Small Business Management Challenges and Solutions

This assignment delves into the multifaceted challenges encountered by small businesses. It examines topics such as risk management, non-financial information's role, gender considerations in lending, innovation strategies, and entrepreneurial development in various contexts. The assignment also highlights solutions and best practices for addressing these challenges, emphasizing ethical considerations, effective financing models, and fostering a culture of innovation within small enterprises.

Small Business
Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Profile, Strengths and weaknesses of Cafe Portrait..............................................................1
1.2 Business analysis on measuring performance level..............................................................3
TASK 2............................................................................................................................................4
2.1 Appropriate actions to overcome the weaknesses.................................................................4
2.2 Ways of maintaining and strengthening the performances...................................................5
2.3 Areas in which business can be expanded............................................................................5
TASK 3............................................................................................................................................6
3.1 Existing objectives and plan of the Cafe Portrait..................................................................6
3.2 Revising business plans to incorporate appropriate changes................................................7
3.3 Action plan to implement the changes..................................................................................7
TASK 4............................................................................................................................................8
4.1 Impact of changes on the business and its personal..............................................................8
4.2 Ways to manage changes with in Cafe Portrait....................................................................9
4.3 Monitor improvement in performance of business over the time.......................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

Illustration Index
Illustration 1: Kotter's Change Model............................................................................................10
Index of Tables
Table 1: Profit made by Cafe Portrait in 5 years.............................................................................4
Table 2: Sales done by Lantana Cafe and Cafe Portrait in five years..............................................4
Table 3: Analysis employees performance level in 2015................................................................5
Table 4: Gantt Chart for 10 weeks.................................................................................................11
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INTRODUCTION
Small business enterprise can be determined as a business in which small number of
employees work together to provide satisfaction to customers by proving them products and
services. This type of businesses have a low volume of sales and are privately owned. These
enterprises are classified on the basis of number of employees, net profit, value of assets or
annual sales (Bridge and O'Neill, 2012). Present report is about Cafe Portrait which is a small
business enterprise located at Edinburgh. It is a place where people can enjoy lunch, cake and
coffee. Its provides variety of coffee, tea, cakes, meals which are helpful in satisfying their
customers and in providing them different options (Cafe Portrait, 2015). This report covers the
over all performance of this enterprise. Further, it covers the changes which can be made by
management for this enterprise. Moreover, it covers the revised business objectives and plans to
incorporate the proposed change. Lastly, it also covers the impact of change management on the
operations of the management.
TASK 1
1.1 Profile, Strengths and weaknesses of Cafe Portrait
Following are the profile, strengths and weaknesses of Cafe Portrait:
Profile:
Name and address: Cafe Portrait, 1, Queen Street, Edinburgh EH2 1JD, Scotland.
Phone Number: [phone]
Employees: 22
Annual Sales: £4, 28, 000
Operated by: Cafes by Heritage Portfolio.
Email: [e-mail]
Following are the mission and vision of Cafe Portrait:
Mission: Main aim of this enterprise is to provide quality services and hygienic food to their
customers. They ensure that the customers receive professional and friendly services. Further,
they aim at maintaining comfortable and healthy environment to their customers as well as their
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customers (Malhotra and Temponi, 2010). Lastly, they focus on providing nutritious, hygienic
meal and that also in affordable price.
Vision: Their vision is to create branded, healthy, stir-fry and to become the best enterprise in
UK. Further, its vision is to avail as provider of the best coffee and food in UK.
Strengths:
 Because of it mission and vision developed by the enterprise, it has created goodwill by
providing quality services for meals, coffee, cakes and of good quality.
 As they provide delicious and healthy cakes, meals and coffee, the enterprise if growing
at a tremendous rate.
 They prepare a delicious tea every afternoon.
 On every weekends, they provide their customers with special food products.
 They also arrange special events like camp-fires, parties, etc. in addition to this, they also
provide gift vouchers to their regular customers (Longenecker, Petty, Palich and Hoy,
2013).
 They are also working for the preservation of the national heritage.
 They provide special offers for families, children of holidays, etc. they aim at providing
their services at low price so that all can afford them.
 Because of the complimentary dishes which they provide, it helps in increasing the
demand of that particular dish.
 Cafe Portrait has also focused of families and in this context they have also arraigned
their sitting in such a way that all can sit together and enjoy.
 Day photography is one of the facilities which is provided by Cafe Portrait.
Weaknesses:
 Because of the overload of the work, the employees some times become impatient. Same
is there in case of customers, when they are not attended on time, then some customers
become impatient and leave the cafe as they do not get what they actually expected.
