My Bakers: Business Plan, Growth, and Funding Strategies Report

This report provides a comprehensive analysis of My Bakers, a small UK-based bakery, focusing on its planning for growth. It begins with an introduction to growth planning and its importance, followed by an evaluation of growth opportunities, including market size, building relations, cash flow management, skillsets, and persistence. The report then applies Ansoff's Growth Vector Matrix to determine the best strategies for My Bakers, with a justification for market development. The report also explores various funding sources, such as personal investment, family and friends funding, and government grants, detailing their advantages and disadvantages. A business plan for My Bakers is developed, addressing factors affecting the company's objectives and discussing financial aspects. Finally, the report examines exit strategies for small and medium organizations, providing a complete overview of the bakery's growth and business operations.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Considerations for Evaluation of Growth Opportunities.............................................................3
Use of Ansoff’s Growth Vector Matrix.......................................................................................5
LO2..................................................................................................................................................6
Sources of Funding for the organisation:.....................................................................................6
LO 3.................................................................................................................................................9
Business Plan of My Bakers........................................................................................................9
LO4................................................................................................................................................13
Exit Strategies for Small and medium organisation:.................................................................13
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Planning for Growth involves all the activities that allows the owners and the management
to plan and monitor the growth of the company. It has to make certain strategies keeping in mind
several factors like competition, external factors, objectives of the company and many more
(Wang, 2016). It focuses on minimum resources and investments to gain maximum profit.
My Bakers is a small bakery in UK which is dealing in the manufacturing and selling of bakery
products like cakes, brownies, shakes, cookies, biscuits, snacks etc. It plans to have a rapid
growth in the coming years. The report underneath describes various considerations to be kept in
mind while evaluating the opportunities of growth along with the use of Ansoff Matrix for
deciding the best strategy for the bakery.
The report also highlights different sources of funding like investors, bank loans etc. along with
their advantages and disadvantages. the report below also develops a business plan for My
Bakers which lays emphasize on various factors which hinders and fosters the objective of the
company along with discussing about its financials. At the end, the report also explains the
numerous methods to close the company and its succession.
LO 1
Considerations for Evaluation of Growth Opportunities
Whether starting a new business or expanding an existing business, it is necessary to
evaluate the opportunities of growth and the factors which are to be considered during the
evaluation. Though, it is difficult at initial stages to focus on all considerations but they are
mandatory (Bellamy and et.al., 2019). My Bakers, being a medium sized enterprise also keep in
mind certain factors which will help to gain the advantages of all the opportunities. Following
are the key considerations My Bakers must lay emphasis upon:
Size of Market
Market Size is to be considered first while evaluating the opportunities for growth
because the company must know the market in which it provides its products and services. My
Bakers must do a complete research of the market. Initially, the company must search for a small
market and must examine the demands of the customers living there. This will help the company
to know about the expenses the customers can do on a particular product or service.
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Building Relations
The company cannot perform all the operations on its own without taking help from
others. For example, if the company wants to exercise the marketing practices with the use of
advanced technology then it must build strong relation which some technical minded persons
who will help it out to make innovations in technological field (Bongomin and et.al., 2017).
Likewise, My Bakers does not have enough capital so, it must build good relations with some
potential investors and customers which can help well financially. The company can make use of
the opportunities by making good relations with other people.
Managing Cash Flow
The company My Bakers must evaluate the abilities to manage the cash flow. It must
enquire about any start-up funding or the funding which can be used every month to enhance the
progress of the business. The company should also examine the business plan which will be
provided in the report underneath to know about its financial status. It must ensure that the
company can sustain easily for a longer period of time.
Skillsets’ Management
Skills play a major role in diversifying any business whether small or big. My Bakers
must be honest in knowing the skills the employees had and the skills needed for the growth. The
owner of the company must keep a tab on the skills whether they are up to the level of the needs
of the market or not. The skills must be upgraded according to the demands of the customers or
the company must appoint those employees which have those skills if implemented in the
products and services can satisfy maximum number of customers.
