Managing Small and Medium Enterprises: Challenges and Growth Strategies

This report discusses the challenges faced in managing small and medium enterprises, with a focus on Laynes Espresso, a UK-based coffee shop. It covers the nature of the entrepreneur behind the venture, the start-up process, business concepts and competitive advantages, the current level and demand of the competitive environment, and the development and growth of the business. The report also includes recommendations and government measures to support businesses.

managing small
medium enterprises

Table of Contents
Introduction .....................................................................................................................................1
MAIN BODY...................................................................................................................................1
The nature of entrepreneur behind the venture ......................................................................1
The start-up process of SME..................................................................................................2
The business concepts and any source of competitive advantages........................................3
The current level and demand of the competitive environment ...........................................3
The development and growth of the business .......................................................................4
Challenges of managing a business .......................................................................................5
SMEs current development and growth strategy....................................................................5
Government measures to support business from all challenges.............................................6
Recommendations..................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES ..............................................................................................................................7

Introduction
The small medium enterprises or small and medium sized business are the business whose
personnel department numbers will be get followed by the numbers that will fall below with
some of the limits. The small medium enterprises will play a major role in the current economy
of the particular country. This will become represent a source of the entrepreneurship capabilities
as well as innovation and the creation of the country. This will be also helpful to represent the
entrepreneur capacity to get apply adapt and will become innovate the new technology that is
unique for the customers (Alqassabi, 2020). Now, in the context of the report the small medium
enterprise laynes espresso a coffee shop that is based on UK is offering best coffee and snacks
including the new taste that will be liked by the customers because this will taste much different
than other brand. Now the further discussion is about the nature of the entrepreneur behind the
venture, the start up process of Laynes Espresso and further concept and source of competitive
advantages will be further discussed within the report.
MAIN BODY
The nature of entrepreneur behind the venture
For being an entrepreneur of small medium enterprise of that is usually means the starting of the
business as well as building their business successful, after all people with the entrepreneur skills
can get always thrive within the larger organisation (Baum and et,al, 2020). The entrepreneurs
will mainly take a creative as well as innovative approach, also they are taking the risk that
others will become avoid. Now the further discussion is about the nature skills and traits of the
entrepreneur behind the venture will be discussed as follows;
The personal characteristics of an entrepreneur ;
optimism- The small medium enterprise is an optimistic thinker, because optimistic thinking is
the asset, that will be helpful in the difficult times as well as on the starting phases as well as
many of the entrepreneurs will get experience as they can easily get find the model of business
that will be useful for the owner of laynes espresso for doing innovation of the new things
within their organisation
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vision- by the help of this, entrepreneur can easily will get spot the areas for the improvements
that can smoothly will helpful to get grab the new feature and will able to get imagine and
knowledgeable enough to explain the things to others
initiative- the entrepreneur of laynes espresso coffee shop having the courage to get start the
problem as well as this process will be helpful in understanding that how the business
improvement can be done within the easy way.
Resilience- this process is get mainly get focused to observe the actions and movements of the
entrepreneur when some of the actions is not get planned and they will learn and get develop the
power of learning from their mistakes and make their mistakes in understanding of the problems
and will take initiative accordingly.
The start-up process of SME
The starting of the business will get involve various planning, making the major key decisions as
well as completing the major series of the lawful activities that will be discussed below within
the processes.
Conduct market research- The market research will get tell about the opportunity that will get
turn within the ideas into some of the successful business (Baloyi and Ozumba, 2020). This is
the way to become gather information in appropriate manner as well as this will help to
recognise the potential customers as well as business that will be already get operating inside the
areas. As well as using the information to get easily find some of the competitive advantages for
the business Layness Espresso
fund of the business- the business plan will get help to figure that how much the owner of
laynes espresso will get need to start the business. If they do not have that amount of the money
within the hand, this will need to be get borrowed the capital of the business (El Hanchi and
Kerzazi, 2020). However, if more of the capital will need to get find that amount of capital that
they will need.
Choose the business structure- The legal structure that they will choose for the business having
the several impacts on the registration of the business as well as the requirements of the business
and this will get decide that how much of the amount will be get needed within the business.
