Society Cafe: Evaluating Growth Strategies and Financial Planning

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This report provides a comprehensive analysis of Society Cafe's growth strategies, examining various opportunities and challenges. It begins with an introduction to the company and its context, followed by an evaluation of major growth opportunities. The report utilizes tools such as PESTLE analysis and Porter's Five Forces to assess the external environment and competitive landscape. It then applies Ansoff's Matrix to identify and evaluate different strategic growth options, with a focus on market penetration, product development, market development, and diversification. The report also delves into the identification of funding sources and culminates in a business plan for growth, including financial information and strategic objectives, along with a discussion of succession and exit strategies for small businesses. The conclusion summarizes the key findings and recommendations, supported by relevant references.
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Planning for Growth
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Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1 Major Evaluation for growth opportunities.......................................................................................3
P2. Analysis of various opportunities about growth through the use of competitive advantage and
Ansoff’s Matrix.......................................................................................................................................5
TASK 2..........................................................................................................................................................7
P3 Identification of various sources of fund raising................................................................................7
TASK 3..........................................................................................................................................................9
P4 Business plan for growth including the financial information and strategic objectives for scaling
the business ...........................................................................................................................................9
TASK 4........................................................................................................................................................12
P5 Succession and exit plan for small business with their advantage and disadvantage......................12
CONCLUSION.............................................................................................................................................13
REFERENCES ..............................................................................................................................................14
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INTRODUCTION
Anticipating development is the administrative cycle which includes assessment of outside
business condition to decide open doors for augmenting income and deals by making ventures
into money related and different assets for upscaling and updating. Society Café is a private
venture association which was fused in the year 2011 and the organization has its central
command at Oxford, Oxfordshire. In the accompanying report, various contemplation for
assessment of development open doors for SMEs are being broke down alongside the basic
assessment of various wellsprings of assets. The report likewise decide the strategy for item
improvement by the administration of Society Café and features the significant budgetary data.
Finally, the report assesses the distinctive exit or progression procedure accessible for the
proprietors of little and medium business associations(Hu, 2016).
TASK 1
P1 Major Evaluation for growth opportunities
In the age of the present serious business condition where creation and assembling
exercises at expanding exponentially, it gets basic for each business association to continually
lead statistical surveying and recognize the open doors for business development and
advancement to keep up the intensity and determine economical business execution in the long
haul(Park and LaFrombois, 2019). A portion of the significant contemplations for assessing
various open doors for business development for the executives of Society Café are being
examined as follows:
Assets: Considering a development open door for any association requires a fundamental
thought of the current and the necessary assets also that assume the part of building blocks in the
development of an endeavor. Significance of considering assets for development openings
strengthens on account of little and medium business association, for example, Society Café
since these organizations have restricted monetary and physical assets. Thus, the administration
of Society Café ought to decide the current assets of the organization and the ideal degree of
assets for development opportunity and whether these assets are open to the
association(DODDS, DIMANCHE and SADOWSKI, 2018).
Capabilities: It can be named as the quality of a business association which decides its capacity
to convey uncommon incentive to the customers. Each organization has a novel selling
suggestion which gives solidarity to the association and goes about as the center competency.
Assessment of center skills is significant for the administration of Society Café to assess any
development opportunity and recognize the way wherein center competency of the association
can heighten or expand the capability of development opportunity.
PESTLE Analysis:
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It is system of vital administration that is actualized to investigate the effect and impact
of outside condition changes on the inner dynamic and activities. The administration of Society
Café ought to investigate and think about the accompanying outer variables for assessment of
development openings:
Political Factors: It incorporates factors, for example, government intercession and strategies,
dependability in a business domain etcetera. For thinking about any development opportunity,
the administration of Society Café needs to consider it with the political measurement to decide
if the development opportunity has a positive effect or a negative contact as for government's
strategy and rules(Kumar, 2016).
Economic Factors: It incorporates factors, for example, level of salary, charge rates, import-
trade rate etcetera. Financial variables decide the market favourability of the development
opportunity and business advancement methodology. For instance, with the ascent in level of
salary, a business chance to build the nature of food items at expanded costs can be defended for
the administration of Society Café because of an ascent in level of family pay.
Social Factors: Social components are fundamentally worried about buyer request and conduct
which impacts the dynamic cycle of each business association. A business association may
choose to put into a business opportunity which isn't in amicability with the shopper patterns and
increment the danger of misfortunes. Subsequently, the administration of Society Café needs to
consider buyer requests, for example, expanding request of solid food items and put resources
into a business opportunity which lines up with the social elements(Baschat, 2018).
