Managing SMEs: Challenges, Growth Strategies, and Government Support

This report explores the challenges faced by SMEs in managing and running their businesses, their growth and development strategies, and the government support measures available to overcome these challenges. It focuses on the case of Warburton Building Services, a company specialized in mechanical and electrical services in the UK.

Managing SMEs

Table of Contents
INTRODUCTION...............................................................................................................3
FINDINGS...................................................................................................................................3
The start-up process of Warburton Building services............................................................4
The business concept and any sources of competitive advantage.........................................5
The current level of demand and the competitive environment.............................................5
The growth and development of business to date..................................................................6
The challenges of managing and running business................................................................6
The SMEs current growth and development strategy............................................................7
Any government support measure that may be available to help the business overcome the
challenges faced......................................................................................................................8
CONCLUSION..............................................................................................................................9
RECOMMENDATIONS...............................................................................................................9
REFERENCES.............................................................................................................................10

INTRODUCTION
Small and medium enterprise contribute largely towards the economy of a nation and are
emerged due to major challenges arouse in a market environment. Entrepreneur are those who
come up with a innovative approach which have not be done even before and develop a
products and services as per the available opportunities to satisfy the unmatched and
unaddressed needs of customers . One of the significant example of small medium enterprise is
Warburton Building Service located in Southern England which enable the company in
addressing the needs of building industry. The enterprise was established in the year 1979, with
the objective of providing mechanical and electrical service and maintained to the commercial
and residential building at UK. Company offer a numerous range of services such as hot and
cold water installations, air supply and ventilation system, rainwater, guttering and drainage
system through their qualified technicians and engineers. The report is conducted on various
aspects such as nature of business, process for set up SMEs, growth and development strategy
along with the challenges and measures taken by the government to overcome these challenges.
FINDINGS
The objective of the report is to conduct a detailed analysis of the nature of the business
of Warburton Building Service and how the enterprise was formed and developed. What is the
concept of business, sources of competitive advantage, current level of demand along with the
competitive advantage of Warburton Building Service and how much company have grown and
developed over a period of time. Another important aspect covered in the report is challenges
and difficulties faced by the company while executing its business operations along with the
government support measures taken so as to overcome these challenges (Díaz-Correa and
López-Navarro, 2018).
The nature of the entrepreneur behind the venture
The report is conducted on the entrepreneurial enterprise which is Warburton Building
Services which have emerged out with the concept of providing mechanical and electrical
service and maintenance to the construction sector. With their qualified and experienced
engineering technicians, company undertakes the numerous building projects such as
ventilation, heating, plumbing, rainwater, electrical,air conditioning and cooling, leadwork etc.

with the use of modern products, components and techniques. There was the increase in the
demand for the maintenance of the existing or new office and residential building which gave
the spark to come with the idea of creating a architectural designs for the old and unused
building and convert them into a valuable assets.
The start-up process of Warburton Building services
Warburton Building services have emerged through the series of steps which have given
the shape of legal entity from a mere business idea (Sahoo and Yadav, 2018). The series of
steps are :
 Getting an idea : Business ideas are generated only by identifying the various
challenges prevailing in a environment and convert them into a business opportunity.
Warburton identifies the companies in a relevant sector, understand what they do and
how these could be done in another way. Target customer group is generally identified
at this stage. Business plan :Business plans helps Warburton in setting vision, mission and long term
goals of a business. With the help of extensive research Warburton gets to know
customer need, taste, buying power, attitude as well the products of competitors. Exit
strategy is wise option to consider at this stage. Getting finances :Converting business plans into reality need finance and company look
for a numerous sources of finance such as bank loans, anger investors, investors,
crowdfunding etc. Warburton used opted for bank loans while entering into the market. Identify legal structure : Getting a right legal structure help the business in future
success and growth and have signifiant impact over legal bindings. Warburton have a
limited liability structure which offer legal protection and tax benefits at the same time. Register with government and IRS : In order to run a business it is essential to get the
firm registered with government (Ghadge, Wurtmann and Seuring, 2020). Article of
incorporation is a document which covers name, purpose, structure and other detailed of
the company.
 Build workforce, choose supplier and market the products : The last step is to hire a
workforce for efficiently running the business operations along with the trading partners

such as suppliers. One of the best way to advertise the company is through websites or
social media.
The business concept and any sources of competitive advantage
Warburton building services limited was founded in the way back 1979, specialised in
mechanical and electrical service and maintained of properties. With their expertises workforce,
it ensures that higher standard of workmanship with desired quality and value (Msangi, Kessy
and Kitindi, 2020). With the some of the competitive sources company have managed to do
some exceptional quality work such as, Housing development at Northampton which was
restructuring of former shoe factory into the residential building or conversion of agriculture
building into a Manor House at Oxfordshire.
Sources of competitive advantage High skilled workforce : Warburton with their skilled, experienced and qualified
engineers and technicians undertake the numerous projects such as cooling, ventilation,
plumbing, rainwater, electrical work etc. Company keeps their employees motivated and
updated through comprehensive and regular training programmes. Service differentiation : One of the attribute that gives Warburton competitive edge
over others is their unique and innovative services in a building industry which aims to
deliver best and updated services in building design and technology.
 Geographical location : Warburton being centrally located in Southern England have
enabled the company in addressing the needs of the customer to a larger extent. It gives
them a competitive edge by accessing to the project site with ease and on time from
office or warehouse.
The current level of demand and the competitive environment
Warburton building services is unique its approach as it the new and innovative idea to
deal with the issue concerned with building industry (Prashar, 2020). Company is specialised in
providing mechanical and electrical services to the construction buildings in UK. Being
innovative in its approach company is offering a wide range of services within building service
area such as air conditioning and cooling, heating, ventilation, plumbing, rainwater, leadwork
etc. through qualified, experienced and knowledgable engineers and technicians. There is a rise

