Small Business Success Factors

This assignment delves into the critical factors that influence the success of small and medium-sized enterprises (SMEs). It analyzes research findings on key aspects such as resilience in volatile markets, strategies employed by high-growth SMEs, and the impact of entrepreneur characteristics on business outcomes. The assignment also considers the role of innovation, sustainability practices, and internationalization in shaping SME success.

Small Business
Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1Business profile by evaluating its weaknesses and strengths............................................3
1.2 Comparative analysis of financial performance of business............................................5
TASK 2............................................................................................................................................8
2.1 Suitable actions to overcome weakness...........................................................................8
2.2 Analysis of ways by which performance can be maintained and strengthened...............9
2.3 Areas in which business could expand.............................................................................9
TASK 3..........................................................................................................................................10
3.1 Assessment of existing plans and objectives of business..............................................10
3.2 Review business plan & suggested areas of change.......................................................10
3.3 Action plan to execute change........................................................................................10
TASK 4..........................................................................................................................................12
4.1 Impact of change on business and employees................................................................12
4.2 Plan for managing change in business............................................................................12
4.3 Improvements in business performance over past two years.........................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Small business enterprises are considered as an important part that assists in
development of economy of the country. It is the basis of livelihood for the people of
lower and middle class as it administers employment to them which assist in achieving
their basic needs (Acs, Audretsch and Lehmann, 2013). Although the size of business is
small, its activities covers various areas like whole selling, production, mining, retailing
etc. The investment in these businesses are low but administers employment to large
number of people in the economy. Besides this, medium and large size businesses are
relying on small enterprises. These ventures create opportunities of job and plays
essential role in increasing GDP of the country. Small enterprises are highly impacted
by any kind of change in economy. Although government provides subsidy, tax
exemption etc., these businesses are influenced. In the present assignment, chosen
company is Café Finix which is located in London, UK. It is a small shop that offers
coffee to its customers. They do not get any support from management in organising the
fund for project. So, the report includes strengths and weaknesses of business and
various comparative measures that assists in handling issues in appropriate way. Due to
constant change in business environment, various objectives and strategies are
formulated for reviewing business plan.
TASK 1
1.1Business profile by evaluating its weaknesses and strengths
Café Finix deals in café products and is small size business enterprise. It plays essential role
in the development of economy and improve living standard of people. It also administers
employment opportunity to large number of individuals (Barber, Metcalfe and Porteous,
2016) Around 110 employees are working in café and they plan to increase their manpower.
Competition for small businesses are so high in comparison from medium and large.
Therefore, management team develop a report in order to determine strengths and
weaknesses of business. Upper management emphasize on the issues that are being faced by

firm in attaining its daily targets. The prime objective of Café Finix is to administer eco-
friendly surroundings with good interior to its customers. SWOT Analysis of Café are as
follows:

Strengths Weaknesses
Company's major strength is that it delivers a
large variety of goods along with the fast
services.
Management of the firm is suffering with lack
of innovation due to unskilled manpower
which is not capable to cook innovative food.
Pricing policy for their offered food and
beverages is less and affordable which assists
in attaining high sales.
Weaknesses arise when competitors of the firm
come with competitive and attractive pricing
policy that leads to decline in the market share.
Location is the important factor that needs to
be considered as it adds value to firm and
assists in attracting large group of customers.
Due to lack of professional and skilled
marketing team, firm fails to compete with
their competitors as they are unable to
formulate effective marketing strategies in
order to attain the competitive edge in market.
One of the major strengths of firm is its
employees who do not resist to adapt with
change and adopt new culture that assists them
in exploring new opportunities and lower
down threats.
Any change made in legal and political
environment leads company to failure as they
are not able to implement changes in a proper
manner.
Another strength of company is that it provides
tasty as well as hygienic food with clean
dining room and other facilities.
Untrained staff put a negative impact on
regular customers that give a reason to
customers to switch cafe.
