SMEs Performance Factors

This assignment provides a comprehensive overview of the key factors that influence the performance of small and medium-sized enterprises (SMEs). It draws on various studies and research papers to identify the most significant determinants of high-growth SMEs, including managerial capabilities, R&D cooperation, innovation capacity, and business success. The analysis also explores the importance of entrepreneurial orientation, sustainability, and environmental factors in SME performance. With a focus on empirical investigations and case studies, this assignment offers valuable insights for students, researchers, and practitioners interested in SME development and management.

BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1: Business profile of Kristy and its strength and weaknesses............................................1
1.2: Analysis of financial performance with comparative solution........................................2
TASK 2............................................................................................................................................5
2.1: Recommendation regarding actions to overcome the weaknesses..................................5
2.2: Various ways by which current performance can be maintained....................................6
2.3 Areas in which business can be expand...........................................................................7
TASK 3............................................................................................................................................7
3.1: Assessment of existing business objectives and plan......................................................7
3.2: Revised business plan to rectify necessary changes to overcome weakness..................8
3.3: An action plan to implement the changes.......................................................................9
TASK 4..........................................................................................................................................10
4.1: Report on the impact of proposed changes on business................................................10
4.2: Management of proposed changes................................................................................11
4.3: Measurement for developing the performance of business...........................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Small business enterprises are operating with very less capital. They are self governing in
nature and most of these operations are handled by individual owners. There business is mainly
categorised into small units so that better chances of good results can be attain. The main aim of
that business organisation is to achieve these goals with the available resources. This project
report will provide critical information about management functions of small units in accordance
with the small business (Islam and et. al., 2011). The understanding of various approaches a
small business organisation is taken into considered under this particular report. Analysis of
strength and weakness of Worthenshaws Ltd. It also explains effective analysis of effective
business performances. The project examines various measures to overcome all the issues which
are arising in that enterprise. Determination of growth chances for the company with a well
organise business plan with an appropriate objectives. Further, it explains action plan to
implement new changes. Understanding of various impacts related with business and those
changes can be managed are discussed efficiently.
TASK 1
1.1: Business profile of Kristy and its strength and weaknesses
As a small business enterprises most of the businesses are perform with the motive of
setting up there organisation goals. Worthenshaws Ltd is one of the fastest growing companies in
UK. The restaurant provides various facilities in order to meet customers’ needs and wants. It
has 106 staff responsible for planning accommodation services in different parts of UK. A best
small company which is operating since 2014, Worthenshaws Ltd has excellent management
group. Kristy is making their full efforts in making her business more effective which is situated
in Lancashire. It carries two Michelin stars that have been featured in world's best 50 restaurants
(Barbero, Casillas and Feldman, 2011). It was established in 8 years ago in 2009 with the
facilities of British cuisine with the total capacity of 55. As a small chain that has transform their
business by increasing sales. The skills and close relationship with their suppliers make ensure
that quality of products should be at appropriate so that maximum customers should get attracted
towards them. One of the youngest entrepreneurs who is receiving capital from various sources
in order to manager there restaurant services. It has been analysed that Kristy originally belongs
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to not well rich family and started cooking in his Newcastle home town at the age of 15. His
early background was a subsequent three year was more effective and profitable.
Strength:
 Offering wide variety of cuisine to its customers with affordable price in order to make
healthy meals.
 They are expanding their business in many parts of the country.
 Product and hospitality is the major part of this particular restaurant.
Weaknesses:
 Because of less number of staff they are not able to cover entire orders.
 Revivals are selling more superior food with extra entertainment facilities.
1.2: Analysis of financial performance with comparative solution
Kristy is providing ready to eat meal to those customers those who cannot make food and
also targeting on best quality of food with extra services. As they are more sufficient enough to
became effective market leader with implementing lot of extra effort that can meet our customer
needs and wants. There are so many competitors such as Purbeck in cream which is also making
responsible for offering similar kind of products with plenty of other options (Purbeck ice cream
limited, 2016). There performance can be determined through measuring their competitors in
some other context. Some of them:
Quality audit: It is the systematic evaluation of quality system those are carried out by
an inside and outside quality auditor or other teams. It is known as crucial part of quality
management system (Chum and Mun, 2012). It follows a ISO standard of 9001.Under this
managers is having a more effective role in maintaining all financial transaction which are done
by company during the year. Kristy is offering several kind of multi-cuisine to its customer at
appropriate charges. It is more in dynamic in nature and used to keep proper balance among taste
and nutrition.