Get federal and state tax IDS – this will generally get includes the identification of the numbers
for doing the important steps to get start and develop the business like for example opening the
bank account as well as this will also get include paying the taxes, this will like the social
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security as well as number of the business but this is not necessary that every of the state will be
get required to get the tax Id within the business.
Open the business bank account- this is related from the small business that is related to get
checking the account that will help to get handle the tax that is legal and handy day by day for
resolving those of the issues. This is the good news that is really easy to set to having the right
paperwork as well as registration that is already in the ready as well as paperwork.
SWOT Analysis: -
Strengths: -
 The major strength of Layness Espresso is that it has high brand visibility and they has
targeted the major part of population of United Kingdom and enabled a positive impact
across all individuals.
 The company offers wide variety of discounts on constant basis which helps them in
achieving growth and becoming successful by attracting maximum number of audiences.
 By being a small business organisation, Laynes Espresso has still built up their stores
across different locations which becomes a good strength for them.
Weakness: -
 The weakness associated with coffee shop is that they do not provide much innovative
menu due to which people don't get attracted towards it. In present scenario, each
individual is active on social media so they get more interesting varieties of coffee.
 In the marketplace, there are already other small business organisations which are the
competitors for Laynes Espresso and becomes a weakness for them.
Opportunities: -
 Laynes Espresso has a good opportunity to introduce affordable options so that each
individual could afford it and get attracted to coffee shop.
 The company should do expansion in the varieties and produce certain eye-catching items
also.
Threats: -
 There are many other existing coffees shops which creates a threat for Laynes Espresso to
gather audiences towards their outlet.
 All audiences has started focusing on online channels so it becomes difficult to cope up
with customers offline.
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The business concepts and any source of competitive advantages
The competitive advantages will generally get refers to the following factors that will help the
coffee shop company to get produce the goods as well as services that will be get better and as
well as more cheaper that their rivalry of the business (Nguyen-Duc and et.al, 2020)(Asija,
2021). These are the factors will get allows to the productive as well as more of the sensitive to
get allow the more and more sales of their coffee shop for the extraordinary margins as per the
comparison to their rivalry of the business. Apart from this competitive advantages is generally
the set of the circumstances as well as conditions that is related from the being first to get and
launch the products within the place of markets. The sources of the competitive advantages will
be is as follows-
superior skills- this will get show the different capabilities of the personnel major of the keys
that will set apart from the personnel for competing the firms. Apart from this, benefit of the
superior skills is giving the results as well as ability to get perform the various functions that is
more effectively than the other firms.
Core competencies -This will get show the nature that is distinctive of the skills as well as
resources that will make up the core competencies that is the most important sources of the
uniqueness. They will be the combination of the multiple resources as well as skills that will be
get differentiated within the firm as well as market place
The current level and demand of the competitive environment
The competitors will directly get affects the business as well as the decisions that they can make
as well as if the coffee company will get brings out of the new products to the markets as well as
competitors that will required to get consider the hacking of the growth (Blose and Okeke-
Uzodike, 2020). Therefore, the competition that can be get beneficial for the company that can
get better day by day and will get improve the quality of the products. The competitive
environment also have the positive effect on the customers as well as businesses that will get
offers within the affordable prices. Therefore, within the companies have to bring out the
products by the help of the innovations. Therefore, the competition that can get complicates the
innovations as well as existence of the business. Apart from this to get access the economic
environment within the business as well as functions of the markets so that within the future they
can easily get analyse the industry as well as markets news and changes of the policies as well as
legislations. Now get review some of the competitive advantages in the more detailed way.
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Pure competition- within the more perfectly competitive advantages, many of the small
company like laynes espresso will get produce the similar of the products as well as many of the
customers to buy the products (Kim and Lee, 2020). These are the manufacturers of the small
business as well as the market functions. So that within the future they can easily get analyse the
industry as well as market policy as well as changes within the legislations.
Monopolistic competition- within the environment, there are many of the manufacturers will get
produce the different of the products that will get might serve the same purposes of the company.
Apart from this customers can easily will get distinguish the following products because of the
differences within the quality as well as their features. The businesses will be actively get
advertising to get promote the products as well as get motivate the customer.
