Small Business Enterprise

This report analyzes the importance of small businesses in the UK economy, focusing on Root’s Reggae Reggae Sauce Limited. It includes business profiles, market comparisons, proposed changes, and performance improvements.

Small Business Enterprisedd/mm/yyyy
Small Business Enterprise
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
a) Business Profile of Root’s Reggae Reggae Sauce Limited.........................................................4
b) Comparing Root’s Reggae Reggae Sauce Limited with Industry Averages...............................6
Task 2...............................................................................................................................................8
a) Recommend with justification, appropriate actions to overcome the weaknesses......................8
b) Analyse ways in which the existing performance could be maintained and strengthened.........9
c) Suggest new areas in which the business could expand with reasonable justification..............10
Task 4.............................................................................................................................................11
a) The impact the proposed changes will have on the business and its personnel........................11
b) The plan for how the changes will be managed in the business................................................12
c) The improvements in the performance of the business over the past two years (preferably
using trend graph or other suitable reporting format)....................................................................12
Conclusion.....................................................................................................................................16
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Introduction
Small businesses usually form the backbone of an industry and this is the same in the United
Kingdom. As of 2013, there was an estimated 4.9 million private sector business in the UK, who
employed almost 25 million people and provided an annual turnover of almost 3000 Billion
GBP. More than 90 per cent of these were small businesses that hired between 0 to 49 employees
(gov.uk, 2018). A company is considered a small business when it is registered and has a
turnover that does not exceed £6.5 million. The company also must not employ more than 50
people.
This assignment analyses the importance of small businesses to the economy of the United
Kingdom. The case studies have been analysed from the successful BBC show, Dragon’s Den
where prospective entrepreneurs pitch their business ideas in a bid to get funding. The company
that was finally selected was Root’s Reggae Reggae Sauce Limited. This company appealed to
the learner as they found that Peter Jones, a Dragon’s Den investor had termed this as one of his
most successful investments on the show. Levi’s Roots pitched the idea when he appeared on the
show and received an initial investment of £50,000. Today the company stock exclusively in
Sainsbury’s and restaurants such as Subway, JD Wetherspoon and Slug and Lettuce offer this as
a part of their menu. As of 2016, the company have current asset holdings worth £167,000
(leviroots.com, 2018).
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Task 1
a) Business Profile ofRoot’s Reggae Reggae Sauce Limited
Name of the business- Root’s Reggae Reggae Sauce Limited
Owner structure- There are three main people who form the basis of the company. These
people are Mr Keith Valentine Graham, better known as Levi Roots. This musician came up with
the unique idea and pitched it on the show. He was appointed as a director in the year 5th January
2007. The other key stakeholder in the business is Teja Owen Howell who was appointed in 18th
April 2007. These two people satisfy the role on directors, while Pennsec Limited are the
company secretary, appointed in 31st July, 2012.
History/Background- The organisation, Root’s Reggae Reggae Sauce Limited, was born when
Levi Root’s novel idea of a barbeque sauce that incorporated Jamaican jerk spice took off in the
show Dragon’s Den. When the entrepreneur pitched his idea, he received an initial backing of
£50,000 for a 40% stake in the company. A successful television appearance meant that the
sauce gained fames and Sainsbury’s then registered interest in stocking the product. On the 7th of
March the sauce went on sale nationwide and the company was incorporated as a private limited
company. The company is very small and does not employ more than 10 people at a time
(beta.companieshouse.gov.uk, 2018).
Activity- The organisation produces several products such as meal kits, table sauces and pasties
and wraps. They try to integrate a unique Jamaican feeling into the company as Roots adds
unique jingles to each product, while also bringing in aspects of the Caribbean culture to the
products. The activities of the company have received popularity all across the UK as Dominoes,
Subway and KFC have started integrating aspects of this company into their own products. The
company also benefit from a strong Jamaican demographic and expatriate community. This
provides them with a strong business presence.
Business location- The registered offices of the company are located in 125 Wood Street,
London, EC2V 7AW.
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Strengths and weaknesses:
Strengths Weaknesses
The unique nature of the company means that it is
an attractive prospect to most customers.
The company was taken to court over ownership
issues that may affect their brand image.
The company is a part of the foods and condiments
industry that usually performs well. They also
provide frozen foods that may appeal to the
younger working population.
This is a large industry where there are several
players. This company could be targeted with
several pricing measures that could eat away at
their market share.