Persistence and Passion
It is not possible for the company to exhibit all the skills and talents needed but it must
have passion to achieve the goals. Every business faces darkness sometimes so it is the passion
which gives a strong push to the company. The employees and the management must be
confident about their research and the plan about its successful implementation. There must be a
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will in the employees to do the things with full determination and dedication which will help
them to make great use of every opportunity which comes to the company.
So, My Bakers must critically evaluate all the above mentioned key considerations to make
advantage of all the growth opportunities which helps in enhancing the progress of the company.
Use of Ansoff’s Growth Vector Matrix
This matrix also known as Product or Market Expansion Grid which is used by the
companies for analysing and planning certain policies and strategies which can be used for the
growth (Yoo, Choo and Lee, 2018). Ansoff’s Growth Vector Matrix presents four major
strategies which helps My Bakers to have a rapid growth and also helps in analysing the risks
associated with every strategy. Following are the four dimensions of the matrix which My
Bakers follows:
Figure 1: Ansoff Growth Vector Matrix
Source: What is Ansoff Matrix, 2015
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The figure above shows the four dimensions of Ansoff Growth Vector Matrix.
Market Penetration
Some of the firms follow this strategy by promoting the existing products in an existing
market. This helps the company to drive out its competitors in the market. The company can do
this by motivating its existing customers to increase the consumption of the products by
mentioning the benefits they will have after consuming their products. It is the least risky
strategy to be followed by the company as the market and the products both remain same. The
company can provide good quality products at reduced prices to gain loyalty of the customers. It
can also draw the attention of maximum number of customers by advertising the products and
services using digital marketing and social networking sites.
Market Development
Some companies follow this type of strategy by promoting the existing products in the
new markets. The company can expand its business in the new areas by establishing some stores
according to the needs of the customers living there. It can also produce some variants of the
existing products to attract the segments of new market. The best method becomes the online
mode in which the company can promote the products and services on the official websites along
with presenting some of its benefits. This way the firms can increase the market share and also
enhance its dominant part in the market.
Product Development
Certain firms follow this strategy by introducing new products in the existing markets.
This can be done by analysing the changing needs and demands of the customers. Risk in this
strategy is less as it needs less amount of investment to gain larger profit (Tsuruta, 2020). The
new products are introduced keeping in mind the competitive advantage which can help the
company to emerge itself among its competitors. Sometimes, the companies also provide the
customers with the new products at a very less prices to attract more customers and increase the
demand for that new product or the innovation in the existing product. The company must focus
on its presentation also which creates a good image in front of the consumers and the market.
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Diversification
This type of strategy is the riskiest strategy among all as it promotes new products in new
markets. This can be done by opening new stores and producing new products in those stores.
The company must do a complete research and analysis before applying this because its
ineffective implementation can even result in shutting down of the company for a long time. It
can have a financial impact on the firm.
Justification
After going through all the above strategies, My Bakers must follow the Market Development as
it can reach other markets through social media and websites. Initially, the company can use
funding for arranging the sufficient capital needed to promote the products in the new markets.
This will enhance the brand name and value in many parts of UK and also will increase the sales
and profit margin which is the main goal of the bakery.
LO2
Sources of Funding for the organisation:
Growth of organisation depends on financial capacity of it and for increasing capital
company use different source of funding. Financial strong company run business smoothly as
well as expand in different market. There are different methods of source of funding that
includes personal investment, love money, venture capital, angels, business incubators,
government grants and subsidies and bank loans. Raising the fund create opportunities for
organisation as well increase the debt. Following sources of funding discussed below in details
with advantage and limitations.
