Managing Small and Medium Sizes Enterprises

This report discusses the nature of entrepreneurship, SME start-up processes, sources of competitive advantage, current levels of demand, and the competitive environment. It also covers the growth and development of Marshfield Bakery, challenges in running a business, current growth and development strategies, and government support. The report provides recommendations for managing small and medium-sized enterprises.

Managing Small and
Medium Sizes
Enterprises

Table of Contents
Introduction......................................................................................................................................3
Findings...........................................................................................................................................3
Nature of entrepreneur.................................................................................................................3
SME- Start up process.................................................................................................................5
Business Concept & Source of competitive advantage...............................................................6
Current level of demand & competitive environment.................................................................7
Growth & development of business till date...............................................................................8
Challenges of managing & running business..............................................................................9
Current growth & development strategy of SME........................................................................9
Government Support to help business in order to overcome with challenges...........................10
Recommendations......................................................................................................................11
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

Introduction
Small & medium size businesses are those units which are started with lower amount of
investments, equipments & resources. These entities play a crucial role in escalating economic
growth & development. Small & medium size companies offer range of products & services to
customers and also generate huge employment opportunities. In UK, 99.9 % private sector
entities fall under the category of SME. These entities work with limited number of employees.
Generally, there is employees base of less than 250 people. From the employment prospective,
SME employed nearly 16.8 million individuals within UK & maintained a contribution of
£2.3 trillion in overall economy of country (Gaudenzi and Siciliano, 2018). In present report,
Marshfield bakery is taken into consideration which is a well known SME based on England &
was founded in 1984. It offers snack bars, biscuits, seasonable food, fruit cake & other such
products. It is engaging in remarkable practices related to private label as well as self branding
still falls under the category of small business unit. The present study covers nature of
entrepreneur of venture, start up process of SME, sources of competitive advantage. After this
discussion, current level of demand along with an analysis of competitive environment is also
going to discuss in the following report. Further, it includes growth & development of business
entity along with challenges in running a business. Current growth and development strategy of
SME and the support of government in terms of subsidies, grants has also discussed in the
present report.
Findings
Nature of entrepreneur
Entrepreneur is a person who has a business idea & has the courage, enthusiasm, zeal and
passion to convert the idea into reality. Entrepreneur takes risk to introduce a new product and
services in market place. It is the aim of entrepreneur to do something creative & introduce
unique products to society (Pousa, Mathieu and Trépanier, 2017). Entrepreneurs initiate a
business venture to commercialize their idea & earn substantial amount of profit margin. In
current scenario, Marshfield bakery is a small company which was started as a family business to

earn significant amount of profit margin. It was established by Paul white & his wife lenny.
Here, nature of entrepreneur in context of bakery is given as under:
Risk taker: It is analyzed that an entrepreneur is a risk taker. Starting & running a
business based on new & unique idea is not an easy task. It includes huge risk in terms of lower
earning, profit margin, acceptance in market & more. However, a new business is started with an
aim to earn substantial profitability but, there is no certainty of profit & loss. In current scenario,
Paul took risk to start a new venture in spite of extensive competition in present in market place.
He took the risk & resulted enjoying great success of venture in current time.
Profit maker: Major purpose of starting each & every business is earning profit. An
entrepreneur also starts new entity for making profit. Without profit, it is not possible to operate
business for longer time. Profit drives growth for future betterment & strengthens the market
position of organization (Clinton and Whisnant, 2019). In current scenario, the primary reason of
Paul & his wife behind starting a new venture was profit making. For this purpose, they keep
expanded business over the period of time.
Innovator: It is the most crucial characteristic of entrepreneurs which allows them to
invent something unique for meeting with requirements of customers. If, there is no unique
points include in venture then people are not likely to get attracted towards its product &
services. Here, Paul’s wide lenny is a good cooker & has the experience in same filed. With this,
lenney is able to provide delicious cookies, puddings, cakes to customers which is a
differentiating point for organization. Further, they appoint qualifies, competent as well as
proficient people to make quality food for matching with pre defined standards set by respective
entrepreneurs.
Challenge taker: During entrepreneurial journey, there are ample of challenges faced by
entrepreneurs. It is not easy to commercialize the business idea. Challenges such lack of
resources, funds, fewer profit margin, lack of competent staff, lack of government support &
more are faced by entrepreneurs while embarking on entrepreneurial journey (Melendez, Dávila
and Pessoa, 2016). For Paul & Lenny, it was not easy to start as well as run the venture
successfully as they faced several hurdles during the journey. With constant efforts, dedication,
assertive attitude they could successfully established the positive image of organization.

