Analysis of Small and Medium-Sized Enterprise (SME) Performance

This assignment requires an in-depth analysis of Small and Medium-Sized Enterprise (SME) performance. It includes a review of relevant literature on SME performance, business environment impact, employee performance improvement, and business sustainability. The assignment also provides references to online resources and academic articles for further research. A suitable title is 'Analysis of Small and Medium-Sized Enterprise (SME) Performance' which can be shortened to 'SME Performance Analysis'.

Developing Professional Practice in Human Resources
Small Business Enterprise

Developing Professional Practice in Human Resources

Developing Professional Practice in Human Resources
INTRODUCTION
Small-scale enterprise is the enterprise which run one a small-scale to earn profit. It is a
type in which individual or a group of people that collaborate to achieve certain commercial
goal. It is an independently owned and operated company that is limited in size and in revenue
depending on the industry. Small-scale businesses in many countries include service or retail
operations such as convenience store, small grocery store, bakeries, beauty parlour, restaurant,
guest houses, photographers, etc. These are privately owned and mostly have sole
proprietorships or partnerships. Posh Nosh is a small-scale business enterprise which is into the
business of wedding and event catering industry since 1989 and also provide world class street
food. Small-scale enterprise is important because of their employment potential and contribution
to industrial outputs and exports.
TASK 1
1.1. Strengths and weaknesses of small business enterprise
Overview of the company
Posh Nosh is a very small company and is known for event management and catering
services. They have a fast food chain and have limited number of workers. However, with a
work experience of more than 25 years in catering services, they are very active in serving at
major number of events that takes place in England. They have some highly professed members
in their team who determinedly work to provide excellent services to their clients. Uniqueness is
referred to be yet another concerning agenda of their team where they feel a sense of pride in
doing something innovative for the users (POSH NOSH – ABOUT US & OUR ETHOS, 2017).
They together have an award-winning team in their kitchen to endlessly experiment with high
quality products and produce something new for the clients to gratify their needs. Also, the team
of Posh consists of total three different segments with 4 people handling the work related to the
management of the company. Beside this, there exists another team for event management that
mostly consists of a set of event managers. Lastly, there exists a profound team of chefs
comprising three people, out of which, 2 are event chefs and 1 is head chef, each specialised in
distinct cuisines.
Strengths
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Developing Professional Practice in Human Resources
 Price: Posh Nosh provide food and service which are affordable and can be purchased at
a good price range. Customer are always satisfied with the price range of their product as
it is very reasonable of which company always take advantages.
2. Quality: The quality of product which Posh Nosh provide are remarkably very good and that's
why customers are so much attached to their taste. The quality of food and service provided by
the company is very good at both its restaurants and their event management. As events are
organised by very highly qualified professionals.
3. Close supervision, small capital, management is easy: The management is easy as less
number of workers are employed. As it is a small-scale company so capital employed is also less.
The owner can supervise the employee in a very good manner.
4. Controlled supply: As demand changes, supply can be adjusted as it is easier in small scale
business. Supply is under control as they have good knowledge about their customers and their
particular demands
Weaknesses
1. Brand name: It is run on a very small-scale and popular in Wales and London only so it need
to do good marketing of its products and service to bring it on a wide platform.
2. Competition: It has its competition with some big brand names such as McDonald's and KFC
which are providing the same quality of product that too worldwide. Posh Nosh has to fight with
them to remain stable in the industry.
3. Cost of production: Being a sole proprietor of organisation it becomes costly to produce any
product. Moreover, due to high labour cost there is an increase in cost of production.
1.2. Analysing business using comparative measures of performance
Posh nosh should keep the daily track on its performance and also should respond to all
the queries of the customer for their feedback. In this way they can increase the sale of the
product and would be helpful in the development of the service.
1. Delivery time: Posh Nosh can control its delivery time. Customers will be attracted more if
they will be served their food on time. Maximum time should be around 10 mins for an order. Of
course, it is essential for any restaurant to give services of utmost quality.
2. Number of orders: At present Posh Nosh are taking about 300 orders on a daily basis and
200 home delivery orders. They should however increase their food quality or do marketing of
the business or by giving the discounts to the regular customers.
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Developing Professional Practice in Human Resources
3. Percentage of business with existing customers: As compared to the other in the same
industry Posh Nosh are doing well by satisfying the customers. According to the feedbacks given
by the customers it is doing good to retain the existing customers.