Technological Factors: Technological advancements and improvements have developed at an
exponential rate introducing open doors for business associations in each industry. Thus, the
administration of Society Café ought to assess the development opportunity with thinking about
the mechanical changes and advancements. For instance, advancement in food handling
innovation which expands the span for which food can be shopper etcetera.
Legal Factors: Every nation has a lot of rules and guidelines for overseeing and observing the
direct of organizations and organizations in the area which ought to fundamentally be considered
by the administration of little and medium business associations. For instance, the administration
of a private venture may settle on growing business universally which requires a thought of rules
and guideline of other nation and consistence with equivalent to resistance can prompt hefty
fines and complexities.
Environmental Factors: In the previous decade, natural activism has expanded a great deal
because of concerns introduced by a worldwide temperature alteration and environmental change
affecting the business tasks. Thus, the administration of private companies needs to decide if the
business opportunity positively affects the earth or not. For instance, opening up new stores may
be an open door for the board of Society Café to grow however the effect of business
development should be resolved as opening more stores converts into utilization of more energy
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and characteristic assets and an alternate course of action must be readied(Gounaridis,
Chorianopoulos and Koukoulas, 2018).
P2. Analysis of various opportunities about growth through the use of competitive advantage
and Ansoff’s Matrix
Porter’s Model of Five Forces:
This instrument of vital administration is extremely imperative in assurance of the quality of
serious market powers and recognizes the upper hand for an association in its industry.
Investigation of Porter's five powers for Society Café is as per the following:
Purchaser's Power: It is a solid power for the administration of Society Café since there are
various business associations and organizations with immense speculation working in the food
business and the exchanging costs are low which empowers the purchasers to overwhelm the
exchange and appreciate the best nature of items at extremely serious costs.
Suppliers's Power: It is a feeble power since the organization has overseen great associations
with a scope of providers incorporating solid associations with the cultivating network too to
acquire crude materials straightforwardly from the ranches and get the best nature of items at an
all around arranged cost as the exchanging costs are additionally irrelevant.
Danger of substitutes: Society Café offers a wide scope of espresso items including hot and
cold fermented espresso, different refreshments, cakes and sandwiches etcetera and the quantity
of substitutes for these items is extremely high which expands the danger of substitutes for the
organization(Wey, 2019).
Danger of new participants: It has been seen that because of the allure of food industry,
numerous business associations especially at little scall have begun entering the business with
remarkable incentives for the clients, for example, advancement of smart dieting propensities
with a pleasure for the taste buds too making the danger of new contestants a high power for the
association.
Serious Rivalry: Food industry observes a hardened rivalry with various firms running from
large café chains, for example, Starbucks or Costa Coffee to numerous nearby shops and bistros.
It makes value wars, broad showcasing and utilization of deals special devices, item
advancement etcetera a typical component of the business to keep up the seriousness and
subsequently, serious contention is a solid power for the administration of Society Café(Wey,
2015).
Ansoff's Matrix:
It is one of the most critical instrument of vital administration that gives a system to supervisors
to devise and investigate future development heading and technique. The model gives four
distinct bearings of vital future development for an association and furthermore helps in
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1602765199 (1)recognizable proof of the danger and measures to kill hazard related with every
course(Hu, 2016). According to the Ansoff's Growth Matrix, the different vital development
choices accessible for the administration of Society Café are being assessed as follows:
Market Penetration: It is the principal bearing for key development of business where
endeavors are made to expand the deals of existing items in the current business sectors with the
assistance of broad utilization of apparatuses of deals advancements, for example, limits,
cashbacks, vouchers etcetera. With regards to little and medium associations, market infiltration
is the alternative which has least chance and can be actualized viably for cultivating higher
income age plan of action. For instance, the administration of Society Café can offer client
dependability projects to increment monotonous deals and actualize client referral programs for
pulling in more clients and informal exposure of the organization. Counter from different
contenders which can prompt more broad value wars is the essential danger of market entrance
that can be disposed of with the assistance of conservation procedure where the supervisors of
the organization can zero in on investing aggregate amounts of energy on most significant items
and benefits and pulling back minor endeavors(Yu, Yanxu and Bojie, 2019).
Product Development: As the name proposes, item improvement is a key development
alternative accessible for private ventures where the organization offers an advanced and novel
scope of new items in the current commercial center and business region for amplification of
income and business development. It helps in expanding market strength and setting up a stage
for long haul supportable business execution of the association. For instance, chiefs of Society
Café have an open door for business advancement with the assistance of offering solid food
items and developing the current scope of food items being offered by the organization. Potential
danger related with the cycle of item advancement for private companies is fluctuating degrees
of enhancement in the whole creation innovation and segments for developing items which can
be hard to support for independent venture association and the administration of Society Café
can deal with this danger with the assistance of apparatuses, for example, hazard register to
decide the probability and the effect of various dangers(Tian, 2016).
