Managing SMEs: Challenges and Growth Strategies

This report explores the challenges faced by SMEs in managing and running their businesses. It discusses the nature of entrepreneurship, the start-up processes, sources of competitive advantage, and the current level of demand and competitive environment. It also examines the growth and development of the business, the challenges of managing an SME, and the assessment of the current growth and development strategy. Additionally, it highlights appropriate government support schemes that may be available to SMEs.

Managing SMEs

Table of Contents
Executive Summary...................................................................................................................2
Introduction..............................................................................................................................3
Findings.....................................................................................................................................4
1. The Nature of the Entrepreneur Behind the Venture..............................................4
2. The SME Start-up Processes.......................................................................................5
3. The Business concept and any sources of competitive advantage...........................5
4. The Current level of demand and the competitive environment.............................5
5. The Growth and Development of the business to date.............................................5
6. The Challenges of Managing and Running the SME...............................................6
7. The Assessment of the SMEs Current Growth and Development Strategy...........6
8. Appropriate Government Support Schemes that May be Available to the Business
6
Conclusion.................................................................................................................................7
Recommendations....................................................................................................................7
List of References.....................................................................................................................8
Appendixes................................................................................................................................8
Appendix 1 : Financial Details of the Business........................................................8

Introduction
Entrepreneurship refers to the overall concept of developing and managing business
ventures such that high gains can be collected. Entrepreneur is the individual which is
responsible for establishing an organization for the purpose of earning financial benefits. Small
and Medium sized Enterprise (SMEs) in an type of business whose number of employees and
customer count often fall in an specific range and often operates within an specific region (see
the figure 1 below). SMEs plays a pivotal role in the economy of most of the countries,
especially in the UK.
Figure 1: The Small and Medium Enterprise Criteria
The chosen SME for the evaluation in this report is Pure Planet. The SME was being
established in 2016, which tend to provide affordable sustainable energy, it is London based
organisation. The company provide services like Digital, renewable energy supplier for creating
a smart, sustainable and shared future to customers. The challenges faced by Pure Planet are low
availability of appropriate equipments for development.
Evaluation on the nature of entrepreneur behind the development of venture is being done in
this report. Also, analysis on organizational services and its competitive environment is also
being done within the report. Accordingly, this report aims to find suitable approaches by which
company can improve its performance on the ground level and the set objectives are:

To effectively meet the established aims and objectives, the data was collected using a mixed
method, where secondary data was used to collect data in terms of the relevant concepts,
theories, statistics and financial figures and that by using a mix of books, journals and webpages
both printed and online, along with certain interviews with the management of the Pure Planet.
Conducting this report during the current Covid-19 pandemic was challenging, forming some
limitation to reach to more people and do profound primary research, along with the time
limitation and access to some financial details due to its privacy and GDPR (Matthewman, 2018)
Findings
1. The Nature of the Entrepreneur Behind the Venture
Entrepreneur is an individual or a group of individuals which is responsible for establishing an
organization, in which a set of activities are being done to achieve financial growth. Pure planet
is being established by a group of friends in which each member of the group is having an
expertise in its respective fields. Therefore, because of which they are being able to collaborate
their expertise within the working process of the company (Raybould and et.al, 2020). Thus,
since each member is having an expertise in its respective fields, therefore because of which Pure
planet is able to implement innovative approaches within the working process. Through which it
tend to ensure that level of customer satisfaction can be improved and also at the same time
customer’s loyalty towards the institute can be increased, through which the chances of goal
achievement can be increased. Pure Planet entrepreneur tends to have creative personality and
this can be seen in company’s high engagement for integrating technological advancements
within working process. Through this high creativities entrepreneur also motivates its employees
as well by providing flexible working environment, through this high work creativity is being
accomplished.

