Role of SMEs in the UK Economy

This report discusses the role of small and medium-sized enterprises (SMEs) in the UK economy. It highlights their contribution to economic development, employment opportunities, and competitiveness. The report also explores the growth strategies and government support measures for SMEs. Case study of Egg Free Cake Box is used to illustrate the concepts.

Medium and small enterprises
MSME

EXECUTIVE SUMMARY
SMEs is one of the most important part for the nation as it contributes in individual’s
development and enhancement to remain always competitive in business environment. It is the
government accountability to enhance the participation of SMEs for development of economy in
potential manner. as it has been analyzed that SMEs contributes 99% in the enhancement in the
UK economy.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
About the SME................................................................................................................................6
FINDINGS.......................................................................................................................................7
CONCLUSION..............................................................................................................................14
RECOMMENDATION.................................................................................................................14
REFERENCES..............................................................................................................................15
Appendix:......................................................................................................................................17

Introduction
The chosen organization for respective project is rely on the egg free cake box which is a
small sized enterprise established in the UK. It is the manufacturer of cake and bakery products.
Respective organization produces the cake and other kind of bakery products for the all age
group people (Siswanto, Arifin and Cavin, 2019). There are a large number of SMEs in the UK
business, name of some businesses are southern Business technologies, Williams performance
tenders, RL Maynard and Agmet. SMEs are generally considered as the backbone of business for
any healthy economy, they bring or drive the growth, provide employment opportunities and
many more to remain competitive in marketplace. SMEs in the contributed to 51% of all the
turnover generated by the private sector in the year 2018. It creates lot of employment
opportunities as it provides 6.3 million people employment that not directly contributes in
economy but also raise their living standard (Soegoto, Soegoto and Pasha, 2020). It has been
analyzed that UK government is very encouraging towards development of SMEs. The UK
government federal reserve by altering the federal funds target rate that directly influence interest
rates to stimulate lending of their business. they provide the tax incentives that is lower in nature
to encourage businesses to enlarge opportunities. SMEs adds the 473 billion euro or 49.8% in the
UK economy. In between the 2001 and 2019 the business increases in the rapid pace that is very
potential for organization to remain competitive.

Figure 1UK SME Data, Stats & charts, 2020

About the SME
SME is the Small, medium sized enterprise as per the definition of EU, SME is the
business with less than the 250 employees and turnover of 50 million euro. SMEs build around
the 99% of the all business as per operations in the UK(Rosalina, 2019). Respective report is
based on the egg free cake box that deals in the cake and other confectionary products.
Respective organization conducts its operations in the UK and deal in consumer food and drinks.
It established in the year 2008and deals in food and beverage in order to remain competitive in
marketplace. It has 18 to 50 employees and a public organization that shows its size and scope in
wider marketplace. the total revenue earned by the organization in the year 2017-18 was 12.8
million pounds. in the research process involves the chain of activities consisted the
identification, find out location, assessment and analyzing the information that assist in the
research question to develop and express the ideas in front of people to achieve the desirable
outcomes(Singh and Roy, 2019). the research skills are required to write the report, proposal and
put together the presentation for accumulating necessary knowledge and information in potential
manner. in respective project the interview should be conducted from the Entrepreneur of the
respective organization to accumulate potential information by using the questionnaire. The main
aim of respective report is “ To accumulate potential knowledge about SMEs and their
contribution in the UK economy”. A through study on egg free cake box.
Objectives:
 To evaluate about SMEs and way to develop it.
 To access the role of entrepreneur in development of economy and way to become
successful entrepreneur.
 To examine the factors that need to evaluate by entrepreneur to gain sustainability.
It has been analyzed that there are a number of challenges while conducting the report is
lack of information, scarcity of resources and coordination of content and many
more(Thyagarajan, Nambirajan and Chandirasekaran, 2019).

