Factors Affecting Business Success of SMEs

The assignment delves into the world of small and medium-sized enterprises (SMEs), examining the key factors that influence their business success. From Thailand to global contexts, it highlights the importance of effective management, entrepreneurial spirit, and resilience in overcoming market turbulence. The document provides a comprehensive overview of relevant literature, including research studies and journal articles, offering insights into the strategies for enhancing SME performance and sustainability.

SMALL BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK1.............................................................................................................................................1
1.1 Profile of small scale with its strengths and weaknesses......................................................1
1.2 Analysis of business using aggressive measures of performance.........................................3
TASK 2............................................................................................................................................5
2.1 Action to overcome weaknesses of business .......................................................................5
2.2 Different ways to maintain existing performance and strengthen........................................6
2.3 Areas where business could be expended ............................................................................7
TASK 3............................................................................................................................................8
3.1 Existing business plan and objectives...................................................................................8
3.2 Revise business plan to built innovative modification..........................................................8
3.3 Action plan to implement changes........................................................................................9
TASK 4..........................................................................................................................................10
4.1 Impact of changes on business and its personnel................................................................10
4.2 Managed of changes in Baby Bear......................................................................................11
4.3 Improvement in business performance ..............................................................................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14
.......................................................................................................................................................14

INTRODUCTION
Small business is a privately owned business that is handled by an organisation or small
firm which has a minimum hundred employees and has revenues of less than $25 million. This
type of firm typically has a less number of employees. This kind of business is an independently
operated and owned company which is small in size and income depending on the firm. A local
bakery that employs ten people is the best example of a small scale. Such kind of organisation
specifically owned by private hands in the form of sole proprietorship, corporation and
partnership, etc. This report is based on Baby Bear which is the nursery home for little kids in
United Kingdom.(Hilmersson, 2014). The purpose of this company to offer professional
childcare services which is the best advantage for development of child and give secured, safe,
stimulating and happy environment for the success of little kids. This file includes company’s
profile and their strengths and weaknesses. Comparative analysis of firm is also described here.
Along with this, the way firm can manage changes by making an effective plan is also discussed
in this report.
TASK1
1.1 Profile of small scale with its strengths and weaknesses
Small business enterprise provide type of services to its buyers and charge limited
amount from the service user. This is very essential part for such entity to use effective tool and
quality measures so that they can give best services to another. Baby care is the nursery home in
UK(Gunasekaran, Rai and Griffin, 2011). This company is based on small entity that provides
better and healthy service to child care from birth onwards. The mentioned firm opens in
between 8 AM to 6.30 PM, Monday to Saturday. This enterprise is closed only on national
holidays along with 6 days at the time of Christmas. They have experience and professional staff
members who are skilled in their respective fields.
SWOT Analysis
It is the best way to identify company’s weaknesses, strengths, opportunities and threats
which support in effective planning. This is essential for any enterprise to plan their policy and
strategy about to their strength and weaknesses so it can not impact them in negative way.
Strengths Weaknesses

 Effective and experienced management
in industry.
 Their staffs are trained related to
customer care.
 Launch the best practices through
various centres.
 Sufficient cash flow is available.
 They have the latest and best child care
methodology.
 Their overheads are small.
 Speedily feedback on conflicts within
particular time.
 Adaptability to choose innovative
changes.
 They are innovative in local
community.
 Lack of awareness among the people.
 Poor compliance with federal laws,
state and local.
 Business running cost is very high
including food and utilities.
 Poor service quality and lack of food
items.
 Their canter maintenance is bad
because these expenses are high.
Opportunities Threats
 The residential area is very rich with
high population of multiple income
families.
 They can provide home services.
 New generation of aggressive business
in same area.
 Insufficient supportive members.
 Leaders provide in house day care
centre.
1.2 Analysis of business using aggressive measures of performance
Business analysis is needed to doings time to time so that extra sources that are necessary
for strengthen and its performance can be selected. The measurement of performance can be
define as financial and non financial data( (Fassin, Van Rossem and Buelens, 2011). It is very
essential element that can be utilized to determine the area where it is needed for company to
devote much impact to strengthen its condition. This is essential technique's to built comparison