Financial report: By the help of financial report, it has become essential for led bury to
determine it present position in today's competitive market. Apart from this it is used as effective
measured techniques that can be used by company at the same point of time. The financial report
of led bury and its competitors are mentioned underneath:
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Figure 1: Financial balance sheet
(Source: Worthenshaws ltd, 2016)
From the above balance sheet it has been that Worthanshaws Ltd is attaining proper
growth on continious basis. As the debts of the company are enhancing but they are having cash
at bank. It can reduce some sort of uncertainty during the time.
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Figure 2: Financial Balance sheet
(Source: Purbeck Ice-Cream limited, 2016)
Non-financial measurement: HR
Year Ending Purbeck Ice-cream Worthanshaws Ltd
Staff turnover 10.00% 8.00%
Total percentage of Job
opportunities
14.00% 18.00%
Absentee rate 4.00% 2.00%
Customer perception of food and service quality
Closing year 2014 Purbeck ice-cream Worthanshaws Ltd (Kirsty)
Q1. Is it beneficial ? Maximum of customers are More than 80% of customers
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agreed that business was
offering better quality of
cuisine
think it positive and rest of
them are slightly confused.
Q2. Does it bring effective
performance?
Yes, they are able to satisfy
customer’s needs.
Yes, from 2012, growing rate
is jumped from 5%.
Q3. How it different from
competitors?
As they are offering milk
products so they required
further expansion for other
sectors.
They are mostly having
diversified business.
TASK 2
2.1: Recommendation regarding actions to overcome the weaknesses
There are various limitations which are faced by Kristy during management of their
business operations. Those are drawbacks are affecting the profitability as well as growth of their
restaurant business. Some of them are discussed underneath:
Assistance from government: As it has been seen that government is always there to
help small scale business in order to extend their support in them in the form of loan and other
crucial advisory services. With enterprises finance guarantee scheme that carries very low
interest rate and it can be taken into considered by owner of restaurant in order to invest in their
services (El-Gohary, 2012). But with they are not able to utilise these facilities in appropriate
manner.
Interaction of consumer is low: With the small level of operation, Kristy is not able to provide
these services to their customers. That is biggest issues for them. Because of which profitability
get affected and they are not increase customers demand in right manner.
Competitors are selling more variety: The another limitation of their business is related
with competition as they are offering wide range of food facilities as compare to them that
draws the attention of plenty of customers toward their business. Being in same line of services
sector competitors like purback Ice cream which is attracting customers by providing them
variety of products under the same roof. It will make direct impact on the performance and
sustainability.
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Restricted market share and growth: The opportunities are very low in this kind of
business because of minimum support and capital. Because of which they are not able to rise
upwards. The market share is also very low as compare to other companies that draws the
attention of customer through plenty of innovative quality and taste in their products. This will
also make huge impacts on the growth level as they are not able to attain provide necessary
services to them.
2.2: Various ways by which current performance can be maintained.
In current scenario, it is necessary for organisation to maintain their present time
performance in well organised manner. It is essential for maintain perfect position in the market
so that their competitors can be handled in effective manner. According to company's
performance, it will be supported them to attain there aims and objectives in specified period of
time. They need to target mostly on their strength so that it can be easy to become harder in front
of other companies. It is important to concentrate on their core activities in order to gain
sustainable outcomes in coming time. In present time they are providing ready to meal services
to its customers those are very perfectly health conscious and these are accessible at most places
such as supermarkets, mall and other online also (Forsman, 2011). To become more success in
competitive market they need to make their brand image so that well repudiated goodwill can be
enhanced. As they are associated with delivering online services to plenty of customers which
make them more strong and also quickly resolving their issues those are arises with the products
and services. There are some ways in which Kristy can make their perfect position in the market
are as follows:
Know the phase of customer royalty: Kristy required identifying royalty of customers
towards products those are sold by them. In order to maintain effective position in their minds,
they require taking continuous feedbacks and reviews about the taste and preferences of
customers.
Develop strong team: It is the most crucial ways by which company can attain
maximum advantages in long time. A well capable team can completed and face any challenges
those are coming the ways of organisation.
