Lyle's Restaurant: Evaluating Growth Opportunities and Business Plan

This report provides a comprehensive analysis of Lyle's Restaurant's growth strategy. It begins by identifying key considerations for evaluating growth opportunities, including Porter's Generic Strategies and PESTLE analysis. The report then applies Ansoff's growth matrix to analyze market penetration, market development, product development, and diversification strategies. It further explores potential sources of funding for business expansion, differentiating between internal and external sources like bank loans and investors, along with their advantages and disadvantages. A business plan is formulated, detailing strategic objectives and financial information necessary for scaling the business. Finally, the report assesses succession and exit options for small businesses, weighing their benefits and drawbacks. The report aims to guide Lyle's Restaurant in making informed decisions for sustainable growth and expansion within the competitive UK market.

PLANNING
FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Define key considerations to evaluate growth opportunities and justify them in context
with organisation.........................................................................................................................3
P2 Analyse growth opportunities by applying Ansoff's growth matrix......................................5
TASK 2............................................................................................................................................7
P3 Mention potential sources to collect fund available for business along with their
advantages and disadvantage......................................................................................................7
TASK 3............................................................................................................................................8
P4 Formulate a business plan for growth which include strategic objectives and financial
information for scaling up business............................................................................................8
TASK 4..........................................................................................................................................11
P5 Access succession or exit options for small business while mentioning their drawback and
benefits......................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for growth is a strategic activity that enables an individual in planning, tracking
and monitoring organic growth of their business. It benefits the businesses in allocating their
existing resources in an optimal manner so that competitive advantage against rivals can be
attained in a proper manner (Blackburn, Hart and Wainwright, 2013). This assignment is based
on Lyle's which is a UK based small restaurant offering food and beverages to its customers.
Restaurant is headquartered in London and established two years back. Owner of restaurant is
planning to grow their business by offering flavoured Lassi to their customers. This report will
cover about key consideration that will helps in evaluating growth opportunities. Beside this,
Ansoff's matrix is applied along with mention of various sources to collect funds. Also, a
business plan is formulated so that objectives and high growth in business can be achieved
without facing much complexity. At last, different options for succession and exiting business
along with their merits and demerits are discussed.
TASK 1
P1 Define key considerations to evaluate growth opportunities and justify them in context with
organisation
Lyle's is a small sized restaurant in UK which provides wide range of beverages and food
to their clients. Company is planning to expand their business by introducing flavour Lassi to
their menu. As people in UK are fitness freak and they do not prefer to have drinks with high
calories, restaurant offers healthy food and drinks which is beneficial for health. Also, company
is going to introduce flavoured Lyle's, as it will be offered in different flavours like Mango,
strawberry and chocolate, there are high chances people in UK will like their product (Lewis,
2013). Key considerations for evaluating the growth opportunity for Lyle's in achieving high
revenues is mentioned below:
Porter's Generic Strategies
These strategies define the ways by which an organisation can attain competitive
advantage over rivals within marketplace. According to porter, there are four type of growth
strategies which can be used by an organisation for achieving desired outcomes and growth. In
context with Lyle's, these strategies are mentioned below:

 Cost leadership: According to this strategy, an organisation is needed to offer high
quality products to its customers in low prices. This will force customers to buy more and
company will be able to achieve high sales. This will benefit Lyle's in getting
competitive edge within industry. For example, by lowering the price of their dishes and
drinks, Lyle's can enhance their sales due to which their market shares will increase in a
considerable manner (Mahmoudi and et. al., 2013). Differentiation: It is another strategy which can helps an organisation in achieving
desired growth. In this growth strategy, company offers unique products or services to
their customers which are not offered by rivals and competitors. Due to innovativeness,
customers prefers to buy them in large quantity. This will results in increased sales and
revenues for Lyle's. Cost focus: In this growth strategy, an organisation focuses on current market conditions
and provides their services or products at lowest possible cost. This helps the firm in
gaining advantage over companies operating in same field due to increased revenues and
sales. Lyle's can use this strategy to expand their customer base and sales by offering
meals and drinks in genuine price.
 Differentiation focus: Under this strategy, a firm tries to offer those products which do
not currently exist in market (Vargo and Seville, 2011). It benefits a company in gaining
more revenues and profits than rivals due to which business is able to achieve wide
growth.
In context with Lyle's, business owner of company can adopt differentiation strategy in
which restaurant will offer new dishes and drinks to their customers. Due to this, customers will
prefer to visit their more and business will achieve wide growth and success as per their
expectations.
PESTLE analysis
It is a strategic framework which benefits a firm in acknowledging external business
environment in detail so that only advantageous decisions can be taken. Different aspects which
can be acknowledged by this framework are political, technological, social, economical, legal
and environmental. In relation with Lyle's, these factors are stated below:
 Political factor: This factor is related with the stability of government and their
interference in the working of an organisation. Due to Brexit, UK faces some instability