The development and growth of the business
For every business organization, developing and achieving growth is very important. In
terms of the stage of development, the main focus of business organisation is on upgrading
themselves with the help of certain activities like in the form of product development and using
new facilities. In relation with chosen company, they are also developing and growing since
their starting phase. The company used different ways to achieve growth and it is further
explained below: - Know about consumers: - All audiences has different taste and preferences so company
need to understand about their demands (Musatova, 2020). In context with the selected
company, at the initial stage they also attained insight from consumers in terms of
knowing about their demands and motivating them to give feedback. Offer effective customer service: - As company started getting to know about the
consumers, they offered good services to all customers. As in relation with Laynes
Espresso, in order to achieve growth they focused on providing great services like in the
form of different varieties of coffee, self-order service and many more. Look for new opportunities: - The business organisation started looking out for new
opportunities in order to expand their customer base. The company find out a proper
balance between finding new consumers and attracting the existing one too.
 Usage of social media: - In present scenario, social media is considered as the most
strong technique to grow the business and ensure development aspect. In relation with
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chosen company, they also started using social media websites in order to attract more
and more consumers and expand the profile of company.
Porter's five forces model: - It is defined as a framework for evaluating an organisation
competitive environment. It is involved with five forces which are threat of new entrants,
substitutes, bargaining power of suppliers, buyers and competitive rivalry.
 Threat of new entrants: - In context with Laynes Espresso, the threat of new entrants is at
high level and the reason behind this is that the obstacles in relation with market entry is
low. To start a coffee company, it is very easy for small businesses to enter into a new
market and do production of coffee. It creates high threat for existing companies to carry
on their coffee shop.
 Threat of substitute products: - The threat of substitute products is at high level because a
coffee shop is not unique. There are many other companies which are dealing in coffee
products so it becomes a high competition for Laynes Espresso also. It is a basis product
in the world and high substitutes are already present in the market.
 Bargaining power of buyers: - In context with Laynes espresso, buyers has high
bargaining power because there are many other companies which are provide coffee to
consumers. It is very easy for audiences to shift from one brand to another and try their
coffee.
 Bargaining power of suppliers: - In context with chosen company, bargaining power of
suppliers is low because they are dependent on those organisations. On the basis of this,
they are at the dominant position and reduce the suppliers bargaining power.
 Competitive rivalry: - It is at very high position because there are already many other
competitors in the marketplace which are offering good coffee to customers. The profile
of each business is very strong due to which customers could get attracted to any of the
coffee shop.
Challenges of managing a business
In context with small business organisation, they face several challenges in terms of
managing the business like finding out efficient employees, completing several goals and
objectives, financing an organisation and so on. In relation with selected company, it is being
explained below: -
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 Financing the company: - It is one of the biggest challenge that every business
organisation faces. The reason behind this is that to run even a small business, efficient
amount of capital is needed (Belhoste, Bocquet and Favre-Bonté, 2021). In context with
Laynes Espresso, they also needed a financial source in order to manage the business in a
positive way. Identification of demand: - It is necessary for a business organisation to identify needs
and wants of consumers so that right products can be provided to right individuals. It
becomes a major challenge for the organisation to focus on all the preferences of
consumers. In relation with selected company, they need to determine certain factors
through which demand can be fulfilled and it becomes easy for the company to develop
themselves in the marketplace. Lack of marketing: - In context with Laynes Espresso, they has faced many issues of
doing marketing. In present time period, businesses are ready to focus on the
development of creative and innovative marketing techniques in order to deal with all
challenges.
 Managing resources: - All small business organisations has limited resources which
create an impact on the functioning for long period of time. In accordance with Laynes
Espresso, it becomes significant to develop an overview of resources in an efficient way.
The main challenge associated with this is the scarcity of all financial resources which are
used for several functionalities.
SMEs current development and growth strategy
In order to develop the business and expansion of growth, it is necessary to implement
certain strategies which would be beneficial for an organisation. As per the chosen enterprise,
they also used different ways which is defined below: - Alternative channels: - It is one of the current development strategy which a small and
medium term enterprise uses. The company use different channels for doing promotions
in order to best outcomes. In present time period, the most effective channels which are
considered is social media websites and email marketing. As a small enterprise, it
becomes important for them to use such channels in order to achieve growth.
