Unit 42�Planning For Growth - Developing An Exit Plan Assignment Sample

Introduction Of Planning For Growth - Developing An Exit Plan Assignment

Get free written samples from expert assignment writers and academic writing services in UK.

PART 2

 1.1 Evaluation Of Current Business Situation, Using Entrepreneurial Strategies and Development of a Detailed Business Case to Secure Funding

Company Profile

 Logo of the brand

(Source: Coffee Wake Cup, 2022)

Coffee Wake Cup is a Clapham-based popular coffee shop that has established in 2013 and serves in the local area of London. It is a private limited company. The cafe shop is situated at 14 Clapham Park Road, London SW4 7BB, United Kingdom. The brand offers breakfast, lunch, coffee, homemade cake and many more items that will satisfy customers' demands and expectations (Coffee Wake Cup, 2022). Customers can get healthy lunch that also increases the brand value of the business. It offers a delightful and welcoming gesture that attracts huge customers to the restaurant. It provides the best quality food and personal service that gives an innovative and exclusive experience to customers (Coffee Wake Cup, 2022). The brand offers varieties of drinks, coffee, and sandwiches. The brand has achieved success over competitors due to its customer rating and confidentiality about maintaining proper quality and customer benefits.

Mission: The mission statement of the brand is “To enrich the entire coffee experience for customers of the brand, franchises, and restaurant partners through sharing the knowledge of specialty coffee”. Coffee Wake Cup promotes the specialty of organically grown coffee by employing youth in rural areas of Nepal and urban cities. The mission of the brand is to provide an exclusive Nepali coffee experience to customers that will give a better taste to customers, and increase customer loyalty and expectations (Coffee Wake Cup, 2022). It also focuses on educating Nepali farmers about the quality and varieties of high-grade coffee that will help them to grow more amount of coffee beans. The brand also has the mission to stop the child labor concept in eastern Nepal which will ensure better education and wellbeing (Coffee Wake Cup, 2022). It also provides support and increases the skills of the youth of the Nepal Coffee industry will help to acquire better skills and expertise and the brand will get reputed in the overall industry.

Vision: The vision of the Coffee Wake Cup is to provide the best specialty coffee from Eastern Nepal to all over the world. The obsession of the brand is to get the excellence to provide the best coffee experience to customers by using the original Arabica Seeds that enhance the taste and quality of the coffee. The brand loves to create endless creation of food that gives a better experience to worldwide customers.

The brand focuses on making experiments with the best quality raw materials and using the best quality technology that will help to get a reputed place within the industry that increases brand value and efficiency (Coffee Wake Cup, 2022). The brand is very passionate about experimenting with drinks and cakes by designing and mixing that will increase the competitive advantage of the brand (De Bernardi and Azucar, 2020). Coffee Wake Cup believed that a well-balanced lifestyle is a healthy lifestyle that will help the brand to provide better well-being to people. The brand is very fascinated by a variety of colors that attract people of every age so it serves coffee in many colourful cups that increase the productivity and ambiance within the cafe shop. It also offers varieties of luxurious chocolates that enhance the product range of the brand. The principle of the business is to provide the best quality products that will help people to enjoy delicious foods by maintaining proper health concerns.

Objectives

The brand follows several objectives that help the brand to achieve success over competitors:

1. Promote a better coffee experience among a wide range of customers.
2. Offer health well-being by providing fresh and health-conscious food which is also delicious in taste.

• Provide better coffee firming knowledge to farmers of rural areas to maintain the quality of coffee seeds.

1. Give a better ambiance to guests so that they can enjoy their order with their family, friends, and colleagues.
2. Give more focus to make experiments that will help to make different varieties of products.

Financing Options

<td

Forecasted Income statement
FY2022	FY2023	FY2024
Sales and Revenues:
“Sales Coffee and Bakery Products”	“50400”	“52400”	“56120”
“Revenues from any event”	“3110”	“2559”	“3400”
“Total sales and revenues”	“53510”	“54959”	“59520”
Operating Costs:
“Cost of goods sold”	“39250”	“42400”	“43000”
“Selling, general and administrative expenses”	“4180”	“3910”	“3500”
“Reseacrh and developments expenses”	“1754”	“1650”	“1500”
“Other operating expenses”	“950”	“1010”	“860”
“Total Operating costs”	“46134”	“48970”	“48860”
“Operating profit”	“7376”	“5989”	“10660”
“Interest expenses excluding Financial products”	“576”	“625”	“510”
“Other income (expense)”	“2600”	“2704”	“-57”
Profit before tax	“9400”	“8068”	“10093”
“Provision for income tax”	“1676”	“1814”	“1900”
“Profit of consolidated companies”	“7724”	“6254”	“8193”
“Equity in profit(loss) of unconsolidated affiliated companies”	“26”	“34”	“30”
“Profit of consolidated and affiliated companies”	“7698”	“6220”	“8163”
“less: profit(loss) attributable to non controlling interests”	“9”	“15”	“11”
Net profit	“7689”	“6205”	“8152”

