Strategic Financial Planning Impact & Barriers in UK SMEs: Cahinia

This case study investigates the impact of strategic financial planning and its associated barriers within UK Small and Medium-sized Enterprises (SMEs), using Cahinia Accountancy & Business Advisory Service as a specific example. The research aims to evaluate the role of effective financial management practices and identify challenges that hinder organizational performance. It explores the relationship between strategic financial planning (dependent variable) and financial management barriers (independent variables) through correlation and regression analysis. The study acknowledges that despite the growth potential of UK SMEs, many face obstacles such as ineffective managerial skills, lack of trained personnel, limited technology utilization, and restricted access to financial resources. The research seeks to provide insights into addressing these barriers through recommended financial management practices, including improved accounting information systems, financial analysis and reporting, and enhanced management of financial structures, ultimately contributing to a better understanding of financial management's role in supporting overall management systems in SMEs.

Running head: IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN
UK SME
To Study the Impact of Strategic Financial Planning and its Barriers in an SME in the UK: A
Case Study of Cahinia Accountancy & Business Advisory Service
Name of the University:
Name of the Student:
Authors Note:

1IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
Executive Summary
Despite of the growth trends as well as positive outlook in the SME sector of UK, it has been
observed that most of these companies including Cahinia Accountancy & Business Advisory
Service are dealing with barriers to successful financial management planning in the form of
ineffective managerial abilities, absence of trained personnel, less utilisation of new technologies
and improper access to the financial resources. The aim of the research is to study the impact of
“strategic financial planning”along with the barriers in a same in the UK: a case study of Cahinia
Accountancy & Business Advisory Service. Correlation as well as regression analysis will be
carried out in evaluating the relationship among dependent and the independent variables, where
the dependent variable will be strategic financial planning and the independent variable will be
financial management barriers.The recommended financial management practices for addressing
the identify barriers are likely to include accounting information systems, financial analyse and
reporting, management of financial structure,

2IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
Table of Contents
1. Introduction..................................................................................................................................4
1.1. Research Background...........................................................................................................4
1.2. Problem Statement................................................................................................................4
1.3. Research Hypotheses............................................................................................................5
1.4. Research Questions...............................................................................................................5
1.5. Company Description...........................................................................................................6
1.6. Research Significance...........................................................................................................6
1.7. Research Aim and Objectives...............................................................................................7
2. Literature Review........................................................................................................................8
2.1. Concept of SME and Strategic Management in SMEs.........................................................8
2.2. Strategic Financial Management Practices in UK SMEs.....................................................9
2.3. Impact of Strategic Financial Management Practices on SME Performance.....................10
2.4. Barriers in Implementation of Strategic Financial Management Practices in SME...........12
2.5. Conceptual Framework.......................................................................................................14
3. Research Methodology..............................................................................................................16
3.1. Research Approach.............................................................................................................16
3.2. Research Strategy...............................................................................................................16
3.3. Data Source.........................................................................................................................17

3IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
3.4. Sampling and Sample Size.................................................................................................18
3.5. Data Analysis......................................................................................................................18
3.6. Accessibility.......................................................................................................................19
3.7. Ethical Considerations........................................................................................................19
3.8. Deliverables........................................................................................................................20
3.9. Resources Needed...............................................................................................................21
3.10. Research Timeframe.........................................................................................................21
4. Conclusion and Recommendations............................................................................................22
References......................................................................................................................................23

4IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
1.Introduction
1.1. Research Background
Due to considerable role of fresh jobs creation, increase in GDP, innovation and
entrepreneurship Small and Medium Scale Enterprises (SMEs) in UK are considered to be the
important socio-economic growth drivers. It has also been observed that SMEs in UK are
observed to deal with several challenges related with issuesconcerned with poor financial
management that resulted in the major business failure causes of SMEs (Ahmad 2017).
“Strategic financial management” observed to be the major managerial areas of the SMEs
because of its important function on survival, growth as well as performance of these SMEs.
Focused on such consideration, the objective of research is to evaluate major function of efficient
practices of financial management in these companies along with recognizing the financial
management challenges along ith the practices that impacts organizational performance of the
UK SMEs from the perspective of strategic management (Alvesson and Sköldberg 2017).
Despite of the growth trends as well as positive outlook in the SME sector of UK, it has been
observed that most of these companies including Cahinia Accountancy & Business Advisory
Service are dealing with barriers to successful financial management planning in the form of
insufficient managerial skills, absence of trained personnel, less utilisation of new technologies
and improper access to the financial resources.
1.2. Problem Statement
Cahinia Accountancy & Business Advisory Service is observed to deal with issues
related with poor financial management planning that has affected the existence of the company
in few locations of UK. It has been observed that the managerial mistakes along with failure of

5IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
developing a strategic plan along with weak financial control among the most operations of the
business. It has been observed that certain SMEs including Cahinia Accountancy & Business
Advisory Service deals with certain challenges related with insufficient new technology use, lack
of business based training, insufficient managerial capabilities, increased tax rates as well as
certain different bureaucratic issues (Burns 2016). Ineffective know-how along with low levels
of technology use is observed to be commonbarriers that are faced by Cahinia Accountancy &
Business Advisory Service in planning their financial management activities. In consideration to
such research problem, the current study will be focussed on analysing the reasons related with
ineffective technical knowledge in developing business plans along withdifficulties in
recognising the start-up capital that is required to undertake a high amount of costs regarding the
business launch (Cowling 2016).
1.3. Research Hypotheses
The hypotheses of research developed will be tested in this study are represented below:
 H0: Strategic financial planning has no such impact on the businesses of SMEs
 H1: Strategic financial planning have positive impact on the businesses of SMEs
1.4. Research Questions
The research questions which will be answeredby accomplishing of the current research are
indicated under:
 How is the strategic financial planning in the SMEs of UK considering the case study of
Cahinia Accountancy & Business Advisory Service?
 What are the barriers that are faced by the selected SME Cahinia Accountancy &
Business Advisory Service in the strategic financial planning?

6IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
1.5. Company Description
Cahinia Accountancy & Business Advisory Service is a Private Limited Company based
in UK and the business of this SME includes accounting and auditing activities, bookkeeping
and tax consultancy activities. The company is focussed on offering door-to-door service and is
also cantered on collecting and delivering completed work of less inconvenience (Eniola and
Entebang 2016). Accountancy and the business advisory services of the company includes
certain specialist accountancy areas that includes business development, advice on business start-
up, secretarial company service, fundraising, family owned managed businesses, advice on IT
skills, advice on loan finance and leasing, management consultancy and payroll services. Over
the years the company have employed combined financial resources and skills to support its
consumers to improve as well as retain their personal along with business wealth. However, over
the recent years the company is observed to face barriers related with building reputation all over
UK with effective use of its financial resources across various sectors (Eniola and Entebang
2017).
1.6. Research Significance
The research significance is to analyze the important role of financial management along
with challenges faced by these SMEs in UK in attaining advantages through suitable
implementation of the strategic financial management practices. SMEs in UK is observed to be a
developing research area and in consideration to that the research will have significant
contribution to present literature through evaluating the key challenges within financial
management conduct in UK SME along with the influence of strategic financial management
practices on the performance of SMEs (Fletcher 2017). The research findings will have increased
significance in analyzing the financial management as supporting the overall management

7IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
system in the SMEs. In consideration to same, the study will also evaluate the inefficiencies and
ineffectiveness of the financial conduct that has drastic impacts on the longevity and
performance of the SME. In addition, the research will also make significant contributions in
revealing that most of the barriers faced by the SMEs in UK have a financial nature and through
analyzing the case study of Cahinia Accountancy & Business Advisory Service the researcher
will also reveal that poor financial management is an important as well as common reasons for
business failure among the UK SMEs (Galbraith et al. 2017). Significantresearch implications
will reflect from this study in the form of explaining that financial management knowledge
absence along with uncertainty in business surroundings results in the SMEs to address serious
issuesconcerned with financial and business performances. This can further intimidate the
survival of the SME as observed in case of Cahinia Accountancy & Business Advisory Service.
1.7. Research Aim and Objectives
The research aim is to study impact of strategic financial planning and its barriers in
asame in the UK: a case study of Cahinia Accountancy & Business Advisory Service. The
research objectives that must be tested through completion of recent study are indicated below:
 To carry out study on the strategic financial planning in the SMEs of UK considering the
case study of Cahinia Accountancy & Business Advisory Service
 To analyze the barriers that are faced by the selected SME Cahinia Accountancy &
Business Advisory Service in the strategic financial planning

8IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
2. Literature Review
2.1. Concept of SME and Strategic Management in SMEs
Hussain, Salia and Karim (2018) indicated that there are several small and medium sized
companies segmentation due to changing socio-economicsituations of the entire economic region
and the nations. These researchers also stated that there is no particular explanation of the SME
concept andfor this reason SMEs are explained as the enterprisesthat has a low market share
managed by the owners withinpersonalized manner and not by means of well-developed
management framework. These act as individual entities through not being a part of large group
or enterprise. Malagueño, Lopez-Valeiras and Gomez-Conde (2018) stated that SMEs are
considered as support of the European nations as well as UK as it includes 98% of companies as
well as contributing towards 67% of employment along with the gross value added in the nation
as recorded in the year 2018. These researchers also indicted that the contribution of SMEs in the
social as well as economic development is widely recognized in the developed nations along
with developing economies that is closely associated with growth. Researchers such as Rizos et
al. (2015) has also revealed a robust as well as positive relationship among relative size of SMEs
and growth of the economy.
The likely economic and social advantages of SMEs in UK are observed to include job
creation at low cost of capital resulting in contribution to positive Gross Domestic Product
enhancing forward and backward linkages between sectors. Rizos et al. (2016)indicated that
SMEs in UK are considered to be highly innovative in comparison to the larger companies that is
generally viewed to be highly innovative in comparison to larger companies. These researchers
have also revealed that the SMES include up to 250 employees and these companies are the
major contributor of entrepreneurial skills, employment and innovation that is also highly

9IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
affected by the process of globalization and regularly confronts with certain barriers related with
attaining sufficient capital for business growth, specifically in the early set-up phase. Shah, Long
and Ganji (2017) stated that due to their increased contribution to the economy they are likely to
deal with increased difficulties associated with attaining financing along with higher fixed
taxation costs along with regulatory compliance. Other than this, the SMEs are also offered with
increased incentives alongwith favorable tax treatment. Based on the convoy of the company,
governments might employ a range of policies in order to improve the growth of the SMEs.
2.2. Strategic Financial Management Practices in UK SMEs
Sinkovics, Kurt and Sinkovics (2018) have identified that the performance of UKs SME
sector is a good indicator of its vitality as well as its future prospects. Small businesses in the
nation is considered to be a vital factor for improving income, growth as well as individuals
prosperity, the community as well as the economy of UK. These researchers also revealed that
the SMEs in UK constantly adapt their business function in enhancing the business performance
at the situation of economic turmoil. Stankovska, Josimovski and Edwards (2016) stated that the
previous researchregarding the financial management function as the area in SMEs that needs
increased focus and adjustment and in improving the business performance at the times of
challenging economic times. These researchers also sought to identify the most important
business and management skills needed for the small enterprises of management. The
findingsalsoindicated that most SMEs feel the absence of management and the business skills
and the UK SME owners often seemed to be persuaded by the non-monetary rewards. Trianni,
Cagno and Farné (2016) indicated that the SMEs in UK is not observed to have necessary
skillsthat they need for their growth and survival. These researchers also stated that the SMEs in
the nation also do not possess of financial and accounting management skills that is necessary to

10IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
optimally function and reach the potentialin consideration to the growth, sustainability and
profitability.
It has also been determined by these researchers that the business, entrepreneur expertise
along with financial management skills are regarded as the most strongest predictors of the
survival of small businesses in UK. Sinkovics, Kurt and Sinkovics (2018) revealed the
importance of internal and external business environments’ impact on the debt availability from
the commercial banks to the SMEs as observed in case of Cahinia Accountancy & Business
Advisory Service. Internal factors were categorised as collateral, managerial competencies,
networking along with business information and the external factors are considered as macro-
economy, ethics, legal, corruption and crime. Sinkovics, Kurt and Sinkovics (2018) added that
these identified external and internal factors is deemed to have considerable impact on the debt
availability of the SMEs existing in UK. These researchers also revealed that it has also been
evidenced that companies like Cahinia Accountancy & Business Advisory Service’s failure
evidenced that financial management is an important skill for an SME as it impacts all the
business aspects of an organisation. Previous research also revealed that
financialmanagementpractices in the SMEs include cost minimisation, profit maximisation along
with planning as well as controlling the company’s financial assets. Sinkovics, Kurt and
Sinkovics (2018) investigated the financial information use by the SMEs in UK and revealed that
several small organisations implements practices which encompass formal control and planning.
2.3. Impact of Strategic Financial Management Practices on SME Performance
Sinkovics, Kurt and Sinkovics (2018) revealed that effective and suitable strategic
financial management practices have a broad positive impact on the performance of the SMEs
existing within UK. Supporting such view, it has also been envisaged that SMEs cannot maintain

11IMPACT OF STRATEGIC FINANCIAL PLANNING AND ITS BARRIERS IN UK SME
their successfulposition in the absence of sufficient funding as well as necessary management
skills. Conversely, the funding that is attained can generally isassociated with the financial
management skills level existing with the SMEs. Previous research carried out by Hussain, Salia
and Karim (2018) also suggested that the SMEs must consider implementing as well as
developing new business plans, attain strategic as well as operational plans and forecast cash
flows in securing the debt along with actions that are likely the result of advanced skills of
financial management. Devoid of such important results, the credit providers are observed to be
quite hesitant in offering necessary funding to the SMEs. From such finding it can also be
ensured that as financial management skills are important for SMEs for thisreason it can be
grouped within logical groups and can be associated with the financial skills and topics.
Hussain, Salia and Karim (2018) added thatthe financial management practices that
positively impacts the operations and business performance of the SMEs include cost and
management accounting, financial planning and analysis, investment decision, financing decision
as well as working capital management. These researchershave also evidenced that SMEs in UK
such as Cahinia Accountancy & Business Advisory Service takes into consideration the financial
management planning in the company in the form of profitability management through income
interpretation, tax returns preparation, income statement forecast and through conductingbreak
even analysis. Hussain, Salia and Karim (2018) also evidenced that the SMEs in UK have also
attain better financial management panning through working capital management that supports
the performance of these company through observing improvement in maintaining stock levels in
the business, preparing creditors list, improvement in the cash flow statement and observing the
positive variance on the balance sheet. These researchers also evidenced that maintaining
effective financial management skills planning by the SMEs in UK has resulted in their