Small Business Strategy & Growth

This assignment delves into the world of small business strategy and growth. Students are tasked with analyzing various concepts like the Ansoff Matrix, different business models, and factors influencing entrepreneurial success. The analysis should encompass ethical considerations, social responsibility, and sustainable practices within the small business context.

Finance and
Funding

INTRODUCTION
In business economy there are large number of firms who are involved in performing
business operations, Small business operations are valuable for economy in order to enhance
local economic areas. These business are playing vital role in economy by developing innovative
ideas in order to provide job opportunities to large group of people who are unemployed and
cannot fulfil their basic necessities of life. The undermentioned report is based on Caffe Finix
which is small coffee shop in UK (A. Harris and P. Patten, 2014). They are employing large
group of individuals who can work and earn money. The report covered study about Strong and
weak points of business, tools used to measure performance, different ways by which existing
performance can be enhanced. Business should focus on implementing changes in business plans
in order to improve their performance level.
TASK 1
1.1 Profile of small business with its strengths and weaknesses
Small business are operating at smaller level in economy and they have employed less
number of people who are involved in performing business activities. Caffe Finix are local
business running their operations at smaller scales in UK. These business have adopted
economical pricing strategy in order to attract large group of customers who can consume their
quality coffee. There are making strong positions in economy by serving quality coffee to their
potential clients.
SWOT analysis of Caffe Finix are described below as:
Strengths:
 They are using qualitative process in order to manufacture their goods and offering
services to customers.
 They have focused in establishing their business operations at higher street shopping
areas ( Altman, Sabato and Wilson, 2010).
 They are adopted effective strategies in order to develop brand values at market areas.
 They should adopt flexibility in performing business operations.
Weakness:
 They are lacking in checking quality of products offered to customers at regular time
intervals.
 They had to pay higher rent charges for executing business activities.
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 They are facing higher level of competition from their rivalry business.
 They are not having sufficient amount of money to invest in future strategies.
Opportunities
 They are having good opportunities in order to develop their business operations by
giving franchise.
 They are focusing on doing high investment in UK as firms are earning higher
profitability from these business operations.
 They are planning to merge their operations with other business operating at larger scales.
Threats
 They are facing difficulty from large number of competitors in market areas.
 Due to instability in political factors there is fluctuation in tax rates (Burrows, 2015).
 There are variation in plans and policies which are formulated by government.
1.2 Business analysis while adopting comparative measure
Business have to focus on evaluating their performance level by making comparison
between their present and past performance index. Management can formulate plans in order to
achieve effective results for their business operations. Balance sheet ratios are formulated which
are useful in order to take proper judgement which helps in achieving success for business.
For the year ended 30 April 2016 and 30 April 2017
2015 2016
£ £
Sales 130,000 300,00
Cost of sales 70,000 160,000
Gross profit 30,000 60,000
Overheads 12,000 16,000
Net profit 40,000 45,000
BALANCE SHEET as at 30 APRIL 2016 and 30 APRIL 2017
2015 2016
Fixed assets 16,000 17,000
Current assets
Stock 8,000 36,000
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Debtors 10,000 18,000
Bank 2,000 0
20,000 54,000
Less Current liabilities
Creditors 8,000 14,000
Bank overdraft 0 11,000
8,000 25,000
Working capital 14,000 29,000
Net Assets 29,000 41,000
Financed by capital
Opening capital 22,000 29,000
Add net profit 30,000 35,000
52,000 64,000
Less drawings 23,000 23,000
Closing capital 29,000 41,000
a) Current ratio = current asset / current liability
2015 2016
CR = CA / CL = 20000/ 6000 = 54000/ 25000
= 3.33 times = 2.16 times
2) QUICK RATIO (ACID TEST) = CURRENT ASSET – CURRENT LIABILITIES
2015 2016
Q r= CA– INVENTOR / CL
=20000– 7000/ 6000 =54000-18000/25000
= 2.17 = 1.44
TASK 2
2.1 Actions to overcome weaknesses in business
This is the most important factor for firms which are related with all the difficulties
which are faced by people while they are consuming coffee. This results in affecting growth and
development stage of business (Carney and et. al., 2011). There are various difficulties which are
faced by Caffee Finix and proper measures have to be adopted in order to resolve them and
achieve success for business. The main issues are linked with quality factors, rent factors which
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are very high, tuff competition from rivalry business etc. Thus there business operations are
affected in negative ways.