Table: Forecasted Income Statement

(Source: Created by the learner)

Coffee Wake Cup is a small local Cafe shop that operates in the local area of London. It operates under the private limited sector. It is most important to collect sufficient financial resources that will help the business to complete every activity with proper expertise and experiment. The brand can use various funding options that will help the brand to collect better funding or investments. Coffee Wake Cup should follow the following fund collection process to get better financial support-

1. Public Funds:

   Public funds include receiving money from a public entity from appropriations, fees, interest, taxes, and return on investment. Public funds can be collected from state, federal and other public-funded agencies. Public funds are classified as physical or tangible investments, human or intangible investments, and current investments for the consumption of goods and services. Coffee Wake Cup uses public funding options that help them be on streamline the industry. The brand can issue public shares that will create scope for collecting investment from a wide range of people.

2. Venture Capital:

   This sort of fundraising is also very beneficial to the company because, in this funding, there are very few investors eager to support small start-ups when companies are in the growing or pre-revenue stage. Venture capital is a type of finance that can come from private sources, and the individuals who are willing to invest in businesses are generally referred to as venture capitalists (Pinkow and Iversen, 2020). Coffee Wake Cup can use venture capital that will help to increase the financial strength of the business and ensure better expansion. It increases the overall growth and profitability of the organization. By using venture capital the brand increases its capability and opportunity to acquire a better position within the industry over competitors.

3. Cloud Funding and Crowdfunding:

   Cloud funding refers to the way of funding businesses using the internet. It allows a wider range of investors to get influenced by the business idea and get interested in providing investment. Coffee Wake Cup should use Cloud Funding which will ensure better funding abilities and better future growth and performance. Crowdfunding is a popular Funding option that gives the opportunity to seek investment among a wider pool of investors that ensures wider scope and opportunities for better operation and management (Petruzzelli et al., 2019). The investments collected from crowdfunding are based on a debt or equity basis.

4. Term Loan:

   Term loan refers to long-term loans applied by a business when investors approached the business idea and are willing to provide financial support in credit to execute the idea, that helps to meet the capital expenditures of a business and offer the full amount. Generally, term loans get secured by bonds but lenders also are able to offer them insecurely. Term loan is mainly offered for a period of 15-20 years with fixed or variable interest rates.

Competitive Advantage

1. Market penetration:

   The business intends to enter new market areas as it commences its activity in a new nation in order to draw in much more clients (Distanont and Khongmalai, 2020).
2. Market development: The Company is planning to create a new platform for the sale of its current line of merchandise in the new market.

• Product development:

  The Company currently sells various kinds of coffee, refreshments and chocolates, and it plans to add additional products in the future.

1. Diversification:

   The Corporation plans to make novel goods and offer the greatest services to its customers in an effort to explore new markets (Distanont and Khongmalai, 2020). Customers will receive a variety of products anywhere they are in the world as a consequence of this.

2.2 An Evaluation of The Company's Exit or Succession Possibilities, Weighing Pros and Cons

Small businesses can select from a variety of exit plans, including liquidation, family succession, passing the business on to heirs or other family members, and selling to outside businesses. The finest exert strategy for a small business will be one that enables it to achieve both its own goals and that of the company.

1. Liquidation: This refers to the company's plan to dissolve all of its assets. Low returns on investment will be received by the owner. A more effective and effective strategy to grow their business. Instead of developing the items, businesses make the money. They pay off all of their liabilities and investments. The limitation of the liquidation strategy is that management and workers should mainly focus on creditors due to huge money pressure (Rosslyn-Smith and Pretorius, 2018). Businesses will lose trade licenses, assets, and goodwill which will affect the growth and performance of the business.
2. Selling it to family and friends or heirs: In this process, the company owners transfer ownership of their company to their relative or to an heir. The sole proprietor knows the participants in this process and can rely on them. The members obtaining business administration aid are those who will be in charge of the company. The benefit of this technique is that no external parties are involved. It offers the chance to continue getting influence within the company. The disadvantage is that finding the appropriate accessor is not always easy.
3. Sales to investors: One can completely exit the firm while still maintaining the business legacy. It will enable the company to turn a profit. The process will be easier if the sponsor is known. The ideal investor can be difficult to contact at times. Controversial and problematic results are sometimes the result of the approach.
4. IPO (Initial Public Offering): An option where firm owners sell to a third party is an IPO (Initial Public Offering). The financial investor receives the proceeds of the share sale. It aids in increasing a firm's capital. Any organization's corporate debt is reduced through it (Wang et al, 2022). It maintains the company culture in place. By using this specific method, the company gains recognition. It is a very expensive and continuous procedure that creates difficulties for effective business operations.
5. Acquisition and merger: The business joins forces with other companies and is acquired by larger companies. Because they would be hiring more competent and skilled workers, the company would produce higher income (Segal et al., 2021). Through mergers and acquisitions, the business has been developing a variety of new items and services. The difficulties of Merger and Acquisition are it creates cultural conflict, increase stress on employees, and increases the financial burden that affects the existing scopes.