4. Collecting customer feedback: According to the customer feedback they complaints against
the delivery time which is more and the company is working over it. Feedbacks are important as
it tells the company to where they need to work or where they need to improve.
Posh Nosh Ltd
Year Sales Net profit Net profit % Sales Net profit
Net profit
percentage
2012 1500 150 10.00% 1400 96 6.86%
2013 1050 120 11.43% 1670 106 6.35%
2014 1600 195 12.19% 1500 180 12.00%
2015 1780 212 11.91% 1600 168 10.50%
2016 2020 260 12.87% 2200 230 10.45%
Interpretation: From assessment, it has been identified that in the year of 2013, sales and
profit margin of Posh Nosh Ltd shows declining trend. Further, tabular presentation shows that
after such period sales of the firm increased continuously from 1600 to 2020 at the end of 2016.
Along with this, due to having positive relationship profit of the firm increased significantly in
line with the sales. From the results, it is visualized that as compared to Posh Nosh, the net profit
margin of companies in opposition to it is comparatively less than 6.86%, 6.35%, 12%, 10.50%
and 10.45% respectively on an annual basis. Although its sales performance is good, still, due to
excessive overheads and ineffective control over overheads, firm had earned less net profit.
Thus, it can be stated that profitability and sales of Posh Nosh Ltd is good as compared to the
rival firm.
TASK 2
2.1 Ways to overcome weakness of business
Posh Nosh is facing problem of 'serving time'. Serving time is relatively more as
compared to other restaurants. Due to this, customers are irritated and go to other restaurants.
Company having this issue due to poor labour quality. They are not doing their work properly.
Labours need to work properly for giving a proper outcome to company. It can also be due to
problems in machines used for production of food. Solutions to this problem is as followed:
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Developing Professional Practice in Human Resources
1. Strict action against labour: when labours don't work properly they have to be told to do
proper functioning. Training must be given to specifying goals that have to be reached. Even if
they don't work well rather than firing they can be improved to perform their duties well. If new
labours will be employed then other costs will come into play.
2. New machines: These machines can be installed in order to reduce production time. It is also
a solution to given problem (Gronum and et. al., 2012). Machines use new technologies which
reduce time and also reduce cost of production. It can be seen that it is essential to bring these
changes in Posh Nosh for ultimate customer satisfaction
3. Complimentary drinks or food: This can be a great way for old customers to feel special and
loyal towards Posh Nosh. Giving complementary food and drinks to privileged customers can be
noticed by new customers. Obviously, new ones would like to avail these benefits also. So, for
this they will try to become privileged customers hence, will increase their sales and loyalty
towards their company will increase.
2.2. The way in which the existing performance could be maintained and strengthened
Posh Nosh needs some improvement for better performance in business. It can be seen
that a proper research has to be done over the segments where it is lagging behind. One way of
determining it is by knowing reason of poor performance of employee. There can be several
reasons behind it but by knowing their problems solutions can be known. Encourage
communication (Ratten, 2014). It is basis of any business and all sorts of deals are done by
having better communication skills. Employees have to be trained in order to achieve their goals
and see to deadline that has been given to them. Working environment has to be really good in
order to strengthen relations and so that employees perform well.
If they will be dominated by superiors then problem can arise. They have to be provided
a healthy and friendly environment where they are able to express their ideas, views about any
problem. Posh Nosh can be improved by using these techniques and make changes around.
Effective training is yet another way of grooming an employee and making them work in way
which Posh Nosh wants (Neneh, 2012). It can be seen that most of time training is not a small
process, it keeps going on and is gives proper result. Working over weaknesses is also essential.
Without improving weaknesses nothing can be solved. Posh Nosh has improved their weakness
of taking more time in order delivery. This was done by giving proper training to their
employees and guiding them about solution.
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Developing Professional Practice in Human Resources
This is on considering the above found strengths and weaknesses of Posh Nosh, below
are some ways in which, the cited organisation can make an effective use of those ways through
which, they can consider strengthening their potential aspects-
 Conducting market research- This is referred to be a principal step with a foremost
responsibility of the marketers of Posh Nosh to conduct an active research of their
marketplace. This is basically to recognise the current needs and demands of the clients
associated with them as a way of satisfying the same and fulfilling the gap that has
been found in their present services to gratify any changed requirements of their
clients.