 In order to attend the customers quickly, the employees of this enterprise do not wash the
plates properly and because of this the enterprise fail in providing their services
effectively.
 Complimentary dishes provided by cafe make the dishes of poor quality (Stokes and
Wilson, 2010).
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 Because of increase in customers, enterprise fails in providing peaceful environment.
 In case of natural disasters, cafe has not taken any precautions.
 Because of its popularity many customers visit Cafe Portrait and as a result the waiting
time for the customers have increases. The customers have to wait for a long time in
order to get their ordered food products.
1.2 Business analysis on measuring performance level
Non-financial and financial data of the enterprise will be helpful in knowing the
performance level. Following are the data of Cafe Portrait which would help in measuring the
performance level:
Table 1: Profit made by Cafe Portrait in 5 years
Year PAT(Profit after
tax @20%)
(￡000)
PBT (Profit
before tax)
(￡000)
PAT (Profit after
tax)
(￡000)
PBT (Profit
before tax)
(￡000)
2015 500 608 439 576
2014 450 567 368 498
2013 438 549 342 464
2012 380 477 331 425
2011 347 440 319 391
From the above table it is clear that the enterprise in is doing very well. Lantana Cafe which is
one of its competitors has not even touched the profit mad by Cafe Portrait.
Table 2: Sales done by Lantana Cafe and Cafe Portrait in five years
Year Lantana Cafe Cafe Portrait
2015 331 443
2014 303 427
2013 269 397
2012 257 304
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2011 232 276
It is clear for table number 2 that Cafe Portrait is doing very well with respect to its sales. In
addition to this, it is also clear that Cafe Portrait is better in attracting and in retaining customers.
Table 3: Analysis employees performance level in 2015
Year ending 2015 Lantana Cafe Cafe Portrait
Job offers 11.00% 17.00%
Absenteeism 17 days 14 days
Staff turnover Rate 6.00% 7.00%
Job satisfaction 79.00% 94.00%
From table 3 it can be sated that they understand their customers needs, wants and accordingly
they satisfy them.
From all the three tables it is clear that the performance of Cafe Portrait is comparatively better
than Lantana Cafe.
TASK 2
2.1 Appropriate actions to overcome the weaknesses
All the organization whether big or small have weaknesses. It depends upon the
management how it understands it and come up with appropriate solution in order to overcome
weaknesses. Following are the actions which Cafe Portrait can follow in order to over come their
weaknesses:
 Customers who prefer a peaceful environment, for such customers proper arrangements
should be done (Jones and Rowley, 2011).
 In order to create emergency procedures, some samples of warning and instructions
should be used for posting or distribution to employees.
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 Highly skilled employees should be hired who would be efficient enough to manage the
work load and would provide proper services.
 They should hire more employees so that customers need not wait long. In addition to
this, they should also arrange or manage their table so that customers may not stand and
wait.
 Training should be given to the employees so that they do not get angry or impatient and
could provide proper service to their customers.
 They should focus more on their dishes rather than their complimentary dishes. In fact,
they should focus on both their main dishes as well as their complementary dishes.
2.2 Ways of maintaining and strengthening the performances
Most of the organizations main aim is to retain and to attract new customers which is
very essential for the firm to grow. In this context, following are the ways which Cafe Portrait
should follow in order to strengthen their performance:
 All the tools should be provided to their employees so that they could provide proper
service to their customers. If they are not given proper tool then this force them to lie and
make excuses to their customers (Gronum, Verreynne and Kastelle, 2012).
 Cafe should prepare service manual in which all the services which they will provide to
the customers should be included. This will be helpful for the employees to understand
their job which has to be performed by them.
 Cafe should conduct surveys and research which would help them to identify the needs
and wants of the customers. This will be helpful improving their services according to the
customer requirements.
 They should reward the employees who performance would have been remarkable. This
will be helpful in boosting up their moral and they will work with more efficiency.
 Employees should be analysed and areas should be identified in which they lack. Further,
they should be given proper training so that they can enhance their skills and improve
their performance level (Herbane, 2010).
2.3 Areas in which business can be expanded
Expansion of business is possible when the organization is consistently increasing its
sales and profit. Following are the areas in which Cafe Portrait can expand its business:
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 Expansion globally: This is an expensive task, cafe will get new customers but they have
to understand the need and wants of customers in different country. But this will help in
recognition of the enterprise at global level.
 Diversification: Cafe should diversify their products and services so as to make unique
and better products. In this context, they can increase their complementary services and
could make changes in their taste or flavour (Hatten, 2015).