2.3 Justified Recommendations for The Business

Coffee Wake Cup should use Merger and acquisition existing strategies that ensure better scope and benefits for the organization. It is also important that by merging with other businesses Coffee Wake Cup will be able to acquire talented employees and the market that will help to develop better growth and opportunities within the organization. It will increase the financial scope of the business and gain competitive advantages over rivalries. It will help to identify the risks associated with the business operation that will allow the business more benefits of business operation. By adopting the merger and acquisition the brand will get the opportunity to expand its operation in more countries. It will ensure better growth and stability and extend varieties of products and services to local customers.

Conclusion

The report is based on the topic of planning for the growth of a business. Every business should prepare proper planning to increase the scope and opportunities of the businesses. The report has selected Coffee Wake Cup as the organization for the study. Coffee Wake Cup is a popular cafe shop that offers varieties of coffee, smoothie, drinks, and sandwiches to customers. It is a local brand that operates in the local area of London, United Kingdom. The assignment has discussed the future investigation of the business. It has also evaluated the development of an exit plan for the business. Finally, the study has provided recommendations for applying appropriate strategies for the market exit.

References

CGMA, 2022. Porter’s Five Forces of Competitive Position Analysis. Porter’s five forces of competitive position analysis[online] Available at: https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html [accessed on 15th September,2022]

Cleberg, C., 2019. Strategic Success: The Ansoff Matrix vs. The Balanced Scorecard.

Clement, M., Otten, C., Seifert, R., Kleinen, O., Houston, M.B., Karniouchina, E.V. and Heller, C., 2018. IDEA FORUM: the impact of subscription-based video on demand on traditional distributors’ value chains and business models. Journal of Media Economics, 31(1-2), pp.50-67.

Coffee Wake Cup, 2022. Home | Coffee Wake Cup. [online] Coffee Wake Cup. Available at: <http://www.coffeewakecup.co.uk/> [Accessed 15 September 2022].

Dawes, J., 2018. The Ansoff matrix: A legendary tool, but with two logical problems. But with Two Logical Problems (February 27, 2018).

De Bernardi, P. and Azucar, D., 2020. Funding innovation and entrepreneurship. In Innovation in Food Ecosystems (pp. 223-244). Springer, Cham.

Distanont, A. and Khongmalai, O., 2020. The role of innovation in creating a competitive advantage. Kasetsart Journal of Social Sciences, 41(1), pp.15-21.

Ferdinand, D.Y.Y. and Tresyanto, C.A., 2020. Marketing strategy using porters five force model approach: A case study at the culinary center in Sidoarjo Regency. International Journal of Business and Management Invention (IJBMI), 9(11), pp.44-48.

Hughes, R.C. and Troy, M.A., 2020. Small business energy challenges and opportunities. Energy Transformation Towards Sustainability, pp.239-248.

Karakaplan, M.U., 2021. This time is really different: The multiplier effect of the Paycheck Protection Program (PPP) on small business bank loans. Journal of Banking & Finance, 133, p.106223.

Khajezadeh, M., Niasar, M.S.F., Asli, S.A., Davari, D.D., Godarzi, M. and Asgari, Y., 2019. Application of neural network in portfolio product companies: Integration of Boston Consulting Group matrix and Ansoff matrix. International Journal of Economics and Management Engineering, 13(6), pp.821-825.

Kinoti, G., 2019. Influence of PorterS Five on the Competitiveness of Small and Medium-Sized Hardware Business in Imenti South Sub County Meru County Kenya (Doctoral dissertation, KeMU).

Kurniawan, D., Iswahyudin, M.D. and Suciati, T.R., 2020. SWOT Analysis and Ansoff Matrix in Creative Food Industry Business Development: A Study on Creative Food Business “Komala”. Open Access Indonesia Journal of Social Sciences, 3(2), pp.128-136.

perfectdailygrind 2022.How has technology changed in the coffee industry over the last few years? [Online] Available at: https://perfectdailygrind.com/2022/05/how-has-technology-changed-in-coffee-industry/ [Accessed on: 23^rd September, 2022]

Petruzzelli, A.M., Natalicchio, A., Panniello, U. and Roma, P., 2019. Understanding the crowdfunding phenomenon and its implications for sustainability. Technological Forecasting and Social Change, 141, pp.138-148.

Pinkow, F. and Iversen, J., 2020. Strategic objectives of corporate venture capital as a tool for open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), p.157.

Rosslyn-Smith, W. and Pretorius, M., 2018. A liabilities approach to the likelihood of liquidation in business rescue. South African Journal of Accounting Research, 32(1), pp.88-107.

Saci, F. and Jasimuddin, S.M., 2021. Does the research done by the institutional investors affect the cost of equity capital?. Finance Research Letters, 41, p.101834.

Segal, S., Guthrie, J. and Dumay, J., 2021. Stakeholder and merger and acquisition research: a structured literature review. Accounting & Finance, 61(2), pp.2935-2964.

Wang, Y., Lv, L. and Xia, S., 2022. Initial public offering, corporate innovation and total factor productivity: Evidence from China. Accounting & Finance.