Figure 2:
2. The SME Start-up Processes
Develop business plan- This is the initial step in which a proper business plan is being
developed on which bases business operations are being performed (Sylwia, 2020).
Business logo and name- Once the type of service is being identified then arises this stage in
which individual brand personality is being developed through name and logo (Marx, Forin and
Finkbeiner, 2020).
Development of company structure- It is the next stage in which various departments are being
developed and specific tasks are being provided to each employee on the bases of their expertise.
HMRC registration- This is the organizational step in which company tend to register itself to
legal authorities for tax payments.
Billing system- It is the approach in which all the financial transactions are being documented
by which proper steps can be taken to improve company’s financial growth.
Financial loans and fund raising methods- It is an important stage in which steps are being
taken to achieve initial investment for the company.
Small business legal issues- This is the last stage in which proper governmental legal
legislations are being done by which operations can be implemented on the ground level.
This can can be seen in the case of Pure Planet in which company’s entrepreneur has to take
appropriate steps by which all the business start-up processes are being followed. This is

important for Pure Planet because customers tend to identify organizational offering through its
logo, therefore if the logo is being used for false purposes then it will affect customer’s loyalty.
3. The Business concept and any sources of competitive advantage
Pure planet tend to provide renewable energy based services to its customers at an affordable
pricing by which the company tend to ensure that it is able to provide services, such that it
influences customers to increase their utilization of renewable energy solutions (Alexander,
Kumar and Walker, 2018). Since company is able to provide customer desired level of services
and also reducing the negative impact upon the environment. Thus through this approach it is
able to ensure customers that they are able to achieve new type of services by which sales can be
increased, which will resource organization with an efficient competitive edge. Also company
provide smart monitoring systems as well by which it is able to insure that it is able to provide
additional services to customers. Pure Planet provides its services to general households and
commercial businesses as well. Now since company provide renewable energy based services
due to which it is able to develop a positive brand personality in front of customers by taking
steps for environmental welfare. Due to this the company is being able to achieve specific
governmental benefits as well which are being provided to motivate companies in use of
renewable sources.
4 The Current level of demand and the competitive environment
The competitive environment of Pure planet can be identified through the implementation of
Porter’s five forces. Following is the Porter’s five force analysis of Pure planet (McQueen and
Turner, 2020).

Figure…….
 Threat of new entrance- Pure planet provide renewable energy-based products to
limited customer base and thus if a new entrance tends to enter within the market then
organizational customer base will further be reduced. Therefore, company has to utilize
its market presence to develop a proper communication bridge with suppliers as well as
with customers (Gaeta and et.al, 2021). Through which it can minimize the threat of
having a new entrance within the market while maintaining strong engagement with
customers. By which company’s sustainability within the marketplace can be maintained.
 Threat of substitute- UK’s market is fill with some of the biggest competitors which are
having a large customer base and efficient economic background. Therefore because of
which Pure planet has to develop a proper communication bridge with the customers by
which they can be assured that they are able to achieve best in class services at an
affordable pricing. Also in order to minimize the threat of substitute SME also has to
provide additional services as well to the customers. Therefore, this is being provided in
the form of smart tracking system and various other value of money products and
services.
 Supplier power- Pure planet, provide renewable energy services to customers and
because of which the threat of supplier power is low for the organization. This is also an
effective approach because if the chosen market field by which institute is having less
number of market competitors. Therefore in that case high prices have to be paid by

