Enterprise Assessment: Analyzing Business Components and Developing Effective Small Business Planning

This report analyzes the main components of a business and how they are inter-related, develops an effective small business plan, and evaluates potential issues that may impact the overall success of the business enterprise. The report focuses on Uptown Fresh, an online organic store start-up, and provides justifies reasoning and evidence/data to support the projected performance and viability of the business plan.

Enterprise
Table of Contents
1

INTRODUCTION ..........................................................................................................................3
MAINBODY....................................................................................................................................3
Critically analysing the main components of a business and how they are inter-related............3
Development effective small business planning and providing justifies reasoning and
evidence/data to support the projected performance and viability of the business plan............3
Critically evaluating potential issues that may impact on the overall success of the business
enterprise.....................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4
2

INTRODUCTION
An enterprises is refereed to a for-profits business that is established and operated by an
entrepreneur. An enterprise consist various factors that are essential for its functioning and
overall growth. In order to develop an enterprise it is crucial to develop an optimal business plan
that consists vital information relative to operations required in order to run the enterprise. The
following report will consist of the business plan based on Uptown Fresh which is an online
organic store start-up and offers high quality organic products at lowest prices. The following
report will pay emphasis on critically evaluating the main components of a business along with
how they are inter-relate. Furthermore, it will highlight development of small business plan
along with justifications and reasoning through evidence in order to project the performance of
the start-up. In addition to this, the report will critically evaluate the potential issues that can
impact the overall success of the business through SWOT and PESTLE analysis.
MAINBODY
Critically analysing the main components of a business and how they are inter-related.
There are various components within a business that play crucial role in ensuing that it is
successful as well as effective in the market. These components are interlinked with each others
in order to enable the business to operates in an optimal manner and ensure high level of
performance (Drucker., 2020). In context to Uptown Fresh, there are various components such as
business strategy, legal status, business operations along with marketing and business finances. It
it vital to understand the inter-relate between all these components in order to develop a suitable
business plan which will ensure higher level of success rate in the market. Given below are main
components of Uptown Fresh and how they are inter-related.
Business strategy:
A business strategy is referees as the overall course of actions that is developed through
set decisions that help provide vital assistance to an entrepreneur in achieving its established set
business goals and objective. In context to Uptown Fresh, its business strategy is interlined with
all the main components such as legal status, its operations, marketing along with finances all
serves as a base for the development of Uptown Fresh business strategy. Given below are various
business strategies:
Cost leadership strategy:
3

This strategy is based on having the lowest possible cost of operations in the market in
order to gain market competitiveness. An organization can be the lowest cost producer and still
not offer the lowest-prices products in the market.
Differentiation strategy:
This strategy allows a business to develop an approach by proving customers with unique
and different products and services in the market relative to its competitors in order to gain an
advantage in the market place.
Focused cost leadership:
This business strategy requires an organization to competes on the bases of price relative
to a niche market. It is not necessary for a business that utilizes this strategy to charge the lowest
price in the market and rather focuses upon charging the lowest price relative to the competition
within the target market.
Focused differentiation strategy:
This particular business strategy requires a business to offer unique features products and
services in the market in order to fulfil the demand of a narrow market. The various organization
that utilize this business strategy concentrates their efforts on a particular channel of sale such as
selling over the internet (Weill and Woerner., 2018).
From the above mentioned business strategies it is vital for Uptown Fresh to utilize
Focused differentiation strategy as the market of organic products in relatively narrow in nature
and will allow the business to offer unique goods thorough a specific channel of sale which is the
online platform in order to negate the impact of COVID-19 pandemic restrictions.
Legal status:
The overall legal status of an business is based on the overall type as well as the scale of
the business. In addition to this, aspects such as tax implication as need to be considered when
establishing the legal status of an organization. In context to Uptown Fresh, the legal status of the
business is linked with its finances as it will determine how the business will operation relative
tom its legality. In addition to this, the financial component has a direct impact on running the
operations of the organization and the profit it generates. Given below are various types of
business legal status:
Sole trader:
4