There is a large Jamaican demographic in the
country. The company would thus, appeal to them.
It can be found that two company secretaries have
already resigned and this may affect motivation
levels of the firm and its employees.
The company founder is a unique character who
provides a strong and positive brand image.
Their net worth has fallen to almost £35,000, a
76% drop (standard.co.uk, 2018).
Table 1: Strengths and weaknesses of Root’s Reggae Reggae Sauce Limited
(Source: Created by the learner)
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b) Comparing Root’s Reggae Reggae Sauce Limited with Industry Averages
Variables Root’s Reggae Reggae Sauce
Limited
Industry Averages
Background This fledgling company was
formed in 2007 after its Director
gained prominence with the
product, Reggae Reggae Sauce.
Today they are stocked across
shops in the United Kingdom and
have also gained the attention of
larger fast food companies such
as Subway and Dominoes.
Though they can only account for
a net value of £35000 (this has
fallen almost 76.73%), they hope
to grow into the industry and
create a stronger market base.
This company only employ 10
people.
The industry is worth billions
and generates almost £100 billion
in sales. This is one of the largest
industries in the country and
annually contributes almost £28
billion to the economy. It
accounts for 19 % of all products
produced in the industry. Almost
400,000 peopleare employed in
this industry.
Sales Figures The company have not accounted
sales figures but a net asset value
of £35.99k and £15.39k as cash
in the bank. Most of the major
financial figures of the company
have been falling as per previous
year figures (standard.co.uk,
2018).
This industry generates almost £
95 billion as turnover.
Potential for Growth The company can grow when the
debt ratio is brought down from
78.65%. This could improve
asset figures and allow the
company to grow.
The industry is growing
exponentially and aims to
achieve a growth rate of 20% by
2020.
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Marketing The company try to add a
Caribbean touch to their
marketing as Levi Roots himself
creates various jingles for
product launching and marketing.
The food industry spends almost
£927 billion a year on
advertising. The Root’s Reggae
Reggae Sauce Limited company
need to increase funding efforts
considerably to meet industry
averages in the future.
Human resource management As the company only hire about
10 employees now and are a
micro firm, human resource
management entails good
employer-employee relations,
timely pay and less employee
disputes.
This industry must use several
types of recruitment, selection
and employee acquisition
strategies. This will allow
effective employee relations and
high levels of profitability and
productivity.
Table 2: Root’s Reggae Reggae Sauce Limited vs. Industry Averages
(Source: Created by the learner)
This table displays the great potential and scope of expansion. This company exists in a very
competitive industry and need to improve operations significantly to continue their effective
levels of performances in the British food and drink industry.
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Task 2
Political factors
 The company must maintain hygiene
standards thatare imposed by the Food
Hygiene Regulations of 2006.
 The government bodies, Competition
Commission and Office of Fair Trading
observe and control competition.
Economic Factors
 Consumer spending and disposable income
have increased across the country which
may result in higher net spend (Feldmann
and Hamm, 2015).
 Higher taxes may lead to supermarkets
demandingdecreased shelf prices and affect
the profitability of the company.
Social Factors
 The company can appeal to several
demographics with their unique Caribbean
dynamics.
 As the Jamaicans are a famous community
in the United Kingdom, there foods and
culture are very popular and would appeal to
several customers.
Technological Factors
 The company can implement a Universal
Product, an innovative bar code which can
simplifying pricing and check out of
products when they are used at supermarkets
(Ahmadet al., 2014).
Table 3: PEST analysis for Root’s Reggae Reggae Sauce Limited
(Source: Created by the learner)
a) Recommend with justification, appropriate actions to overcome the weaknesses.
Operating in the food and food retail business would present this company with several
opportunities to overcome their weaknesses and grow in a consolidated manner that would mean
and increase in profitability, market share and customer acquisition. The most important point of
contention for this company is the fact that it exists in a high-income country where
commercialisation of food and increases in the number of supermarkets have provided
companies with several opportunities to thrive.
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To ensure that the company are able to improve brand image the company should leverage the
popularity of Levi Roots as a problem-solving strategy. Aacker and Biel (2013) have talked
about the importance of strong leadership. A strong face of the company would mean that
customers would attach the values of this entrepreneur as values of the business. This would
impose a better sense of brand visibility and increase customer trust in the brand. A popular
example of this is the brand positivity that someone like Colonel Sanders would provide to brand
KFC (Kentucky Fried Chicken).
