Literature Review on Small Business Success Factors

This assignment requires a detailed literature review on the success factors of small businesses. The student needs to analyze various studies and research papers published between 2011 and 2020 on topics such as entrepreneurial orientation, innovation capacity, marketing practices, business model applications, and E-marketing use in small businesses. The student should also identify gaps in existing research and provide recommendations for future studies.

Small Business
Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
1.1 Profile of a selected small business enterprise......................................................................1
1. Identification of size, structure, goals and objectives.........................................................1
2. Internal constraints on business..........................................................................................2
1.2 Comparative analysis of performance of business................................................................2
LO 2.................................................................................................................................................4
2.1 Appropriate actions to overcome weaknesses in the business..............................................4
2.2 Approaches through which existing performance could be maintained and strengthened . .4
2.3 New areas of expansion for a business.................................................................................5
LO 3 ................................................................................................................................................6
3.1 Assessment of current objectives and plans..........................................................................6
3.2 Revision of plan to incorporate changes...............................................................................7
3.3 Action plan for change implementation................................................................................8
LO 4.................................................................................................................................................9
4.1 investigating and reporting potential impacts on business....................................................9
4.2 Management of changes in the business.............................................................................10
4.3 Monitor improvement over a given timescale....................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Small business enterprise is referred as a business which carries out its operations at a
diminutive scale and employs less number of people ( Aremu and Adeyemi, 2011.). These
enterprises are mostly owned and managed by individuals who carry out operations for self-gain.
The popular manner through which small enterprises operate are sole proprietorship, partnerships
and corporations. This assignment aims to analyse the working of Hallmark Hotels. It is a small
scale business fulfilling the hospitality needs of people. This aims to investigate the performance
and identify ways through which performance can be enhanced. The objectives of business will
be revised so that changes can be proposed. Lastly, the impact of changes on business will be
identified.
LO 1
1.1 Profile of a selected small business enterprise
Hallmark hotel is a small business enterprise working in the hospitality sector in United
Kingdom. It is referred as one of the fastest growing enterprises relating to hospitality sector in
country. This organisation began its operations in the year 2007 and experienced tremendous
growth in the operating market. The number of employees in this corporation are lower than 50
and annual turnover of this enterprise stands less than 10 million euros.
1. Identification of size, structure, goals and objectives
Type of business: It is an organisation carrying out its operations in the hospitality sector
of country. This institution is responsible for fulfilling the housing and entertainment needs of
visitors.
Structure: The ownership structure of this organisation states that it is owned and
managed by Topland group. This group has acquired Hallmark hotel for a price of 75 million
euros. Topland group is an investment group encompassing number of people who are originally
known to deal in the real estate industry.
Mission, goals and objectives: The mission of this organisation is to provide best-in-class
hospitality services to guests visiting the hotel. The organisation has adopted a tailored approach
which refers to treat guests in manner they expect. The funding provided by Topland group is to
be utilised in rendering ideal services to customers which carry a positive impact on customer
experience. The long term strategy employed by this organisation aims to continue rendering
great hospitality services and extend their operations up to number of 50 hotels.
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2. Internal constraints on business
Constraints refer to the problems which are encountered by business in carrying out their
operations. The major constraints which are encountered by this hotel are as follows:
Competition: There are numerous organisations competing in the industry for a targeted
pool of consumers. This intensity of competition in the industry persuades a business into
deploying discounting and vouching tactics leading to a maintain stability in their operations
(Barbero, Casillas and Feldman, 2011).
Resources: A small business enterprise does not match corporations in terms of
resources. They are not confined to the possession of adequate funds as it also takes into
consideration workforce and technological resources as well. Such factors easily differentiate
between corporations and enterprises.
Expertise: This is another limitation which is encountered by small organisations. The
experience of carrying out operations in the market provides a business with expertise. This
feature will further help a business in fulfilling needs of consumers in the best possible manner.
1.2 Comparative analysis of performance of business
To compare the performance of this small scale enterprise, the financial statement such as
profit and loss account along with ratio analysis is employed.