in demand for these types of services offered by Warburton. Few examples are : One of the
project of the company was to redesign the agriculture building into a royal and impressive
house in which company installed mechanical services, lighting controls, audio system, data and
door access installations and general lightings as well as power circuits (Müller, and et. al.,
2020).
Competition faced by the Warburton Building Services is low because there are very
limited companies offerings such kind of expertise and services in building industry.
The growth and development of business to date
The idea of providing mechanical and electrical service and maintenance of building
industry emerged way back in 1979. The company is presently offering building services such
as heating, cooling and air-conditioning, ventilation, plumbing, rainwater harvesting,electrical,
leadwork etc. Warburton offers services to the wide customer base which includes house
developers, building contractors and architects, domestic, commercial and industry buildings.
The idea was new and different which took time to get developed and popular among the
citizens of UK. Warburton have made a significant development from the time of its inception
and offering a services through new installations at buildings, up gradation of systems,
refurbishment and renovation work of building along with regular site maintenance and
servicing. Company is now well recognised as a leading company in offering installation and
maintenance services in electrical and mechanical segment through skilled, talented,
experienced and knowledgable workforce. Company keep their employees motivated and
updated through certified training programmes (Ivaldi, Pais and Scaratti, 2018).
The challenges of managing and running business
While running and managing business, Small and Medium enterprises faces distinct
challenges and difficulties which hinder the prosperity and growth of business. Below
mentioned are the challenges faced by Warburton Building Services : Government regulations : Warburton provides services with regards to the mechanical
and electrical services and management into building industry. Government regulations
for health and safety measures, working conditions, and especially with regards to the

environmental pollution. The emission produced by the frequent movement of their
private vehicle was a biggest challenge for them to manage. Tax Compliance : Small and medium enterprise contribute largely towards the
economy development (Dey and et. al., 2018). However complex and rigid tax structure
have affect the overall profitability of a Warburton in long run. Online presences : Considering current scenario, presence of social media is imperative.
Warburton is a leading building service company in UK, however, company have failed
to maintain its online presences due to the non availability of funds and workforce.
 Client Diversification: One of the major challenges that Warburton faced is
incapabilities for diversifying the business which would generate more clients for the
company. Warburton is operating in a sector where getting more clients is little bit
difficult therefore may result in sluggish growth and success.
The SMEs current growth and development strategy
There are numerous options available for small and medium enterprises which is proved
to be beneficial for future growth and development. The type of strategy adopted completely
depends on the nature and type of business. Warburton may opt for a numerous strategy which
are listed below : Market Penetration : One of the signifiant growth strategy for Warburton is getting
more deeper into the current business with existing products and customer. It is all about
expanding the customer base. This can be done through numerous ways such as
lowering the price of the current offerings or by offering sales discounts and other
offers. Acquisition : This strategy can be adopted while strengthening the competitive edge of
Warburton. Having a sufficient amount of fund can help in capturing large market share
while being competitive and relevant in a market (Katz‐Gerro, López Sintas, 2019).
Getting a new technology, acquiring skilled workforce or gaining new customer is
beneficial for the company in overall growth and development.
 Market development : Another strategy that can be opted by Warburton is that it can
look for a new target market where the existing products or services could match needs
and wants. This can be done by finding out the distinct ways through which products

and services could be used. Warburton comes with a new and innovative services which
helps in attracting more customers.
Any government support measure that may be available to help the business overcome the
challenges faced
There are numerous government support measures which help the small and medium
enterprise to encourage for executing the business activities and overcoming uncertainties and
difficult challenges (Ruepitiviriya and Puttawong, 2018). Below mentioned are the few measure
which support and encourage small and medium enterprise in UK : Financial Assistance Scheme : One of the support measure taken by government to
support and encourage small and medium entrepreneurship is providing financial
support to manage and run their business operations. There are numerous schemes
which provide financial assistance at minimum interest rate with no collateral security. Research and development schemes : One of the factor which pull small and medium
enterprise from success and growth is lack on intense and detailed research programmes
(Díaz-Correa and López-Navarro, 2018). Due to the high amount of cost involved in
Research and Development, few companies like Warburton could not compete in a
market. With the various research and development programme UK government
empower the small and medium enterprise in providing relevant information and
knowledge.
 Scheme for technology up gradation : Rapid changes and new innovations in
technological sector have compelled the small and medium enterprise to enhance their
competitiveness through technological up gradation. Reduction in import duty, exercise
duty, taxes and partial payment for acquiring the updated technology is a significant
move by the government. Government also offers subsidy and low amount of interest on
loan amount to make small enterprise capable of compete in international market
(Sahoo and Yadav, 2018).

CONCLUSION
As per the above mentioned report it is evident that small and medium enterprise
contribute largely towards the development of an economy. However there are numerous
challenges and difficulties faced by the SMEs while running and managing their business
operations. In order to promote and growth of a SMEs government is taking initiates at local
and national level to promote the functioning of these units as they together help largely
towards the development of a society and an economy.
RECOMMENDATIONS
As per the above analysis it has been concluded that one of the significant growth and
development strategy for Warburton building services is acquisition because company is already
in a state of maturity in a business cycle as it is regarded as one of the leading company. The
tendency of business cycle suggests that after maturity, declining stage come that would be
harmful for Warburton. Therefore, for continuous survival it is necessary for the company to go
for acquisition so as to gain more market share.

REFERENCES
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