SME- Start up process
SME is a small & medium enterprise which is started with fewer resources, funds &
equipments. For starting a small business, it is required to follow systematic procedure so that
there will be no issues arise in future period of time. In present scenario, a complete systematic
procedure followed by respective entrepreneur which are given as under:
Conduct market research: It is the initial stage wherein, entrepreneur is required to
conduct detailed market research in order to find a business idea which also has potential to
generate profit in future period of time (Matejun, 2016). Here, information related to potential
customers, already existing companies within the field is gathered. In context of Marshfield
bakery, they also gathered in-depth information about competition, customers, profit & more
before commercializing the idea.
Write business plan: Business plan is the foundation of business which provides a
roadmap to start, run as well as grow the business. It includes mission, vision, objectives of new
business entity. It is a document which includes information regarding marketing, financing,
budget & more so that it is easy to convince other people to invest in business. In context of
respective company, they also prepare a business plan comprising all necessary information
regarding mission, vision & more for ensuring future growth & success.
Fund the business: It is a crucial step wherein the funds for business is arranged. Either,
it can arrange by own or funds can be raised through external sources. There are several sources
from where funds are collected such as bank loan, equity & more (Bican, Guderian and
Ringbeck, 2017). In current scenario, respective entity is required to select suitable source of
fund after analyzing risk & return factors.
Choose business location & structure: It is the next step under which location of
business venture is selected. Here, premises to open the business venture is determined after
detailed analysis of raw material availability, resources availability, competition & more. After
that, it is required to select suitable legal structure which will affect taxes, personal liability &
more. Marshfield bakery is started at prime location of UK in order to get attention of more
number of buyers. In addition to this, they also operating business as per the predefine guidelines
& rules of UK government.

Choose business name: name of business needs to be unique & alien with its products &
services so that customer get an idea about the brand by reading the name. It need to reflect the
brand & unique which will help in creating distinct identity of business entity. While selecting
business name, owners need to confirm that the name is not taken by someone else so far. In case
of Marshfield bakery, they have been selected an unique name which reflect their services like to
customers.
Registered the business: After selecting brand name, next step is to protect it for which,
entrepreneur can registered the venture with federal & state government. Registering brand is
really imperative as it helps in formulating distinct identity (Santoro and et. al., 2018). It is a
legal way to protect the brand so that any other person cannot hamper the brand image. In
context of respective company, they also have been registered the brand with federal & state
government for protecting the brand image.
Open business bank account: It is the last step wherein new business owners are
required to open a business bank account after completing all the necessary legal formalities &
paper work. Business bank account offers safety by keeping personal funds & business funds
separately. It also allows to get payment in an authentic way (Moeuf and et. al., 2016). In
reference of respective organization, they are also required to open a business banking account
for making & accepting payment in legal manner.
With above information, it is assed that there is a complete step by step procedure which
needs to imply while opening a new small size business. With the proper implementation of this
procedure, it is possible to run business in highly systematic & legal manner.
Business Concept & Source of competitive advantage
Business is a commercial activity wherein different activities are performed with an aim to earn
higher amount of profitability. In business, there are functions such as marketing, finance,
operations & more are consolidated so that business entity performs in an efficient manner. In
current scenario, Marshfield bakery is a bakery is a family run business which produces snack
bars, cakes, seasonal goods, biscuits & offers it throughout the UK & Europe. Now, they also
have association with some well known brands such as Marriott, Waitrose & more. They supply
bakery items to these renowned hotels (Mattevi and Jones, 2016). Unique point which

