding is something that aids a company's growth and expansion to new heights.
They essentially simplify the process of purchasing assets. It also aids in increasing efficiency by
primarily provisioning for working capital, which is required by practically all businesses for
day-to-day operations. In the case of Origin Coffee Roasters Company, it can tap into a variety
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of potential funding sources to help the company grow and expand in order to meet its financial
needs. Internal and external sources of funds are the two most common types of funding sources.
Both the types of funding required to the respective organization are mentioned below:
External Sources of Funding: These are the sources that are raised with the assistance of
outside parties, primarily from outside entities. They can be funded by debt or equity, which can
take the form of any type of loan or borrowing. The many types of external sources are listed
below:
1. Bootstrapping: This method of funding is deemed effective because it relies on personal
savings and luck generated by the first sales. Because it does not focus on diluting
ownership, it is one of the best fundraising solutions. Bootstrapping allows the company's
owner to keep 100 percent of the profits.
Benefits:
 It does not address the issue of ownership dilution.
 The owner has the power to decide which direction the company should go.
Drawbacks:
 Growth remains slow with bootstrapping.
 The existence of valuable connections is absent in this type of financing.
2. Angel Investor: It is one of the most popular forms of financing for the company, since
the main objective of this form of financing is to financially secure small and medium-
sized companies through the exchange of social capital in the company. Angel investors
are proving to be a better choice compared to other common lenders because their motive
is based on starting a business rather than focusing on the future success of the business.
Benefits:
 It is the cheapest way to provide seed capital to start ups.
 The investing angel can play an important role in the important decision-making
process of the company.
 This form of financing is less risky than debt financing.
Drawbacks:
 There is a total loss of control by the owner.
 Along with high expectations, there is a higher level of risk in the career
path.
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Internal source of funding: These are those sources that are collected with the help of internal
parts of the company. They are used by many organizations because they don't put a lot of
pressure on refunds on the company. The internal fonts are mentioned below:
3. Retained profit: It is a form of financing in which the company's profits are used for a
specific purpose that the company requests. This method is regarded as the way to
provide working capital to businesses with the aim of achieving higher levels of growth.
Benefits:
 This source of funds provides increased cash flow to the company.
 Retained earnings improve the liquidity position of small and medium - sized
enterprises and their owners.
Disadvantages:
 Reduces the company's profit or profits resulting in lower shareholder dividends.
 Abuse of retained earnings can also be done by manipulating the company's stock
prices.
4. Sale of assets: It is a form of financing that makes funds available by selling the assets of
the company. It is basically a liquidation technique that aims to improve the liquidity
position of the company.
Benefits:
 Primarily helps provide quick cash to the business when it needs funds.
 Disposal of assets can be done quickly.
Drawbacks:
 The company may suffer tax consequences if the assets are sold.
 Although this is a quick way to improve the financial position of the
company, it can sometimes happen that the company's assets are not
properly valued and carry amounts lower than the real ones.
Therefore, the respective company must use the external financing source for the
particular purpose. The type of fund that can be used in order to expand the business
is "Angel Investor", as it is the most appropriate and convenient form of financing for
Origin Coffee Roasters.
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M2 Evaluate potential sources of funding and justification for the adoption of an
appropriate source of funding for a given organisational context.
There are many ways businesses can raise funds, some legal and some not so legal, to help
them thrive and grow. The small and medium enterprises are important to the economy, as
they create jobs and increase the capacity of businesses in different fields. In order to help
those businesses, funding is needed. There are various types of potential sources of
funding, such as bootstrapping, angel investor, commercial finance and many more. All of
them are popular sources of funding for small and medium type of enterprises. In order to
raise finance for their business, Origin Coffee Roasters should use an Angel Investor. The
reason behind the choice of this form of funding is that it is the cheapest of the forms of
capital that can be used to get the business started, while also having less risk than other
forms of capital.
D2 Critically evaluate potential sources of funding with justified argument for the adoption
of a particular source or combination of sources, based on organisational needs.
It is important for any business to have the best form of funding in order to avoid any type
of financial crisis in the long run of the business. In consideration to this, Origin Coffee
Roaster should raise funds by teaming with an "angel investor," which will help the
company to expand the business in a more economical way, while reducing its risks. The
company can miss out on important information if it does not consider this technique. It
may face high level risk as well as it can also miss out on the expert opinion of the angel
investors in the decision-making process of the company.
P4 Business plan for growth that involves financial information along with strategic goals
for carrying business.
Executive Summary:
Origin Coffee Roasters is an autonomous espresso business which was set up in the year
2011. The organization is significantly zeroing in on giving the espresso to the espresso
darlings at home alongside the component of imagination and enthusiasm which makes in
well known in the cutthroat business sectors. It is utilizing various methodologies to grow
its business by holding 10% benefits as a piece of held acquiring of the organization.