but now government in getting stability again and supporting small companies in
maintaining strong position in market. As tax rates and trade tariff's are low in UK, it is
beneficial for Lyle's to operate their business (Wynn, 2017).
 Economic factor: These factors are concerned with GDP, growth rate, interest and
inflation rate, earning of people etc. People in UK earn disposable income and GDP of
country is high. This is the reason, UK population prefers to visit outside for eating and
spending quality time with friends & family. Due to this, expanding business in UK is
beneficial for Lyle's as it will results in earning of high sales and revenues.
 Social factor: This factor includes opinion, behaviour, attitude and lifestyle of people
living in a specific area or region. As UK is an open minded society and people living
their prefer high quality and healthy food which can keep them fit. Due to this Lyle's can
earn high revenues and success as they offer healthy food which do not include
unsaturated oil.
 Technological factor: Lyle's has adopted latest technology and machines to produce
their dishes, meals and beverages. Also, company is using social media and online
platforms to advertise about their services or products. This benefits the concerned
restaurant in reaching wide customer base in few minutes. If company will not update
their technology then customers will not be acknowledged about their services due to
which sales can get impacted negatively (Moseley, 2013).
 Environmental factor: These factors are related with preserving environment from
harmful business practices. As restaurant offers healthy food and use mainly vegetables
and fruits to prepare their products. Company do not harm environment in any manner.
Due to this, Lyle's will sustain a positive presence in market and customer's will prefer to
purchase their products.
 Legal factor: These factors are concerned with legal rules and policies which are
formulated by government of a country. Lyle's is needed to follow legal procedures in a
proper way so that employees and customers of company can became satisfied. If
company will not follow legal norms, victim worker or consumer can file a case against
them which can reduce their image in marketplace.
P2 Analyse growth opportunities by applying Ansoff's growth matrix
Ansoff growth matrix

Ansoff's growth matrix is defined as a strategic tool which offers an appropriate structure
to business organisation so that growth strategies can be implemented in an efficient manner.
This tool emphasize on both existing and potential customers so that high growth can be
achieved. Different strategies offered by this matrix in relation to Ansoff's growth matrix are
mentioned below:
 Market penetration: In this strategy, an organisation tries to enhance their sales and
profit by offering existing services and products to the customers present in existing
market. In context with Lyle's, manager of company can reduce the price of their
products or provides some discounts or offers so that customers will buy their offerings in
more number (Barnett, 2017). Risk of this strategy is that due to reduced price, customers
may questions the quality of products offered by restaurant. To overcome this risk,
company is required to advertise about their low price offers so that customer can
acknowledge them properly.
 Market development: Under this strategy, a company offers existing services or
products to the customers in new market. Due to this, customer base of firm enhances and
they earn high market shares. Manager in Lyle's can offer their product in new area and
market so that their sales and revenues can rise considerably. Risk associated with this
strategy is that if new customers will not like the products, business reputation will
decrease. To overcome this problem, manager of company is needed to perform
appropriate market research so that right product can be offered to customers.
 Product development: In product development, an organisation develops a new product
and offers it to the existing market and customers. As product is new and unique,
potential or existing customers will buy them due to which profits of Lyle's can enhance
in a considerable manner. Risk due to this strategy is that if new product will not be liked
by customers, investment of restaurant will be failed and it can further result in customer
loss and business failure. To mitigate the risk of this strategy, company is needed to
identify the opinion and exception of consumers before preparing a product.
 Diversification: In this kind of growth strategy, a business firm introduces a new product
in new market to earn desired growth and profits. This is the most risky strategy, if the
new product will not be liked by new customers, it will results in business failure. But if
this strategy gets successful, Lyle's will attain high profits and revenues along with