differentiates Marshfield is the delicious taste & quality they offer. Owners of company never
compromise with quality reason being they are able to survive in such competitive market place
since 1984. They focus over providing value to customers with an aim to maintain positive long
term relationship. For this purpose, they emphasis over quality for gaining higher level of
customer’s satisfaction.
Sources of competitive advantage:
In current time, there is extensive competition present in market place. In such situation,
it is imperative to maintain positive relationships with buyers. In this regard, some sources of
competitive advantages have been identified by Marshfield bakery which are given underneath:
Quality: Marshfield bakery makes sure to provide quality products to customers. For this
purpose, they execute quality check at each & every step of manufacturing process. They have
been appointed qualified, educated, competent people in order to produce quality goods for
which provides them an edge over competitors.
Customer’s willingness to pay: If, customers receive best services then they are also
willing to pay adequate amount. Here, Marshfield ensures to offer best possible services, values
to customers so that they get satisfied & ready to pay suitable charges accordingly. This feature
of organization is helpful in terms of making unique identity at existing market place.
Product attributes differentiation: Product is the best way of creating differentiation. For
this purpose, owners of Marshfield add new & unique attributes in their products which further
help in gaining attention of buyers (Mistry, Bouguettaya and Dong, 2018). It is a great source of
competitive advantage which will help in sustaining at market place for longer period of time.
Current level of demand & competitive environment
It is stated that Marshfield bakery was opened in the year of 1984 & has been formulated
significant brand image at market place. It is constantly offering quality products since its
establishment which is helpful in terms of getting trust of customers. Due to higher quality of
products, they are able to maintain distinct brand image from rivalries. It is analyzed that
respective organization is expanding business at different locations of London & will be able to

drive more sales & profit margin by enlarging current base of customers. Company has a
turnover of nearly £2m which shows their efficiency of providing effective services .
Competitive environment:
Marshfield is working in competitive atmosphere wherein, it is surrounded with
numerous rivals. For understanding the competitive environment of respective company, there is
a model called Porter’s five forces has been applied elements of which are mentioned below:
Threat of new entrants: There is fewer entry barriers in marker of food & beverage so
that it is easy for a new company to enter as well as sustain in current market place for longer
period of time. Therefore, threat of new entrants is higher (Yaseen Mustapha and Ibrahim, 2018)
.Bargaining power of buyers: Here, bargaining power of customers is really higher as
they have ample of other options. Buyers have an upper hand & can easily negotiate with
organization for getting quality goods at reasonable price.
Bargaining power of suppliers: Bargaining power of suppliers is lower as there are
ample of vendors who supply necessary raw material. Hence, Marshfield has option to switch
over other vendors for getting timely supply.
Threat of substitutes: It is high reason being a lot of alternative products can be availed
at the place of bakery items. Even, people can cook something at home rather purchasing outside
food. Therefore, threat of substitute is quiet high in context of respective SME.
Competitive rivalry: Industry in which Marshfield bakery is working comprises higher
competitive rivalry. There are ample of companies which are offering ready meals such as bright
blue foods & more. Hence, respective organization is required to prepare significant strategy for
staying in competition till longer time.
Growth & development of business till date
In context of Marshfield bakery, it has witnessed tremendous amount of growth &
success within such adverse situation. It was founded by Paul & his wife in 1984. They started
the business from village where merely these two people were working. Lenny used to cook
puddings, cakes & Paul sold those products to local stores, schools & colleges. After getting

more number of orders they shift the business at western farm & also appointed some initial
staff to help the out with bakery work. After then, they keep expanding at more locations due to
the positive response of customers & constantly increasing demand. In 2004, they hire 45 new
people and shifted business to toll down which is a prime location. By this way, Marshfield
bakery expanded business at different location with an aim to escalate its performance in terms
of brand reputation & profit ratio.
Challenges of managing & running business
It is not east to start as well as run a new business as it requires constant efforts & hard
work. There are several hurdles faced by a small business owner while managing & running the
entity. In case of Marshfield, challenges faced by them in order to mange & run business venture
are given below:
Funding: Funds are fundamental requirement of each & every business. However, it is
not easy to get adequate amount of funds. In context of Marshfield bakery, they face a lot of
issues related to funding during initial days (Blackburn, Huong and Mendham, 2020). Due to
this, they were not able to install necessary equipments & tools which are required for operating
a bakery business in successful manner.
Recruitment: Human resources play an imperative role in success of a business entity.
They bring innovative ideas & creativity at work place. In Marshfield, there is lack of competent
& qualified people. It affects their efficiency to serve customers in best possible way.
Retaining customers: It is the major issue which is faced by each and every company. In
hospitality industry, customers are price sensitive and they are likely to prefer reasonable
products. In context of Marshfield, they are facing challenges related to customer retention
which will affect future sales & revenue of company.
COVID-19: The ongoing pandemic has become an emerging issue for different countries
across the globe. Being an SME, Marshfield is facing great difficulty in present situation. Due to
lockdown, strict guidelines of COVID-19, it is difficult for organization to operate business in
such challenging environment.