Market Development: In this, the association offers the current items and administration in
another business region or market zone. For instance, opening of new stores by the
administration of Society Café. Essential danger associated with market advancement is
organizing the advertising exertion in various geological area and the absence of required market
information which can be disposed of with the assistance of statistical surveying and basic
examination(Khajezadeh and et. al., 2019).
Diversification: For little and medium business association, expansion methodology is the most
least secure procedure where the firm offers new items and administrations in new market
territories which includes an extremely enormous measure of venture and whenever turned out
badly, can hamper the benefit of tasks for a significant stretch in future. For instance, offering
new sound items in another store is an expansion methodology for the administration of Society
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Café which has potential dangers, for example, pressure from investors or danger of losing
venture. The administration can take out these dangers or control these dangers with the
assistance of vital arranging and collaboration between different offices in the association and
having a reliable dependent on successful statistical surveying and field preliminaries(Wey,
2019).
In view of the above assessment, item improvement can be suggested as the most appropriate
system for business development and advancement for the administration of Society Café which
can expand deals and encourage high income for the organization with moderate danger(Bridge
and Dodds, 2018).
Discuss options for growth for analytical framework
To above analysis it is examined that the Society café adopts the various options for
growth in terms of future perspective. In this they can adopts the use of PESTLE and porters
generic model that helps in ensuring the competitive advantage within marketplace. In this it also
helps in examine the external factors so that firm will easily analyzed opportunities and threats
so that best strategy can be select out. In this ansoff matrix provide the suitable option for
success and position the company within competitive market.
Critically evaluate options and pathways for growth
From above scenario it is critically evaluated that there are several options and pathways
for the business growth and success. In terms of Society café can examine the best options that
are suitable for growth and setting the success pathways. in this organisation can examine the
market development strategy so that they can effectively gain high profits by targeting the new
market. This also ensures in beating the rival firms and helps in their longer survival.
TASK 2
P3 Identification of various sources of fund raising
Wellsprings of reserve can be named as the diverse elective alternatives from where a
business association can meet its present moment and long haul monetary prerequisites. Diverse
accessible wellsprings of store for the administration of Society Café are as per the following.
There are basically two type of sources of funding i.e. internal and external that can be shown
below:
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Internal source- This defines as those options that are present within the company for
generating the funds for their future growth. It involves retained earning, sales of assets, working
capital etc.
External source- It refers to those source of funds which the company can collect from
outside the business entity to expand and grow the organization. It involves various sources such
as equity share, bank loan, leasing, hire purchase etc(Hess and Sorensen, 2015).
Following are the several sources that are useful for the Society Cafe:
Retained Earnings:
It alludes to the measure of benefit which has been retained by a business association after
installment of fixed intrigue and profit commitments. Private company associations can consider
retained earnings as it is a fitting wellspring of assets which is in effect basically assessed as
follows:
Preferences:
•It is a practical strategy or wellspring of assets because of disposal of any intrigue or profit
necessities(Mobin, Li and Komaki, 2017).
•It doesn't include any weakening of control in the business tasks and the power to settle on
choices can be brought together.
Detriments:
•Reinvesting the benefits earned once again into the organization can result into demonization of
investors and strife with their inclinations.
•It can result into over-capitalization.
Bank loan
It refers to that amount which is borrowed by the company from the bank in the promise
of paying some fix interest to the bank within a specified period of time. As it is very effective
and safe for using this source of fund to finance the operations of the business unit. In case of
Society Cafe this source of fund is containing both positive and negative aspects that can shown
below:
Advantage:
One of the best benefit of bank loan is that interest rate is fixed and it is decided in
advance at the time of taking loan.
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As it is the type of secured loan due to this company cannot face the any issue regarding
payment and anything else(Agyemang and Silva, 2019).
Disadvantage:
Main disadvantage of this type of fund is that in this company can grant the loan against
some security so that if the firm will fail to pay the amount of loan than bank will seized
the organization security.
Overdraft
It is one of that source of fund in which there is a agreement between the two parties i.e.
customer and financial institutions in which the bank can exceed the limit of withdraw than their
actual amount.
Advantage :
As it is one of the most common and flexible source of fulfilling the financial needs
where one person can withdraw the extra money that is beyond their balance at any time.