This legal status of business does not require large amount of investment and the owner
of the business has total control over its operations and how they are run. In addition to this there
is not need for accounting or business audit in this legal status.
Partnership:
This legal status of a business requires two or more people to be involved. It allows the
owners to share their risk as well as cost of business and profit generated. This type of legal
status allows in sharing day-to-day management responsibility and improves performance.
Limited company:
In this type of business legal status the company is treated as a separate entity from its
owner and has its own legal existence. The overall finances of the organization as separate form
the personal finances of the owner (Krawczyk-Sokolowska, Pierscieniak and Caputa., 2021).
From the above types of legal status the limited company is highly suitable for Uptown
Fresh as it will allow the business to have limited liability for debt along with establishing a
board of directors and management team to control all its operations which will enhance business
performance. In addition to this it can be perceived as more professional than sole trader status.
Business operations:
Business operations refers to the overall activities that help a business engage with its
daily business operations and provide assistance in increasing the value of the organization to
earn profitably. The activities in business operation can be altered in order to generates higher
level of revenue and cover business expenses. In context to Uptown Fresh, the operations of the
organization are interrelated with the overall business strategy as well as its finances in order to
ensure aspects such as budget and alignment of goals are established. In addition to this the
primary goal of business operation in context to Uptown Fresh is to stock products that
customers are looking for and at a price range that they are willing to pay. This will allow the
business to maintain an effective inventory systems as well as reduced instanced of dead stock.
Moreover, the operations of the business will allow it to maximize its revenues and help in the
developing of fast-moving items that the customers are willing and happy to pay for.
Marketing:
The components of marketing refers to the overall promotion of an organization products
and service to customs in an efficient manner. It allows a business to target a specific customer
base and ensure growth of the organization to increased sales. In context to Uptown Fresh, the
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marking components is interlinked with the finances of the organization as it allows in
establishing a specific budget for marking. In addition to this, the marketing component serves as
a base for the business strategy components as well in order to along business goals and objects
with marking operations. Marking mix is utilized below in order to elaborate the component:
Marketing mix:
The marking mix allows an organization to pay emphasis on parts of comprehensive
marketing plan. It focus on elements such as product, price, placement and promotion:
Product:
It refers to the development of products based on the preference and demand of
customers in the market in order to have effective marking operations. In context to Uptown
Fresh, the organization will focus on offering organic product to its customers which will allow
the business to differentiate its market share from majority of grocery businesses (Carter and
Passerini., 2018).
Price:
This elements pays emphasis on establishing a specific price for the product which can be
marketed in order to attract customers through various offers and discounts. In context to
Uptown Fresh, the price of the products will be reduced relative to its competitors by acquiring
raw material directly form the farmers in order to cut the middleman and save operational cost
provide attractive prices to customers.
Place:
This aspect of the marking mix focuses on making products of the business available to
its customers in an effective manner. In context to Uptown Fresh, the operations of the business
are base online which enhances its overall reachability to customs enabling it to have optimal
marking operations.
Promotion:
This element of the marking mix focuses on selecting effective channel of promotion
such as social media in order to attract customers. In context to Uptown Fresh, the business will
utilize social media platforms in order to boost its brand awareness. In addition to this, it will be
cost efficient resulting in reduced business operation cost.
Business finance:
6

Business finance is a vital business component as it establishes the funds that are
available for the business and the owner in order to meet the needs of the organization. The
finances of a business can allow it to achieve its market objectives and attain crucial assets that
are necessary for the business to operate. In context to Uptown Fresh, the financial component is
possible the most important aspect of the business as it establishes the overall function of its
operations. The overall financial component of Uptown Fresh are based on Debt finance due to
the business being a start-up and will requires establishing external funding through deb and
borrowing loan from lending institution (Business and Ombudsman., 2019). This will allow the
business to gain efficient financial resources to start business operations. Moreover, the business
will function on an online platform which requires relatively low cost making debt finance a
suitable way to finance the business.
Development effective small business planning and providing justifies reasoning and
evidence/data to support the projected performance and viability of the business plan.
Cash
flow
Statem
ent
Particular Janu
ary
Fe
b
April M
ay
Ju
ne
Ju
ly
Aug
est
Septe
mber
Octo
ber
Nove
mver
Dece
mbe
r
Tot
ear
A. Cash flow from
operating activities
Sales/Revenue 3060 45
90
6120 61
20
91
80
91
80
918
0
9180 12240 12240 1224
0
994
Payment of salary -
3000
-
30
-3000 -
30
-
30
-
30
-
300
-3000 -3000 -3000 -
3000
-36
7

00 00 00 00 0
Rent Paid -216 -
21
6
-216 -
21
6
-
21
6
-
21
6
-
216
-216 -216 -216 -216 -25
Staff Wages -
1000
-
10
00
-1000 -
10
00
-
10
00
-
10
00
-
100
0
-1000 -1000 -1000 -
1000
-12
Payment of Utilities -100 -
10
0
-100 -
10
0
-
10
0
-
10
0
-
100
-100 -100 -100 -100 -12
Phones -
3007
-
10
-10 -
10
-
10
-
10
-10 -10 -10 -10 -10 -31
Fright and postage -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -60
Stationary -2 -2 -2 0 0 -2 -2 -2 -2 0 0 -16
Promotion and
advertisement
-
9000
0 0 0 0 0 0 0 0 -9000 0 -18
Legal Expenses -50 0 0 0 0 0 0 0 0 0 0 -50
Transport -50 -
50
-50 -
50
-
50
-
50
-50 -50 -50 -50 -50 -60
Vehicle running -250 -
25
0
-250 -
25
0
-
25
0
-
25
0
-
250
-250 -250 -250 -250 -30
Insurance -20 -
20
-20 -
20
-
20
-
20
-20 -20 -20 -20 -20 -24
Maintenance -100 -
10
0
-100 -
10
0
-
10
0
-
10
0
-
100
-100 -100 -100 -100 -12
Misc. Expense -20 -
20
-20 -
20
-
20
-
20
-20 -20 -20 -20 -20 -24
Setup cost - 0 0 0 0 0 0 0 0 0 0 -14
8