Current growth & development strategy of SME
For sustaining in such competitive market, Marshfield needs to embark growth &
development practices. It will help in terms of maximizing profit margin for further growth &
betterment. In this regard, Ansoff matrix is applied which is given below:
Market penetration: It is a crucial strategy wherein company operates with existing
product in existing market. Here, discounts, coupons & other offers are given to customers so
that they get attracted towards products & services which are being offered by company. It is a
great way of enhancing current sales & profit ratio without bearing any kind of risk.
Market development: Company enters into new market in this strategy with current
products & service. It is required to undertake detailed marketing research before selecting a new
market to target. For this, one is required to analyze profitability, demand, and requirements of
customers while entering into new market (Todorova, 2019).
Product development: Here, new range of roducts & services are launched in order to
expand business in significant manner. For this purpose, it is imperative to identify market
opportunities, needs of customers for making the launch of new product successful.
Diversification: It is a risky strategy wherein products market both are new. There is
requirement to invest huge amount for diversification. However, it provides tremendous
opportunities of growth & success by enlarging current amount of sales & profitability. It also
offers great strength to face competition present in market place.
From above stated strategies Marshfield is adopting market development strategy. They
are looking forward for innovative ways to expand business. With market development, they will
able to enter into new market which will full with opportunities of growth & development. It is
analyzed that respective company has been explored business at different locations so far & also
looking forward to expand it in new market areas for earning substantial amount of profit
margin.
Government Support to help business in order to overcome with challenges
Government offers support in numerous ways such as by providing subsidies, grants &
loans. They offer loans at lower rate along with limited formalities. SME’s can use this amount

for business expansion. More resources, equipments can be purchased through the financial
assistance. It is analyzed that small entities are likely to face the issues related to tools, resources
& competent personnel’s. With the help of grants & subsidies, they can hire competent
individuals for running business in an efficient manner. There is an enterprise called Seed
enterprise investment scheme (SEIS) is designed to provide financial aid to small companies
upto £150,000. In UK, this scheme has already supported 75000 business with more than £623
million worth of loans (A guide to government support for small businesses, 2021). Alike, there
are also some other schemes such as enterprise investment scheme which enables business to
raise fund of nearly £ 5 million each year & £ 12 million throughout the life of company. Hence,
there is complete support as well as assistance is provided to small companies by government of
UK. By this support, Marshfield can easily cope up with the hurdles related to managing &
running business. Here, respective organization was founded in 1984 and received tremendous
support from government. However, the policies have changes over the period of time. But,
government of UK has always been supportive for SME’s. In addition to this, higher authorities
are likely to provide grants for innovation and research & development. Marshfield also took
benefit of scheme of government which further helped them in business enhancement. At
present, they are also benefitted with recent schemes of government such as SEIS scheme and
more. Therefore, grants and support offered by government will help company to grow and
achieve tremendous amount of success in future period of time.
Recommendations
After going through with among stated information, it is analysed that there are a lot of
challenges face by SME’s while starting as well as running business. Due to this, it has become
difficult for small business entities to survive in this competitive marketplace. By keeping the
current scenario in mind there are some recommendations have been given for successful
operations of small enterprises. These recommendations are given below.
 It is suggested that small business entities need to focus on innovation and creativity for
differentiating themselves with rival firms. For this purpose, they need to develop
something creative by which it is easy to grab the attention of customers. It is analysed
that there are ample of a small and medium enterprises in UK so innovation and

creativity is a crucial way by which a company can differentiate itself with parallel
organization.
 Government offers a lot of subsidies, grants as well as easy loans to small businesses. So,
they are required to stay updated with significant information about these subsidies and
grants. It will help in getting experts opinion as well as funds to survive in competitive
marketplace for longer period of time. With these grants, they can install new
equipments, tools and also highly competent as well as qualified personnel’s to manage
business operations in best possible way. This practice will help SME’s in inflating
current level of sales and profit margin.
 It is suggested that small business entities need to embark crucial ways of marketing so
that they can attract more number of buyers. In this regard, they need to use advance
practices of marketing and promotion such as online marketing and more. With this, they
can easily expand the current customer base which will help in escalating current level of
revenue & profit.