Adopting a more profitable business model would also help this company find a solution to their
problems. As of now, their strategy of participating in a supermarket model is not helping
profitability or asset value. This is proved when once notices the fall in cash in the bank and the
increase in the company’s debt ratio. Thus, a franchising model would help Root’s Reggae
Reggae Sauce greatly. If the company were able to open up impendent kiosks in different parts
of the country that were owned and controlled by local business people, they would be able to
improve their own profitability and provide sources of employment in different parts of the
country. The franchise model is a universally appreciated model used by the likes of McDonald’s
which would improve customer acquisitions and retail sales figures.
The company also need to employ professional expertise in the area of organisational
management. This means that the company need to explore employment opportunities for senior
level management that would give the company a more organised corporate structure and
strategy and ensure that they are able to improve sales figures in a more impactful fashion.
b) Analyse ways in which the existing performance could be maintained and strengthened
The company serve a unique product. Several strengths have been identified. Consolidated
marketing strategies must be employed to ensure that the company are able to bank upon this
nature and attracts customers accordingly and thus maintain their current position. Building on
this strength would see the company buy television spots and billboard spaces, which could be
used to advertise the unique selling point of the company. This would also mean the company
could advertise the product as one, which is rare in the United Kingdom market and would be
able to provide customers with a unique experience that they would not find with other products.
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To grow in the market, in an organic fashion, the company must explore improving trade
channels. This means that the company should look at different ways in which they could
improve their supply pipelines. Dominating the most visible spaces in supermarket shelves
would mean that the company would be able to increase brand image and visibility. The
company will be able to improve trade channels by opening or improving dialogue with other
business partners that would be essential to the company to improve project effectiveness
c) Suggest new areas in which the business could expand with reasonable justification.
The company have already begun product diversification. Being a part of the EEA (European
Economic Area) means that market expansion should be a serious objective for the company. By
expanding into newer market areas, the company will be able to provide their products to a
newer customer base. The unique nature of the product but the ubiquitous appeal of the foods
and condiments that are being offered. The customer is usually on the lookout for products that
will satiate their increasing needs and demands, and this company can help in this cause.
Product ranges need newer financial vestures. The company should look for different sources of
financing, as their cash reserves are considerably low. Another opportunity for the company is
using more market data and market insights that will provide them with ideas on how to use
newer research and development techniques that can provide them with an idea about different
products which can increase profitability and rates of market expansion.
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Task 3
a. Give your assessment on existing business objectives and plans.
The organization Roots' Reggae Reggae Sauce Limited is one of the most famous companies that
participated in show Dragons Den (startups.co.uk, 2018). The main objective of this organization
is to provide a high standard quality of service and products to customers, which would lead the
organization to enhance its brand image all over the world. The organization Roots' Reggae
Reggae Sauce Limited is famous for its high range of spicy BBQ sauces and so, Levis Root has
planned to increase its range of varieties. This organization has planned to bring sunshine of
Caribbean to its ventures by increasing popularity of its spicy flavours of Jamaican heritage
(standard.co.uk, 2018). This organization has also focused to inspire people by showing them
different methods to make healthy food. Presently, sauces of this organization are stocked in
major supermarkets of United Kingdom. This organization has planned to spread authentic
sights, sounds and tastes of Caribbean to huge mass of public. As per report, it is been identified
that the organization Roots' Reggae Reggae Sauce Limited is planning to expand its products and
services by stretching from sauces to snacks and from chilled ready meals to soft drinks
(standard.co.uk, 2018). Unique nature of company has broadly leaded the organization to
increase its brand strength effectively. This organization believe in providing music in food,
which is one of the main reason behind attraction of huge number of individuals in attaining the
target as per required.
As per reported in Dragon’s Den success stories, Peter Jones and Richard Farleigh were very
much influenced from the plan of organization Roots' Reggae Reggae Sauce Limited
(startups.co.uk, 2018). This organization has already widened its market within United Kingdom
and so, for future scope, this organization has planned for expanding its network all over the
world.
b. Review business plans and suggest areas where changes can be made.
The organization Roots' Reggae Reggae Sauce Limited provides wide range of products like,
kits, table sauces and pasties and wraps. This organization focuses on integrating unique
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Jamaican feeling into the company as Roots adds unique jingles to each product, which is the
reason behind attraction of huge number of customers. Operating in the food and food retail
business would present this company with several opportunities to overcome their weaknesses
and grow in a consolidated manner that would mean and increase in profitability, market share
and customer acquisition. Following are few areas where this organization needs to improve and
thereby lead in attaining its objectives effectively.