Disadvantage :
Major disadvantage of this source of fund is that the organization can pay the
arrangement fees to their financial institution or banks for their extra credited money.
From the above analysis it is to be analyzed that Bank loan is the best source of fund for
Society Cafe because it is one of the most secured type of loan. In this firm will pay the fixed
amount of interest. As it is very flexible in nature that is best for the SME firm. As this helps in
expanding the business so that high profits can be attained. It also have low interest rate due to
this Society Cafe does not feel pressure to to pay the high interest. Because of this it is the best
source of fund to generate and arrange financial resources for expanding business.
Evaluate potential sources for funding and justify suitable source
To the explained sources of funds it is evaluated that for Society café bank loan is the
best source of fund to arrange the financial resource for market development. as it is one of the
best and secured type of loan in which the bank can set the interest rate that is fix at the time of
taking loan so that firm will not face the issues at the time of repayment because they arrange
the funds effectively and efficiently. It will helps In enhancing the image of the organisation in
marketplace.
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TASK 3
P4 Business plan for growth including the financial information and strategic objectives for
scaling the business
Business plan refers to that outline document of the company that includes the strategies
and policies for attaining the specified goals and objectives in effective and efficient way within
a specify period of time. It considers the essential information that is related to the activities and
functions of the business firm. Developing business plan is significant because it gives the
various knowledge regarding vision, mission, objectives and financial budget etc. Implementing
the business plan helps in executing the several policies and strategies that are related to
investment which gives successful results to the firm. In case of Society Cafe that is a small
business in UK offers the quality food to their consumers want to expand the business in some
other area of UK(Esmaeeli and et. al., 2015). For this developing the business plan is essential
that can be shown below:
Executive summary
Society Cafe is one of the famous Cafe in UK that serve the fantastic coffee to their
customers in the hearts of Bristol, Oxford and Bath. Now the Society Cafe can expand their
business in some other area of UK with their best quality of coffee so that they can make high
amount of profits and revenues.
Vision
The vision of the Society cafe is to fulfills the needs and demands of the customers by
offering the best coffee and atmosphere in their cafe. It also working for enhancing the demand
of the brand in the food sector by offering unique, qualitative breakfast and snakes.
Mission
The major mission of Society cafe is to offers the customers the best quality goods that is
healthy, economically and hygienic that will attracts the large base of customers.
Objectives
Strategic objectives that is develops by the manager of Society Cafe is to expand their
business operations in various other parts of the UK by offering the best quality different flavors
coffees to their buyers. To attain this specified target Society Cafe follows the strategy of
SMART objectives in which objectives are of the organization are measurable, practical,
attainable, circumstantial that must be completed on a desired period of time. In this business
enterprise is plan to launching a new organic flavorful coffee including snacks and breakfast. In
this Society Cafe can mainly targets the couples, friends group etc. who love to drink coffee and
snacks. Using this new organic flavor coffee company want to enhance their market share within
the UK so that they will sustain for a longer period of time and attracts the large base of
customers(Abolhasani and et. al., 2016).
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Market Analysis
It is analyzed by using the SWOT analysis of Society’ café:
Strength Weaknesses
The major strength of society café is there
coffee and their service which is quite
attractive for attracting customer attention.
The major weakness is their ambience which is
small due to these customers cannot feel
happy. This will affect image of the café.
Opportunities Threats
The opportunity for this is their online take
away policy that will attracts the office type
customers by saving their time. use of
technology in promoting business also helps in
attracting the attention of people.
The major threats of Society café is their
competitors that will affect the brand image of
the firm.
Marketing strategy
Product Society café offers the coffee and cookies to their customers that can attracts
the large number of customers in the specific areas of the UK.
Price The price of their goods and services are reasonable that every person in the
UK can afford it and due to their profits and sales are enhanced.
Place Society café can operate their business in the street of UK, where people are
very busy and want coffee and snacks for their relaxation so that high profits
can be attained by company.
Promotion For this they need social media where number of people is very active so that
more and more customers are attracted. It is also time saving and cost
effective.
Financial information
To launching a new range of coffee, snacks Society Cafe can enhance their operations
within the UK so that there sales and profits also increased. For this Society Cafe can arrange
and collect the funds to fulfills their goals due to this they can get high profits and revenues. For
arranging funds there are various options like Bank loan, Overdraft, Retained earning etc. all this
helps in attaining the demand of generating maximum revenues. At the same time company also
adopts the use of several promotional tools for influencing the purchasing action of the public.