1460
0
Net cash flow from
operating activities:-
-
2836
0
-
18
3
1347 13
49
44
09
44
07
440
7
4407 7467 -1531 7469 211
B. Cash flow from
financing activities:-
Repayment of Loan -10 -
10
-10 -
10
-
10
-
20
-20 -20 -20 -20 -20 -18
Interest Payment -50 -
50
-50 -
50
-
50
-
50
-50 -50 -50 -50 -50 -60
Net Cash flow from
financing activities:-
-60 -
60
-60 -
60
-
60
-
70
-70 -70 -70 -70 -70 -78
C. Cash flow from
Investing activities:-
Initial investment made -
4000
0
0 0 0 0 0 0 0 0 0 0 -40
Net cash flow from
investing activities:-
-
4000
0
0 0 0 0 0 0 0 0 0 0 -40
Total cash
inflow/outflows(A+B+
-
6842
-
24
1287 12
89
43
49
43
37
433
7
4337 7397 -1601 7399 -19
9

C) 0 3
10

Compute the break – even point and margin of safety.
Break-even point (in units) = Fixed Cost / (Selling price per unit – Variable Cost per Unit)
= 7453 / (994.5 – 716.42)
= 7453 / 278.08 = 26.80
Margin of Safety: (Current Sales – Break Even Sales) / Current Sales * 100
= (50 – 26.80) / 50 * 100
= 45.4 %
Critically evaluating potential issues that may impact on the overall success of the business
enterprise.
There are various risk that are associated with establishing a start-up business which need
to be identified as well as considered in order to develop a suitable business plan that will be
effective in its intended purpose. Given below are various risk Uptown Fresh can encounter:
Risks associated with start-up business:
Financial risk:
This risk refers to the overall issues related to finances of a business such as loss and
insufficient funds to operate a business. In context to Uptown Fresh, the organization will have
to develop suitable plans that are based on financial risk just as back-up funds in order to ensure
it is able to be financially securer in unforeseen scenarios.
Competitive risk:
The overall number of competition in the market also posses as a great risk to a start-up
as it can be difficult to venture into a new market which already has established business offering
products and services at similar price points. In context to Uptown Fresh, it is vital to to identify
the various competitors in the market in order to develop business plan that is based on its
strengths as well as market opportunities and takes into consideration various weakness and
threats of the business (Kasemsap., 2018).
Economic risk:
This risk is related to the dynamic change in the economic business environment due to
various reasons such as changes unemployment rates and inflation. In context to Uptown Fresh,
it is important for the business plan of the organization to take current economic balance of the
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market into account while developing strategies ion order to ensure that all organizational
operations are aligned with the current economic scenario for optimal growth and success.
Business environment analysis:
Pestle analysis
Pestle analysis is a tool which is used by marketers to track and monitor the external
environment factors that have an impact on its organisation and business strategies. It is a
strategic tool to understand the growth or decline of its market. It identifies the firm strengths
and weaknesses and accordingly comes up with a strategy for future growth. So these are the
factors which are depicted below that can influence the business of Uptown fresh in such ways:
Political factors: This factor refers to the government's involvement which may
influence a particular industry or a company. It may include tax policy, environmental
regulations, trade restrictions, reforms, tariffs and political stability. In context to Uptown fresh,
it should have complied with the restrictions and policies of government because of the
pandemic where strict safety measures are mentioned that can affect its business. The company
might face problems due to the regulations imposed by the government which declines the scope
for company to operate its business activities.
Economic factors: These are the factors which refers to the economic growth of the
company and its profitability. This may include interest, exchange rates, inflation, wage rates and
so on that directly impacts the company. With reference to Uptown fresh, the situation of
COVID-19 pandemic has reduced the overall purchasing power of the customers. This can be
utilized by the business as it will offer organic products at low price by cutting out the
middleman. This can allow the business to attract customers in an effective manner and ensure
high level of growth in the market. The rise in inflation rate of the economy is affecting the
pricing policies of company which could result in decreasing purchasing power of consumers
and affect profitability margins (Scranton, Scranton and Ballenger, 2019).
Social factors: This factor directly related to the consumer standard that regulate their
behaviour and demands which include cultural norms and expectations, heath consciousness,
safety and etc. This help the marketers to understand the needs of the targeted customers and
make better strategies for their business. In relation to Uptown fresh, people are more conscious
for their health and safety after such pandemic and love to be eco-friendlier. So this can also be
an advantage for the company if they provide organic food to the consumers which lead to attract
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customer and market growth. The growing inequalities in many countries is changing the power
structure, which can have serious consequences on the business of the company.
Technological factors: These factors refer to the innovation, automation, research and