The selected firms can focus on adopting effective quality measures in order to solve
issues which are related with effectiveness of quality standards. These small business can used
standardised materials in order to provide quality services to their clients. They are facing
difficulties from higher rents so they can make plans in order to establish their activities in front
of malls and restaurants so that people can easily approach them. This is valuable for them in
order to increase their profitability ratios. Effective tools and techniques can be used by them like
giving discounts on food products as they are operating at small scales and it results in increasing
large group of customers (Chittithaworn and et. al., 2011). There are various programmes
designed by government authorities in order to teach various methods by which quality services
can be offered to clients in order to satisfy them. This is valuable factors which are related with
enhancing brand values of business so they can grow and increase their profitability ratios.
The mangers should make plans in order to use their skills and capabilities which are
linked with external and internal factors operating in business environment so that effective
strategies can be formulated for future growth. Firms are having opportunities to grow their
business operations by recruiting new employees who can execute business activities in order to
achieve success. This helps in achievement of all their aims and objectives in effective and
planned ways.
2.2 Different ways by which company can maintain their existing performance
If selected firms are focusing on adopting best and effective strategies then it helps them
to maintain their present performance level in economy. Tools have to applied which are
beneficial in order to perform business operations (Ebert and et. al., 2014). This can be achieved
by keeping record of quality products and services which have been offered to customers.
Another factor can be business environment in which activities are operating. Caffe Finix can
effectively maintain their existing performance level by focusing towards their strong points
which are described below as:
 Quality products should be offered by firms in order to satisfy needs and wants of clients
which helps in gaining loyal customers.
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 Team work should be encouraged at work places in order to make employees do their
working while maintaining cooperation thus development of positive working
environment.
 Firms should make strategies in order to maintain healthy relations with all their clients.
This is valuable factor in order to increase customers who will use their services while
there are many rivalry firms operating at market places. Employees should serve all their
customers with a positive smile on their faces this helps in gaining loyal customers who
will use their products (Fassin, Van Rossem and Buelens, 2011).
 They should conduct market surveys in order to recognize differential needs and wants of
customers so that they can manufacture goods in order to increase their sales and
profitability ratios. They should adopt flexibility in their operations so that changes can
be easily implemented which helps firms to achieve success in their ventures.
 Best and attractive location should be chosen by firms to execute their business activities
in order to gain attention of large group of customers like Malls, shopping complex, parks
etc.
2.3 Recommendation new areas where business can expand its operations.
In present times the location of coffee shop is Stratford. Now firms are focusing on
expanding their business operations in new areas where they can achieve growth. The achieve
success in their operations by analysing target markets and their customers and all other factors
which can hamper their business activities. If selected firms are focused towards expanding
business activities then it results in gaining more profitability and success for their operations.
The company can execute their working while focusing on the aspects which are described
below as:
Location: The best and effective locations should be selected which are valuable for
customers so they can be easily attracted towards the products (Gunasekaran, Rai and Griffin,
2011). This helps in gaining loyal customer who will increase footfalls thus enhancing their
profitability and sales ratios,
Products: Firms should focus on manufacturing products according to needs and wants
of customers. This helps in satisfying customers thus their business operations will not be
affected by rivalry business.
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Employees: The employees should serve all their customers while smily faces and they
should solve all the difficulties which are faced by them.
Ansoff Matrix are best and effective strategies which can be used by business in order to expand
their business activities. The four areas of matrix are described below as:
(Source: Ansoff Matrix, 2017)
Market Penetration: In this stages firms are trying to sell their existing goods in existing
markets in order to achieve higher growth. This is valuable for them in enhancing their market
shares of already existing products. Thus achievement of loyal customer.
Market Development: At this point business are adopting plans in order to sell their into
new market areas. This helps in creating awareness about their products and expending their
operations at national and international areas (Mitchelmore and Rowley, 2013). They have
adopted new channels for distributing their goods so that they can easily reach towards their
potential clients.
Product Development: In this stages business are adopting various methods in order to
sell new and innovative goods at existing market areas. It requires development of new and
effective competencies thus there is requirement for firms to develop modified goods which can
be easily sold in existing market areas (What is Ansoff Matrix, 2017). This is best and suitable
strategy used in order to develop new products which can be sold at market places.