which organization because of which customer to customer will also be increased and
thus would result in reduced profit margin or high chances of customer brand switching
(Vlados, 2019). However since UK’s market is having a large number of energy suppliers
because of which Pure planet is having an ability to switch between suppliers. By which
it can guarantee that it is able to fulfil its requirement at an minimum expenditure.
Buyer power- It is the customer based power in which customers have an ability to switch
between companies to achieve the desired level of service. Therefore because of which
companies have to ensure that a proper type of service is being provided such that customers
requirements are efficiently being meet. Also the organization has to guarantee that additional
services are also being provided to the customers (Stewart and Hurth, 2021). By which
customers can accomplish add on values of money services, through which their loyalty towards
the institute is also being increased. Also at the same time institute has to guarantee that creative
customer attracting schemes are also being implemented by which new customers can be
attracted towards the institute.
Industry competition- Pure planet is working in an market area which is fill with some of the
biggest market competitors, which also provide energy based services to their customers. Due to
which Pure planet often faces limitations in terms of attracting its segmented customer base.
Therefore because of which institute has to implement several innovative approaches within its
working area, by which it is being able to attract new customers towards itself (Schonebeck and
Pöllinger, 2020). This is an effective approach that Pure planet utilize its renewable energy
providing concept to attract new customers towards the organization. Therefore, with this
approach SME can ensure that it is being able to attract the customers from other market
competition as well. By which sales and sustainability within the marketplace can be increased
and chances of goal achievement can be increased.
Pure Planet tends to operate in a renewable energy based industry and due to which some of
the biggest market competitors of company are Tokamark Energy, First Light Fusion and many
more.
5 The Growth and Development of the business to date
Pure planet was being established in the year 2016 from where the organization was being able
to achieve an efficient customer count. This happens because the company provide renewable
energy services to its customers and because of which customers were also being motivated to

establish direct contact with the company. By which they were being able to promote the
utilization of renewable energy sources than compared to other type of sources for generating
energy (Jones and et.al, 2018). Since company is promoting the use of renewable energy sources
which is an advantage for environment. Therefore because of which it is also being able to
achieve special benefits from the government as well because through this approach the
government can provide a carbon free environment.
6 The Challenges of Managing and Running the SME
There are many challenges which is faced by Pure Planet, some of them are as follows:
 Lack of Effective Marketing Strategy: Pure Planet does do proper marketing and they
lack in that and because marketing is not done properly then customers are not get
awareness about the product of the company. Company should do offline and online
marketing (HRISTOVA and STEVCESKA-SRBINOVSKA, 2019). For online marketing
they can use social media marketing. As social media is on boom nowadays and its users
are also increasing everyday so using social media platforms for marketing can benefit
the company.
 Retaining customers: it is also vital to retain your existing customers. Mainly SME
focus on bringing new customers but retaining customers are also important. When
customers will retain then only business can achieve its objectives.
 Money and time management: SME should know that how money and time should
managed. They should assign time and money to each business activity. If they will not
manage money then they can went out of budget and if time is not managed then timely
they will not accomplish goals.
greiner theory: this framework explains steps which company went when they start growing.
Every growth step is made with period of stable growth and foolwed by change which company
needs to grow.
7 The Assessment of the SMEs Current Growth and Development Strategy
Pure planet tends to provide quality services like renewable energy to its customers and its main
goal is to develop Britain as carbon free nation. Therefore, because of which it utilizes several
approaches, through which overall work productivity can be increased and services can be
provide to a majority of customer base. Subsequently, this includes development like integration

of different type of energy generation solutions. This includes activities like use of solar, wind
and hydro plants for the purpose of power generation (Seidel-Sterzik, McLaren and Garnevska,
2018). It is an important step for the organization because with this approach it ensures that it is
being able to minimize the negative impact upon environment while achieving high sales.
Ansoff Matrix
Market penetration: pure plant can go for massive advertisement so that they can penetrate their
products in the same market.
Product development: to increase the market share company can launch new product in same
market.
Market development: for expansion company can launch existing product in new market.
Diversification: company can choose new market and come up with new product in order to
attain success.
8 Appropriate Government Support Schemes that May be Available to the Business

Government plays important role when it comes to SME funding. They give financial and
emotional support to the business. Government very well know that SME helps in economic
development of the country and if they will support them then that will benefit economy of the
country only. With the aim to support SME so that they can turn to large organisation one day.
Government give loans to those companies on low interest rate. As the size of company is small
so they did not have enough money to expand the business. That is why government gave them
short term loans at low rate of interest (Kotaskova and et.al., 2020). Growth vouchers is also
provided by local authority in which programs are held for small companies and under that
programs guidance are provided to them as to how business should carry so that more sales can
be generated. As due to covid 19 many small businesses has shut down so government should
have provided loan on low interest rate so that small and medium enterprise can survive.
Conclusion
From the above evaluation it can be concluded that SME has to ensure that it is being able to
analyse the changing market conditions. Then on that base has to implement appropriate changes
within the working process by which high sales can be accomplished. With that it can also be
identified that proper working strategy has to be developed, in which all the organizational
working criteria’s has to be integrated. Through which appropriate improvisations can be made
within the working process of SME. Also with that approach it can ensure that it is able to
identify and improve the weak areas which it is having within its working process, through
which desired work productivity can be accomplished.
Recommendations
In light of the conducted research about Pure plant, and the analysis of its current status in
light of its aims and objectives, where sustainability and growth are of vital importance, the
followings are the recommendations of this report:
Review the points below and add the estimated costing of each step (£……)