of available financial data with previous. It supports to analyses its present position and to
implementation of future plan. In this way various concepts can be used by cited company and to
measure its performance as forced ranking and graphic rating scales etc. There is perfect diagram
of financial data in current day and its maximising on high rate which is shown in graphical
rating scale.
As per the above study it is determined that business has better rating among its market
challengers. They are impacting in giving service quality to its potential buyers.
P&L account of the year ended 30th April 2016 and 30th April 2017 of Baby Bear shows
following figures:
Particular 2016 (value in £) 2017 (value in £)
Sales 150 210
Cost of sales 60 140
Gross profit 90 70
Less: Manufacturing
overheads
30 35
Net profit 60 35
Balance sheet for the year ended on 30th April 2016 and 30th April 2017 of cited business
shows following figures:
Particular 2016 (value in £) 2017 (value in £)
Fixed Assets 20 15
Current Assets:
Debtors 8 15
Stock 10 20
Cash and bank 2 1
Total 40 51

Ratio for the year ended on 30th April 2016 and 30th April of Baby Bear shows followings
figures:
Ratio 2016 (value in £) 2017 (value in £)
Current ratio= Current assets /
Current liability
20000/ 5000
= 4.00 times
60000/ 30000
= 2.00 times
Quick Ratio= Current assets-
inventory/ current liabilities
20000- 7000/ 5000
= 2.6
60000- 20000/ 15000
2.67
Interpretation: In the year 2016, company current assets in more around 4 times more
than it liability which is better condition but in year 2017, it CA is more than 2 times of it current
liabilities. Current ration is i.e. 2. Than quick ratio in year 2016, cited company give its liabilities
by it CA. But its position is maintained in next year. In year 2017, they used working capital in a
efficient way . Wisdom is on ideal perfect time I.e.1.
Gross and net profit ration in both years of company shows the following figures:
Particular 2016 (value in £) 2017 (value in £)
Gross profit ratio= cross
profit /sales*100
60/150*100
40
70/ 150*100
46.67
Net profit ratio= Net profit/
sales*100
50/150*100
33.33
30/150*100
20
Interpretation: In the year 2016, cited company's gross profit ratio is 40 which is lower
than its next year data i.e. 46.67. In the year 2017, the production cost is lower than its next year
data . The net profit ratio in year 2016 is 33.33 which is lower than its next year data.
TASK 2
2.1 Action to overcome weaknesses of business
Weaknesses is highly as well as negatively affect on business operations. There are
several source that generate hurdle in its success (Chittithaworn and et. al., 2011). This is very
essential for company to use impressive measures to over come its weaknesses. It gives

development and growth opportunities to the enterprise. There are several issues which are faced
by company and its employees in relation to quality performance, poor maintenance, lack of
awareness, maximise in aggressive enterprise and innovative in local community etc. they faced
several problems because they are innovative in marketplace so it is essential for them to use
impactive marketing tools as well as technique's so that they can increase their popularity. They
can use this approach directly to families, business, and their working partners. They can provide
important information about their facilities and services to them. It will support to reduce the
issues related to lack of awareness.
This is very important to cited company to select effective execution so they can timely
follow with the rules, regulations and norms etc. It is needed because when it is not applied than
it has reverse effect over the company goodwill. There is food material quality and service are
very poor so it is necessary for cited company to use best quality of food material for that they
can relation to several another businesses unit which give better product to them. It is also
determined that they is poor maintenance so this is essential for them to unbend money on repair,
painting, furnitures replacement and another supplies. It is needed to attract more protector
toward Baby Bear centre.
Similar business and their brand name is well known in marketplace so it is not easy for
this enterprise to enter in innovative market. For that they can select impactive marketing
strategy and they may focus on service quality(Burns, 2010). Professional employs are required
in this company who have experience as well as knowledge in this field so that they can reduce
these problems in best manner. It is a key elements of cited company to use mentioned
recommendation in their enterprise so that they can follow their issues in an effective way. It is
essential because if it can not determined it may cause negative effect over the company's
performance.
2.2 Different ways to maintain existing performance and strengthen
This is very essential task for Baby Bear company to keep their existing strength and
performance. This is needed to gives growth opportunities to company as it can run much
ineffectively in aggressive marketplace (Altman, Sabato and Wilson, 2010). It is necessary for
this enterprise to built innovative improvements in their businesses operation so that they can
intrigue large number of person and support to take stand in innovative aggressive marketplace.