Maintain quality of products and services: As an perfect entrepreneur, Kristy need to
focus more on delivery best quality and to maintain superiority of their products so that
maximum population can attracted toward their business.
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Competitors business planning can allow an organisation to develop and sell their goods
and services in more efficiently in the market to beat their rivals.
2.3 Areas in which business can be expand
Kristy is delivering more healthy and quality food to its clients. In order to expand
business in different parts of the country, it will be the huge task for them. As, it will have strong
customer base which is more helpful at the time business expansion. The food those are offered
by the owner of Worthanshaws Ltd are relies on some effective concepts. There should be
categories of delicious food; it would maintain calories and hygienic aspects so that it would not
affect the health of customers. Such kind of thoughts is information about the products and
services those are offered by companies to its numerous customers (Aremu and Adeyemi, 2011).
In order to retain for long time in the marketplace, it is essential for them to lead their
competitors or capture wide market share in order to expand their operations in new locations.
By this company have the opportunities to grab market and serve more delicious food to its
customers.
Develop diverse and dynamic team work: The Company is having complete connection
with the partners which will increase their ability to perform as a team units. Through this Kristy
can access with new clients and also to emerge with latest techniques.
Global expansion: It is an effective opportunities to Kristy to make particular expansion
for their business during opening of new outlets other than UK market. This can be cop up with
popular supermarket those are operating at national level and products can be sold at more easily
at international stage.
Ansoff matrix or market growth planning in order to provide more suggestion that
business attempts perfect chances of increasing their market share. It is mostly depends upon
entry of new market or current market or products available in the market. There are various
aspects that are required under this matrix. Market penetration is the ways by which selling
present goods into current marketplace. Product development, market development and
diversification of market are the other aspects under this particular matrix.
TASK 3
3.1: Assessment of existing business objectives and plan
It has been seen that positive business aims and planning for that small restaurant can be
done in the so many manners. Every organisation needs a well organised business plan so that
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more attractive and effective outcomes can be attained. It is the owner who decides whether any
changes are required in order to expand their business. It will be necessary to increase their
market share as well as growth at the same point of time. Assessment of plan is discussed
underneath:
Business objective: Worthenshaws Ltd is required to draw the attention of maximum customers
with quality foods and hygienic environment. The aim of business is to enhance the productivity
and determine a repudiated restaurant in city of London. There are various positive aspects with
this goals is to set a benchmark or right path for their staffs in order to maintain proper facilities
in order to increase moral so that targets can be achieved (Blackburn, Hart and Wainwright,
2013.). There are certain drawbacks which is lack in proper regulation for following their
objectives.
Process: It is the process by which teams of an organisation maintain their activities in
accordance to reach the goal. This particular approach of the restaurant is not stated clearly
which can be creating doubt and miscommunication between staffs. Unexpected guest arrival
sometimes disrupts the procedure that implies the lack of flexibility in process of restaurants
which is at negative side. The benefits aspects of reporting are the authority which is clearer. The
employees of Worthenshaws Ltd are handled by skilled supervisors and experienced persons.
Performance indicators: The Company’s control the performance of employees and customers
by completed observing their activities. The biggest advantage of observation is related with
direct interaction that reflects the true image of the performance level. There are certain
limitation to it which is improper judgements of performance because lack in total time given to
them. Hence, it is required to conduct a well organise performance appraisal at regular interval
so that they feel motivated in doing their work at that place. Hence, it is essential to increase
motivation in them so that better outcomes can be generated.
3.2: Revised business plan to rectify necessary changes to overcome weakness
With the any business plan there are certain strength and weakness associated with it. A
business plan should be timely reviewed whenever any market or operation changes. Because of
volatile environment develop through credit crunches, it has made it more crucial to reconsider
its target as well as perfect strategies (Jasra and et. al., 2012). For formulating a business and
incorporated any modification, it is foremost necessary to create an understanding regarding the
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business. However, it is essential to review the results through measures which is undertaken for
achieving the aims and objectives with proper actions plan and assess the entire performances.
The long term planning is further, built on several short term phases coming during the
process of project planning. In case of Worthenshaws Ltd business which is not that much
effective or at satisfactory level then necessary changes are needed to taken in order to rectify all
these issues. At the same point of time, it is vital for just switching from one plan to another.