Personal Investment:
Personal investment is one of the best ways to raise funds for the organisation. In this
owner invest money in development and growth of the organisation. This type of funds includes
cash in hand or bank, fixed deposits, collateral on assets etc. Adding your fund improve your
image in front of investors, partners and others that you are committed for the betterment of the
organisation on your own risk. This type of fund can easily be added into the organisation capital
hence quick monetary helps in growth and increasing efficiency of the organisation (Abbasi,
Wang and Abbasi, 2017)
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Pros
This is one of the quickest and convenient ways to raise the funds for the organisation.
By this owner’s image improves in front of employee, partners and investors that founder is
willing to take risk for the organisation hence encourage them for more inclusion in the
organisation. Another advantage of raising funds, no interest has to pay to anyone hence debt
chances reduce. Less formalities and documents require in this kind of funds and hence urgent
financial need of organisation can meet.
Cons
There are number of disadvantages of raising financial capacity of organisation from
personal fund for example future of owner will be in risk if company if company fall under
debts. In the financial emergency of organisation, it will difficult for the owner to raise the fund.
Friends and Family funds:
In this kind of source of funding, finance capacity of organisation increase by taking
money from friends, family or relative (Brogi and Lagasio, 2017). This is again quickest form of
raising the fund for the organisation. After certain period of time owner payback money without
interest to funder hence debt of owner remains zero. This kind of amount is least possible in
raising fund for the organisation as nobody wants to take risk of giving money and everyone has
a priority. However, if the owner fell to payback to family member, friend or relative then
personal relation will effect.
Pros
One of the quickest form of raising fund for meeting financial demands for the
organisation. No documentations and formalities required and on the other hand no interest has
to pay to funders. Emergency demands of organisation can be full-fill by Friends and Family
funds. Another advantage is flexibility in paying back money to funders so that decrease the
burden on organisation as well as owner.
Cons
If owner is fail to pay back the money then personal attachment with the funders will be
effected. Another limitation is that there are less number of personal willing to provide such
kinds of funds because of personal priorities and money loss fear. Large amount for the
organisation cannot be raised through this kind of source of funding.
Government grants and subsidies:
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In all the country government provides grants and subsidies to organisation for the
economic growth of the country. It is one of the less risky form of funding but require lots of
time in documentation and formalities and on the other hand difficult to meet demands for
emergency funding. The amount which has to be paid buys government grants and subsidies are
very low hence company cannot fully dependent on it (Das, Hui, and Sha, 2018).
Pros
Company financial capacities increase without any risk. Another advantage is not paying
interest or amount back to the governments hence company remain in profit. It will easily
available for small entrepreneur opening and growth.
Cons
There are number of formalities and documents require in this source of funding and
hence it is time consuming. Organisation emergency funding cannot be possible from such kind
of grants and subsidies. The amount given by such kind of grants and subsidies is very low hence
owner has to focus on other source of funding too.
Bank Loans:
Bank loans are one of the best ways to raising large amount of finance for the
organisation. However, there are number of formalities and documentation required for taking
loan and need to attach collaterals. Taking loan from bank increase the financial capacity of the
organisation but charged high interest on loan hence increase debt and financial burden on the
organisation. In case owner is fail to pay back amount on the time than bank has a right to sell
collateral of the owner (Scoreboard, 2019).
Pros
Organisation raise large amount of money from bank loans and hence increase the
financial capacity of the organisation. As there are many banks in the market hence owner has a
choice of taking loan which will have benefits in interest and pay back terms.
Cons
Large number of documentation and formalities required for processing loan hence time
consuming and on the other hand emergency finance cannot be meet with such kind of sources.
High interest and pay back terms increase the financial burden on the organisation. In case
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company fail to payback loan, banks have a right to sell the collateral (Đalić, Terzić and
Novarlić, 2017)
Justification:
My bakers are one of the famous bakery chains in UK and offers large variety of products
to customer. For the growth of company, it can raise funds from government grants and
subsidiaries so that financial burden of company cannot increase. It also increases financial
capacity to open up new stores and introduce new products and services hence increase the
growth of the chance. Raising financial capacity of organisation from such kind of fund has
negligible of limitation for example emergency fund cannot be possible but as company is small
so emergency financial need is very less. Organisation has not payback or give interest hence
overall increase the profit.