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Illustration 1: Ansoff Matrix

Diversification: It is a different concept in which firms try to adopt new market areas
where they can sell their new and innovative products. It is very risky strategy as firms are not
having knowledge about new market areas where they are entering.
TASK 3
3.1 Assessment for existing business plan and objective
Each firms have to develop their own goals and targets which they have to achieve in
desired time frames. Business have to formulate various plans and strategies which are beneficial
in order to get good results. This can be achieved if business are preparing plans in order to
achieve good results and setting objectives which had to be achieved by them in desired time
frames. Business plans are valuable task in which all business operations have to be completed in
time frames which are allotted to them (Rafols and et. al., 2012). It helps in executing working in
effective and planned so that business can achieve success in their ventures.
After plans and policies have been designed in order to formulate business plans then
aims and objectives have to be stated. It is the sole responsibilities of all mangers in order to
execute all business objectives in effectual and planned ways. The main objectives are described
below as:
 They want to achieve strong positions in order to serve quality coffee in whole town.
 The are planning to use effective tools and techniques in order to enhance their
profitability ratios.
 They have to formulate and maintain gross margins of more then 50%.
 There products should satisfy all customers in economy.
 Once firms have decided their goals and objectives now they are focusing on those
aspects which are valuable for them in order to achieve growth:
 The coffee shop should have good interior which are attracting customers so that they can
come and spent their valuable time by consuming coffee.
 Employee should be given training so that they can add flavours in coffee which can
increase footfall of customers.
 They should formulate effective plans and strategies in order to achieve all their aims and
objectives.
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All the above factors have to be incorporated in business plans in order to achieve all
their aims thus achievement of growth for their business operations. Current they are operating
their business operations at smaller scales thus they have to make effective plans and strategies
in order to raise funds which are beneficial for them. This can be achieved by designing business
plans.
3.2 Revising business plans to incorporate changes
The vital functions which are to be performed by business is to implement changes in
their business plans. Plans and policies have to be changed according to demand factor in
economy thus they should adopt flexible working plans. The persons who are involved in
decision making process should make changes according to requirement of customers in order to
achieve success (Rao and Kak, 2011). Thus strategies are formulated by them which are focused
towards targeting new customers in new market areas. All these elements have to be included in
business plans in order to gain success.
Management have to focus on weak areas in order to improve them so that they can
achieve growth. These are main elements which had to be focused by firms in order to
effectively implement action plans.
The most vital issues were based on quality. Mangers have to recruit those employees
who can focus on quality of products in order to satisfy customers.
They have to mange their pricing policy so that customers can easily consume their
products.
Firms have to manage funds in order to make their working executed in effective and
planned and business operations are not stopped thus they can achieve higher growth.
3.3 Action plan to implement changes
The action plans of firms are described below as:
Objectives Actions High
status
Advanta
ges
Material
Resources
Time
schedul
e
Responsi
bility
Prosperit
y factor
Monitori
ng
strategy
Stratifying
customers
who are
using
Marketi
ng
researc
h have
The
importan
t focus of
firms are
It is
beneficia
l in
raising
There is
need of
finance in
order to
Varies
from 1
weeks
to 1
The
major
responsib
ility is of
Detailed
informati
ons are
vital for
Analysis
should be
done on
data
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products to
conduct
ed in
effectiv
e ways.
on
satisfyin
g
different
needs
and
wants of
customer
s thus
they
should be
achieved
in
minimu
m time
durations
.
sales and
profitabil
ity ratios.
implement
changes
according
to
customer
requireme
nts.
month marketin
g and
service
team.
their
operation
s.
which
have
been
gathered
by
customer
s.
Employees
should
provide
quality
products
to
customers.
Knowle
dgable
employ
ees
needed
They are
an
essential
factors
for every
firms
because
without
them
customer
s cannot
be served
with
quality
Training
activities
are
helpful in
increasin
g
performa
nces of
all
workers
The
elements
which are
beneficial
for them
are money
and
valuable
time of
customers.
Three
week.
Main
responsib
ility is of
human
resource
officers.
All aims
and
objective
s should
be
defined
in proper
and
effective
ways.
Feedback
s and
marketin
g
surveys.
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products.
TASK 4
4.1 Impact of changes on business and its personnel
If there are any modifications in plans then they are greatly affecting business operations.