Market expansion
Market expansion is one of the most effective strategies for any organization to increase its brand
image and productivity. This would enable the organization to expand its network of services in
wide range. The organization Roots' Reggae Reggae Sauce Limited can plan for expanding its
network of services in EEA (European Economic Area) (startups.co.uk, 2018). By expanding
into newer market areas, the company will be able to provide their products to a newer customer
base.
New kiosks
Opening huge number of new Kiosks enables the organization to increase its overall sale and
also facilitates customers to easily grab its services. By opening multiple numbers of Kiosks
within its existing market, the organization Roots' Reggae Reggae Sauce Limited would be able
to increase its overall rate of customer satisfaction by facilitating its customers to easily purchase
its products and services. This plan would directly enable the organization to increase its
performance and productivity that would directly lead in increasing its sales per year. Multiple
numbers of new Kiosks would enable the organization to increase its strength in the market
effectively and efficiently with minimum investment.
Social media campaigns
Continuous advancement in technology has resulted in facilitating the entrepreneurs to easily
attain maximum number of customers in minimum duration of time. On analyzing continuous
increase in number of users of social media, social media tools would be the most appropriate
tool for the organization Roots' Reggae Reggae Sauce Limited. By focusing on social media
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campaigns, the organization would lead in attaining huge individuals easily and therefore, lead to
increase its brand image worldwide.
c. Prepare an action plan to implement the changes.
Objectives Tasks to be
achieved
Success
Criteria
Duration Resources
To expand its
overall market
The
organization
need to carry out
market research
and based on
choices and
demands, the
management
department
would be able to
make decisions
and select the
most appropriate
market to
introduce its
products and
services.
Proportion of its
success can
easily be
measured from
effectiveness of
market research
carried out.
This objective
can be achieved
within one year.
A market
research team
and huge
marketing team
will be required
to attain this
objective.
To open multiple
number of
Kiosks
The
organization
need to segment
the market based
on customer’s
choices and
demands before
Success rate of
this objective is
very high as the
products
provided in
different Kiosks
would be based
This objective
can be attained
within 8 months.
Human
resources,
equipments, and
funds.
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installation of
Kiosks. This
would lead in
providing
products and
services in
multiple Kiosks
on the basis of
their
requirements
and demands.
on customer’s
choices and
demands, which
would increase
its overall rate of
customer
satisfaction.
To form social
media
campaigns
The
organization can
use all social
media tools like,
Facebook,
twitter, etc., so
as to improve
connection with
the individuals
Success rate of
this objective
can be easily be
calculated by
analysing the
increasing
number of
followers and
thereby
enhancing its
brand image
worldwide.
This objective
can be attained
within 2 months.
IT specialists
and funds.
(Source: Created by author)
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Task 4
Executive Summary
This report will analyse how proposed changes will have an impact on the company, Root’s
Reggae Reggae Sauce Limited in terms of market operations. The current financial data and
operation techniques have been analysed to understand what provides the impetus for current
product offerings and services.
Introductions
The company, Root’s Reggae Reggae Sauce Limited started out very impressively as they were
able to secure good financial backing for company expansion and product launch. Yet, over the
past few years, the company have seen their profits and cash reserves fall. This has increased the
debt burden on the company and led to several reasons for the performance dip.
a) The impact the proposed changes will have on the business and its personnel
The market changes that have been proposed are expanding markets, opening independent
product kiosks and social media campaigns (Allyson et al., 2012).The changes that have been
proposed would mean that the company would expand in size and scope. The most important
change would be an increased in operational costs of the companies. The company would now
need to employ more personnel as they increase operational process. New operational ventures
that would be opened up are customer relations, distributors and market analysts (Schaperet al.,
2014).
The business structure would change (Bridge and O’Neill, 2012). As of now, the company
operate with a flat business structure, as there does not seem to be able to be any hierarchical
nature for employees. The business would now adopt a vertical structure, where new employees
would have to report to newer company superiors who would provide inputs into how the
company would operate and how customer acquisitions could be made.
The company would probably see an increase in the profits that are being earned. This would
ease the pressure on the debt ratios of the company. The increased profitability that will be
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brought in from newer market ventures could also be reinvested into the company. This would
help in the research and development actions of the company which would help them increasing
advertising and marketing operations of the company.