Profit and Loss Account
For the year ended 30th April 2016 and 30th April 2017
2016
£
2017
£
Sales 300 420
Cost of Sales 50 60
Gross Profit 250 360
Overheads 100 100
Net. Profit 150 260
Balance Sheet 30 April 2016 and 30 April 2017
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2017(£) 2016 (£)
Notes
Fixed assets
Tangible assets 3 927 1 ,236
Current assets
Debtors 4 47,702 70,055
Creditors 90,030 104,131
Amounts falling due within one year 5 68,292 102,624
Cash at bank 42,328 34,076
Total assets less current liabilities 22,665 2743
Provisions for liabilities 185 247
Net assets
Capital and reserves
22 480 2,496
Called up share capital 100 100
Retained earnings 22,380 2,396
Shareholders' funds 22 480 2 496
Net current assets 21738 1 ,507
Total 2496 2496
Current ratio = current asset / current liability
2016 2017
Net profit margin = net profit/ net sales *
100
150/300 * 100= 50
Net margin = 260/420 *100 = 31.9
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Gross profit margin= gross profit/ net sales
* 100
250/300 *100= 83.33
Gross margin = 360/420*100= 85.7
It can be ascertained from the above financial overview, that this organisation is experiencing a
net increase in the profitability of this enterprise. There is a decline in the profits margin of this
enterprise at the same time there is an significant increase in the operational expenses in 2017,
when compared with year 2016.
LO 2
2.1 Appropriate actions to overcome weaknesses in the business
It is necessary to overcome weaknesses of the business so that better performance based
outcomes can be ascertained (Blackburn, Hart and Wainwright, 2013). The various ways through
which a business can overcome its limitations are as follows:
Technological Advancement: This is one of best approaches to counter with limitation of
technology in the organisation. It is essential to adopt the latest technology in delivering service
so that operations will be carried out in an improved manner. This feature will further help a
business in achieving the improved level of efficiency in operations.
Training and development: Employees working for the organisation determined
customer experience to a major extent. Therefore, it is necessary for a business to provide ample
of opportunities so that they will be able to enhance their skills and knowledge of carrying out
their individual tasks ( Importance of Training and Development, 2014.). This feature will
further equip a business in rendering specialist services to people.
Marketing strategy: This is another tool which helps a business in marking their presence
in the market. Marketing tools can be employed by a business in informing more people about
the job. Company can also take help from marketing tools and tactics to enhance the level of
sales volume of this enterprise.
Financial assistance: it is very important for a business to be possess adequate financial
resources so that major tasks are carried out. The justification of same is that they are essential in
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carrying out day-to-day tasks. Financial resources help in adopting the latest technology along
with recruiting competent individuals for organisation.
2.2 Approaches through which existing performance could be maintained and strengthened
It is essential to maintain a certain level of consistency in the tasks so that more
customers can be retained within organisation (Bridge and O'Neill, 2012.). Therefore, a firm has
to adopt measures which help in maintaining the present performance level and simultaneously
improving the same. Some of the approaches are listed as below.
 The first approach is conducting a market research of business. This will help a business
in identifying the latest trends in market along with tastes and preferences of people
which lead to better provision of services.
 It is essential for a business to obtain feedbacks from the guests so that variations in
services can be identified and major shortcomings will be addressed.
 There should be continuous efforts carried out by business in strengthening and
motivating its workforce so that better services will be offered to guests.
 A business should adopt digitalisation in its operations so that trends will be matched. A
business staying up-to-date in the digital sector will be able to secure better revenues for
the firms and improved market awareness (Broekemier, Chau and Seshadri, 2015).
 There is the need to form a right and suitable organisational structure which defines clear
authority and subordinate relationship so that there will be less conflicts in the
organisation. This feature will help in maintaining the stability in operations of a
business.
 A business needs to adopt a reward programme so that efforts of the employees will be
monitored and rewarded which will lead to development of a productive culture within
organisation.
2.3 New areas of expansion for a business
It has been ascertained that Hallmark hotels are running successfully in the market and
possess ideal good return in forms of sales revenue. The next step for this business is to grow and
enlarge their operations so that they will be benefited in terms of market reputation and finance.
This organisation can either penetrate into the market or can venture into product diversification
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so that opportunities of the market can be achieved. The areas in which this small business can
expand are as follows:
Loans or Finance: Finance is a crucial component when a small business is looking to
enlarge its operations in the market. This enterprise can take assistance from banks or investors
to expand the size of business which will further help in catering more guests leading to better
revenues (Burrows, 2015).
Combining Companies: Another manner through which operations of business can be
expanded are integration of two brands. A small enterprise can integrate its efforts with a reputed
firm to secure more revenue through this business. When availing this expansion strategy, a
business can have access to financial as well as intellectual capital which is beneficial for
business.
