Challenges in Managing and Running a Small Business

This report discusses the challenges faced by small businesses in managing and running their operations. It covers topics such as labor shortage, irregular working hours, skilled labor shortage, staff turnover, and financial management. The report also highlights the impact of these challenges on productivity and profitability.

MSME

Table of Contents
INTRODUCTION...........................................................................................................................3
FINDINGS.......................................................................................................................................4
Nature of entrepreneur-:...............................................................................................................4
Start-up process............................................................................................................................4
The current level of demand........................................................................................................5
Growth and development of business .........................................................................................7
How much percent age of market share the SME holds..............................................................7
Challenges for managing and running the business.....................................................................9
Government support measures.....................................................................................................9
Conclusion ..................................................................................................................................9
Recommendation.........................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Small business enterprise termed put as those entities that maintain revenue, assets and
provide employment number of individuals (Ambong, Mark and Liberty, 2020). Hence, this is
entity that plays crucial roles that has key contribution in economy, innovation and growth. In
UK, there are number of small business enterprise that is taking initiative to adopts innovative
approaches and develops growth of nation. Small business can be create with help of low
investment and they also supports and bring reduction in poverty. As per the data of 2019, there
were 5.52 million small businesses out of 99.3% of the total business. SMEs accounts for three
fifth of employment and almost half of turnover in the UK private sector. Small business entities
contributing 47% of revenue to the UK economy. This entity plays crucial role in boosting
productivity. Also, legal authorities offers state loans that target small-business, start-ups or
female entrepreneurs. With nearly 10 million SMEs contributing to 23% of the GDP, 80% of
jobs in the commercial enterprise sector and 25% of the total labour force. Else, Finance Policy
play a pivotal role in enhance SME financing. Over the last 20 years, the SME in UK has grown
continually. By offering job opportunities to varied segments of individual. Additionally, small
business enterprise gives strong preference for hiring local people (Amentie, Negash and
Kumera, 2016). Small entities are more flexible and less bound by the policies and procedures.
Being flexible also relates with ability to react quickly to the changing market conditions.
However, small business enterprise supporting in local communities in different ways.
The present report will lay emphasise on small business activities of Qbic, this entity
carried out hospitalisation service and offer accommodation service to its customers. Therefore,
it has been found out that modernity of business majorly put their consideration on arrival,
check in desk in lobby and also offer communal living area to the individuals. This entity has
help to boost employment in the surrounding area (Anumudu, Joseph and Chinasa, 2017).
Additionally, main aim of this entity is to offer the green credentials, quality beds and effective
services that supports to maintain customer satisfaction with invaluable services. Henceforth, the
objectives of establish entity was to enhance profitability, develop productivity with creative and
innovative approach and ensure long term sustainability in UK market.
Therefore, the size of the business is small medium enterprise. It is entity that running out
their business activities from last 5 years and more. The present report based on research process
such as primary technique. With help of this research process, the first hand data can be collected
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with use of taking interview of selected entrepreneur as Paul Rinkens. Hence, report has outline
the aim as “To managing the small and medium enterprise”. Therefore, the findings of the report
will be undertake with help of interview of chosen entrepreneur. In this report, the entity can face
the challenges in manner of existing firm, variation in technical advancement and customer
assistance services etc. Therefore, labour shortage is one of the main challenge that faced by
enterprise. Herein, this can be stated that skilled labour shortage, irregular working hours and
staff turnover are some of challenges that highly affect the organisation productivity and
profitability.
FINDINGS
Nature of entrepreneur-:
By taking the interview, this has been found out that Paul Rinken is at the age of 40, he is
male. He has done his master in management course and MBA in Hotel service management.
Therefore, he also stated that he has 5 years of experience in the field of hospitality entity.
Start-up process
By underrating the interview, this has been analysed that he has started the business with
purpose of turning empty real estate into the stylish accommodation. However, SMEs face
challenges from limited access to finance, lack of databases, low R&D expenditures,
undeveloped sales channels. He stated that one of the challenges he faced was rivalries in the
existing market. This was so typical to establish business with goodwill. To cope up with this
challenge, this is crucial to bring improvement in quality and service. Therefore, by adopting
innovative approaches the entity can able to survive in the market for the longer period. (Bagh,
Arif and Razzaq, 2017)
Hence, the main idea behind this business is to earn long term profitability with help of
providing improved and quality services. In order to be different in the market, this entity has
planned to offer quality service with affordable price rates. To make their business stands out in
the competitive environment, they adopts discount facilities to their customers so that
sustainability and customer retention rate can be enhanced. Thus, unique selling point of the
entity was to be different from other hotels in surrounding. They have done this by brining
changes in customer services. By conducting the interview, this has been found that Paul
Rinkens has involved himself in the hospitality services such as hotel La Bergère, Hip Hotel St.
