Business Growth and Funding Strategies for R&H Cafe Gallery Report

This report analyzes growth strategies for R&H Cafe Gallery, a small UK-based coffee shop. It identifies key considerations for evaluating growth opportunities, emphasizing competitive advantages like pricing and innovation. The report discusses growth options using frameworks like PESTLE analysis and Ansoff's matrix, recommending market development as the optimal strategy. It explores potential funding sources, their benefits, and drawbacks. A business plan is presented, incorporating financial information and strategic objectives. Finally, the report examines exit or succession options for the business, comparing their advantages and disadvantages. The report underscores the importance of innovation, collaboration, and understanding market dynamics for sustainable growth. It offers a comprehensive view of strategic planning, funding, and exit strategies for small businesses in the food and beverage industry.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
P1 Identify key considerations for evaluating growth opportunities...........................................3
M1 Discuss the options for growth using a range of different frameworks to demonstrate the
understanding of competitive advantage.....................................................................................5
P2 Analyze the opportunities for growth by using Ansoff’s growth matrix...............................6
P3 Present the potential sources of funding available to businesses and discuss benefits and
drawbacks of the given sources...................................................................................................7
M2 Identify potential sources of funding....................................................................................8
P4 Present a business plan for growth that involves financial information and strategic
objectives for scaling up a company............................................................................................9
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies an appropriate frameworks for achieving goals......12
P5 Analyze exit or succession options for a small business explaining its advantages and
disadvantages.............................................................................................................................12
M4 Identify exit or succession options for a small business comparing and contrasting the
options........................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for the growth is plays an important role for the long term survival term of the
business in the marketplace. There are different strategies which the organisation has to plan to
achieve their targets. Organisation should try to innovate its services from time to time so that its
demand in the market can be increased. Organisation should target the audience to whom they
have to provide their services so that its demand in the marketplace can be increased and more
profit can be earned. Targeting the right audience will helps in increasing the sale of the business
in the marketplace due to which company will also be able to gain competitive advantage in the
marketplace. Selected organisation in this report is R and H cafe gallery it is the small coffee
shop which is based in UK. It provides variety of products and services to its clients due to
which clients prefer their services more attracting the attention of the customers helps in
maintaining the sustainability of the business. Following report involves various key
considerations which the SMEs follows while monitoring its opportunities for growth. It also
discuss about the various types of capital and funds which the company will use. Business plan
of the firm will also be developed. Various ways through which company can exit and grow will
also be discussed in this report (Harms, 2020).
MAIN BODY
P1 Identify key considerations for evaluating growth opportunities.
R and H gallery is the small business in Uk . In order to grow in the marketplace businesses can
try to strengthen their business and grow their company easily. Business should try to identify
the demand of the customers so that they can develop their perform their activities and can earn
more profit in the business which will increase the goodwill of the business in the marketplace
they will also get competitive advantage over their vendors Also, since can make a variety of
company’s own products, company can easily attract a lot of customers. They created different
strategies and policies to help them innovate their products in their own innovative ways.
Company can expand its business in many countries by working with another partner company
and other businesses. This will helps the company to expand its market share. Digital
technologies and tools can also be used to attract more users. They make it easy to promote their
products because they can create attractive websites and unique applications. R & H's Cafe
Gallery allows to create website-specific applications and easily attract more users. As a result,