LO 3
Business Plan of My Bakers
Executive Summary
My Bakers is a small bakery in London which needs to have a growth by increasing its
sales and enhancing the profit margin in the upcoming time (Ivanisević and et.al., 2019). It deals
in manufacturing and selling of bakery products like cakes, pastries, cookies, snacks, brownies
etc. The company makes a clear and measurable goal and implement certain strategies which
contributes positively in analysing the market effectively.
Objectives
 There must be an increase of 45% in the profit margins of the company by the end of
2021.
 The market share must be increased by 40% by the end of 2022.
 My Bakers must make completely new and innovative strategies thereby doubling the
sales till the end of 2023.
Analysis of PESTLE Factors
Political
These factors affect the company in a greater way as these restrict the company in its
expansion. The company must make all the strategies keeping in mind all the rules and
regulations and the laws of the government (Osiyevskyy, Costa and Madill, 2016). There are lot
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of taxes imposed on the bakery so it must make such strategies which can give sufficient profit
after paying all the taxes.
Economic
These factors decide the financial stability of the My Bakers. The company must prepare
a strong base for itself because the GDP of UK is getting better day by day. The employment rate
of the country is also increasing which can be an opportunity for the bakery to sell its products at
a higher rate. The company must keep the prices such that it becomes affordable for the
maximum customers to buy the products and services.
Social
The society plays a significant role in the growth of the company. My Bakers must
produce the products and improve its services according to the fluctuating needs and demands of
the customers respecting the culture and the value of the country (Eniola and Entebang, 2016).
The people of UK are socially active that they will be easily attracted by socially advanced
techniques in practices like packaging, delivery etc.
Technological
My Bakers must use more advanced technologies like marketing through online modes
and social networking sites, entry in the stores by doors having automated open and close
system, printed bills for securing the sales, online ordering and delivery, biometric system,
activities under CCTV surveillance etc. These all needs large capital but will increase the
goodwill and also helps in competing with the existing competitors.
Legal
These factors also play a major role as the laws of the country should not be violated in
any practice of the company. Any process done against the laws of the government can create a
bad impact resulting in the bad image of the company on the people. The raw materials used to
make the products must also follow all the rules of the Food Association to ensure the safety of
the customers.
Environmental
The company must also aware the customers about the environmental safety by using the
eco-friendly materials in all its processes of packaging and manufacturing. The delivery must be
done in paper bags instead of plastic bags. There must be no emission of harmful gases while
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manufacturing the products. This is not only in favour of the goodwill of the company but also
the environmental as well as health of the employees and the customers.
Marketing Strategy
My Bakers must introduce such policies and strategies which could meet the demands of
the customers and perform its operations accordingly (Anwar, 2018). There are many strategic
changes which are to be done in the bakery to attain an effective growth by increasing sales and
profit.
Segmentation
This helps the company to keep in mind certain groups of people while marketing and
targeting. This gives a clear idea to the company and makes easy to divide the whole population.
It can be classified as follows:
Behavioural: This is based on the nature of the purchase, loyalty of brand, behaviour of the
customers etc.
Geographical: This is based on the country, regions or areas, rural or urban, density of
population etc.
Demographic: This helps the company to segregate the population on the basis of age, gender,
marital status, profession, ethnicity, income, education etc.
My Bakers must follow the demographic segmentation which is based on the age, gender,
income etc. which will help the company to make the products accordingly. The prices must also
be decided according to the income of the families living in those areas.
Targeting
My Bakers must target the customers according to the demographics because it will
easily give the clear idea to manufacture certain products. The market size must be enough to
justify the segmentation. Target must be to attract large number of customers to increase the
brand value and the stronger portfolio.
Positioning
My Bakers must position itself mainly on the online platforms like social sites and
official websites which attract more customers and also becomes easy for the company to
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