Subsequently, this sum can be utilized to think of new kinds of espresso alongside new
product offering which can incorporate tea. Additionally, the organization can likewise
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enter in Australia, France and Italy which will be a pristine domain to carry on its tasks
with expanded productivity edges.
Company Description:
The vision of the organization expresses that the organization is focussing on disrupting
the market to turn into a main espresso organization with the gigantic scope of espresso
items just as going into new business sectors to turn into the market leader in United
Kingdom. Origin Coffee Roasters ventured into the market with a mission to enhance just
as disrupt the coffee market with a mean to turn into the market leader among every one of
the contenders.
Products & Services:
To recognize the development openings for Origin Coffee Roasters various systems have
been utilized like Ansoff grid and BCG matrix. Development is vital for long haul
endurance of a business and drives the exhibition and benefits also. It was seen that the
organization should wander into new market with their star items to draw in new client
base like giving convenient offers and limits inside their set up market to continue leaving
clients drew in with the business. The organization ought to likewise enhance its line of
items to advance extension and increase its productivity alongside acquiring a strategic
advantage over its rivals.
Market Analysis (STP Analysis):
Segmenting: Origin Coffee Roasters has sectioned its market by meaning to incognito its
potential client base into steadfast client base. The significant portion of the organization is
attempting to get is the entire espresso customer section. Additionally, the organization has
attempted to draw in the British populace by dispatching tea.
Targeting: Origin Coffee Roasters is focusing on the espresso fragment significantly. The
objective is on individuals old enough gathering 13 or more. Alongside this, the advanced
age bunch is being focused on to give tea.
Positioning: Origin Coffee Roasters has done its setting in such a manner so that it can
turn into the market driving supplier of espresso and tea by disrupting the entire market to
give an extreme contest to the contenders.
Smart Objectives:
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• To utilize the 10% held profit sum to discover a greater number of kinds of espresso
other than the current reach.
• To dispatch 'Tea' as its superb item to get the British population as its potential client
base.
• To give the refreshments at the clients doorsteps with undeniable degree of comfort.
Financial Plan & Projections
It is fundamentally an itemized information about the financial and monetary exchanges
of a particular business association or a person. The monetary data is significantly utilized
by the organization to characterize a gauge of credit hazard by banks and moneylenders.
Particular 31/12/18 ($) 31/12/19 ($) 31/12/20 ($)
Implementing
technology cost
14000 - -
Promotional
event
12000 8000 4000
Advertisement
cost
4000 6000 7000
Total Cost 36000 24800 20900
Monitoring and Controlling
Observing and controlling is a significant piece of any field-tested strategy. Along these
lines, Origin Coffee Roasters should screen in order to control all the activities so that it
can achieve the standard target that has been set by the organization. Likewise, these
targets should coordinate with the outcomes achieved. Assuming if any deviations comes,
it should be executed with the use of remedial measures to defeat the issues.
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D3 Present a coherent and in-depth business plan that demonstrates knowledge and
understanding of how to formulate, apply and achieve business objectives successfully
A methodical and inside and out arrangement is a vital part for any organization which can
assist a business with arriving at new statures. In setting to Origin Coffee Roasters, it
thought of an extremely noteworthy arrangement of giving various kinds of espresso to the
espresso sweethearts at their entryway step. The particular organization can likewise hold
their 10% profit and spend it on the finding and contributing on the new flavours when
contrasted with their current reach. It can likewise extend its business to different nations,
for example, Italy, France and Australia which can turn into a productive and profitable
new new regions for promoting its marketable strategy to get immense benefits over the
long haul.
P5 Assess exit and succession options for business examining their benefits and drawbacks.
` It is critical for organizations to foster a very much planned and organized exit and
progression plan to acquire benefits by producing ideal results and making a positive effect on
authoritative execution. It empowers organizations to manage different questionable situations
that are dynamic. There are different exit and progression designs that can be carried out by
Origin Coffee Roasters, few are referenced beneath:
Succession Options:
It is a methodology that is considered as the most common way of recognizing and
growing new innovators to supplant old forerunners in situations like leaving an association,
retirement and demise. This arrangement guarantees that business keep on working without a
hitch and productively without the presence of people who were standing firm on essential
footings in the organization. Different progression plans and their benefits and drawback in
thought to Origin Coffee Roasters are explained below:
Mergers:
Many organizations look for mergers to access a bigger market and client base. It helps
with decreasing contenders for blending organizations and give them an upper hand. In setting to
Origin Coffee Roasters, using this choice will guarantee their image name proceeds to develop
and extend with the assistance of merging their business with an another association. It will
permit the organization to fortify their monetary assets and use them towards advancement of
items to acquire upper hand in market.
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