Managing Small and Medium Enterprise

This report discusses the nature of small and medium enterprises, the start-up process, sources of competitive advantage, the current level of demand, and the challenges faced in managing and running the business. It also explores the growth and development strategies and government policies that support the growth of small and medium enterprises.

Managing Small and
Medium Enterprise

INTRODUCTION
Small and medium size enterprise are owned by private entities which include only limited
numbers of employees to conduct their operation and also earn small revenues (De Jong, 2018).
These businesses possess less risk than large organization as investment in these enterprises are
limited. There different size of business includes small, medium and large size organization
depend on their investment, numbers of employees, numbers of customers. This project report
include study of Connect catering services which is UK based small medium enterprise which
are providing catering services to their customers and provide best quality food to their
customers in order to enhance their satisfaction. Founder of his organization is John Herring and
is providing service to around 30 years to their customers. This project report includes nature of
enterprises and start up process of SME. This also include current demand level and competitive
environment.
MAIN BODY
Nature of Entrepreneur
Entrepreneur of Connect Catering service is John Herring who is passivate of their work
and has established this small medium enterprise. Entrepreneur is contributing their service in
order to increase satisfaction of customers and are confident for what they doing in market. It is
important for entrepreneur to have good communication and ability to build network and
relationship. They need to understand management of money and finance in organization. They
also need to understand problems occur in their business and should also have ability to provide
creative solution to these businesses.
SME start up process:
Business plan: It is important for a start-up business to reduce cost of business and this cost is
not only related to monetary cost but also include time (Hosoda, 2018). It is important for
business to create business plan for their business. Business plan is one of document which
include detail related to mission, vison and objectives of business and also include strategies to
be followed by business. It provides direction to business of connect Catering business which
include vision, mission, objectives of business. It also includes strategies to be implemented in
organization.
Define budget: Budget is important in business and it provide direction to manager related to
where and how much money need to be spend in organization (Lee, Yoon and Kim, 2017).
Budget is including estimation of profit and cost of business in advance which provide brief to
business. It is important for Connect Catering service to define their budget which helps them to
saves their cost.
Decide legal Entity: To start a business, entrepreneur need to complete paper work. These legal
requirements are differing from state to state and country to country. Some business requires
licensing, business entities and state incorporation. In initial ace, business can be start as sole

proprietorship which require less paper work. Connect Catering also need to decide their legal
entity.
Money: Money is another important factor in start-up business as individual need to find source
of funds for their business and also need to separate these business funds from their personal
expenses. Finance are important for small business as they invest their saving or take loan to
conduct their operation in market.
Websites: Company can also develop their own websites which helps them in which helps them
to provide their service online to their service. With this they can use social media marketing and
digital marketing. Online mode is important in this digital world for business like Connect
Catering services.
Test sales: In this step, business can use test sales and need to ensure they have availability of
resources for their business. Connect catering service in this step, need to access to resources and
can test their sales
Sources of competitive advantage
Competitive advantage is one advantage which helps firm to compete in market with other
market players. A firm can get competitive advantage on different basis which are as follows:
Product attribute differentiation: Organization can get competitive advantage on basis o
attribution of their products (Lopez-Fernandez, Serrano-Bedia and Gómez-López, 2016). This
advantage can be getting on basis of differentiation their products from those of competitors on
basis of product attributes. These product attributes include customer’s service, more variety,
location, color source of goods.
Customer’s willingness to pay: Another competitive advantage that a firm can get on basis of
willingness of customers to pay. It includes maximum prices which are customers willing to pay
for products and service of company.
Price discrimination: Price discrimination is another competitive advantage which a firm can
get by changing different prices to different customers. This helps to increase market share of
company and allow firm to compete in market.
Human capital: Human capital is also one of important resource which provide competitive
advantage to firm. Having skilled human resources in organization increase their efficiency and
decrease cost of organization which helps them to competitive with other market players in
industry.
Current level of demand and competitive environment
Porter’s five forces model: Porters five forces model is one of model which is given by Michel E.
Porter (Motta, 2017). This model helps to understand competitive environment of industry in
which business operating Porters five forces model of Connect Catering services are as follows:

Competition within industry: This factor includes numbers of rivals present within industry
providing same services. Connect catering service has threat from this factor as it is providing
food service to their customers and there are various competitors in this industry in UK.
Threat of new entry: This factor includes threat form new entries to come in same industry.
Connect Catering service has low threat from this factor as to enter in this industry, entrepreneur
need to have knowledge of food industry.
Power of supplier: This factor include suppliers in industry as these can affect business.
Connect Catering service has less threat form this factor as there are various suppliers who are
providing them fresh vegetables and other supplement for their business.
Power of Customers: This factor includes ability of customers to fluctuate prices offered by
companies. Connect Catering services has less risk from this factor as customers has less power
to fluctuate prices of company.
Threat of substitute: This include availability of substitute products in industry with which
customers can swift to another organization. Connect catering services has moderate risk form
this factor as there are substitute available in this industry but are not providing same taste and
quality like Connect Catering services.
The growth and development of business to date
In order to develop a business, there are few stages which are considered by the Connect
catering services:-
Existence stage: In order to generate an idea, an enterprise needs resources, stakeholders
and capacity during the process of start-up.
Survival stage: By passing the start-up stage, a company can show their competitors that
it has a product that customers can and will buy, and their sustainability becomes the main
apprehension. It is important for the organisation in order to counterbalance their expenditures
they must have the capabilities to generate enough profits (OBADEMI, O., 2020). Along with
this they must be desired to expansion its fund.
Success Stage: An enterprise will remain stable whether it is producing better results and
economically stable to make sure its growth. Additionally, seat-of-the-pants leadership is desired
for the organisational growth, financial management and delegation to a developing management
team.
Take off stage: In this stage if an enterprise wants to expand then the delegation and
funding can be a major concern (Wellalage, N. H. and Reddy, K., 2020). In order to deal with
dynamic market, expansion and ever changing business world they will require a proficient
management team.
Maturity Stage: If an enterprise is able to manage maturity stage then it will be grateful
in order to manage the most complicated activities related to financial capital.

The challenges of managing in running the business
There are many challenges which are met by small and medium enterprises during
Covid-19 situation which will impact highly on the financial stabilities. Small medium
enterprises requires no specific academic qualification in order to provide a leadership to its
members. Small medium enterprises faces many issues and problems related to pandemic
situation because during economic problems it becomes very essential to acquire a right
leadership style for the enterprises in order to overcome those issues (Klausmann, J. and Papula,
J.). Due to lack of leadership styles the company faces various consequences during these
situations which are also lacking with planning and controlling. Business tools, equipment and
planning which help an organisation to concentrate on the facts but due to this deficiency of a
strategies their growth and development is becoming more difficult in order to deal with such
challenges. After the completion of lockdown period such enterprises face many challenges in
order to stay in the market just because of its deficiency in leadership and strategies. There are
several problems which is faced by these enterprises which includes complications in sourcing
raw materials, inadequate working capital, lack of management strategies, low capacity
utilisation, educational background of operators and many more. These organisations also faces
problems related to quality customer surveys complicated to purchase because of its lack of
strategy and price related issues and many more.
The Small-medium enterprise current growth and development strategy
Business development can be understand as a procedure in which opportunities are
develop and implement in the company. Business development is proposed to create long-term
significance from the markets and consumers for their enterprises. It has been stated that there
are few phases of small business growth which classify the development patterns and issues of
small medium enterprise which is advantageous to businessperson (Hosseini, S. A. and Et.al.,
2019). These are such enterprises which are classified by its structure and activities of their
management patterns. A small medium enterprise is differ from its size and capacity for their
development. It is very important for the small medium organisation to set a particular objectives
which helps them to grow and can be used in an appropriate way. The goals and objectives are
must be clear for the employees and owner of the company in order to get the desired growth and
development of the business and must have the understanding to overcome the issues and
challenges which are faced by the enterprise. In context to Connect catering services, they are
needed to maintain their capital because it is very important to maintain its financial stability. It
is also desired to create an accurate and realistic forecast that will help to achieve their objectives
and stay focused. Business maturity is a phase where a company is secured and sure about their
success and development. They are more brand conscious with their presence and customers in
the industry.
Government policies that support the company to grow and develop
Government plays a very important role in order to support in growth and development of
small enterprise. There are many ways such as promoting and generating special loans,
supplying collateral for SMEs. They are also favoring in terms of taxation. Small and medium
sized enterprises are also assists by commerce department in order to expand their product sales

globally. In order to meet specific criteria government also awarding grants to others such as
recruiting more people and growing production (Beraha, I. and Đuričin, S., 2020). Small
business administration also provide small business loans. Grants, preparation, guidance and
counselling related management are also offered.
CONCLUSION
It has been concluded from the above report that small and medium enterprises can be
understood where employees are less than 250 in the organization. For the growth and
development of small and medium enterprises there are very stages which helps to create
opportunities to grow their business. Along with this, the report also includes porter's five model
which helps to create more opportunities in order to increase its market share and profitability in
the market. Also due to lack of strategies and leadership these enterprises face many problems
and challenges which is related to their growth and development.

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