business expansion plan

Expansion of a corporation entails a variety of practices aimed at propelling the enterprise to grow. Perfect strategies must be developed and executed in order to improve the supply of reliable services to an overwhelming number of consumers. In today's volatile market climate, it may be difficult for a company to carry out any tasks without consulting with others. External market climate impediments, on the other hand, are difficult to consider and even address all at once. A business strategy is therefore a vital instrument for developing a corporate plan to balance the company's financial situation and other tools critical to its smooth activity. This plan is addressed to “Phoebe” who began to operate a sole proprietor form of business of providing sandwiches and other lunch products to customers in a town. The availability of a restaurant to lease for the operations has therefore necessitated preparation of this business plan. The areas covered include the growth strategy, the business form, financing assistance, organizational structure as well as strategy needs, customers and promotions, and finally ethical issues and social responsibility.

Growth strategy

Unlike marketing where a business aims at gaining a significant market share, in this context, the plan has discussed possible strategies that will be utilized for the restaurant to grow. Growth, however, will be reflected in the increased number of services and products offered and making the business more lucrative. For the past five years, this business used to provide only lunch to customers, and it will be due to growth that variety of dishes and services will be offered to customers and further open up branches to new locations across the United States and other parts of the world (Pearce, 2004). For Phoebe to ensure the business grows, the following steps must be undertaken:

a) First and foremost, the business will employ all the possible approaches to understanding the customers’ needs and preferences. It will be possible to gain customers profile through the involvement of experts in the catering field. Today, consumers are influenced by a diverse range of factors while determining products to consume and those not to consume. By understanding influences and motivations that make consumers chose to dine in a particular restaurant in the town, Phoebe will be assured that the additional products included in the portfolio will be liked by customers. As a result, the business will boost the volume of sales and also enhance its competitive edge.

b) Secondly, Phoebe should undertake the investment in the form of a joint venture. It will involve striking an agreement with another firm concerning the production of the sandwiches. Apparently, a joint venture has many merits that include access to new customers and increased capacity. It is from the joint venture that the business will grow, generate more returns on investment and increase productivity.

c) Thirdly, Phoebe should find partners to share the ownership of the business. Carrying a business as a partner has more advantages than doing it a single owner. There are high prospects for success because of various reasons not restricted to the following; facilitates the acquisition of technology, expertise, share business risks and sharing of responsibilities. It is quite clear that partnering with another investor will result in increased capital contribution.

d) Also, Phoebe should improve the productivity of the business. Productivity can be enhanced through different approaches. The most common methods include the hiring of experienced staff, establishing good relations with suppliers to enhance the constant supply of inputs, acquiring the required equipment and more. Putting everything into strategic planning and proper implementation processes can probably promote production. As a result, the business will manage to serve many customers hence attaining growth and expansion.

Business form

Some of the forms of business ownership applied in various organizations include the sole proprietorship, partnership, corporation, and the limited liability company. These forms are discussed as shown in the table below:

Business form

Advantages

Disadvantages

Sole proprietorship

The owner is the boss

The owner does not share the profits with anybody.

The privacy of the business can be kept

The owner can easily change the form of business when need arises

The cost of starting the venture is relatively low.

The owner suffers from unlimited liability.

Opportunities for raising capital are limited.

The business cannot support retaining talented workers.

The business closes up when the owner dies.

The decisions are made by one person.

Partnership

The business is easy to start because of low initial cost.

The business has a greater borrowing capacity

The form of ownership can be easily changed.

The business is not exposed to strict legal regulations.

There is unlimited liability for the partners.

Every partner is jointly liable to business debts.

The possibilities of disagreements between partners are high.



Corporation

The shareholders are not liable for the business debts.

Shareholders are not obligated to pay taxes of the business.

The corporation has a perpetual existence.

It can easily raise funds because it attracts more investors.

It is expensive to form.

They operate under strict regulations.

Creditors are discouraged from trading with it because of limited liability.

The dissolution process is long.

There are elements of double taxation.

Limited liability company

Shareholders are liable up to the level of their contribution.

The owners have no powers to negatively interfere with the operations of the business.

This form of business is expensive to set up.

The business has complex accounts.

There are possibilities of disputes arising between the directors and the shareholders.



Phoebe having operated as a sole proprietorship for about five years without growth and expansion, it is a high time to bridge the gap. However, Phoebe should seek a partner and run a partnership form of business. Weighing the advantages and disadvantages as highlighted in the table, this expansion will work pretty well with partnership form of the business. Partnership form of business ownership has various advantages that include sharing capital contribution, easy formation, better decision making, easy to change the form based on the circumstances, less influenced by government regulations and more. Because Phoebe has been operating on a small scale, raising enough capital to finance the purchase of all requisite for the start of a restaurant will perhaps be problematic. The expansion plan will require more funds and also will succeed if appropriate strategic plans are formulated, and responsibilities are shared. Also, a partnership will help Phoebe to borrow funds from various institutions to finance business operations. Phoebe should therefore operate the business as a partnership.