Impressive marketing tools and technique's can be selected by them so that they can bonded
impactive position in another area.
This enterprise can support impactive ways to strengthen and maintain their existing
performance:
Always try to gives large consumer satisfaction: It is very essential for mentioned company to
use impactive mechanism as well as qualitative product material and their best services so that
they can give maximal fulfilment to its buyers. Professional as well as experienced workers can
be engaged by them which support to provide impactive services which output is customer
satisfaction.
Be adaptable to change: This is very important for Baby Bear to select innovative changes that
ate present in market so that they can protect such as secure aggressive benefits. In this market
there are several changes like innovative technological up-gradation and extra activities for kid
that assist in the children growth which can be adopted by them. This source are needed to select
by the cited company because it assistance to take stand in marketplace.
Assess challengers strategies: It is necessary foe above mentioned company to take a view of
challengers policy and plan so that they can idea their tasks in agreement with another's
(Audretsch and Link, 2012). This gives support to keep their strengthen and position in future.
Manage interruption: There are several source that generate obstacle in the business growth so
it is very important for enterprise to handle such interruption so that their performance not
impacted in a negative way. When this source are not examine in right manner then it impacts
performance in unfavourable way.
Prioritize and organise: This source which are used by cited company manager in their business
operation as well as growth oriented. It is necessary for Baby Bear to prioritize and organise
various activity s that they can not be sphere to each other. This technique's is one of the
impactive way to fulfil the work in a best manner and give best service quality to its buyers.
2.3 Areas where business could be expended
This is a very essential part for company to grow their areas to other level. It supports the
business to increase their profitability as well as market share. Currently, cited company is giving
their best services in nursery home (Bridge and O'Neill, 2012). It is needed segment so that they

can provide much services to its buyers. There are several area where they can expand their
company are as follows:
24 hours day care: in current day, this enterprise give their services between 7.00 AM to 6.30
PM so it is needed for then to provide services to 24 hours and seven days for company tour. It is
a best opportunities for this company to to give their services to twenty four hour and 7 days. It
assist to strength their marketplace.
To open pre school: The every one was contracted with this enterprise because they give their
effective service in a best way and parents are fulfilled with them. There is an individual location
where they can expand their firm like Pre school. This is a best advantage for this enterprise and
parents. They responsible to open pre school where they can give education to kids. This support
to expand their company into another area.
Health and care centre: In this way then business open their another health care centre in their
world where they can give effective treatment to child. It is very essential to create by an
individual who are experienced in this filed to give treatment with playing tasks. Business
segment will provide them development and growth opportunities to them.
Sports activities: In this way they can develop their market share to innovative segment by
expanding their tasks to sport activities (Burns, 2010). In current situation, where parents have
focus on this tasks because it is needed for the child growth. There are several opportunities that
are present in sport department so it is essential for such kind of business. They consider these
tasks as well as activities to highly expand their firms.
Employ other curriculum activities: According to this, there are different area where cited
business expand another company. It is necessary for this small scale to believe other tasks such
as dancing, painting, drawing, singing and other activities. Apart from this then large number of
the person are attracted according to their services. Parents are stimulated towards the area where
they provide another activities for the development and growth of kid.
TASK 3
3.1 Existing business plan and objectives
This is very essential for the enterprise to establish their objectives and goals in an
effective way. It is necessary to built the regular assessment so that it can be determined such

targets can be achieved or not. This support is implementation of strategy and plan to achieve
their value.
The main objective and aim of cited company, is to give best service to parents who are
operative in this field. They try to built needed modification through that they can built
development and growth of child (Chittithaworn and et. al., 2011). Baby Bear always try to
select innovative measures which is needed for the children betterment. It has best to employ
professional in their company who have better knowledge in their filed. Cited company
objectives should be SMART so that they can attain their value within time. It is a important
objectives of an enterprise to choose quality material to give kid. Cited company always try to
give healthy and good surrounding to child so that their physical an well as mental growth can be
developed.
Baby Bear not only focus on children growth but in this way other factors are give basic
things & education and teaching manner that they can use. Assessment objectives is one of the
main activity that provides fair plan regarding the business and it support to determine its
objectives which can be achieved in a effective way or not. Through this, it is ascertained that it
is needed for the mentioned company and to establish several improvement in their facilities so
that they can mark various person and attain its goals.
Objectives which are mentioned above and it can be achieved by the Baby Bear when
they emphasis on their future plan and strategy (Fassin, Van Rossem and Buelens, 2011). It is
necessary to arrogate service quality and to built focus on healthy growth of kid. It can be
possible when they are liable to give good surrounding to child.
3.2 Revise business plan to built innovative modification
It is important for company boost their business in a more time as per the needs of
market. This will also gives aggressive benefits to Baby Bear and through this, they can achieve
their objectives and goals in an effective way. There are several modification that boost in
surrounding and when enterprise adopt such changes then it is best benefits for them to achieve
their targets in an effective way.
In current time, person choice are dynamic day by day. Formerly, parents choose to focus
on education only they need and want to admit their kid in the enterprise where they are more
focus on additional curriculum activity and education (Gunasekaran, Rai and Griffin, 2011). It is
needed for cited company to employ such modification in their company so that they can pull