competitive advantage over rivals (Colantoni and et. al., 2016). Risk associated with
diversification strategy is product fail. If people of new market will not like these then it
will be a big loss for the company. To overcome this risk, company is needed to provide
right product to right people with the help of extensive research.
Out of all these strategies, concerned restaurant can adopt diversification strategy in
which new dishes or drinks like flavoured Lassi will be given to customers in new market place.
As product will be unique, customers will purchase them and market share of companies will
enhance in a considerable manner.
TASK 2
P3 Mention potential sources to collect fund available for business along with their advantages
and disadvantage
Funding is defined as a way to collect essential funds which is needed by a company to
perform their business operations in a proper manner. Lyle's has investment of 20000 pounds but
to expand their business further, company needs 35,000 pounds. There are different internal and
external ways through which a business organisation can collect the required funds in a proper
manner. Some of these sources in context with Lyle's is mentioned below:
Internal sources: The internal sources are referred to those funds which are generated
inside the business. In context with Lyle's, company can collect source funds internally by
collecting receivables, disposing inventories and enhancing profits. But these sources of finance
can fulfil only limited business needs (Fahlvik, Elfving and Wikström, 2014).
External sources: These sources of fund lie outside the business organisation like
investors, suppliers and lenders. In situations when Lyle's will require large sum of money,
company will be needed to gather funds from outside. Different external sources from which a
firm can collect funds are mentioned below:
Bank loans: It is a simpler way to collect funds so that important operations and
activities of company can be performed easily. It is important for business firm to pay back
taken loan in a timely manner otherwise bank can charge them further penalties excluding
interest rates. In context with Lyle's this option is desirable to collect remaining amount of 15000
pounds. Also, bank charges less interest rate due to which company can easily pay it within time
limits.

Advantage: Merit associated with bank loan is that organisation have idea about the
amount to be paid and the remaining time to pay it. Bank gives capital for a certain time of
period and charges a fixed interest rate on the given loan.
Disadvantage: Main drawback of this external source is that Lyle's is required to give
some asset or collateral as a security for taking a bank loan. If amount will not be paid on time,
bank can sell that collateral to collect back their given loan (Gatukui and Katuse, 2014).
Angel financing: In this type of external source, investors which posses large amount of
money invest some capital in an organisation to achieve equity position. This is an effective way
to collect funds. These investors mainly helps entrepreneurs and people which are interest in
starting-up new business. Lyle's can take help from angel financing so that their need of 15000
pounds can be fulfilled desirably.
Advantage: Main advantage of this kind of fund source is that organisation acquires
additional expertise and knowledge about investors due to which they can collect further funds in
future to perform their activities. Person investing in business prefers to monitor the growth and
performance of company.
Disadvantage: Demerit is that concerned organisation will be needed to give their shares
to investors in return of investment. Due to this, financial position of owner in business will
reduce considerably.
TASK 3
P4 Formulate a business plan for growth which include strategic objectives and financial
information for scaling up business
Business plan is referred to a written document that defines the objectives and goals of a
company along with potential actions which benefits in attaining these goals. It is very essential
for Lyle's to formulate an effective business plan that involves mission statement, vision,
strategic objectives and other aspects of company in a detailed manner. With the help of this
information, an organisation is able to perform its business activities in more efficient manner.
The main reason of Lyle's to formulate a business plan is to gain the attention of maximum
number of investors which can invest high in their business so that desired growth for business
can be achieved (Huang and Zhang, 2014). As Lyle's is a UK based small restaurant which offer
healthy drinks and foods to their customers, company wishes to increase their presence by