This results in affecting their overall working and they are not able to achieve their goals and
targets. They are not able to execute their working in effective and planned ways. Impact of
revised plans are described as:
Organisational capabilities: If there are changes in business operations then there
profitability ratios can raise or even decline. While adopting changes business have to recruit
new employees who can work for them in order to achieve profitability.
Functional resources: Mangers should adopt plans in order to execute their business
operations in effective and planned ways. This is the most valuable factor so that firms can
achieve effective results in order to gain success (Storey, 2016).
Technological resources: If business plans are changes according to new technologies
then it results in satisfying needs of customers thus their profitability can be increased but more
money is needed in order to execute working according to those aspects.
4.2 Plan for managed changes
Change management is linked with all those factors which are affecting business
operations. There should be effective guidelines designed in order to manage all activities which
may impact business operations. While executing decision making process plans and policies
have to be formulated which are beneficial for organisations. Thus plans which are revised can
be beneficial for overall economy (Williams and Schaefer, 2013).
Plans are also valuable in order to remove all types of negative impacts which are never
involved in business operations. It is valuable for firms in order to make changes according to
needs and wants of customers. The process of changes are classified into three main areas as:
Current → Transition → Future
The selected firms are focusing on adopting changes in order to improve their current
positions so that they can achieve good results in future. This helps in achieving growth and
success in their business operations.
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4.3 Monitor performance in desired time scale
It is very important for firms to measure their performances on desired time frames. This
can be effectively achieved by use of balance scorecard. This is an essential factor in order to
evaluate their performance level in economy. In relation to Business strategy models firms have
mentioned all their budgets and targets which are necessary for executing all business operations
in effective ways. There are focusing on making division among all factors and giving them
ranks according to their performance level (Teece, 2010). The selected firms are facing financial
difficulty thus they are not able to provide quality products to their customers.
Firms can adopt measures in order to make comparison between their present
performance level and their future targets. Balance scorecards are effective tools in order to solve
all the issues faced by business in desired time frames. Thus they are focusing on developing
effective time management strategies in order to achieve their targets in desired time frames. If
employees are not working according to these plans that mangers can take action against them.
CONCLUSION
From the above report it can be concluded that small business are achieving growth in
their operations as they are providing employment to large group of people in economy.
Company had to focus on finding out their strong and weak in order to make changes which
helps them to increase their profitability ratios. Business performances can be improved by
taking feedbacks from customers in order to evaluate where changes had to be implemented.
There should be effective decision making process in order to resolve all issues in planned and
effective ways.
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REFERENCES
Books and Journals
A. Harris, M. and P. Patten, K., 2014. Mobile device security considerations for small-and
medium-sized enterprise business mobility. Information Management & Computer
Security. 22(1). pp.97-114.
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). p.95.
Burrows, R. ed., 2015. Deciphering the Enterprise Culture (Routledge Revivals):
Entrepreneurship, Petty Capitalism and the Restructuring of Britain. Routledge.
Carney, M., and et. al., 2011. Business group affiliation, performance, context, and strategy: A
meta-analysis. Academy of Management Journal. 54(3). pp.437-460.
Chittithaworn, C. and et. al., 2011. Factors affecting business success of small & medium
enterprises (SMEs) in Thailand. Asian Social Science. 7(5). p.180.
Ebert, R. J. And et. al., 2014. Business essentials. Pearson Education Canada.
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.
Gunasekaran, A., Rai, B. K. and Griffin, M., 2011. Resilience and competitiveness of small and
medium size enterprises: an empirical research. International Journal of Production
Research. 49(18). pp.5489-5509.
Mitchelmore, S. and Rowley, J., 2013. Entrepreneurial competencies of women entrepreneurs
pursuing business growth. Journal of Small Business and Enterprise Development.
20(1). pp.125-142.
Rafols, I., and et. al., 2012. How journal rankings can suppress interdisciplinary research: A
comparison between innovation studies and business & management. Research Policy.
41(7). pp.1262-1282.
Rao, S. and Kak, A., 2011, May. Retrieval from software libraries for bug localization: a
comparative study of generic and composite text models. In Proceedings of the 8th
Working Conference on Mining Software Repositories (pp. 43-52). ACM.
Storey, D. J., 2016. Understanding the small business sector. Routledge.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
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
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What is Ansoff Matrix. 2017. [Online] Available through:
<ttps://www.tutor2u.net/business/reference/ansoffs-matrix>. [Accessed on 5th Occtober
2017]
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