 Adopting developed technologies- This is specified to be yet another considerate
approach of Posh Nosh where they are hereby required to undertake certain effective
strategies to provision their services to their associated clients and users (Sampaio,
Thomas and Font, 2012). It is mainly on considering the fact of an advanced technical
resources at a global level that is directly impacting upon the event management
companies that are required to be in a highly active state to accommodate the users
with the most recent services.
 Development of human resource- Lastly, developing professed team of personnel’s is
considered to be yet another requisite outlook of organisations like Posh Nosh where
they are hereby required to ire the most talented set of workers. This is to serve the
clients in the most proficient manner where this necessitates the firm to arrange timely
sessions of training to develop the workers on regular basis. It is with the help of such
effective training programs, the firms like Posh Nosh will also be able to bring
something innovative in their existing range of services to address the current
consumer demands.
2.3. Areas where business can be expanded.
Posh Nosh has to expand its business in order make a big name in UK. There are various
areas where it can expand its business. One sector is of farming sector. Farming sector is a very
good sector for Posh Nosh since it can reduce its raw material cost as through farming raw
materials they can be earned. They can name it as Posh Nosh Farms (Advantages and
Disadvantages of Small Scale Industries. 2016). By growing own crops like wheat, rice etc.
which are used in production of food items which they can sell and huge profits can be made. On
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Developing Professional Practice in Human Resources
their farms, they can also grow vegetables like tomatoes, potatoes, lady finger, onions, garlic,
spinach etc. and also fruits like oranges, bananas, cherries, apples etc. These subsequent
vegetables will be used to make various dishes, flour will be used to make breads etc.
Fruits can also be used to make shakes, salad, juices etc. Posh Nosh can directly use these
raw materials and can save extra that they used to do before. Initially, they had to buy raw
materials at higher prices, bear transportation cost and losses which happen when they are not
delivered on time. Posh Nosh Farms can also enter into selling of raw materials produced.
Selling their raw material at their own price can be a good business (Ratten, 2014). They can
earn profits through selling crops and fruits. Posh Nosh Farms can serve both purposes that
would be providing raw materials for Posh Nosh food and for event that they do. Secondarily,
can serve as a seller of raw materials to other companies or buyers.
TASK 3
3.1. Assessment of existing business objectives and plans
It can be seen that Posh Nosh main objective is to increase number of sales and to attract
more number of customers. This can be done by providing extra benefits to their customers who
regularly come to their restaurants. Benefits like providing discounts over meals and also
providing them complimentary drinks and food in order to retain customers (Hatten, 2015). This
way regular customers feel privileged for extra services provided to them. Also, this is a local
firm and people love taste of local areas. Mostly college going students come in this restaurant.
The privileged customers also help in marketing in this firm by spreading name of this
restaurant.
Of course, such places become hang out spots for people where they would sit and spend
rest of time. Posh Nosh future plan is to open a farming business where they would produce their
own crops for use and also for selling purpose (Neneh, 2012). Previously, they had to buy
resources from other sellers and use it for production process, but with their plan of farming it
can help them reduce this cost. Also, they can sell these crops and fruits in market to earn profits.
Expansion is really important for any firm to earn profits and make their brand name improve.
More number of customers will result in more sales and a better outcome for company.
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3.2 Business plan to incorporate appropriate changes
Changes will come when Posh Nosh will put capital in their business. This can only
happen if a proper marketing and business plan will be made. A land can be bought on which
farming can be done. Crops can be grown on this and used for their own purpose. Fruits too can
be cultivated. Posh Nosh sells various shakes and juices, so fruits grown over Posh Nosh Farms
can be used to produce them. Cost of production is also reduced (Abebe, 2014). To generate
profits, they can even sell these crops in market at their own price claiming to have a better-
quality product. They can change their image using these techniques. Also, for customer
satisfaction they can even use live bands and music concert at their restaurant.
This can become an add-on for their business. Marketing will be done really well using this
method. For customers having complaints about service delivery, new machines will be planted
which would make food quickly. Only then changes can come over and can be used to change
current scenario. At every step proper monitoring has to be done and respective steps needs to be
taken (How to Improve Employee Performance, 2017). In order to get positive feedbacks from
customers waiters also have to be very well trained. Also marketing of Posh Nosh should be
done constantly by using radio, TV ads, newspapers and pamphlets. Normally people think that
marketing need not be done regularly but it is not so. It has to be done periodically.