adding flavoured Lassi to their menu. In this regard, business plan for concerned company is
mentioned below:
Executive summary: Lyle's is a food and beverage restaurant which provide tasty and
healthy drinks or dishes to their customers. Restaurant is planning to introduce flavoured Lassi
so that their business can achieve desired success and growth in London and near by regions.
Vision: The main vision of Lyle's is to fulfil the needs and demands of their customers in
a proper way so that high revenues and profits can be earned.
Mission: Major vision of concerned company is to became a market leader by offering
high quality drink and food to customers.
Strategical objectives: Main objective of concerned company is to enhance their
profitability by 20% in next three years and satisfying the desires of customers by providing
them unique services or products. Company can attain their strategic objectives with the help of
SMART framework which states that a goal is required to be realistic, achievable, measurable,
time bound and specific.
Financial information: Success of a business organisation depends on the appropriate
function of business activities and operations. In order to perform these activities, desirable funds
are needed which can be collected through different external and internal sources. As company
requires 15,000 pounds to perform their activities to expand business, company can take bank
loan. But before raising funds, Lyle's is required to formulated a desired budget which will
include information about the overall expenses which can be incurred while performing business
operations (Mason, 2015).
Marketing strategy: As Lyle's is a small business firm, they can not invest high in
marketing. In this context, business owner of company is needed to chose right marketing
strategy so that maximum attention from targeted customers can be gained. There are some
strategies which can be adopted by the restaurant which are Facebook advertising, google my
business, content marketing, E-mail marketing etc.
Competitor analysis: It include those strategic techniques that helps in evaluating outside
competition. This analysis will benefits the Lyle's in identifying the weakness and strength of
rival companies so that an appropriate plan and strategies can be formulated to give tough
competition to them. Company has performed PESTLE framework to acknowledge about their
competitors and business environment.

Risk strategy: To overcome different risks, company is going to adopt the strategy of best
business practice. Under this strategy, company can perform different activities so that risk can
be minimised. Company is required to hire right employees which are capable to perform work
efficiently. They can enhance safety in their facility so that staff and customers feel more
secured. Also, owner of company is needed to stay compliant so that all legal norms and
procedures can be followed properly. Hence, risk can be mitigated.
Total forecasted budget
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Implementing
technology cost
15000 - -
Promotional expense 9000 8000 6000
Advertisement
expense
6000 5600 5800
Catalogues 2000 4000 3000
Training charges 6500 8000 8500
Total Cost 38500 25600 23300

CASH FLOW STATEMENT
This budget will allow the company to acknowledge their potential expenses
while performing business activities and operations. By this, funds and finances of Lyle's can be
managed in an appropriate manner.
TASK 4
P5 Access succession or exit options for small business while mentioning their drawback and
benefits
Business environment involves different factors like economic fluctuations, political
instability, up-gradation of technology etc. that can bring some difficult situations for the
concerned restaurant. It can negatively impact the revenues and profits of Lyle's due to which
restaurant may have to face difficult situations. In these conditions, management of company can
choose to exit from business or get succeed so that uncertainties can be managed efficiently.

Below are mentioned some ways by which Lyle's can succeed or exit from business in a proper
way:
Ways to exit business
Liquidation: In this situation, a firm became insolvent and decide to end their business
by selling their property and assets to the claimants like creditors, shareholders in accordance
with their shares and priority in business. Advantages: If Lyle's will use this method to exit from business and distribute their
assets to the investors, creditors and other shareholders then those liabilities that are not
guaranteed personally will be written-off. Due to this, pressure of business owner will be
minimised to repay those debts which are not guaranteed and a new business can be
started.
 Disadvantage: Experienced and skilled workforce of company will be gone due to which
starting up new business in market will be difficult.
Floating share: Here, stocks of company are sold in market so that liabilities and debts
can be paid on time and remaining amount is distributed among shareholders. Advantage: Director in Lyle's will became free from all legal compliance and debts.
 Disadvantage: It is a complex and time taking process (Wu, 2015).
Ways to succeed business
Selling your business to co-owner: This method is adopted by those business owners
which are operating their business in partnership.
Advantage: This methods can reduce the burden of business owner and ensure fair compensation
to employees.
Disadvantage: For this method, high cash in hand is required as co-owners needs to buy out
shares of company at any moment which is difficult.
Management buy-in: In this method, a business owner hire management team of
another organisation and so that company can continue its operations and activities with full
efficiency. Advantage: Employees will not get impacted, only the business owner will change.
 Disadvantage: New management team and their intentions are unpredictable due to
which employer- employee relation can be suffered.