Digital Marketing Strategy: Pure Planet should manage their marketing activities properly.
Company should not waste time and efforts on those activities which are not helping company
to increase sales. Company should start promoting business online via digital marketing and
social media marketing. Through social media in less time and money company can give
advertisement and it also covers large audience group. It will also helpful in lead generation and
that leads can be converted by company in order to make profit. Focusing on website is also
essential as website is the online presence and identity of the business. Company should timely
add advanced features to their website which are simple to use but helpful in enhancing customer
experience. Contact details play significant role they should make sure that they had mentioned
all contact details properly so that potential customers can contact them. Customer service is also
important. Customer will retain only if they had received good customer service. SME should
focus on after sales services as it will retain customers and also bring new customers.

REFERENCES
Books and journals
Alexander, A., Kumar, M. and Walker, H., 2018. A decision theory perspective on complexity in
performance measurement and management. International Journal of Operations &
Production Management.
Gaeta, G.L. and et.al, 2021. Innovation in the solid waste management industry: Integrating
neoclassical and complexity theory perspectives. Waste Management. 120. pp.50-58.
HRISTOVA, S. and STEVCESKA-SRBINOVSKA, D.U.S.I.C.A., 2019. MANAGING
TECHNOLOGY IN MACEDONIAN SMEs CONTEXT: PERCEPTIONS, PRACTICES
AND CHALLENGES. Studia Universitatis Babes-Bolyai, Negotia. 64(3).
Jones, B.T. and et.al, 2018. Fundamentals of SME Management.
Kotaskova, A. and et.al., 2020. Significant aspects of managing personnel risk in the SME
sector. Management & Marketing-Challenges for the knowledge society.
Marx, H., Forin, S. and Finkbeiner, M., 2020. Organizational Life Cycle Assessment of a Service
Providing SME for Renewable Energy Projects (PV and Wind) in the United
Kingdom. Sustainability. 12(11). p.4475.
Raybould, B. and et.al, 2020. An investigation into UK government policy and legislation to
renewable energy and greenhouse gas reduction commitments. Clean Technologies and
Environmental Policy. 22(2). pp.371-387.
Schonebeck, L. and Pöllinger, T., 2020. Stakeholder Management as a Tool for the
Implementation of Sustainable Supply Chains in SMEs in the German Food Industry.
Seidel-Sterzik, H., McLaren, S. and Garnevska, E., 2018. Effective life cycle management in
SMEs: Use of a sector-based approach to overcome barriers. Sustainability. 10(2). p.359.
Vlados, C., 2019. Change management and innovation in the “living organization”: The Stra.
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Matthewman, S., 2018. From place to planet: The role of the language arts in reading
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McQueen, D. and Turner, A., 2020. Emerging Green Values in the UK Energy Sector: Ecotricity
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Palgrave Macmillan, Cham.
Stewart, I.S. and Hurth, V., 2021. Selling Planet Earth: re-purposing geoscience
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Online
Sylwia, How to start a small business in the UK, 2020 [Online]. Available through:<
https://www.accountsandlegal.co.uk/small-business-advice/how-to-start-a-small-
business-in-the-uk>
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Appendix 1- Reflective Journal
With this analysis in the report I learned about the creative ways which has to be
implemented by the entrepreneur, through which it can achieve a high profit in context to the
investments which it has made. Also by conducting the research to the analysis my knowledge
base is also improved.
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