Under the situation of niche market planning of Worthenshaws Ltd Kristy is not able to generate
more effective results. But it is not so essential to making changes as they can go with current
plan but little modification. The company should determine correct time to revise the plan which
is obviously requiring any alteration in business environment and market changes.
Like for example, continuous reviewing of the forecasting can brought essential changes
in its belief system. In order to make incorporation in changes under the business plan Kristy
needs to remove some objectives or amend some new goals. Likewise, it requires undergoing
different measure during analysing and executing plan. Apart from exercising any big
modification, the restaurant business required to predict its prospective losses by taking wrong
investment measure which will bring them in heavy losses. Kristy should ensure that are
sufficient amount of capital is there for implementing those changes. It should be taken into
consideration by comprehensive observation of business impacts along with determining BEP
analysis.
3.3: An action plan to implement the changes
In order to make the business more effective, Kristy need to implement a well organised
action plan that can help in making those essential changes. The alteration in structure and
system will be the major benefits for them to measure the performances level of Worthenshaws
Ltd. This modification can bring new challenges in front of employees to deliver more effective
outcomes for the company. The resources are needed to be utilised in well effective manner so
that positive chances of getting more health results can be enhanced (Olszak and Ziemba,
2012.). Hence, change management role is more crucial in the way that can be possible to make
organisation more effective. As business environment is more dynamic in nature and for that
Kristy need to implement new changes to cop up in order to control and manage the business
more efficiently in boundaries of the nation. In the perspective of small business, Lewin;s theory
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of change management is more effective which can help their business operation to reduce the
impacts. Those are discussed underneath:
Unfreeze: Under this stage, in which Kristy which is the owner of Worthenshaws Ltd can
make relevant changes to the employees by showcasing the inefficiency in the current process
and strategies. The nature of business will be increase if these changes are made. Such activity is
required to be determined and shared to the employees in order to identify its importance to that
particular business (Islam and et. al., 2011). During this, various questions will also arise in the
mind of customers as well employees that can be solved by giving them in more tactful manner.
Changes: According to this process, essential changes are adopted and employees will
need to follow the new procedures in the Worthenshaws Ltd in order to give their best for the
growth of businesses. The beneficial aspects of employees will enhance in this particular stage
and they feel motivated in performing their role.
Refreeze: It is the final stage in the changes management, it reflect the advantages in the
ongoing work procedure. The reduction in misunderstanding will be determined and organisation
can get the desired return in the form of productivity from plenty of employees those are working
in an organisation.
TASK 4
4.1: Report on the impact of proposed changes on business
In SMEs business organisation, it is essential to have change. It is imperative for the
organisation in accordance to attain the competitive advantages over other company’s which is
operating in the same business line. The main aim of business organisation is to increase as much
profit as they can (Philip, 2011). They are able to do so if there is flexibility in the organisation
structure and operation. The biggest limitation of this business is to attain the customer in large
range and this can sometime affect the profitability of the Worthenshaws Ltd. Hence, changes
needs to be planned in more effective manner such as structure, employee and customer handling
can be done in well organised manner. With appropriate financial planning it will be easy for
Restaurant Company to attain its desire aims and reaching to its objectives. A well planned
management plan can bring drastic change in business operations of any organisation. The
impact can be determined by taking consideration of two major aspects those are discussed
below:
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Acquiring value added service: With the additional services such as providing alternative
mode of payment, loyalty card and prepaid card or car picking etc. It will help them to bring
more diners as it is not only related with food that can separate there business but other aspects
are also need to be considered.
Positive impact: There is always being the chance of increasing perfect outcomes for the
company’s. The change is the structure which will state the information of flow and increase the
level of coordination. Such style will increase motivation between employees without enhancing
any extra cost to an organisation. The regular monitory of performance will also reflect the best
productive level of an organisation and at the same time necessary feedback and review can
collected from customers about the services provided by the company.
Negative impact: along with positive impacts there is certain negative implication of
making changes. It will only be effective if all the employees are equally contributed towards the
changes (Soininen and et. al., 2012). The resistance is more common and people will be hesitated
to follow those change process. This can create huge chance of conflict between top management
and it will affect the profitability level of an organisation.