this will build the brand loyalty and even create a very important network for small coffee
ventures
Some considerations to monitor at the R & H Cafe Shop:
Competitive advantage: Company can reduce their coffee and other snack prices compared to
other businesses. This allows the company to get the attention of all its customers. Company can
also create innovative web pages and mention details for people to see. They can create new
applications for all products and get the attention of all clients so that they can easily buy the
services of the company and more revenue can get generated.
New Products and Services: By developing the new product in the market company can gain
profit in the marketplace. if the customers will get new variety of goods in the market then
people will get attracted towards the company which will give the competitive advantage also to
the company. innovation in the business helps in increasing the growth chances of the business in
the marketplace. company should take the feedback from the customers so that they can
understand the requirement of the customers more effectively which will further helps in
developing the profit more effectively. Developing the new product in the market helps in
developing the demand of the business in the economy (Renton, 2020).
Innovation: Cafe shops can innovate their company. They can make coffee with a unique taste
like chocolate, pineapple and coffee. It also creates unique websites and compelling applications
with unique images and photos that many consumers can easily engage with. As a result, they
can easily improve their operations and attract existing and new users and customers. This makes
it easy for the company to develop its business as it can attract the attention of all users.
Collaboration: R and H gallery shop can catch the attention of all users because it can easily
collaborate with many companies. They can execute mergers or strategic appliances with many
large coffee shops. This helps them expand their big business or activity. As a result, business
can easily attract a large number of clients, which in turn makes it easy to win trust of the user.
Cooperation allows them to share profits and losses with each other. cafe shops can easily
increase their income. While collaborating with other businesses company can increase its profit
and demand easily in the marketplace.

M1 Discuss the options for growth using a range of different frameworks to demonstrate the
understanding of competitive advantage
To gain the competitive in the marketplace company has to analyse the macro environment so
that they can plan their strategies accordingly. With the helps of pestle analysis company can
easily gain competitive advantage in the marketplace.
Political Factors These factors relate to political circumstances, government policies, rules and
regulations that have a significant impact on an organization. Changes in government and current
political parties modify existing policies and require business-led strategies and policies to
change accordingly. R & H cafe are influenced by the current political situation in the UK.
Economic Factors: it Consists of various factors such as inflation, demand, cost, interest rate,
supply, etc. When starting or operating a business, it is essential to consider the country's
economic situation in an important way. For R and H cafe they are greatly affected by the current
economic situation where people's purchasing power is declining. It can affect the organization's
current sales and profit margins.
Social Factor: Social factor refers to the importance of a customer's personal characteristics,
traits in order to succeed in business (Cowling, 2020).
Technical Factors: These factors are related to technological progress, creativity, and innovation
in business Today, technology is becoming an essential part of business, and it is also playing an
important role in gaining a competitive edge. In the context of R & H cafe they use pre-vending
machines and equipment to serve our customers in the best possible way.
Legal factors: The legal element consists of multiple rules and regulations specifically created
by higher-level organizations to ensure the smooth operation of the business organization. It has
to do with the legal framework that every company should follow.
Environmental Factors: Related to adopting environmentally friendly practices. It is also
important to create a positive image between the target segments. the organization takes the
necessary steps to protect the environment. In connection with R & H cafe they provide our
customers with a safe and clean environment according to all environmental protocols needed to
minimize environmental pollution.

P2 Analyze the opportunities for growth by using Ansoff’s growth matrix.
The Ansoff Growth Matrix is a framework designed to identify the growth opportunities that
exist in the marketplace. There are many ways to expand the business, but choosing the right
technology is essential to achieving positive results in the future. Business can be expanded by
introducing new products and services and capturing new markets. The Ansoff Matrix offers a
variety of options that owner can use to grow the organization. A widely used tool for expansion
and expansion. When it comes to R&H cafes, owner should apply this tool to helps in choosing
the right method for the growth of the business in the future. For this purpose, the various
strategies of the Ansoff matrix are given below:
Market Penetration: The business runs in the current market with traditional goods and services.
It's the best way to improve the sales and profit margins. business owners have made a lot of
efforts to expand their current customer base by offering discounts and other offers. Here, first,
conduct a survey of the current market and prepare an appropriate strategy. To reach the market,
company need to focus on simple areas that are of interest to the customers. owner can use this
strategy (Beynon, 2020). In of R&H cafes by offering products to the target segment at a
discount or at a lower price. In addition to this, they can also promote their products to
successfully execute market penetration strategies. This makes it easier to attract more customers
and gives a far edge over the competitors.
Product Development: In this step new products are developed to meet the needs of existing
customer groups. This allows organizations to easily respond to the changing needs of their
customers in an efficient way. Because of this, developing new products and services is not easy.
Extensive research must be conducted. Thus, business owners can learn about changes in buyer
needs, further conducive to new product development. It is easy to gain acceptance because the
company is working in the same market as before. When it comes to R&H cafes, company can
offer new products such as herbal coffees and organic coffees to our existing customer groups. In
addition to this, they can alter existing products by adding some new flavours. It ultimately helps
companies to strengthen their current customer base by inflating sales and profitability.
Market Development: This strategy means offering similar products and targeting new customer
groups. To do so, it is not easy to enter a new market by first selecting a new target market and
implementing the strategies necessary to attract new customers in an efficient manner. The
company needs to understand the details of new customer requirements and priorities. In the