high number of buyers toward them. This method to run their business operation in a more
effective way and to insecure aggressive benefits in marketplace.
It is necessary for Baby Bear to sustain reputation & untarnished reputation in
community and to give care quality so that they achieve higher support for society. Aggressive
pricing strategies and flexibility hours which are two strategies and they can be adopted by cited
company to vie with other market modification. Now a current day, there are different
challengers in market with provide same services and products so it is necessary for cited
company to select regular modification of surrounding so that they can give best services as a
relation of its challenges.
3.3 Action plan to implement changes
Modification are very essential to adopt by company for the betterment of their
enterprise. There are several changes which came in force that needs to follow by Baby Bear. It
is a best reason for company sustain in marketplace and can be the lower to kick out from
community. These source are modify the market position.
It is important for cited company to formulate action plan so that they can follow other
modification of market in a effective way (Hilmersson, 2014). In this task there are various
technological improvement, social standard of person has increase at top level in current time. So
it is necessary for Baby Bear to follow such modification so that can built improvement in
company.
There are different factors of action plan are as follows:
 To consult the marker research where are will be improved and it can be defined by
business.
 To determined the sources that can be covered.
 Those factors are needed to choose best strategies which are on priority basis.
 To identify the advantage that can be attain plan implementation which is require to
believe as time scale that needed to fulfilled.
In the current case, Baby Bear need and want to select another modification as planning to give
educational and another activities such as painting, drawing, sports and dancing etc.
implementation of plan is required to select best plan as :
 Identified and conducted market research so it show various number of challengers in
market who are giving best services at less amount (Nga and Shamuganathan, 2010).

 They also identified and focus on current development, modification of surrounding, in
this way parents have to focus to admit their kid in enterprise where they focus on
education and other activities.
TASK 4
4.1 Impact of changes on business and its personnel
In working environment adopted many changes, that may be directly impacting on
business and its personnel whether positive and negative in nature. Sometimes, it is important to
change and innovate working system and utilise new techniques in organization for attaining
goals and objectives in effective manner.
Impact on Business
 With the help of changes, new opportunities can arise in organisation. This is one of the
important segment for business, because it assist to expand business firm in other areas
with better and effective ideas.
 By effective changes in business firm can effectively increase efficiency of enterprise.
With the help of new changes in working environment of company, they can target and
attract more customers toward business firm and their services (Stokes, Wilson and
Wilson, 2010). So they can provides better quality of services to customers as per their
requirement.
 Positive impacts on business firm, helps to improve working performance of employees
so they can attain their long and short term goals and objectives in appropriate manner.
Hence, it assists to build brand image in external market place they company will easily
compete with their competitors with smart ideas.
Impact over personnel
 Sometimes, changes in organisation increased mental stress to its employees. Because its
not easy to adopt new changes in working system and hard to complete task with better
outcomes.
 Adopting some changes in working system, for enchaining working performance. So it is
time consuming process in nature. Because its not easy for employees feel comfort with
new changes and modification.