4.2: Management of proposed changes
In every small business organisation those are going for a changes in order to make there
business expansion. As, it will be helpful in increasing the risk aspects those are related with
operations of Worthanshaws Ltd. Kristy is having minimum amount of capital in order to follow
valuable changes. In order to do so, a attractive requirement can be made a vital path so that few
changes can be at workplace. The essential changes will be provided in order to increase their
market share as well as profitability. For selling those products at national level Kristy need to
determine the potential market where she can easily own their products. Like for examples: They
are required to channelize all activities which is affecting performance of employees. As, it will
be made more effective impacts which can influence organisational goals. The method of Kotter
eight phases has proved as major changes those are discussed underneath:
 Creating a sense of urgency
 Develop guiding coalition
 Evaluating a vision for change
 Coordinate the vision
 Remove hurdles
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 Formulate short-term wins
 Consolidate developments
 Anchor the changes
4.3: Measurement for developing the performance of business
It has been found that last two year of performance, it has been seen that sales of cream
those are provided to Kristy in order to increase its profitability through marketing techniques. In
order to enhance improvement of business, it can be analyse with the use of trend line which
shows current year performances. Further, it has been examine the changes which are made in
the business then mangers would also determine their performance. During formulation of new
changes in entire organisation, proper tools, techniques and methods are used by them such as
Lewin (Williams and Schaefer, 2013). By the help of this, it will be analyse as most appropriate
action that can be taken into consideration. By the help of balance scorecard model, Kristy can
be determining their performance in current competitive marketplace.
Financial perspective: The image of financial data is related with the benchmarking from the past
records.
Customer’s aspects: Kristy is always ready to meet every customer’s needs and expectation on
regular basis.
Learning and growth: It is having more learning capabilities and innovative direction to the
company to increase their reputation in the market.
CONCLUSION
From the above project report, it has been seen that small business enterprise is an
important aspects for managing any business operations. This particular project consists of
various information regarding business profile of Kristy. It is essential for them rectify their
strength and weakness which are arises in an organisation. They can plan their business with
appropriate strategies so that maximum outcomes can be attained. Some recommendations are
also provided on the basis of their current year positions.
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REFERENCES
Books and Journals:
Barbero, J. L., Casillas, J. C. and Feldman, H. D., 2011. Managerial capabilities and paths to
growth as determinants of high-growth small and medium-sized enterprises.
International Small Business Journal. 29(6). pp.671-694.
Chun, H. and Mun, S. B., 2012. Determinants of R&D cooperation in small and medium-sized
enterprises. Small Business Economics. 39(2). pp.419-436.
El-Gohary, H., 2012. Expanding TAM and IDT to Understand the Adoption of E-Marketing by
Small Business Enterprises: An Empirical Investigation. In E-Marketing: Concepts,
Methodologies, Tools, and Applications (pp. 931-952). IGI Global.
Forsman, H., 2011. Innovation capacity and innovation development in small enterprises. A
comparison between the manufacturing and service sectors. Research Policy. 40(5).
pp.739-750.
Aremu, M. A. and Adeyemi, S. L., 2011. Small and medium scale enterprises as a survival
strategy for employment generation in Nigeria. Journal of sustainable development.
4(1). p.200.
Islam, M. A. and et. al., 2011. Effect of entrepreneur and firm characteristics on the business
success of small and medium enterprises (SMEs) in Bangladesh. International Journal
of Business and Management. 6(3). p.289.
Blackburn, R. A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Jasra, J. M. and et. al., 2012. Determinants of business success of small and medium enterprises.
Olszak, C. M. and Ziemba, E., 2012. Critical success factors for implementing business
intelligence systems in small and medium enterprises on the example of upper Silesia,
Poland. Interdisciplinary Journal of Information, Knowledge, and Management. 7(12).
pp.129-150.
Philip, M., 2011. Factors affecting business success of small & medium enterprises (SMEs).
Amity Global Business Review. 6(1). pp.118-136.
Soininen, J. and et. al., 2012. Entrepreneurial orientation: Growth and profitability of Finnish
small-and medium-sized enterprises. International Journal of Production Economics.
140(2). pp.614-621.
Williams, S. and Schaefer, A., 2013. Small and medium‐sized enterprises and sustainability:
Managers' values and engagement with environmental and climate change issues.
Business Strategy and the Environment. 22(3). pp.173-186.
Online
Purbeck ice cream limited. 2016.[Online]. Available through:
<https://beta.companieshouse.gov.uk/company/05474647/filing-history>.
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