For this organization make a budget that can be shown below:
Total forecasting budget:
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Particular 31/12/18 ($) 31/12/19($) 31/12/20($)
Production cost 4000 - -
Promotion cost 2000 700 500
Advertisements cost 1000 550 600
Technology cost 600 1700 1900
Catalogues 150 200 150
Total 8250 3150 315
To the above developing budget it is to be noticed that management of Society Cafe can
need to pay more attention of the cost and expenses because it helps removing the wastage in
monetary value. In this company also invest more in advertising the goods and services so that
they can attracts the large base of customers within the different market of the UK. For this they
can use catalouges that includes more details regarding the goods and services.
Cash flow statement
Cash flow statement of Society Cafe can be shown below:
Particular 30/06/20 (£) 30/06/21 (£) 30/06/22 (£)
Sales 100000 120000 130000
Purchase -50000 -70000 -80000
costs -15000 -17000 -16000
wages -16000 -19000 -20000
Cash Surplus 10000 14000 10000
From the above showing cash flow statement it is observed that Society Cafe have
enough cash that helps in paying their debts. This also helps in managing all their cash resources
effectively that helps in their future growth and expansions.
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TASK 4
P5 Succession and exit plan for small business with their advantage and disadvantage
Doing Business is very complex because it is sustain in the dynamic business
environment in which changes can be done by the business as per the demand of the
environment. For small business this report includes the various succession and it options with
their pros and cons that can be shown below:
Exit business options
Sell business in open market- In this when owner do not wind up the business than they sell the
company to third party that includes managers and employees of firm.
Advantage- In this manager are families to the business due to this they can handle
the business effectively. This helps in retaining customers for longer period of time.
Disadvantage- The major issue is that clients and investors cannot effectively trust
the other manager and employees who purchase the business due to this goodwill is
affected(Lines and et. al., 2015).
Liquidity- It refers to that in which company is insolvent and decides to wind up the business by
selling their business assets to the shareholders and creditors. It contains some pros and cons that
can shown underneath:
Advantage – The main advantage of liquidity is that it takes away the business owner
from the penalties and risk. In this once the organization is liquidate and dispense the
assets to their creditors than remaining liabilities that are not guaranteed personally
are written off.
Disadvantage- The major drawback of this is that the skilled and experienced
employees are lost their jobs that create difficulties to them in near future.,
Options of succession plan
Merger and acquisition- In this two exiting organizations joints their hands for enhancing the
value of their business enterprise in the marketplace. In this company can use the following
strategies so that high profits can be captures within the industry.
Advantage- The main advantage of merger and acquisition is that businesses will get
the more resources and capital so that they can invest high to enhance their
profitability and market share.
Disadvantage- The main con of Merger and acquisition is that it deduced the
competition within marketplace that create monopoly within market customers also
have limited choice.
Evaluate exit and succession options to make valid recommendation
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It is evaluated that the small and medium size organisation have several options to
generate funds for exploring the success and growth. It helps in chossing the suitable and
easiest methods so that they get the money effectively and efficiently. In this small business
mainly focus on the exit options as compare to succession options because of shortage of
funds and capital in hands. Small business can adopts the exit options in which they can
select sell business in open market and liquidity. and after analyzing this two they can focus
on choosing sell their business in open market so that they can enhance the image in business
market for longer period of time as it can be purchase by some large organisation. on the
other hand the merger and acquisition are not affected because in this they need to acquire
assets which is very difficult for the SME to arrange that. In management point of view, it
creates conflicts among the staff members that impact the brand image.
Critical evaluate succession or exit options for company and justify recommendations for
implementation
From the above research it is critical evaluate that exit options are more effective for the
small business and helps in collecting money. In this sell the business in open market is very
effective because it enhance the business exposure within marketplace as it is purchase by the
large organisation. in this liquidity is not much affected because in this business owner only
get the small amount that they collect from selling their resources to the general public. in
this selling in open market is effective but at the same time it also contain some disadvantage
that it takes more time in finding out the right seller who can handle all the activities on
effective way. In terms of Society Café, selling in open market is recommended because in
this quick transactions can be done.
CONCLUSION
From the above explained report it is to be concluded that planning is essential element
for gaining the growth and success. In this companies need to examine the affect of various
external factors by using Pestle and Ansoff analysis so that company easily identify the growth
opportunities that helps in getting the future success. It also inculcates the various sources of
funding such as retained earning, overdraft, bank loan that helps the firm to gather and collect the
funds to expand and grow the business unit so that high amount of profits can be attained. In this
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a business plan helps more to the company to attracts the investors towards the company
objectives for this they can provide mission, vision and strategic goals in the plan. At lst it
inculcates the exit and succession for the companies that help in generating the amount of money
for the future use.
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