current scenario, R & H's cafes operate in different locations in London, which maximize the
revenue and growth within a set time period. Market development opens up new opportunities
for organizational success and growth.
Diversification: This is the most important strategy of the new Ansoff Matrix for both product
and market. So while there is a great risk of failure with diversification, it also provides a great
opportunity for growth. When a diversification strategy is implemented effectively, an
organization can achieve its milestones. In the context of R and H cafe, diversification can be
employed because it is a risky and profitable strategy. This allows businesses to offer a new
range of products to new customer segments. Effective application of diversification strategies
has resulted in tremendous success and growth (Xue, 2021).
As per the above discussion it is observed that the best strategy for R and H café is market
development. It will helps in increasing the demand of the business in the marketplace it will
also helps in increasing the market share of the company so that more profit can be earned.
developing the market will helps in making people aware about the services which they are
providing.
P3 Present the potential sources of funding available to businesses and discuss benefits and
drawbacks of the given sources.
The funds are needed to efficiently carry out various business activities are important to all
businesses. It's quiet to run a business without money. Therefore, it is the business owner's duty
to raise the right amount of funds to ensure that business activities are carried out in a consistent
manner. Here, funding sources are related to the various options that an organization can obtain
to grow its business. In connection with R & H's cafes, they are hoping to expand their business
in the UK, which requires huge amounts of money. In this regard, various sources of funding are
listed below.
Bank Loan: An amount provided by a banking institution for a period of time at a predefined
interest rate. The bank loan amount is a corporate liability and must be returned after a certain
period of time. Company need to keep the assets of the bank loan as collateral. If the borrower is
unable to repay the loan amount, the bank has the right to own the collateral assets. In the case of
R and H cafe, they can secure enough funds to meet the requirements for business expansion
through bank loans.

• Advantages: It is a very reliable source with proper documentation and documentation.
Depending on the purpose of the loan, the rate charged by the bank varies. Banks offer loans
to expand their business at reasonable interest rates. In addition to this, the bank also
provides an EMI function which allow to return money based on the validity of the loan.
• Disadvantages: This is a time-consuming method to raise funds because owner need to do
large-scale office work that is very annoying.
Personal Savings: This allows businesses to leverage their savings to meet their business
requirements. Generally, huge funding requirements cannot be met through personal savings, but
there are no formal procedural requirements for earning money. This source can be used for
further growth in Organization , as it is an independent cafe owned by a single owner in
connection with the R and H Cafes.
• Benefits: Money belongs to the owner, so there is no burden of returning it within a
predefined time. In addition to this, security for using personal funds and document-free
business owners can operate their businesses in an efficient manner. Since interest is also
not paid out of personal funds, it minimizes unnecessary cost burdens and allows the
company to fully focus on maximizing individual profits (Mochkabadi, 2020).
• Disadvantages: The main disadvantage of this source relates to the limitation of funds.
This cannot meet the huge financial demand. Apart from this, it can also be a mistake, as
the owner does not have to repay money and interest to outside parties.
Family and Friends: It's also a way for business owners to get the money they need when they
borrow money from friends and family at low interest rates. In general, there is no legal
agreement regarding collateral and repayment of funds. R and H cafe owners can raise funds
from family and friends for a period of time to expand their business.
• Advantages: This is the fastest and most appropriate method for small businesses that
maintain security and do not need to pay interest at predefined intervals.
• Disadvantages: This also increases the involvement of parties other than the actual
process and affects the business process. Apart from this, it is very difficult to raise large
sums of money from this source of funding.
Overdraft: If a person withdraw more money that he has in the account then it is considered as
overdraft for example check written by a person of $60 and he only have $20 in the account.