 By changes loss of loyalty and faith is another factor, which faced by personnels.
Sometimes, companies adopt new changes for reducing salary of employee. In this
situation some of employees can be left their job due to dissatisfaction.
Along with this, changes in working environment of organisation directly has been
impacts upon business firm and its personal. Due to it is very important to properly identify and
analyse actual review and result of carnages (Storey, 2016). If creates any kind of issues and
problems in organisation, so that should be resolve with better solution in effective manner.
4.2 Managed of changes in Baby Bear
It is very important for cited company to consider modification in effective way. There
are several alteration which is faced by an enterprise by the specific time. It is needed to handle
all factors in a effective manner.
Kottler's factor can be determined by Baby Bear for change management as :
Create sense of urgency: It is essential to aware the workers regarding the want of modification,
it requires conceive communication and honest to discuss current solution to issue.
Create guiding coalition: According to this there project team is needed to launched as well as
solved conflict.
Communication vision: It is necessary to accept the modification by whole workers and it is
possible to communicate better information.
Empowering others to act an the vision: This is a best that provide type of ownership to the
workers. It cited company wants to maximise the profitable routes (Teece, 2010).
Check Quick winks: The company decision to maximise the profit value in the bankable routes
calls which are usage of higher aircraft to decrease the per unit cost.
Consolidate improvement: It is important to adopt development so that high support which can
be offered to select necessary alteration.
Anchor the change: It is a best part of organisation and culture value which must be understood
with vision.
4.3 Improvement in business performance
Every organisation try to select current changes so that they can modify their market
position. This is very essential for the Baby Bear to determine the various factors that have direct
effect over its performance. According to this cited company adopted innovative modification

that is considered in plan of action. In this way where different number of buyers are recently
increased. There are different factor which is used by this enterprise are as follows:
SWOT analysis: It is very important factor that identify company internal and external sources
over the business operation (Williams and Schaefer, 2013). Variation in this source support to
find improvement.
Benchmarking: It is a best comparison that define actual performance which can be measured.
This is Mede with same enterprise.
Trend analysis: It is very supportive to determine the recent trend and identify by the
organisation which is liable to track trend.
Balance score card: This is used to evaluate performance matrix as well as identify development
in internal factor. This is very important to measure financial issues and give techniques.
CONCLUSION
From the above mentioned this research project it is concluded that, strengths a nd
weakness of small business firm. As per that easily identify and determine actual working
condition and position of the firm. It has been defined several actions to reduce weaknesses of
organisation in effective manner as well as various ways to managed working performance of
personnel. It has been discussed different areas and sectors, there employers of the firm can be
expand their organisation for gaining high number of profit and achieving goals. In the context of
business firm, objectives played important role. For attaining the should be adopt effective plan
then implement in action. Sometimes appropriate changes are plays eminent role, because with
the help of them effective enhance working performance of personnel. Due to, changes directly
impacting on business and its personnel whether positive and negative in nature.

REFERENCES
Books and Journals
Altman, E. I., Sabato, G. and Wilson, N., 2010. The value of non-financial information in small
and medium-sized enterprise risk management. The Journal of Credit Risk. 6(2). p.95.
Audretsch, D. B. and Link, A. N., 2012. Valuing an entrepreneurial enterprise. Small Business
Economics. 38(2). pp.139-145.
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small
business. Palgrave Macmillan.
Burns, P., 2010. Entrepreneurship and Small Business: Start-up. Growth and Maturity. Palgrave
Macmillan.
Chittithaworn, C. and et. al., 2011. Factors affecting business success of small & medium
enterprises (SMEs) in Thailand. Asian Social Science. 7(5). p.180.
Fassin, Y., Van Rossem, A. and Buelens, M., 2011. Small-business owner-managers’
perceptions of business ethics and CSR-related concepts. Journal of Business ethics.
98(3). pp.425-453.
Gunasekaran, A., Rai, B. K. and Griffin, M., 2011. Resilience and competitiveness of small and
medium size enterprises: an empirical research. International Journal of Production
Research. 49(18). pp.5489-5509.
Hilmersson, M., 2014. Small and medium-sized enterprise internationalisation strategy and
performance in times of market turbulence. International Small Business Journal. 32(4).
pp.386-400.
Nga, J. K. H. and Shamuganathan, G., 2010. The influence of personality traits and demographic
factors on social entrepreneurship start up intentions. Journal of business ethics. 95(2).
pp.259-282.
Stokes, D., Wilson, N. and Wilson, N., 2010. Small business management and entrepreneurship.
Cengage Learning EMEA.
Storey, D. J., 2016. Understanding the small business sector. Routledge.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
Williams, S. and Schaefer, A., 2013. Small and medium‐sized enterprises and sustainability:
Managers' values and engagement with environmental and climate change issues.
Business Strategy and the Environment. 22(3). pp.173-186.
Online
4 Simple Strategies to Improve Your Business Success Rate. 2017. [Online]. Available through:
<https://www.entrepreneur.com/article/239706>. [Accessed on 3th August 2017]