FINDINGS
The nature of the entrepreneur:
The nature of the entrepreneur is that they are very much innovative and always possess
the dare to take risk to remain competitive in the marketplace. The two entrepreneurs of
respective organization are Sukh Chamdal and Pradip Dass that reflects the Indian ethos of
determination and hard work.
The age, gender, and level of education:
The two entrepreneurs of respective organization are Such Chamdal who is 56 and Pradip
Dass 46 determined is to have the approximately 250 cake box stores across the whole globe.
Reason for starting the business:
The major reason for starting the business when the founder of respective organization
Chamdal the former chef, gained the idea of business while his daughter asked for the cake that
did not have eggs in it.
What type of business is the entrepreneur involved in.
It is very much potential for the entrepreneur to collect the necessary knowledge and
information before starting the business(Rosalina, 2019). in that regards it is potential to
accumulate scope, market, competitors, and many more information that helps in taking the
effective kind of decisions. In context of UK entrepreneurs after collecting information they
involved in specified businesses such as services, restaurant and bakery, retail and online stores,
medical and health care and many more.
Is this first business he has been involved in or not?
It has been evaluated that it is first business of both the entrepreneur as they previously
involved oneself in the service sector. But after getting the business idea both involved oneself in
the development of it and take at huge level.
The startup process:
Discuss relevant models for the start up process.

For the smooth functioning of start up it is very much potential for an organization to use
relevant models and tools that are as follows:
Customized everything: In respective process it is suggested to organization to align consumers
with the more personalized products as it directly contributes in enhancing their level of
experience in potential manner.
On demand model: Respective model of startup focus on the understanding the need and wants
of consumers on the instant basis as they required the frequency, suitability and convenience. So
produce products as per their instant demand to remain competitive in marketplace.
How the business began.
The business began with the demand from the side of one entrepreneur daughter for a
cake that did not have egg at all. Respective demand brings new idea into mind and potentially
turn into business(Rosalina and Triayudi, 2019).
How was funding raised.
With the help of franchise would get the 9% of its share at the discount rate once it come
existence in the business world.
How many employees at a start up?
At the initial level, the number of employees is very less as primarily both the
entrepreneurs and two helpers started the work.
Size of the business at a start up
Respective business starts with the one store in 2008 and after 10 years later they
announced about opening of 90th branch in the UK market. With the aimed to open 250 more
new branches in the UK market(Rathnayake, Fernando and Fernando, 2019).
Challenges at start up:

The major challenges that faced at the initial stage by the entrepreneurs is accumulation
of idea to make it practical. As it is very much difficult to build exceptionally large organization
initially.
The business concept and any source of competitive advantage
Competitive advantage: it is one of most important attribute that provides the value to
organization to outperform from its competitors. It helps in capture the large consumer base to
gain higher level of profitability and sustainability.
What is main idea behind business.
The main idea behind the business to provide the egg less cake to the whole market by
using determination of Indian ethos and hard work(Nandeeswaraiah and Ramana, 2020). So, by
accessing demand of market they aimed to reach at large no. of consumers in potential manner.
What makes business stand out.
The most unique proposition in respective products is their vegetarian theme that all
products are refrain from the egg and should be very much delicious.
How it is better than its competitors.
It has been analyzed that there are large no. of competitors existed in the market as most
population liked the non-vegetarian and products with egg instead of that they bring egg less
cake (These 2 Indian-origin cousins will soon make millions from Cake Shop in London,
2020). It attracts the attention of people to make purchase.
The current level of demand and competitive environment.
The current level of demand in the market is very much high as they aimed to expand
their stores and in year 2017 to 2018 they have 90 stores that helps to beat their competitors in
positive manner (Lilananda and Epafruditus, 2019). as it has been evaluated that in every market
large no. of competitors existed in the market but need to bring values in business. in case of Egg
free cake box the vegetarian attribute is their unique proposition.
SMEs that interviewing:

Colourgen
SDK jewellears
Sovrin Plastics
Aitchison Raffety
Pharmallnk consulting
Porter’s five force model:
It is very much potential for the organization to analyze the competitors and their
bargaining power that should be illustrated with the help of Porter’s five force model that are as
follows:
Competition in the industry Competitiveness of the industry is both work
as positive and negative factor for the
organization. it has been analyzed that in food
and beverage industry the competitiveness is
high as various giants existed in industry
besides the small vendors supplying their
products. the competitors are coffee Republic,
stephens, Patisserie holdings and many more.
Potential of new entrants in industry Respective factor plays very much important
role as it directly affects organisational
profitability and sustainability(Kurniawati and
Setiawan, 2019). It has been analyzing that in
UK market there are less restrictions over enter
into market that effect on business of
respective organization.
Power of suppliers Suppliers plays very much important role, in
context of Egg free cake box organization have
large no. of suppliers so the bargaining power
of suppliers is less.
Power of consumers Consumers plays very much important role in

organisational development, in context of Egg
free cake box consumers they have wide
number of options, so the bargaining power of
consumers is high(Kumar, 2019).
Threat of substitute products Substitute products and services always work
as a threat for organization. it has been
analyzing that for respective organization there
are no. of substitute available in market so
bargaining power of substitute products is
high.
Current sales and competitors:
The pretax profits were the 14% to 3.8 million euro while added revenue shot up 33% of
16.9 million euro. The competitors of respective organization are coffee Republic, stephens,
Patisserie holdings and many more.
The growth and development of business
Market share/ cap: The Market share of respective organization is 5.90 million euro.
History of growth: The history of their growth includes that at initial level they started with the
one store and in 2018 they have 90 stores. They aimed to open the 250 new stores.
Challenges of managing the business
Analysis of PEST factors:

Political factors:
In political factors consist of the taxation,
political regimes and many more factors that
directly influence on organizational operations.
In context of respective organization due to
Brexit, that directly effect on their level of
profitability and selection of talented work
force.
Economic factors:
In economic factors consist of the interest
rates, FDI and policies related with the
market(Khurana, Haleem and Mannan, 2019).
In context of respective organization due to
high interest rates organization not able to
expand their market that is primary aim of
organization.
Social factors: In social factors consist of the
change in taste and preferences of consumers, I
context of egg free cake box by analyzing the
consumer preferences organization bring the
egg free cakes.
Technological factors:
In technological factor consist of using various
kinds of tools and techniques that are highly
advance in nature(Hernández, Yañez-Araque
and Moreno-García, 2020). In context of
respective organization by using baking
machines that are very much technologically
advance helps them to serve consumers in one
of best manner.
The SMEs current growth and development strategy
The growth strategies consist of the market development, diversification, market
penetration and product development. Respective strategies are very much important for the
organization as it contributes in development of product as well as market in order to remain
competitive in marketplace. with the help of growth strategies organization can remain
competitive that is very much essential in dynamic business environment.
SME’s internal strategy on growth and development.
In the internal strategy of SMEs for growth and development consist of choosing the
flexible working environment and high context culture in which every individual can share the
roles and responsibilities to one another to gain the desirable outcomes. with they also focus on

the technological up gradation by using the information technology and artificial intelligence to
serve consumers in one of best manner.
Government support measures to overcome from the challenges faced.
It has been analyzed that government plays very much important role for enhancement
the role of SMEs in the UK marketplace (Hanggraeni and et.al., 2019). They provide tax regimes
and rebate on loans that are taken by SMEs to enhance their business activities in potential
manner. with the help of flexible policies organization can be able to enhance the market share
potentially.
Q1: Are you happy and what are the potential changes want to embrace?
Answer:
Happiness is very much important as it contributes in gaining the potential outcomes and gaining
from the employees. As it has been observed that changes are very much potential for
organization as it provides competitiveness to market and want to change the working practices
of organization.
Q2: What was the driving force to become the successful entrepreneur?
Answer: To become the successful entrepreneur is to collect the best idea and work on its
feasibility by taking risk to make it feasible.
Q3: How you build the successful consumer base?
Answer: To build the strong consumer base it is required initially to acknowledge the consumers
and their preferences and reach them to serve them in one of best manner. so, by providing
quality products I build the successful consumer base.
Q4: How you market business and tactics have been most successful?
Answer: It is very much important to reach at large number of consumers and it is possible by
using various kinds of marketing tools such as advertisement and sales promotions to remain
competitive.
Q4: What kind of culture exist in your organization and way to establish it?
Answer: In organization high context culture plays very much important as it contributes in
smooth communication and helps to build close relationship with employees to gain potential
outcomes. to maintain respective culture, we provides accountability and freedom to employees.
Q5: How do you generate new ideas?

Answer: To generate new ideas I believe in reading and creativity that should be gained by self-
reliance and positivity in mind.
Q6: Do you believe some sort of formula or pattern to become the successful entrepreneur?
Answer: I do not believe that there any sort of pattern to become the successful entrepreneur
more than that the right kind of attitude and persuasion of things and attributes.
Q7: What would you want to say about two skills that needed to become the successful
entrepreneur?
Answer: The main skills are risk taking and determination to do something with passionately.
Q8: What kind of risk you face at initial stage of business?
Answer: firstly, I face the problem that lot of idea was in my mind but not able to put in series to
implement in successful way.
Q9: How you coordinate with your employees?
Answer: To coordinate employees I take reviews from employees and communicate with people
on continuous basis.
Q10: What is one of best factor that inspire you to become an entrepreneur?
Answer: The factor most inspire me is freedom, independence, and self-reliance.
CONCLUSION
From the above report it has been concluded that in today’s lack of unemployment
scenario SMEs plays very much important as it contributes in economic development and
enhancement in living standard of people. It has been analyzed that the aim of the report is to
enhance the understanding regarding the SMEs and entrepreneur and way both are contributing
in economic development. By collecting understanding in regards of market and needs proved
very much potential in taking appropriate kind of decisions to remain always competitive in
marketplace. It has been analyzing that support of government is very much important for
organization as well as for individual growth to achieve the desirable goals and objectives.
Instead of that organization faces lot of problems or hurdles in the development of their business
such as poor management and not properly motivated workforce and many more. In context of