Above mentioned are some advantages and limitations of Cafe Finix that are
needed to be kept in view by management at the time of formulating business plans and policies.
Weaknesses of company provide guidance to managers to eliminate all such components that are
the cause of failure (Bernaert and et. al., 2014). Both weaknesses and strengths assist managers
in framing effective policies that help in building a strong brand image and attracting a large
number of customers.
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1.2 Comparative analysis of financial performance of business
Performance measurement techniques are the tools that enable company to assess overall
performance throughout the year. This determines financial position of the firm and assists
managers in assessing the effectiveness of business operations.
For the year ended 30th March, 2016 to April 2017
2016 2017
£ £
Sales 130,000 250,000
Cost of Sales 90,000 180,000
Gross profit 60,000 100,000
Overheads 14,000 19,000
Net profit 34,000 38,000
BALANCE SHEET
For the year ended 30th March 2016 to 1st April 2017
2016 2017
Fixed assets 20,000 25,000
Current assets
Stock 6,000 5,000
Debtors 14,000 40,000
Bank 3,000 0
23,000 45,000
Less: Current liabilities
Creditors 5,000 16,000
Bank Overdraft 0 10,000
5,000 26,000
Working Capital 16,000 30,000
Net Assets 30,000 41,000
Financed by capital
Opening Capital 22,000 29,000
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Add net profit 30,000 35,000
52,000 64,000
Less: Drawings 23,000 23,000
Closing capital 29,000 41,000
On the basis of above mentioned balance sheet, it has been said that closing capital of
2016 is £ 29,000 which is increased by £ 41,000 in 2017. The unsold stock of company is £6000
in 2016 but in 2017, it is £5000. So, it can be said that the position of Cafe is improved in this
year.
This assists the management in formulating effective action plans and suitable strategies.
They identify the factors that hamper the progress of company (Chow and et. al., 2011). Balance
sheet determines the assets and liabilities of organisation. In comparison to assets, if liabilities
are more than Cafe Finix needs to formulate suitable strategies and policies in order to avoid debt
situation as more borrowings influence goodwill of firm.
Non-financial evaluation of Human resource
Year ending 2016 Cafe Finix Worthanshaw's Ltd
Staff Turnover 10.00% 11%
Absentee rates 4 % 5.00%
Percentage of job chance
which are offered by company
17.00% 13.00%
Perception of customers regarding service and product quality
Year ending 2016 Cafe Finix Worthanshaw's Ltd
Production 91% of individuals agreed on
producing good quality but
remaining percentage are not
so much satisfied as they are
little confused.
74% of individuals are agreed
on producing good quality
products but remaining
persons are not satisfied with
goods and services.
Deliver performance Yes, performance rate has Yes, Diversification of
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been increased by 5% in 2015. business is done by offering
products at different places.
Marketing Various diversified products
are available which consumers
are willing to have.
Dairy products are already
provided by the company and
now they want expansion of
their business in different
areas.
TASK 2
2.1 Suitable actions to overcome weakness
It is required by Cafe Finix to eventuate weaknesses by gathering primary as well as
secondary data and take suitable actions in order to eliminate hurdles that restricts its growth
(Cowling and et. al., 2015). It is the responsibility of administrator to determine the issues and
take effective measures in order to overcome them. Based on strengths and weaknesses, some
major issues that are determined by the manager are:
 Unavailability of skilled and trained staff
 Lack of capital due to which future projects cannot be executed
 High competition that influence efficiency and productivity of firm
 Lack of experienced personnel who is specialized in specific area
 After Brexit, changes in government policies and regulations
Based on the above mentioned weaknesses, it is necessary to prepare appropriate plans
and take necessary steps by which issues can be overcome.
Recommendations:
 Process of recruitment should be systematic so that skilled employees can be selected on
right position in order to meet the requirements of firm.
 Proper induction and training programme needs to be conducted so that employees can be
familiar with company's structure and policies as well as get an opportunity to enhance
skills and competencies (De Silva and et. al., 2012).