Martenslane, La Bergère etc.
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By interview the findings stated that after some period of taking establishment Qbic
started getting competitive advancement in market. It has become possible by using innovative
service method that helped them to providing ultimate customer satisfaction. This entity was
better than their competitors as they hired skilled labour force to provide greater customer
experience. This advancement has assist them to increase the profitability and productivity.
The current level of demand
Small medium enterprise make up around 99% of all business currently operating in UK.
Additionally, small hotel entities reported its lowest first-quarter year-over-year revenue per
available room growth, 1.5 percent, since 2010. Through interview, the lot of information about
the competitive environment has gathered and this has helped to established their business in
global marketplace. They always put their major focus over to targeting the new customer by
using innovative idea or technique. In this way, it bring us current scenario of SME which
continue to acquire new facilities, services and applied new strategies . Henceforth, current level
demand of the entity can be analysed with help of competitive environment.
Competitors analysis-:
Factor of competitive analysis Qbic
Threat of new entrants By interview with entrepreneur, this has been
found out that one of biggest risk in
accommodation sector was new entities that
were taking initiative with adoption of
innovative approaches in market. It forces
other entity to adopt new ways of doing things
and put pressure on Entities as Qbic. To cope
up with this, they have considered to bring
changes by lowering pricing strategy, reducing
cost and by providing new value proportion to
customers (Bandara, Kodithuwakku, and
Jayaweera, 2019).
Bargaining power of suppliers With help of interview, this has been found out
that there were number of entities in market
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and accommodation sector buy their raw
material with the number of suppliers.
Henceforth, this has been found out that the
overall impact of higher supplier bargaining
power is that it lowers the overall profitability
of accommodation sector like Qbic.
Bargaining power of buyers By the interview of entrepreneur, this has been
found out that buyers in the accommodation
sector often demanding a lot. Thus, all
customer wants to deal with best minimum
price possible (Eneh, 2017). It has laid great
pressure on working of Qubic enterprise. So,
this has forced the entity to higher the
bargaining power of the customers and higher
their ability to seek increasing discounts and
offers.
Threat of substitute With help of interview findings, this has been
found out that while a new product or service
meets the similar customer need in different
aspect that this can lead to suffer the
profitability rate of entity. In the
accommodation sector, the threat of a
substitute product or service is quite high and
this can be worsen if the entity offers a value
proposition that is uniquely different from
present offerings of the industry.
Rivalries among existing customers By the interview, this has been found out that
rivalries among the existing players in industry
was intense then this drives the down price
and this also led decrease the overall
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profitability of the industry. Therefore, Qbic
entity is operating its business activities in the
very competitive environment. Henceforth, the
competition exist in market led to impact the
overall long term profitability of the
organization. This led the entity to build out
the sustainable differentiation.
Henceforth, after conducting the interview this has been analysed that current level of
demand of entity was table as they have hired skill labour workforce who provides ultimate
customer satisfaction. By adoption of the innovative and bringing improvement in the ways to
offer services to customer they have gained ultimate competitive advancement in market of UK
(Harper, 2019).
Growth and development of business
How much percent age of market share the SME holds.
As per analysis, The Qbic hotel is also expected to grow at rate of 0.8 percentage from
2010-2016. In order to increase the overall business growth and development. Qbic hotel is
mainly participating in the infrastructure design pattern and also developing an efficient policies.
Through conducting an interview, The Government will be supporting the Qbic hotel for
implementing an effective strategies. it is mainly focused on the improvement for increasing
market share in global world. Market share of SME has rapidly increasing where it also
providing the job opportunities. Therefore, it help for talented people to give a chances for
exploring their knowledge in business expansion. it directly positive impact on the Qbic hotel for
enhancing international chain in global world.
As per interview, it can be concluded that 3.6% contribution of SME into economic
development which automatically increases rate of GDP (Harper, 2019). There are large number
of people arrive to visit the Qbic hotel because of their quality of service, product, price.