3.3. Action plan to implement changes
The action plan of the company should be very clear and precise so that they know about
the goal and objectives which to be completed. It can increase the efficiency and accountability
in the organisation. Plan has to include the following points:
 What actions will occur?
 Changes brought by?
 Changes done by what time?
 Resources required?
 Communication.
What actions will occur?
As it is planning to bring Posh Nosh Farms into action with which it will be easy to get
the raw material from the farm only. Reason is that no impurity would be there in raw materials.
So, the money will be saved and this saved money can be utilised in the marketing of the product
and service.
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Developing Professional Practice in Human Resources
Changes brought by?
As by the Posh Nosh Farms to be built by investing and developing a production house
the project will make good profits.
Changes done by what time?
Changes will take place into action after a period of 2 months when plant will be
installed. This is a time period which is required to get this idea to be implemented (Teasdale,
2012).
Resources required?
Capital will be required for investing in project. Asset like land will also be required. For
any project resources are must to carry on any sort of work. Manager and entrepreneurs have this
duty to arrange and settle for all sorts of requirements required for project.
Communication.
Promotions, ads, banners etc will be the source of good communication to bring the new
customers. Without promotions the company cannot reach to the new market and building the
new customer relationship.
TASK 4
4.1. Impact of changes on business and its personnel
Posh Nosh will have these effects:
1.Updated: Keeping oneself updated must be done. Posh Nosh farms will market their products
in market and due to ongoing trend product will be sold more and valued more as compared to
older techniques. Using social websites and internet all sorts of information can be gathered.
These are really powerful tools and whole world is connected over this platform.
2.Opportunities: Due to newer techniques, workers will be curious and excited to learn about
techniques. It can be seen that these workers can be trained well and be promoted in future
(Ratten, 2014).
3.Innovation: Business which foster innovation is welcomed everywhere. A good idea can
change whole system and bring differences. Creativity is present in everybody and so can be
used for business purposes.
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4.Improved attitudes: Attitude play a major role in business and taking risk in it. With new
changes, come new attitude and confidence. Overall improvement is done of company and
employees.
4.2. Changes managed in business
Changes can't be implemented so easily. It takes time for an organisation to get used to
changes as well as it is applicable for employees working there. Employees have to understand
these changes and take proper actions.
1. Positive attitude: Employers have this responsibility to keep their employees motivated and
maintain a positive attitude. Going through a change is little challenging but if a positive attitude
is opted then it can be resolved easily. To get used to new role experiences must be used and
networking must be used.
2. Changes keep happening: One should keep in mind that change is constant and it keeps
going on. One thing is that it keeps you interested and doesn't bore you (Abebe, 2014). With this
philosophy, it becomes easier to go through changes and survive during this time.
3. Communicating with others to learn new role: As new role starts employee should get
connected to all stakeholders and people who have already done this role. Asking questions can
help a lot since they can answer all queries employee has and clear their problems.
4. Help others during change: By helping others it directly makes you comfortable with new
roles by understanding fact that everybody is going through same phase. Also, it has to be seen
that this help may again come as a reward in your crucial times.
To effectively implement the changes, Posh Nosh must undertake certain steps
which are as discussed below: -
Make a decision that changes are more important than other: - The main concern of
the owner is to expand the business but because of lack of funding they are certainly unable to
take long term objectives and making changes to undertake their plan.
Get advice: - Posh Nosh will conduct market research and seek advice to avoid the risk
of going to unknown culture and geographic area. Other way to refer to advises is to take good
look at what other competitors are doing.
Trial the change: - Formulating a project action plan will be very helpful. It will be for
limited time period, such as few months or year, etc. Effective implementation of change in the
organization requires testing (Bridge and O'Neill, 2012). This way the company will be able to
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see any mistake and problems during the process, then find out solution with a proper evaluation
of plan before implementing it within the organization.
Feedback from customers: - Conducting market research and collecting liable set of
data and information from respective respondents is referred to be yet another considerate
outlook. After which, the employees are also required to be kept informed about the changes that
are required to be implemented before revising the changed plans as a whole. Also, measuring
how the changes will occur and perform in long run is required to be considered by the
employees.
