Small Business Enterprise - Performance Analysis and Strategic Recommendations

Small Business Enterprise
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Table of Contents
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................5
a) You are to produce a profile of your selected business or one from the Dragons Den series
using the suggested headings:..........................................................................................................5
b) Compare the performance of your selected business with one of the following; (AC1.2).........7
Task 2...............................................................................................................................................9
a) Recommend with justification, appropriate actions to overcome the weaknesses. (AC2.1).......9
b) Analyse ways in which the existing performance could be maintained and strengthened and
(AC2.2)............................................................................................................................................9
c) Suggest new areas in which the business could expand with reasonable justification. (AC2.3)
.......................................................................................................................................................10
Task 3.............................................................................................................................................12
a) Give your assessment on existing business objectives and plans. (AC3.1)..............................12
b) Review business plans and suggest areas where changes can be made. (AC3.2).....................12
c) Prepare an action plan to implement the changes. (AC3.3)......................................................13
Task 4.............................................................................................................................................16
Based on the information you have collected produce a report on:..............................................16
Introduction....................................................................................................................................16
a) The impact the proposed changes will have on the business and its personnel. (AC4.1).........16
b) The plan for how the changes will be managed in the business. (AC4.2)................................17
c) The improvements in the performance of the business over the past two years (AC4.3)........18
Conclusion.....................................................................................................................................22
Reference List................................................................................................................................23
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Introduction
The term “small-scale enterprises” or “small business enterprises” refers to that form of
business employing small number of workers and having low sales volume. The ownership of
small business enterprises lies in the hands of private individuals, partnerships, corporations or
sole proprietors. As per the Companies Act 2006, in United Kingdom a small business enterprise
employs less than 50 individuals and their turnover is less than £6.5 million. In case of UK, 99
per cent of the corporations are either medium sized or small sized business companies, thereby
having a significant contribution in generation of employment opportunities and GDP of the
country. The given assignment focuses on highlighting the significance of a small scale
enterprise with reference to Skinnydip Limited, a London based brand dealing in fashion
accessories. The investors in the reality show conducted by Dragons Den had supported
Skinnydip with investment needed for the expansion of their business. Theo Paphitis, Peter
Jones and Deborah Meaden had invested an amount of £120,000 in their company. Established
on 2011, it offers a wide variety of creative products like bags, iPhone cases and covers,
headphones, speakers, clothes, accessories and other stylish goods. The assignment will be
analysing the current performance of the company and accordingly recommendations have been
offered for improving their business performance and operations.
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Task 1
a) You are to produce a profile of your selected business or one from the Dragons Den
series using the suggested headings:
 Name of the Company: Skinnydip Limited
 Owner structure: The Company was established on 20th January, 2011, in London by
James Isadore Gold, Richard Matthew Gold and Lewis Blitz, operating under the
ownership of “Companies House of United Kingdom” (Skinnydip.com 2018). A private-
limited company by nature, it is registered under “Wholesale of telecommunication and
electronic equipment and parts”. Currently, the three founders of the company are its
acting directors.
 History/Background: Two brothers founded skinny dip. They were namely Richard
Matthew Gold and James Isadore Gold, along with Lewis Blitz their friend. Initially, the
business function of the organisation was to supply headphones, iPhone cases and other
accessories. With the group efforts of the three friends, they were successful in supplying
original motivating goods, a wide variety of goods that come in unique designs and
unconventional forms, which makes them different from the products offered by other
companies. After completing one year, the owners of the company decided it take part in
a reality show named Dragons Den for acquiring financial assistance for expansion of
business. Impressed by the owners of the company, the investors at Dragons Den agreed
to offer it the necessary funds. Further, within 18 months of its incorporation, the
company had managed to sell approximately 2, 00,000 goods (Skinnydip.com 2018).
The profits were reinvested by investing into retail business and expanding their business
operations. The company joined hands with e-commerce retail companies like River
Island, Asos.com, Harvey Nichols and Topshop. The company has more than 30 stores
spread across different parts of the United Kingdom, U.S.A. and other places. The
company had settled with Peter Jones for 30 per cent of the equity in return of £120,000,
but the deal was cancelled with a settlement of 20 per cent equity for £120,000
(Skinnydip.com 2018). The Dragons Den reality show helped the organisation in gaining
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immense popularity and creating positive impression in the minds of the investors helped
in its prosperity.
 Its activity: The primary function of the company is to provide designer iPhone cases and
covers, bags, headphones, backpacks, jewellery, stationeries, sunglasses and other
fashionable accessories through its chains of retail stores and e-commerce business.
 Business location: The registered office of the company is situated at “30 City Road,
London, United Kingdom, EC1Y 2AB”. With 32 retail stores in London and online
website delivering in 30 countries, the country operates its business (Skinnydip.com
2018).
 Strengths and weaknesses: The strengths and weaknesses of the company have been
analysed and presented in the table below:
Strengths Weaknesses
 The prime locations of the stores helps
in attracting large number of customers
who are fond of fashionable and
exclusive accessories.
 Online business has helped in acquiring
67,400 Facebook, 18,800 Twitter, and
423,000 Instagram followers.
 Student discounts have helped in
acquiring customers of young
generation.
 Creativity and innovation in their
designs have helped in their growth.
 The products of the company are
slightly expensive.
 Poor website, which does not offer
necessary information relating to the
company
 It has a huge turnaround rate of its
goods, as it operates in the fashion
industry, which makes it difficult for
the company to deal with the latest
trends.
 Failure to offer products with the
current trends hampers the profit
margin.
Table 1- Strengths and Weaknesses of Skinnydip
(Source: Created by the learner)
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b) Compare the performance of your selected business with one of the following; (AC1.2)
In order to make a company comparison based on their performance, Wolf and Badger has been
selected. Wolf and Badger is a company offering various independent brands through its online
website.
Basis of
Distinction
Skinnydip Wolf & Badge
Background It was incorporated in 2011 as a fashion
retail company offering designer
iPhone cases, various accessories,
headphones, bags and others
(Skinnydip.com 2018).
It was incorporated in 2009 offering
variety of goods serving the needs of
women, men, kids and some home
ware goods (Wolf &Badger.com
2018).
Marketing With the implementation of marketing
strategies like special student offers, the
company has been able to attract a large
number of youth as their customer base.
In addition, social media activities and
promotional offers have been equally
beneficial. The association with Coca-
Cola for designing and advertisement of
their goods was another milestone of
success. Nevertheless, in comparison
to other fashion retailing companies, it
has less buyers and followers.
The marketing strategies of the
company comprised of sending
customised messages to every
customer, designed as per their
interests, which further helped in
acquiring large number of loyal
customer base. Further, the automation
technique of the company helped in
advanced marketing of the goods. The
online website helped in generating
more revenue and increased it by 4 per
cent. The magazines also help in
presenting and marketing their
products.
Sales In 2016, the organisation earned a profit
of £2.5 million through the sale of its
designers and exclusive products
Despite the large collection of goods
and services offered, it did not incur
huge profits in 2016. Instead, a loss
amounting to £2.3 million was
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