 Proper analysis of market is necessary in order to grow and sustain for a long term as
well as explore more opportunities from market.
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 Get advice from professionals and experienced persons so that effective decisions can be
made and hurdles can be removed.
After Brexit, whole economy of United Kingdom gets badly affected as its growth is declined
and so, it is necessary for the organisation to keep their structure flexible so that employees are
able to effectively deal with problems.
2.2 Analysis of ways by which performance can be maintained and strengthened
It is necessary for Cafe finix to consider all those factors that influence the performance
of business in direct or indirect manner (Fassin, Van Rossem and Buelens, 2011). Firm
emphasize on improving goods and services quality which they provide to their customers. This
provides ability to firm to face fierce competition in effective manner. Management has the
responsibility to formulate targets and objectives that administer direction to existing plan. Total
quality management is an important factor that company needs to consider in order to offer high
quality products to customers and gain their loyalty.
 Firm needs to consider all the factors that can increase its performance. Main purpose
behind it is to improve profitability and sales.
 Business enterprise needs to follow all the rules and policies made by the government of
UK. As non compliance of law results in penalty and influence goodwill of the company.
 It is necessary for the company to choose right location which can be easily accessible by
large population. This provides benefits to firm in its development and growth.
 Flexible structure should be adopted by the organisation within work environment so that
changes can easily adopted in the policies and practices of firm.
Above mentioned are some suggestions that assists in increasing growth and performance
of business. In past years, performance of firm is not satisfactory as expenditure is more which
influence budget. Therefore, management needs to assess such areas that facilitates in managing
growth and performance. Professionals review regarding company's condition suggests measures
that assist to overcome weakness as well as add value.
2.3 Areas in which business could expand
Cafe Finix is the well known restaurant of London due to its variety and high quality of
food. From last year, financial condition of the firm is stable, i.e., revenues are more. Because of
constant growth and good market position, firm needs to formulate plan for expansion (Forsman,
2011). For diversification of business, marketing manager needs to use effective promotional
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tools in order to create good image of the company. Justifications of some ways by which firm
can expand its business:
Employees: In order to improve operations of company, management needs to recruit
skilled and competent workforce and provides them appropriate training and development so that
they are able to work in better manner and attain objectives of the firm (Gunasekaran, Rai and
Griffin, 2011) Market determination: Location of firm also determines its future profitability.
So it is necessary to select appropriate location. In case of Cafe Finix, manager needs to use
various strategies such as diversification and growth strategy in order to redeposition structure of
organisation.
Consult from experts: Firm needs to take suggestions from experts. This assist the
company in evaluating the areas in which risks are associated and develop strategies to overcome
these.
TASK 3
3.1 Assessment of existing plans and objectives of business
The current position of the country will be determined by checking growth on continuous
basis. This helps in determining those areas where improvement is required. This assists
the manager in formulating effective plans and objectives in order to enhance the
performance of business. Café Finix is one of the popular cafeteria of United Kingdom that
provides good quality food products to its customers. Clearly defined objectives and
targets helps the company in its rapid growth in market. The factors of business
environment, i.e., internal and external needs to be analysed so that targeted goals and
objectives can be successfully attained.
Main aim of Café Finix is to attain large portion of market share in upcoming years and in
order to attain this objective, manager of the company revise their strategies and plans on
continuous basis. Assessment of plan are defined below:
Strategic goals: Nature of goals should be analysed by the manages that whether it is qualitative
or quantitative (Hansen and Hamilton, 2011). It should be measured in terms of quantity. This
helps in determining sales performance of the firm as well as it also assists the manager in
knowing response of customers. It facilitates in defining roles of manpower.
Objectives: Organisations are required to establish their objectives via using SMART tool.
These are mainly used to monitor the development and growth of measurable
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goal. .SMART means specific, measurable, attainable, relevant and timely (Hilmersson,
2014).