New Segment development: A hotel can venture into new segment to test their luck. To
enter into untested domain, it is essential for a business to conduct the market research. The
research will help in identifying profitable opportunities which lies in the market (Chittithaworn
and et. al., 2011). For a small scale hotel, the major diversification can be opening up of a
restaurant and pub. This enterprise can form a restaurant expansion strategy and fulfil the needs
of F&B in operating market. This corporation possess a reputed brand name which they can
further employ to reap financial benefits.
LO 3
3.1 Assessment of current objectives and plans
It is very important for a business to continuously examine the objectives and plans for a
business to ensure that they are most relevant and suitable to business circumstances. The
objectives possessed by an enterprise must be assessed so that they can be manipulated according
to the needs of customers.
Business objective: this objective of an organisation working in the hospitality sector
aims to satisfy housing and entertaining needs of a consumers in best possible manner. The needs
of consumers are to be satisfied in the profitable manner so that business operations are carried
out in a smooth manner (Chun and Mun, 2012). The objective which have been established by
this enterprise is positive and more customer oriented which will lead employees to work harder
and achieve the defined benchmarks in the industry. The shortcoming of this approach is that
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there is lesser inclination towards profits which sometimes becomes barrier for the enterprise as
they lack possession of adequate financial resources.
Process: it is defined to be a manner in which operations are carried out in a business. It
also refers to the plan through which a business wishes to fulfil its objectives of an organisation.
There is not a clear description of the process which sometimes act as a major limitation for this
enterprise. The organised structure of the enterprise somewhat helps in rendering quality services
to people as it terminate chances of confusion and conflicts within an organisation (Cowling,
Liu and Ledger, 2012).
Performance Indicators: It is necessary for a business to employ performance indicators
so that major discrepancies are identified. The tool which is employed in this enterprise is
observation. It aims to monitor the performance and behaviour of employees so that the
shortcomings are addressed which ultimately leads to goal acquisition (Curran and Storey, 2016).
3.2 Revision of plan to incorporate changes
The revision of plan is necessary for an enterprise so that it is matched with
circumstances in the market. It refers to a process of an enterprise which aims to ensure that
goals and objectives are achieved. To formulate a right plan it is important for a business to
gather adequate information of the market circumstances and knowledge of the vision of the
company. The possession of right set of knowledge helps in formulating right plan so that goals
and objectives are achieved in the best possible manner (Eid and El-Gohary, 2013). The
competitive analysis is also carried out to determine whether the policies and practices which are
adopted by the rival firms are doing any good to them or not.
These circumstances enforces a business to adopt right set of plan so that they are able to
carry out their operations in the market at the same time coping with the dynamic nature of the
market. Present circumstances of the business are thoroughly analysed so that relevant practices
are adopted and right set of decisions are formulated (Fassin, Van Rossem and Buelens, 2011).
The Process which leads to revision of business plan are mentioned below:
Revision of business objectives:
 Increase in the market share by 20%
 Attain efficiency in business operations
 Adopt digitalisation in business related functions.
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The revision of business objectives is crucial and are comparatively more aggressive
when compared with previous business objectives. This enterprise now along with focus on the
quality of services takes into consideration their market standing more seriously.
Plan: the plan is now to formulate and adopt suitable marketing tactics which enhances
reach of this enterprise along with expanding sales volume numbers. This enterprise will now be
more active on the distinct digital platforms which have become indispensable in current
operating environment.
Allocation of resources: the resources which are now allocated are somewhat different
from the practices which were carried out in the organisation. More resources are now allocated
to the marketing of this enterprise which were at minimal level earlier. The another significant
allocation is considered in the domain of IT and technology as the business is aiming to enhance
its awareness and scale of operations in the existing market.
3.3 Action plan for change implementation
It is very necessary to implement change in the right manner as it can disrupt the ideal
functioning of a business for a longer time (Forsman, 2011). It is essential to provide every
activity with right set of time so that alteration in the environment can be carried out in the right
manner. An action plan determines manner in which activities will be carried out in an
organisation. The management should make sure that action plan is clear and act as a guidelines
for the path of progress. This action plan can also act as a measure to monitor and control
activities of employees working with the organisation (Gorgievski, Ascalon and Stephan, 2011).
Objectives Tasks Success Criteria Time frame Resources
Development of
Marketing
strategy
Thorough
assessment of
tools and
practices which
are employed by
rival
organisations.