Trade Credit: A type of commercial finance that allows a consumer to purchase a product or
service and pay the provider for a later scheduled date. It can be a good way for an organization
to secure their funds for the growth of the business.
Factoring: A type of debtor finance in which a company sells its debt to a third party at a
discounted price. It also provides various discounts offers to debtors.
Angle Investors: They are investors who invest their money in other companies for their growth
and survival.
M2 Identify potential sources of funding
Bank loans from the above sources are the most appropriate source for R and H Cafes as they are
the authentic way to get the amount which is needed and bank lending is one of the best method
of systematic funding. Company can take the loan amount from the bank as per the their
requirement which will helps the business to perform its activities in the marketplace.
Bank loan is the legal method to borrow money as it provides various funds for the growth of the
business. to achieve success in future funds are required by the business so that they can
affectively perform their duties.
P4 Present a business plan for growth that involves financial information and strategic objectives
for scaling up a company
A business plan is a combination of several strategies to achieve predefined objectives and goals
within a stipulated time frame. When creating a business plan, owner need to identify business
process resources and prepare appropriate strategies for new growth and success. This makes it
easy for businesses to face the barriers on the road to success. In context to R and H cafe, the
business plan is as follows:
Overview: The current business plan contains many steps that are taken to expand the business
on a large scale. Company look forward to expand the business in beverages and coffee so that
demand of the company can be increased (Koldewey, 2020).
About the company: R and H is a small cafe that originated in the coffee culture trending in
Australia and New Zealand. The main purpose of the company is to provide our customers with
high quality products at reasonable prices. Company currently operate in both locations in
London and plan to move our business. It is a small organization that operates as a limited
number of resources.

Company Mission and Vision: The company's mission is to earn the loyalty and trust of its
customers in order to maintain it in the market for the long term. Here, the organization's vision
is to obtain a significant rate of return in order to strengthen the company's position in the
market.
Goal:
• By 2022, increase the company's sales by 30%.
• Expand the current customer base to get more profit margins.
• Expand business in more countries.
Market Analysis:
STP Approach: This model is used in R and H cafes to efficiently meet the needs of the target
segment. It also helps the company grow and succeed in a significant way by efficiently
deploying the organization's products and services between target groups. In this regard, the
strategy of the STP model is mentioned as follows.
• Segmentation: Under this, the market as a whole is split into smaller components to help
organizations reach more customers. This is done after examining the characteristics,
personality traits, characteristics of the customer so that the enterprise can use the available
resources efficiently. When it comes to R and h cafes, they use demographic segments to
divide customers into different segments based on factors such as age, income level, etc.
• Targeting: After segmentation, the next step is to select a customer targeting group. If
selected, their main target is the youth sector and people in the 18 to 25 age group (Neuman,
2021).
• Positioning: The company's primary purpose is to actively position its products in the minds
of its target group. To this end, they use a variety of promotional methods to provide their
clients with sufficient benefits to create a positive position in the market.
Situational analysis: For this frame work SWOT analysis has been used so that various internal
factors of the business can be analysed properly.
Strength weakness
The biggest strength of the R and H café is the
customers loyalty because customers helps in
generating revenue in the business which
further increases the Growth chances of the
As R and H is the small organisation due to
which it has limited resources which affect its
performance in the economy.

business in the marketplace.
Opportunities Threat
As demand of the cafes are increasing by the
young generation it will provides various
growth opportunities to the business on the
basis of which they can achieve success.
As various other companies are entering in the
market this can create threat for the company.
Financial activities: In order to achieve the financial requirement of the company. Business will
take required funds from the bank so meet its objectives. Financial projection of the business is
given below:
Marketing budget
Particulars 1st year 2nd year 3rd year 4th
year 5th year
Initial money 60000 9000 22000 70000 14000
Investment 22000 25000 20000 23000
Total 60000 31000 47000 90000 37000
Marketing
expenditures
Advertisement 2000 7000 2000 7000 4000
Sales promotion 2000 5000 4000 5000 6000