Innovation and Creativity: As the respective firm is currently deals in food and restaurant
business, thus it is essential for them to keep updating its menu as per the demand of
customers. They are require to bring frequent innovation in their food products and also
they can change its interior or decor in order to make it more attractive and eye-catching
which ultimately seize the attention of visitors.
3.2 Review business plan & suggested areas of change
After reviewing the goals and plan of referred firm, it can be concluded that the firm is not
doing well in terms of yielding higher profits and customer satisfaction. Thus, the need for
change arises. The existing plan of Café Finix is rely on business expansion and capturing
the share of developing and untouched market. There are various factors associated with
business concern such as market risk, government rules and regulation, competitors etc.
All these factors needs to be taken into consideration while framing effective strategies
related with change. Café Finix needs to conduct market research in order to determine the
needs and wants of its potential customer. They can also figure out how many people
prefers to visits Café Finix over any other rivalry firm and find out what factors attracts
them the most. Also they are require to bring innovation in their food which assist them in
gaining higher competitive advantage. Following are the steps used in revising business
plan are as follows:
Set Objective and Aims: Their revised objectives and goals are as follows:
 Increase market share by 20%
 Serve best quality services and higher customer satisfaction (Islam and et. al.,
2011)
 Modify the production process via innovative and advanced technology.
Develop Plan: For attaining business objective in an effective and efficient manner, it is
essential to formulate constructive business plan. With the help of SWOT framework,
respective company can easily determine its strength, weakness, threat and opportunities
that further aid in developing effective strategies.
 Allocation of Resources: It is important for Café Finix to utilise the available
resources in a cost, time and energy efficient manner. Resources are mainly
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available in human, financial and physical. Company needs to use it an optimum
manner (Jasra and et. al., 2012)
.
Monitoring and Controlling: After completing all the above mentioned stages, Café Finix
needs to monitor all activities and plans and make sure that all are going on in an effective
way. However, if they find any obstruction in their business activity they are require to
develop corrective actions for that.
3.3 Action plan to execute change
Action plan is a descriptive plan that includes all the actions that are being taken by the
company in future so that, objectives and targets of the company can be accomplished in
effective and efficient manner. Various steps that are including in action plan are as follows:
 Define problem
 Gather and analyse data
 Clarify & prioritize problem
 Write goal statement for every solution
 Implement action plan
 Monitor and evaluation
 Restart with new problem
Management of Cafe Finix is responsible for successful implementation of plan. It is
required by the manager to follow this plan in proper way so that objectives and targets of the
firm can be successfully attained (Olszak and Ziemba, 2012). It is necessary to conduct research
in order to analyse market trends and manager needs to prioritize each activity according to the
schedule. After this, benefits gained by the company must be evaluated.
Cafe Finix action plan are as follows:
Objective
s
Actions Priority Benefits Materia
l
Resourc
es
Time
scale
Responsi
bility
Success
factor
Monitoring
strategy
Customer
satisfacti
Conduct
market
Customer
satisfactio
Incremen
t in
Capital
is the
One
mont
Marketing
team as
Detailed Constant
assessment
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on research. n is the
major
priority of
business
concern.
product
sales.
prime
require
ment.
h well as
customer
service
managem
ent team.
data. of
information
and data
collected
from
customers.
Good
quality
food
Health
and
hygiene
needs of
customer
s
Hygiene is
the crucial
factor that
encourage
customers
to visit
cafe more.
Healthy
and high
quality
food
assists in
attracting
large
number
of
customer
s.
Physical
as well
as
financial
resource
s.
Besides
this
creativit
y is
needed.
one
week
Head
chef.
Total
quality
manage
ment
and
preferred
quality
of
customer
s.
Chef's new
invention
and
customers
feedback.
Proposed changes assists in business expansion by offering more dishes to consumers,
redesigning structure, opening new outlets in various countries and made it comfortable and
luxurious.