Increased personnel would also be able to ensure better market research, which could help the
company understand market needs and offer more customer specific goods and services.
b) The plan for how the changes will be managed in the business
Root’s Reggae Reggae Sauce Limited have to essentially carry out risk appraisal measures
which will help them monitor the effects of the changes that they intend to bring about. This will
also ensure that the company are able to analyse any potential disadvantages of growth and
changes. Operational changes are one of the most important aspects of a company and this means
that there must be updated systems evaluation. Technological solutions such as customer
relationship management and employee surveys will ensure that they are able to keep track of the
two most important stakeholders in the business (Hatten, 2012). When these surveys are carried
out, the company must also carry out a needs analysis. This will ensure that they are able to
understand the need of the workers and employees and provide this to them for more effective
performance levels.
The impact that the changes have had on the business model of the company must also be
evaluated to ensure that the company are able to observe advantages and risks that could hold up
growth.
It is of utmost importance that the company also maintain key financial data as this will help
them carry out necessary auditing and appraisal measures to maintain a sustainable financial
model for the business (Mariotti and Glackin, 2014).
c) The improvements in the performance of the business over the past two years
(preferably using trend graph or other suitable reporting format)
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2010 2011 2012 2013 2014 2015 2016
£-
£200,000.00
£400,000.00
£600,000.00
£800,000.00
£1,000,000.00
£1,200,000.00
£317,628.00
£1,035,665.00
£534,972.00
£609,656.00
£301,412.00
£568,811.00
£167,098.00
Figure 1: Cash Flow
(Source: Beta.companieshouse.gov.uk 2018)
2010 2011 2012 2013 2014 2015 2016
£-
£100,000.00
£200,000.00
£300,000.00
£400,000.00
£500,000.00
£600,000.00
£700,000.00
£800,000.00
£900,000.00
£267,284.00
£768,875.00
£263,891.00
£413,632.00
£220,784.00
£419,096.00
£132,593.00
Figure 2: Net Worth
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(Source: Beta.companieshouse.gov.uk 2018)
2010 2011 2012 2013 2014 2015 2016
£-
£100,000.00
£200,000.00
£300,000.00
£400,000.00
£500,000.00
£600,000.00
£700,000.00
£800,000.00
£900,000.00
£267,284.00
£768,875.00
£263,891.00
£413,632.00
£220,784.00
£419,096.00
£132,593.00
Figure 3: Total Current Liabilities
(Source: Beta.companieshouse.gov.uk 2018)
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The company have to improve their performances immediately and these changes are integral for
the improved business model of the company. As we can see from the above figures and graphs,
cash flow has fallen by almost 29 per cent from the last financial years, while the net worth of
the company has fallen by more than £250,000. As the company have started seen their financial
performance suffer, their current liabilities have also fallen. This is where the company can
improve performance levels. Effective performance levels for the company would mean that
would be able to build up production levels so that their future financial years are able to account
for an aggregate increases in cash flow and net worth (Spreitzer and Porath, 2012). The company
can account for this by implementing greater technological solutions that will help the company
in problem anticipation. Finances must also be improved over the next two years as the company
looks to grow their size and scope.
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Conclusion
Small businesses play an integral role in the development and maintenance of the British
economy. SME’s (small, medium enterprises) such as Root’s Reggae Reggae Sauce form
backbone of the economy and add millions of dollars in value to the upkeep of the different
industries. Innovation and operational management are integral for fledgling companies such as
Root’s Reggae Reggae Sauce to expand and continue their market operations. In this assignment,
the learner has analysed the different ways in which the company function in terms of sales and
other management variables.
The company had won their bid to start on the show Dragon’s Den as they secured a large
investment commitment. The company grew from here and captured the hearts and imagination
of the British public, as they were able to relate with the unique product that brought the
Caribbean culture along with it. Unfortunately, over the past few years, the company have begun
suffering and thus an injection of newer more innovative techniques will bring about greater
production gains and increase the profitability of the company. From the above discussion part, it
is analysed that franchising model would help Root’s Reggae Reggae Sauce greatly in market
expansion and effectively attain the target.
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Reference List
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strong brands. Psychology Press.
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marketing principles.Journal of Social Marketing, 2(3), pp.207-221.
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standard.co.uk (2018) Reggae Reggae Sauce founder Levi Roots: 'I went on Dragons Den
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https://www.standard.co.uk/news/london/reggae-reggae-sauce-founder-levi-roots-i-went-on-
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