In past years, Qbic hotel is based on the SME which always participate in growth of
economic condition while improving market share, value across the world. In order to reflect on
the uncertainty in growth as well as development. In recently, it has rapidly changed the demand,
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preference and trends of potential customer towards SME. They always attracts towards service
because Qbic give special treatment for every guest. On regular basis, it can be monitored the
business activities. in 2017, it has found that occupancy growth rate increases and maintain
supply chain.
B. History of small business grows in UK
By findings this has been found out that there ere only 5.9 million private businesses in
the UK in the start of 2019. out of which 99% were small or medium sized business (Meyer and
Meyer, 2017). Also, Small and medium enterprises have significantly contributed to the
economic growth of many countries such as developed, developing or least developed countries.
Illustration 1: Growth of Small medium enterprise
Additionally, this has been stated that the one of significance of the small and mid-size
enterprises (SMEs) is not limited to emerging nations. However, from the year 2002 and 2012,
small and mid-size enterprises (SMEs) created 77% of new jobs to individual in UK. In the 17
years, the total number of small medium enterprise in the UK has enhanced to 64%. In addition
to this, SME companies accounted for 60% of all private sector employment in the UK and
turnover for all SMEs pictured 51% of the total private sector turnover ( Peters, Kallmuenzer and
Buhalis, 2019). Hence, it can be stated that Micro and small-scale enterprises have key roles to
ensure economic growth and this also led to have reduction in poverty in developing countries.
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Challenges for managing and running the business
By underrating the interview, this has been analysed that there are Various challenges and
risks can be face by the business. The challenges such as variation in customer assistance
services and technical advancement etc (Kankaanranta and Louhiala-Salminen., 2016). One of
the major challenge that faced by enterprise is the labour shortage. Many other challenges are
also faced by the enterprise i.e. irregular working hours , skilled labour shortage, and staff
turnover that all are the highly affects the organisation productivity and profitability. As per the
interview, it has been found that any biggest challenges have to be faced by the QBIC. The main
challenge is the uncertainty about the future. Business performance and profitability is totally
depending on the future security and if the future is uncertain then it may create crucial risk and
challenges for the enterprise. To maintain a certainty for the business a small and medium
enterprises have to take every various complex and sensitive actions that may incur extra
expenses for the business (Schermerhorn and Bachrach., 2017).
Financial management is one of the major challenges for the QBIC because small and
medium enterprises have less financial capability. For the better financial management small and
medium business should have to appoint a better financial consultant and that also create a
financial burden. As per the interview environment of the UK creates various challenges for the
small and medium enterprise. Technology is also a main challenge for the small and medium
enterprise because technology changes continuously according to the trends and customer’s
desire so that it is important for the enterprise to be innovative and expertise to adopt new and
unique technologies (Crane and et.al., 2019). Labour shortage in the UK is also creating many
troubles for the small and medium enterprise to run and manage their business constantly. In the
UK environment every person wants to become a entrepreneur so that it will generate limited
labour force. The limitation of skilled labour shortage is also creating troubled for the business. It
is very essential for the medium and small enterprise to acquire or hire skilled labours, because
they help the company to enhance their productivity and profitability at the next level. Irregular
working hours in the business is also a crucial challenge for managing and running the business
in United Kingdom. According to the interview this has been found out those UK business
guidelines does not follow strict working hours rules for their labours or workforce. Irregular
working hours can decrease the company’s work efficiency, productivity , employee’s work
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performance, profitability, increased additional cost, less business expansion etc,. Government
regulation in the UK is also a major challenge for managing and running the business in the
United Kingdom (Crowley‐Henry, O'Connor and Al Aris., 2018). In the UK environment
government regulations and policies are very strict, so that business will have to follow long
procedures to run their business. Increasing profit is the another challenge for the small company
because companies with less than 50 workers struggled more than big organization to enhance
profits and maintain a sustainable cash flow. For the small and medium enterprises maintain and
regularly increased the profit is very essential to run their business constantly (Wright and
Nyberg., 2017).
Government support measures
As per the interview, this has been analyzed that there are different government supports for the
company such as supportive loans to small and medium enterprise, provide collateral, offers
relaxations in the tax policies.
Government also encourage and inspired the local banks to operate with small business and
start-ups by providing investments and loans (Ruston and et.al., 2016). They also take
necessary actions to improve productivity and hire additional personal. As per the
interview QBIC enterprise accepts the various government supports. Company accepts
essential loans, disbursements and grants from the government.