TASK 4
4.1 Impact of change on business and employees
Changes are important and it is necessary to implement change in plans and operations of
business on regular basis. If any change takes place in the firm, whole organisation and its
structure gets influenced (Soininen and et. al., 2012). Similarly, alterations in business plans
influence functioning of all departments. The plan consist of various actions and strategies and
all the activities that are required for the proper functioning of organisation. In case of Cafe
Finix, change impacts on business as well as its employees. It is important to follow change steps
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properly so that change can be effectively managed. Impact of changes on enterprise are as
follows:
 Due to proper allocation of resources, it is seen that financial planning of company is
improved and it becomes easy for financial administrator ton assign funds in proper way
to each department for every activity. It also enhance profits and revenues of company
(Williams and Schaefer, 2013).
 It is observe that execution of latest technology in business processes enables the
organisation top manage data and information in appropriate way. This render
information to Cafe Finix about customer visit. By redesigning structure, customers are more required towards the cafe and it lower
down the requirement of promotion.
Influence on personnel:
 Updated menu card of Cafe Finix compels consumer to visit cafe on continuous basis to
try dishes that are introduced by them.
 Social cohesion is the reason that encourage customers to visit cafe with family and
friends.
Implementation of change assists the firm in increasing its productivity and profitability
in effective and efficient manner.
4.2 Plan for managing change in business
Change management is the process of managing change that takes place in the
organisation. After designing and implementing plan, manage change is important as per the
plan. This plan is prepared by top management and it includes all the informations and details
related to implementation of change. Manager needs to ensure that change is implemented in
proper way. The procedure of managing change is defined below:
Taking opinion: Changes are the crucial part of business so, it is necessary for Cafe Finix
to take opinion of professionals before execute any alteration within organisation (Zortea-
Johnston, 2015). For example; if firm wants to make flexible structure, then what changes are
required and in which manner. All these kinds of suggestions can be take from experts.
Test change: Before permanently implement change, it is important to test the change
first. After this, actual performance is measured with standard and corrective actions are taken if
required.
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Taking feedback from personnel: Views and opinions of workforce related to change are
important. Their views assists in making change process easy. After execution of change,
opinions of owners are also be taken.
Take feedback from customers: Customers are important participants of business and
plays crucial role in increasing profitability and sales of the company. This assist in identifying
the areas where alterations are required (Darroch and Matear, 2012) So, it is essential for the
administration to consider the opinions of customers and execute change accordingly.
4.3 Improvements in business performance over past two years
It is important for the managers to evaluate and monitor the performance of organisation
on regular basis. This is done by using performance management tool, i.e., balance scorecard
method. It is necessary for the firm to design appropriate budget, set targets so that business
operations can run smoothly. From last few years, Cafe Finix face financial crisis and their
quality of product is not good. Company needs to take necessary steps and execute change so
that problems can be overcome. The firm needs to measure workforce performance with
outcomes of change. Balance scorecard technique is an effective tool that assists in resolving
issues (Wilson, 2016). It defines the completion time of task. Management is authorized to take
strict actions if tasks are not completed on time.
CONCLUSION
As per the above mentioned report, it has been concluded that SME's plays vital role in
growth and development of country. It is important for management to execute and manage
change in organisation on constant basis. By the application of corrective measures in proper
manner, manager are able to formulate appropriate strategies and plans in order to successfully
implement change at workplace in effective manner. Managers take various steps so that
performance and productivity of the company can be improved. Business plan needs to be revise
on regular basis.
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REFERENCES
Books and Journal
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Routledge.
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starting point for bringing EA to SMEs, based on adoption models. In Information
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global economic recession? UK evidence on sales and job dynamics. International
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Fassin, Y., Van Rossem, A. and Buelens, M., 2011. Small-business owner-managers’
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Forsman, H., 2011. Innovation capacity and innovation development in small enterprises. A
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Hansen, B. and Hamilton, R. T., 2011. Factors distinguishing small firm growers and non-
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