Direct marketing 7000 4000 4000 6000 7000
Total 11000 16000 10000 18000 17000
Available balance 49000 15000 37000 72000 20000
Risk planning: company need to maintain the amount of contingency funding needed to
effectively resolve uncertainty. They also need to provide proper training to the employees so
that business cannot face any loss in future (Akter, 2020).
M3 Create an appropriate and detailed business plan for growth and securing investment, setting
out strategic objectives, strategies an models for achieving the targets.
The strategic objective of the business is to increase its sale by 30% by 2022, they also want to
increase its market share in other countries so that more profit can be earned by the business in
the marketplace. Company has used various analyze like Stp approach, swot analysis etc to
identify the internal factor so that they can gain competitive advantage in the market. There are
various strength and weakness of the business which the organization has to identify so that they
can perform their duties accordingly in the business and achieve its planned targets.
P5 Analyze exit or succession options for a small business explaining its advantages and
disadvantages.
Exit Option
The company is facing top losses, but liquidating the business is a good way to go. Some of the
ways to get out of a business are mentioned below:
Winding Up: business owner sells the company's assets to pay off its liabilities. The remaining
funds are also distributed among shareholders When it comes to R an h cafe business can choose
this option if they are not getting success so that prevent themselves from the loss (Prayag,
2020).
• Advantages: A great option for easy closing of the company without legal disputes for all
parties to get their share.

• Disadvantages: The person appointed by the higher authorities responsible for the
liquidation process, the owner cannot manage the business. In addition to this, the
organization has also lost skilled and competent staff.
Sales in the open market: In this case, the firm is usually sold in the open market through an
auction. There are a lot of wealthy people involved, so owner can sell the business at a high rate
to get enough money.
• Advantages: Operations of the company are run identically and the existing goodwill of
the organization is not significantly affected.
• Disadvantages: The owner has lost authority by transferring the business to a new owner.
Somewhere, it interferes with the current business.
Selling to family: The owner sells the business to a familiar person which helps the seller to earn
income, in this buyer does not have to pay the initial investment cost to the sellers.
 Benefits: Buyers become familiar with the owner which further helps to reduce business
disruption.
 Disadvantages: Sometimes it can affect relationships and cause conflicts in between the
family members.
Selling to Staff: The owner already knows the employee, so they can guide the employee about
the business activities, which helps the owner to earn more profit.
 Advantage: As the owner has sold the business to his subordinates so they can continue
to participate in the business if required.
 Disadvantages: As the owner is selling the business to their known so the owner may
have to sell the business at a discount.
Succession Options:
Mergers and Acquisitions: Here the company merged with other companies for expansion and
business expansion During the merger, the two companies will merge to create a new company
to ensure higher market share.
 Advantages : Helps increase the current market share of both companies and strengthens
the reputation in the market.
 Disadvantages: Occasional mergers can change the image of a company in the market.
Many people also lost their jobs during the merger of the two companies with other
companies.

M4 Identify exit or succession options for a small business comparing and contrasting the
options
Merger is considered as the best choice of the company as it helps the company grow. As a
small organization, supporting other companies has a higher chance of growth and success. If the
company will merge with the high profile company then it will build the reputation of the
company in the marketplace (Alyfanti, 2020). it also helps in increasing the revenue generating
power of the business in the market due to which company can survive for a long period of time
in the economy it will also helps in increasing the goodwill of the company.
CONCLUSION
From the above report it has been concluded that panning of growth helps in increasing
the productivity of the business in the marketplace. it will also helps in developing the good
image of the business in the marketplace. there are different framework like pestle and Ansoff
matrix which helps in analysing the opportunities of the business in the external market so that
they can perform their duties effective by taking best decision in the business. there are different
sources through which company can borrow money and invest it in the business to perform its
activities without the use of funds company cannot innovate its services in the economy. with the
helps of business plan company can achieve success in the future because it guides the
employees a right direction on the basis of which they have to perform their duties which also
helps in developing management in the business.

REFERENCES
Books and Journals