Conclusion
From the above report, it is concluded that the Hence, this is entity that plays crucial roles
that has key contribution in economy, innovation and growth. Small business can be creating
with help of low investment and they also supports and bring reduction in poverty. Small
business enterprise gives strong preference for hiring local people. As per the interview, it is also
concluded that Qubi becomes successful to achieve its goals and objectives. The whole aim of
the research has been achieved. The Government support the Qbic hotel for implementing an
best strategies. It is mostly focused on the development for rising market share in global world.
SME’s Market share has rapidly growing where it also provide the job opportunities. It assists
the talented people to offer a chances for exploring their knowledge in business growth. It is also
concluded that Many issues and challenges face by the business with government support. The
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government regulations and policies also creates barriers between the small business and
government support. The government support fully available for the business and SME takes full
advantage of these.
Recommendation
By understanding the interview, it has analyzed the Qbic Hotel should have to focus on
providing help to boost employment in the surrounding area. It is essential for hotel to decide
their aim is to present the green credentials, quality beds and helpful services that supports to
retain customer satisfaction with precious services. They should have to take necessary actions
to improve profitability, expand productivity with imaginative and modern approach and make
sure long term sustainability in UK market. According to the interview, it is also recommended
that company should have to take essential steps to managing their small and medium enterprise.
The enterprice should have to prepare for facing huge challenges and be ready for any
circumstances. Small and medium enterprice should have to focus on accepting governemtn
support in any situation.
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REFERENCES
Books and Journals
Ambong, A., Mark, R., Mendaña, D.P.A. and Liberty, R., 2020. Constraining and Enhancing
Factors of Business Enterprise in Occidental Mindoro, Philippines. International Journal of
Management. 10(2). p.2019.
Amentie, C., Negash, E. and Kumera, L., 2016. Barriers to growth of medium and small
enterprises in developing country: Case study Ethiopia. Journal of Entrepreneurship and
Organization Management. 5. p.190.
Anumudu, C.N., Joseph, O.A. and Chinasa, E.I., 2017. ENTREPRENEURSHIP
DEVELOPMENT AND SMALL AND MEDIUM ENTERPRISE (SMEs) GROWTH
AND DEVELOPMENT IN NIGERIA. PROCEEDING BOOK. p.490.
Bagh, T., Arif, M. and Razzaq, S., 2017. Impact of Financial Constraints on Growth and
Development of Small and Medium Enterprises in Sialkot Pakistan. International Journal
of Financial Market. 2 (4). 131, 145.
Bandara, T.U., Kodithuwakku, S.S. and Jayaweera, V.W., 2019, October. Entrepreneurial
Marketing of Small & Medium Scale Enterprises in a Selected Divisional Secretariat
Division of Sri Lanka. In Proceedings of The International Conference on Economics and
Development (Vol. 3, No. 1, pp. 25-46).
Eneh, O.C., 2017. Growth and development of sustainable micro, small and medium enterprises
sector as a veritable factor for poverty reduction in developing countries. Preface and
Acknowledgements. 6(1). p.149.
Harper, S.C., 2019. The McGraw-Hill guide to managing growth in your emerging business:
guidelines for transforming your small business into an exceptional enterprise. McGraw-
Hill.
Meyer, D.F. and Meyer, N., 2017. Management of small and medium enterprise (SME)
development: An analysis of stumbling blocks in a developing region. Polish Journal of
Management Studies. 16.
Peters, M., Kallmuenzer, A. and Buhalis, D., 2019. Hospitality entrepreneurs managing quality
of life and business growth. Current Issues in Tourism. 22(16). pp.2014-2033.
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Kankaanranta and Louhiala-Salminen., 2016. Silo Thinking is Out, Fortress Invaded: Running a
Communication Programme at a Business School', The Management Game of
Communication (Advances in Public Relations and Communication Management, Volume
1).
Schermerhorn and Bachrach., 2017. Exploring management. John Wiley & Sons.
Crane and et.al., 2019. Business ethics: Managing corporate citizenship and sustainability in the
age of globalization. Oxford University Press, USA.
Crowley‐Henry, O'Connor and Al Aris., 2018. Portrayal of skilled migrants' careers in
business and management studies: A review of the literature and future research
agenda. European Management Review. 15(3). pp.375-394.
Wright and Nyberg., 2017. An inconvenient truth: How organizations translate climate change
into business as usual. Academy of Management Journal, 60(5), pp.1633-1661.
Ruston and et.al., 2016. Challenges facing the farm animal veterinary profession in England: a
qualitative study of veterinarians’ perceptions and responses. Preventive veterinary
medicine. 127. pp.84-93.
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