Financing assistance

Moving into a restaurant will probably require more capital. For instance, operating a restaurant will involve additional expenses on the establishment, administrative, operational and legal. It is an indisputable fact that these costs are too much for Phoebe and perhaps the savings from the previous business cannot support paying all for these expenses. For Phoebe to raise enough capital to finance the business, she can go for debt financing. Here, various options like borrowing from friends and relatives, banks and other financial lenders, commercial financial companies, and from government programs. Borrowing from families and friends is usually cheap though getting someone to offer the loan is very hard. Therefore, Phoebe can seek financial assistance from banks and other commercial financial companies. The presentation of a solid business plan and good performance track will be the key metrics that will be considered. Because of the availability of commercial financial institutions to offer loans, Phoebe should firstly seek loans there (Timmons and Spinelli, 2004).

The staffing needs and organization structure

Besides financial consideration, Phoebe has to ensure he hires qualified and experienced individuals. Hotel and catering experience are the primary attribute that can help the business position itself at a better place to overcome the unpredictable business environment. A training program should be developed and be integrated into the business culture such that any employees who join the company are trained and guided by the human resource section regarding the expectations. The recruitment should be based on individuals’ ability and experience, oriented and further be trained before assuming responsibilities. Further training should regularly be offered to keep the staff competitively fit in their positions. Besides, Phoebe should use line organizational structure to enhance the achievement of the business goal. Here is where there will be vertical and direct relationships between different organization levels. The most important attributes of such form of business include simplification of authority, accountability and responsibility, and it promotes decision making and simple to understand. Therefore, through line organization system Phoebe will develop and establish a chain of command where staff will remain focused and committed to their roles.

Promotion of the business

The expansion of the firm should not affect the current customers. Customers should thus be provided with the services and products they need. They should be informed about the benefits that will come with change. Having a specified place where Phoebe will offer services from brings overwhelming benefits to customers. Some of the importance includes; ability to access any meal at the operation hours, access to a variety of products and access to better services. Therefore, it is through the provision of excellent services and menu based on customers’ preferences that the business will manage to retain the previous and current clients.

The most important strategy that must be undertaken should involve carrying out marketing and promotion to inform the customers about the location of the facility. Phoebe should consider promoting the hotel through advertising. Phoebe should advertise the restaurant through the radio, Television, the internet, and social media. Using different forms of advertising ensures that the target market timely receives the information about the product, services, and locations. Advertising indeed is very informative. With the Television, customers can view the new site, price and menu provided. The radio will air informative messages about the business. Similarly, the internet and social media will play the same role in promoting and attracting customers at the new business location.

Ethics and social responsibility

All business institutions are expected to comply with ethical imperatives. With the restaurant business, the possible ethical issues include diversity issues, employee theft, integrity, food quality, language used and others. The possible social responsibility with a restaurant business will include providing quality meals to customers, rewarding the employees better, participating in events and programs intended to benefit the community, avoiding pollution and paying taxes to the government. Regarding ethical issues, Phoebe should draft a constitution describing the position of the business on each matter. The ethical guidelines should then be explained and provided to the employees (Smith and Colman, 2006). With the social responsibility, the business should prioritize essential areas like donating to help the unfortunate in the society, donating to charities, assisting the government in sensitizing the community about some issues and more. Ethical matters should, therefore, not be compromised and further ensure the business gets committed to promoting the society.

Conclusion

In summary, preparing a business plan will be fundamental for Phoebe to have a synopsis of the steps to undergo to put the business on the right track. Unlike the first business, operating in the restaurant will require a range of activities that must be catered for to create a competitive edge. The most important metrics that planning should adequately be done on includes; growth strategy, business form, financing assistance, organization structure, promotion strategy and ethical and social responsibility. Besides planning on the highlighted issues, Phoebe should change from sole proprietorship to partnership form of business which will be more advantageous for the expansion of the firm. Finally, advertising should be utilized to create awareness among the customers which will consequently attract many customers.

References

Pearce, L. M. (2004). Business plans handbook: A compilation of actual business plans developed by small businesses throughout North America. Farmington Hills, MI: Thomson.

Smith, P and Colman, J. (2006) Ethics in the Tourism and hospitality industry. Journal of

Business Ethics, pp. 1175-1187.

Timmons, J.A. and Spinelli, S. (2004). New Venture Creation: Entrepreneurship for the 21st

Century. New York: McGraw-Hill/Irwin.