development that may influence the company's operations. There is often tendency to focus on
developments only in digital technology but consideration must also be given to new methods of
distribution, manufacturings and supplies. In context to Uptown fresh, where technological
developments can be made after this pandemic by creating awareness through social media and
websites that can also lead to attract the customers. Due to adoption of new technology, the
company is facing pressure to develop new products quickly, increase product varieties and
adopt innovative ideas.
Legal factors: These are the factors which refers to the employment legislation,
consumer laws, heath safety, advertising standard products labelling and its safety as well. A
business concern must need to know what is legal or illegal in order to trade successfully and
also must be aware of any change in legislation that can affect its business operations. With
reference to Uptown fresh, there are various legal restriction like employment laws and others
that company may have to follow so as the sales or its business cannot be affected by these laws.
These legal restrictions could impact upon the growth rate of the company and control working
operations of the brand.
Environmental factor: These are the factors that may be influenced by the surroundings
of environment where business need to plan consequently. These may include weather
conditions, temperature, climate change, pollution and etc. With reference to Uptown fresh, the
corporate sustainability responsibility (CSR) initiative also have been taken by it to make the
environment eco-friendly by using paper bags instead of plastic bags. The company might face
the issue of getting negative response from media, environment protection communities and the
general public due to its excessive resource depletion (Shaw., 2019).
SWOT analysis:
This analysis allows an organization to effectively evaluate it organization strengthens
and weakness along with current and future opportunities as well as threats. It provide essential
support to a business in making alterations to its internal business factors in order to gain market
competitiveness. Given below is the SWOT analysis of Uptown Fresh:
Strengths Weaknesses
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 The organization will function in the
niche market of offering organic goods
and services which will allow the
business to be safe from majority of the
market and will help in its overall
business growth.
 The business will utilize social media
platform in order to promote its
products which will reduce its cost of
operations and help the business
accomplish its goals.
 The dynamic business environment can
majorly impact the operation of the
business and will influence the overall
operations as well which can result in
losses.
 The organization will only offer
organic products which will reduce its
portfolio of product and can reduce in
acquiring a small market share.
Opportunities Threats
 The start-up can uses various sourced
of promoting their products such as
online promotional videos which will
help the business enhance its customer
reach and positively effect is brand
image.
 The business can expand its products in
order to cover a range of customer
needs in order to gain wider market
share.
 The organization has a threat from
negotiating with farmers relative to
price as they will have high level of
bargaining power.
CONCLUSION
From the above report it has been concluded that, it is vital for a start-up business to
develop a business plan on the bases of various factors and that takes into account the main
components of the business. In addition to this, the report highlighted the importance of business
planning by taking into account justified evidence in order to present the viable as well as
performance of the business. Moreover, it was also concluded that there are several risk
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associated with a start-up that need to be recognized in order to develop business plan
accordingly and utilizing external analysis tools such as SWOT and PESTLE.
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REFERENCES
Books & Journals:
Drucker, P. F., 2020. Economic realities and enterprise strategy. In Modern Japanese
organization and decision-making (pp. 228-248). University of California Press.
Weill, P. and Woerner, S., 2018. What's your digital business model?: six questions to help you
build the next-generation enterprise. Harvard Business Press.
Krawczyk-Sokolowska, I., Pierscieniak, A. and Caputa, W., 2021. The innovation potential of the
enterprise in the context of the economy and the business model. Review of Managerial
Science, 15(1). pp.103-124.
Carter, R. and Passerini, F., 2018. The strategic CIO: Changing the dynamics of the business
enterprise. Auerbach Publications.
Business, A. S. and Ombudsman, F. E., 2019. Small business counts. Australian Small Business
and Family Enterprise Ombudsman.
Kasemsap, K., 2018. The role of information system within enterprise architecture and their
impact on business performance. In Global Business Expansion: Concepts,
Methodologies, Tools, and Applications (pp. 1078-1102). IGI Global.
Scranton, P., Scranton and Ballenger, 2019. Enterprise, Organization, and Technology in China.
Springer International Publishing.
Shaw, A., 2019. Enterprise Valuation, Risk, and the Modern E-Business. Risk, and the Modern
E-Business (June 5, 2019).
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