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 Product expansion: - To achieve growth and development, expansion of products is bes
strategy. As per current phase of the business, Laynes Espresso expanded their product
lines and initiated new variations in their products.
Government measures to support business from all challenges
The government provides several ways to support a small enterprise so that they can also
develop their business and achieve growth. One of the best way which government has provided
to enterprises is the method of guaranteed loans (Naeem, 2021). It is very helpful for the
company because they get effective amount of capital to invest in their business. Besides this,
they are also decreasing burden on executives through which they receive permission more
quickly.
Ansoff growth model: - In association with this model, it is used for the purpose of analysing
several strategies of growth for the purpose of maximising the market presence.
 Market penetration: - It refers to a strategy that is used by companies when they are using
their existing products in the existing marketplace. It could be initiated by Laynes
Espresso by focusing on reducing the costs in order to attract consumers and building up
the promotion level.
 Product development: - With respect to this strategy, a company is willing to establish a
new product in relation with existing needs. It is involved with extensive level of research
and development of existing products.
 Market development: - On the basis of this strategy, Layness espresso could work on
entering a new market with their existing products. It can be successful when a company
owns proper techniques in new markets.
 Diversification: - In this phase, organisations might enter a new market with their new
products. It is considered as a risky strategy because both market as well as products are
new. In accordance with this strategy, Layness Espresso could work towards providing
the greatest level of potential and enhancing the revenue.
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Recommendations
It was being recommended to the business that they should enable new strategies in order
to do expansion. As being a coffee shop, they should also involve certain desserts also so that
customer base can get enhanced. The organisation should use alternative channels to do
promotions rather than just focusing on social media. It is recommended to small business that
they should has an effective support system which is required to enhance the productivity level
and competitiveness. Layness espresso could develop the strategy of doing promotion and lead to
development. They should address all the organisations at different stages of export in relation
with market development.
CONCLUSION
From the above report it has been concluded that, as a small and medium term enterprise
it is necessary to build up more strategies and advanced technologies in order to attract maximum
number of consumers. In today's marketplace, there are large number of competitors who are
already present in the market. A company face many challenges like financial problems but there
is support from government in context with many measures like they provide loans.
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REFERENCES
Books and Journals
Alqassabi, M.A., 2020. Insights on Sustainability of Small and Medium Enterprises in Oman: A
Conceptual Framework. International Journal of Economics and Financial Issues,
10(1), p.209.
Asija, A., 2021. Leveraging knowledge for competitive advantage (Doctoral dissertation,
Universitat Ramon Llull).
Baloyi, T. and Ozumba, A., 2020. Strategic Risk Management among Small Enterprises in the
Construction Industry. In MATEC Web of Conferences (Vol. 312, p. 02013). EDP
Sciences.
Baum, A., and et,al, 2020. Managing Fiscal Risks from State-Owned Enterprises.
Belhoste, N., Bocquet, R. and Favre-Bonté, V., 2021. Export support services for SME
internationalization. In World Encyclopedia of Entrepreneurship. Edward Elgar
Publishing.
Blose, S. and Okeke-Uzodike, O.E., 2020. Pre-fourth industrial revolution: challenges for small,
medium and micro enterprises in a transforming economy. Journal of Contemporary
Management, 17(se1), pp.67-90.
El Hanchi, S. and Kerzazi, L., 2020. Startup innovation capability from a dynamic capability-
based view: A literature review and conceptual framework. Journal of Small Business
Strategy, 30(2), pp.72-92.
Kim, K. and Lee, S., 2020. The Impact of Innovation Policy Mix on SME R&D Investment:
Focusing on Financial Instruments. Journal of Convergence for Information
Technology, 10(1), pp.1-12.
Musatova, M., 2020. Financing architecture and current trends in the development of Russian
Small and Medium Enterprises. In Entrepreneurial Finance in Emerging Markets (pp.
161-175). Palgrave Macmillan, Cham.
Naeem, M., 2021. Uncovering and Addressing the Challenges in the Adoption of E-Procurement
System: Adoption Process Stages in SMEs. International Journal of Information
Systems and Supply Chain Management (IJISSCM), 14(1), pp.1-22.
Nguyen-Duc, A., and et.al, 2020. Fundamentals of Software Startups. Springer International
Publishing.
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