Comparing the past performance after implementing the changes, it would be possible for
the organization to see how smoothly the changes are applied. Keeping a strong database would
represent what has been proven to be better and what not. Significant impact of any changes can
be perceived by the workforce of Posh Nosh. To evaluate the same, it would be necessary for the
organisation to speak with them and consider whether any other possible changes are required or
not.
4.3. Monitor improvement in business in certain period of time
Posh Nosh has undergone changes due to its marketing techniques. It can be seen that
number of sales has doubled with respect to previous times. This has happened merely due to a
good marketing plan. Many people were attracted and impressed by its marketing techniques
specially of providing free food samples and drinks. Also, ads over radios and TV has made
people realise why this brand is so good to try out food items (Rocha, 2012). Customers now
know a place from where quality food and drinks can be obtained. Also, it is seen that people are
preferring burgers and French fries more. Major benefit to Posh Nosh is that it is a local
company and so people love it. Local food has a sense of reliability and similarity. A good
quality product and a good sense of market has enabled Posh Nosh to bring changes in their
company and sales have increased. This improvement will happen over time and proper benefits
can redeemed.
CONCLUSION
Small and medium sized enterprise plays a crucial role in improving economy. They
provide entrepreneurial skills, employment and innovative ideas. Along with which, they are also
known to generate many employment opportunities. Competitive advantage is also there since it
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mainly works over capital, human workforce and risk-taking capacity. Posh Nosh is using
current marketing strategies and latest equipment’s with advanced technology to effectively
perform in the market. Small scale industries are a good platform where profits can be built
faster. So, it can be concluded that such independent organisations have power to change
economy of a country and attract many investors. Such industries must be promoted.
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REFERENCES
Books and Journals
Abebe, 2014. Electronic commerce adoption, entrepreneurial orientation and small-and medium-
sized enterprise (SME) performance. Journal of small business and enterprise
development. 21(1). pp.100-116.
Blackburn, Hart and Wainwright, 2013. Small business performance: business, strategy and
owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small
business. Palgrave Macmillan.
Gronum and et. al 2012. The role of networks in small and medium‐sized enterprise innovation
and firm performance. Journal of Small Business Management. 50(2). pp.257-282.
Gronum, Verreynne and Kastelle, 2012. The role of networks in small and medium‐sized
enterprise innovation and firm performance. Journal of Small Business
Management. 50(2). pp.257-282.
Hatten, 2015. Small business management: Entrepreneurship and beyond. Nelson Education.
Neneh, 2012. An exploratory study on entrepreneurial mindset in the small and medium
enterprise (SME) sector: A South African perspective on fostering small and medium
enterprise (SME) success. African Journal of Business Management. 6(9). pp.3364.
Ratten, 2014. Future research directions for collective entrepreneurship in developing countries:
a small and medium-sized enterprise perspective. International Journal of
Entrepreneurship and Small Business. 22(2). pp.266-274.
Rocha, 2012. The impact of the business environment on the size of the micro, small and
medium enterprise sector; preliminary findings from a cross-country
comparison. Procedia Economics and Finance. 4. pp.335-349.
Sampaio, Thomas and Font, 2012. Small business management and environmental
engagement. Journal of Sustainable Tourism. 20(2). pp.179-193.
Schoonjans and et. al 2013. Formal business networking and SME growth. Small Business
Economics. 41(1). pp.169-181.
Storey, 2016. Understanding the small business sector. Routledge. pp.11-34.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
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Urban and Naidoo, 2012. Business sustainability: empirical evidence on operational skills in
SMEs in South Africa. Journal of Small Business and Enterprise Development. 19(1)
pp.146-163.
Online
Advantages and Disadvantages of Small Scale Industries. 2016. [Online]. Available through:
<http://www.importantindia.com/24802/advantages-and-disadvantages-of-small-scale-
industries/> [Accessed on 26th September 2017].
How to Improve Employee Performance. 2017. [Online]. Available through:
<http://blog.walkme.com/how-to-improve-employee-performance/> [Accessed on 26th
September 2017].
POSH NOSH – ABOUT US & OUR ETHOS, 2017. [Online]. Available through: <
https://www.posh-nosh.co.uk/what-we-do> [Accessed on 26th September 2017].
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