Egg free cake box, they also suffer from the respective issues as it appears but by using the
strategic direction organization can be able to perform in very well manner.
RECOMMENDATION
It is very much potential for an organization to always look for the improvements as it
positively enhances in their value and sales. To improve the products and services it is very
much significant to collect necessary knowledge and information from the market by using
various sources.
 In context of Egg free cake box, they need to improve their distribution network that not
only helps to reduce the cost but also improve the level of experience of consumers in
potential manner.
 They also need to focus on the standards of CSR and various kinds of ongoing facilities
in which no one shop in the nation remain away from the depots as respective attribute
directly enhance the consumer experience by reducing the waiting time for consumers.
 They also need to work on the variety of their products and services as it is very much
potential to enlarge products also as it enhances the market to remain competitive in
marketplace in potential manner. with the motivation of employees also plays very much
important role, as it directly enhances the productivity and sustainability in the
marketplace.
In that regards it is very much potential for an organization to always focus on the growth
opportunities to achieve the potential outcomes to remain competitive in marketplace. in that
regards organization must evaluate the strategies and tactics to achieve desirable outcomes.

REFERENCES
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size on the influence of corporate social responsibility in the economic performance of
micro-, small-and medium-sized enterprises. Technological Forecasting and Social
Change, 151, p.119774.
Khurana, S., Haleem, A. and Mannan, B., 2019. Determinants for integration of sustainability
with innovation for Indian manufacturing enterprises: Empirical evidence in
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Kumar, P., 2019. Financial Inclusion and Micro and Small Enterprises Growth. International
Journal of Engineering and Management Research (IJEMR), 9(3), pp.43-46.
Kurniawati, E. and Setiawan, A., 2019, June. The Role of Indonesian Micro, Small, and Medium
Enterprises Owners in Choosing e-Commerce Strategy in the Global Market. In 1st
International Conference on Social Knowledge Sciences and Education (ICSKSE 2018).
Atlantis Press.
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Small, and Medium Enterprises (MSME): A Case Study of MSMEs in Surabaya. iBuss
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Medium Enterprises. Journal of Management (JOM), 6(5), p.2019.
Rachmawati, R.Y. and Sholeh, M., 2019, November. Design and Analysis of Database
Clustering System of Micro, Small and Medium Enterprises (MSME) in Bantul Regency.
In Journal of Physics: Conference Series (Vol. 1413, No. 1, p. 012028). IOP Publishing.
Rathnayake, K.M.N.D., Fernando, P.I.N. and Fernando, A.G.N.K., 2019. Impact of
Microfinance Services on Growth of Micro Small and Medium Scale Enterprises (With
Special Reference to Micro Small Medium Scale Enterprises in Kalutara District).

Rosalina, V. and Triayudi, A., 2019. Electronic Customer Relationship Management (E-CRM)
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BEKASI. ETIKONOMI, 18(1), pp.93-104.
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Online:
UK SME Data, Stats & charts, 2020. [Online]. Available through.
<https://www.merchantsavvy.co.uk/uk-sme-data-stats-charts/>.
These 2 Indian-origin cousins will soon make millions from Cake Shop in London, 2020.
[Online]. Available through. <https://www.businesstoday.in/latest/trends/these-2-indians-
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Appendix:
Q1: Are you happy and what are the potential changes want to embrace?
Q2: What was the driving force to become the successful entrepreneur?
Q3: How you build the successful consumer base?
Q4: How you market business and tactics have been most successful?.
Q5: What kind of culture exist in your organization and way to establish it?
Q6: How do you generate new ideas?
Q7: Do you believe some sort of formula or pattern to become the successful entrepreneur?
Q8: What would you want to say about two skills that needed to become the successful
entrepreneur?
Q9: What kind of risk you face at initial stage of business?
Q10: How you coordinate with your employees?
Q11: What is one of best factor that inspire you to become an entrepreneur?