 New location: In order to expand their business this is one of the most effective way as
this will help in attracting new customers and this is less expensive. Cafe Portrait should
choose a place when people are willing to spend by they have fewer options.
 Marketing through social media: Facebook, LinkedIn, twitter, etc. are the most effective
source by which cafe can promote their products and services. In addition to this, they
can promote their offers which they want to provide to their customers. This is very
helpful in developing curiosity among the customers.
 Delivery of product online: In today's world, this is the best way to expand the business
as use of internet is rapidly increasing. Cafe can make available their product online and
can provide better services to them.
TASK 3
3.1 Existing objectives and plan of the Cafe Portrait
In order to sustain in the market it is very essential for the firm to apply strategies which would
help in attracting more and more customers. Following are objectives and plans which Cafe
Portrait is following:
Quick services: This is one of the main motive to the enterprise. They aim at providing services
to their on time and reducing the waiting time.
Understanding customer needs: This is the main objective of the cafe as this is the way through
which the customers can increase its revenue and growth. When the customers needs and want
are satisfied, then more and more customers get attracted to them (Fassin, Rossem and Buelens,
2011).
Increasing sales: Cafe Portrait focus on increasing their sales by providing high quality products
at affordable price. This strategy is very helpful for the customers to increase their sales.
Retention of employees: In this context, the enterprise rewards them. This is very helpful in
motivating and in improving their performance level.
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Special demands: There are customers who demand for specific thing or demand for changes in
the dishes which cafe provides. Cafe Portrait understands these customers wants and accordingly
provide them services.
Creativity and innovation: Cafe encourages innovation and creativity on their products. They
provide their customers with products which would be unique and which are not provided at any
other café's. This is very helpful in attracting customers and in providing new dishes (Altman,
Sabato and Wilson, 2010).
3.2 Revising business plans to incorporate appropriate changes
When organizations get popular, then they should focus on maintaining their image. In
accordance with Cafe Portrait should also focus maintain their goodwill and image. In order to
this they should develop SMART objectives, which are as follows:
Specific: The enterprise should focus on expanding their business to new areas. This will be
helpful in attracting new customers and for growth of the enterprise. With its sellers, the cafe
should focus on increasing its bargaining power. In addition to this, the should also develop new
products and diversify it.
Measurable: In order to reduce their expenses, they should identify employees how do not
perform efficiently and provide them training. Even with training their performance is
improving, then these employees should be removed and new skills and knowledgeable
employees should be hired (Rae, 2010). Further, they should increase their duration of opening
and closing time, this will be helpful in increasing the existing customer base.
Achievable: For providing services to customers who are at far off places, these types of
customers should be provided with home delivery services. In this context, they should make use
of new technology so that expense could be reduced and better services could be provided to
their customers.
Realistic: Cafe Portrait should develop new flavours or dishes and start home delivery which
would help in increasing the sales.
Time-Bound: Enterprise should enter into new contract in order to make the expansion process
reality. Varies strategies should be adopted in order to achieve the objectives with in 5 months.
3.3 Action plan to implement the changes
Cafe can follow the steps in order to implement the changes:
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Understanding issues: In this step, the cafe should identify the issues which avail in the business
because of which act as barriers in achieving goals and objectives of the enterprise. They should
prevent the reasons of dissatisfaction and adopt strategies which would help in motivating
employees.
Values and mission: Reasonable changes should be made with in their principles so as to
enhance productivity of the cafe (Bellucci, Borisov and Zazzaro, 2010). In addition to this, they
should focus on to meet the future requirements and cafe should realize its future expectations.
Understanding situation: In order to make changes, it is very important for the enterprise to
know the current position. This should be aware of the competitors strategies, their market share.
In addition to this, these are various tools like SWOT, PESTEL, Gap analysis, etc. which would
help in the enterprise to grow.
Strategy development: In order to improve the current scenario of the enterprise, they should
adopt different strategies. Further, they should understand the drawback and accordingly develop
strategies.
Completing review and plan: Timely review is very important after making modifications and
preparing outline of the plan. This will be helpful in identifying the deviations in the plan.
TASK 4
4.1 Impact of changes on the business and its personal
Following are the impact of changes on the business of Cafe Portrait:
Attracting more customers: By understanding the needs and wants of the customers, Cafe will
be able to adopt strategies. In addition to this, they can also take feedback for their employees as
they are the one who work closely with customers (Forsman and Temel, 2011).
Increasing market share: By providing improved and by providing attractive offers, Cafe
Portrait will be able to increasing sales and with comparison with the competitors better market
share can be captured.