CONCLUSION
With above information, it is summarized that managing small and medium size business
is related with planning, organizing as well as preparing strategies for success of these entities. It
is analyzed these entities play a crucial role in economic growth and development by generating
great source of employment and providing quality goods and services to people. Small and
medium enterprises are helpful in meeting with needs and requirements of buyers. These entities
are likely to operate with limited amount of resources. There is discussion about nature of
entrepreneur of a small business entity. It is stated that the complete process including different
steps such as market research, business plan, raising funds, choosing business location and
structure is taken out to start a small business entity. There is extensive competition is faced by
SME’s while planning their future growth and development. It is concluded that it is not easy to
operate a SME as it includes several challenges such as funding, recruitment of competent
individuals, retaining customers and more. In present time, COVID-19 has also become a major
issue for companies whether large or small. There is several growth opportunities present in
market which need to analyze in an effective manner. There is discussion about growth
opportunities with implication of Ansoff matrix. However, government subsidies and grants
play an imperative role in development of SME’s by offering adequate amount of funds on easy
conditions.

REFRENCES
Books and Journals
Bican, P.M., Guderian, C.C. and Ringbeck, A., 2017. Managing knowledge in open innovation
processes: an intellectual property perspective. Journal of Knowledge Management.
Blackburn, D., Huong, V.D. and Mendham, D., 2020. Returns to Vietnamese smallholder
farmers from managing acacia plantations for sawn wood over 4-10 year rotations. Forest
Policy and Economics, 121, p.102318.
Clinton, L. and Whisnant, R., 2019. Business model innovations for sustainability. In Managing
Sustainable Business (pp. 463-503). Springer, Dordrecht.
Gaudenzi, B. and Siciliano, G., 2018. Managing IT and cyber risks in supply chains. In Supply
Chain Risk Management (pp. 85-96). Springer, Singapore.
Matejun, M., 2016. Role of technology entrepreneurship in the development of innovativeness of
small and medium-sized enterprises. Management, 20(1), p.167.
Mattevi, M. and Jones, J.A., 2016. Traceability in the food supply chain: Awareness and
attitudes of UK Small and Medium-sized Enterprises. Food Control, 64, pp.120-127.
Melendez, K., Dávila, A. and Pessoa, M., 2016. Information technology service management
models applied to medium and small organizations: A systematic literature
review. Computer Standards & Interfaces, 47, pp.120-127.
Mistry, S., Bouguettaya, A. and Dong, H., 2018. Economic Models for Managing Cloud
Services. Springer.
Moeuf and et. al., 2016. Strengths and weaknesses of small and medium sized enterprises
regarding the implementation of lean manufacturing. IFAC-PapersOnLine, 49(12),
pp.71-76.
Pousa, C., Mathieu, A. and Trépanier, C., 2017. Managing frontline employee performance
through coaching: does selling experience matter?. International Journal of Bank
Marketing.
Santoro and et. al., 2018. How SMEs engage in open innovation: a survey. Journal of the
Knowledge Economy, 9(2), pp.561-574.
Todorova, G., 2019. Building and managing great teams: An evidence-based approach. Journal
of Commercial Biotechnology, 24(4).

Williams, N. and Kumar, S., 2018. Managing Obesity in the Workplace: Turning Tyrants into
Tools in Health Practice, Book 3. CRC Press.
Yaseen, M., Mustapha, A. and Ibrahim, N., 2018, November. An approach for managing large-
sized software requirements during prioritization. In 2018 IEEE Conference on Open
Systems (ICOS) (pp. 98-103). IEEE.
Zieba, M., Bolisani, E. and Scarso, E., 2016. Emergent approach to knowledge management by
small companies: multiple case-study research. Journal of Knowledge Management.
Online
A guide to government support for small businesses, 2021 [Online] Available through:<
https://thepitch.uk/government-support-for-small-businesses/ >\
Marshfield Bakery, 2016 [Online] Available through:< https://www.swmas.co.uk/success-
stories/marshfield-bakery />