Growth: By providing home delivery, diversifying and by understanding the needs of the
customers, Cafe will surely increase its growth and revenue. This will also result in increase in
the profit margin through which the enterprise can also expand their business.
Satisfaction of employees: Enterprise should adopt different motivational theories which are
very helpful in motivating employees and they should rewarded according to their performance.
This will be helpful in boosting up their moral.
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4.2 Ways to manage changes with in Cafe Portrait
There are many ways through which change can be adopted. In order apply the changes
effectively sited enterprise can apply Kotter's Change Model. In this model eight steps are
involved. Following are the ways through which Cafe Portrait can adopt change:
Developing urgency: Before implementing any change it is very essential for the enterprise to
make understand the importance of change which has to be taken place. There are chance of
creating a sense of insecurity among the staff of cafe. In this context, enterprise should be careful
and should communicate effectively to their members.
Powerful Coalition: Member of the cafe should be convinced that the change is important. In
this context, leaders play vital role in making the change accept. If not leader, then other key
individuals can be identified because of which change can be adopted effectively.
Creating a vision: All the employees and customers should aware regarding the change. They
should have a clear vision regarding the change.
Communicating vision: Powerfully and frequently, vision should be communicated. All
information regarding the change should be conveyed to members honestly.
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Illustration 1: Kotter's Change Model
(Source: Kotter's 8-step Change Model, 2014)

Removing Obstacles: In order to achieve or adopt the changes, enterprise should identify all the
obstacles which fall on the path in adopting the change (Kotter's 8-Step Change Model, 2014).
Creating short-term wins: In order to achieve long term goals, it is very essential to win small
term goals as it boost up the employees moral.
Build the change: After the win, analysis is very important to know the effectiveness of change.
In case of problems, immediate changes can be adopted.
Anchoring the changes: All the members and customers of cafe should be conveyed regarding
the progress of the change (Abor and Quartey, 2010).
4.3 Monitor improvement in performance of business over the time
In order to make change effective and in motoring the performance effectively. In addition to
this, Cafe Portrait will be able to identify areas of deviations and also help in motivating the
employees and in improving their performance level (Boyyes, 2015). In this context, following
char will be helpful:
Table 4: Gantt Chart for 10 weeks
Activities/Week 1 2 3 4 5 6 7 8 9 10
Talk to suppliers
Collect Facts
Market situation analysis
Pooling of Funds
Application of strategies
Installation of new assets
Initiate the project
Importing of quality and
variety coffee beans
Employee training
Monitoring
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CONCLUSION
From this report, it can be articulated that whether the enterprise is big or small, they should
focus on understanding the needs, wants and accordingly they should provide services which
would help in satisfying the customers. In addition to this, they should also focus on motivating
their employees and for this enterprise should reward them according to their performance. This
is very helpful in boosting employees moral.
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REFERENCES
Books and Journals
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small
business. Palgrave Macmillan.
Malhotra, R. and Temponi, C., 2010. Critical decisions for ERP integration: Small business
issues. International Journal of Information Management. 30(1). pp.28-37.
Longenecker, J., Petty, J., Palich, L. and Hoy, F., 2013. Small business management. Cengage
Learning.
Stokes, D. and Wilson, N., 2010. Small business management and entrepreneurship. Cengage
Learning EMEA.
Jones, R. and Rowley, J., 2011. Entrepreneurial marketing in small businesses: A conceptual
exploration. International Small Business Journal. 29(1). pp.25-36.
Gronum, S., Verreynne, M.L. and Kastelle, T., 2012. The Role of Networks in Small and
Medium‐Sized Enterprise Innovation and Firm Performance. Journal of Small Business
Management. 50(2). pp.257-282.
Herbane, B., 2010. Small business research: Time for a crisis-based view. International Small
Business Journal. 28(1). pp.43-64.
Hatten, T.S., 2015. Small business management: Entrepreneurship and beyond. Cengage
Learning.
Fassin, Y., Van Rossem, A. and Buelens, M., 2011. Small-business owner-managers’
perceptions of business ethics and CSR-related concepts. Journal of Business ethics. 98(3).
pp.425-453.
Altman, E.I., Sabato, G. and Wilson, N., 2010. The value of non-financial information in small
and medium-sized enterprise risk management. The Journal of Credit Risk. 6(2). pp.1-33.
Rae, D., 2010. Universities and enterprise education: responding to the challenges of the new
era. Journal of Small Business and Enterprise Development. 17(4). pp.591-606.
Bellucci, A., Borisov, A. and Zazzaro, A., 2010. Does gender matter in bank–firm relationships?
Evidence from small business lending. Journal of Banking & Finance. 34(12). pp.2968-
2984.
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