Formulating of
right marketing
strategy which
fulfil requirement
of an enterprise.
20 Days Marketing team
will carry out this
tasks along with
tools of research.
Technology
Implementation
The task in this
action is make
Desired level of
efficiency in
45 days Manager looking
after operations of
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use of technology
in the best
possible manner
so that a
efficiency can be
attained.
operations is
referred to as
success criteria
this enterprise
will be employed
to carry out this
task.
Market research To analyse and
identify various
trends in the
market. The taste
and preferences
of customer will
be identified as
well.
The results of the
market research
which is carried
out in relevant
and ethical
manner.
15 Days A team of 3
professional from
marketing domain
will be employed
to carry out
market research.
Acquire finances To identify
various sources of
the market and
identify their pros
and cons for final
decision making.
Acquisition of
adequate finance.
45 days A manager will
be allocated to
identify and select
most suitable
source of finance.
LO 4
4.1 investigating and reporting potential impacts on business
It is an undeniable fact that change introduced in an enterprise carries an impact on all the
major segment of a business. All the tasks in a business are interrelated and can be influenced by
introducing change in a single segment (Jasra and et. al., 2012). The recent changes which are
introduced in the Hallmark hotels are bound to bring positive outcomes for an enterprise.
Ascertaining the impact of change in an organisation is as follows:
Finance: this is most important sector for an organisation as it makes sure that business
activities are sustained in the industry for a longer duration. The company will take assistance
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from contemporary sources of finance such as Venture capitalists or loans from the banks rather
than relying on the revenue attained by the organisation. The changes which will be ascertained
are that an organisation will now be possessed with more of finance and equally amount of
liabilities (Jones and Rowley, 2011).
Workload: there will be a significant impact on the workload of employees. The
introduction of technology will help business to rely less of human effort and integrate
technology into their operations (Ratten, 2014). There will be chances of less errors and more
efficiency in work that is being performed by employees.
Culture of an organisation: the recent changes will impact organisational culture. It
disrupts the manner in which work is carried out in an organisation. The culture of enterprise will
be more transformative and productive compared rather than quality oriented practices.
4.2 Management of changes in the business
It is necessary for a small business to employ a change management model so that an
enterprise is able to transforms in ideal manner (Lambert and Davidson, 2013). To facilitate in
the best manner lewin's change management model is employed. The metaphor of ice is utilised
to understand the concept of change. The various stages of this model are as follows:
Unfreeze: This steps aims to inform employees about the need of change within the
organisation. It is important for them to be informed about the change which is about to take
place within enterprise. It is the duty provided to the manager to guide employees through the
most difficult phase in the process of transformation.
Change: this steps involves introduction of change within the organisation. The adoption
of digital measures and expansion process which is employed by the enterprise. The actions and
efforts of employees are to be managed in an ideal manner so that change is introduced in the
best possible manner (Mahmood and Hanafi, 2013). The manager are persuaded to provide
assistance and support to employees so that they are able to cope with the change.
Freeze: this step aims to inculcate stability in the life of employees. They are now
gaining familiarity with the newly introduced systems and processes. It is very important for the
employees to be provided with time so that they are able to transform in right manner and adapt
to new circumstances of business.
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4.3 Monitor improvement over a given timescale
The changes which have been introduced in the organisation are to be monitored on a
regular basis so that it is able to reap its benefits (Oyedijo, Idris and Aliu, 2012). There is a
particular time allotted to each activity so that it is carried out in an improved manner. Such
circumstances makes it necessary to employ balanced scorecard approach so that changes are
monitored. A balanced scorecard undertakes all necessary details which are to be included in this
tool of monitoring such as targets, budgets and timescale offered to each activity. Hallmark
Hotels can adopt this approach so that changes are products and services are improved and
enlarged. This approach not only provides a resolution to queries but also determines the
outcomes ascertained from implemented change. It also acts as a pillar between current
circumstances of business and place where it aspires to be in the future (Philip, 2011). Any
discrepancies from the guidelines will result in failure of the task and organization have to start
this process again.
CONCLUSION
It can be comprehended from the above report that small businesses constitute as
important segment of the economy. These are referred to corporation which carries their
operations at a smaller level and stay confined to a particular section of economy. It has become
essential for organisations to enlarge their operations in the market so that they are able to build a
reputed brand. It is essential for organization catering their services in the hospitality sector so
that better revenue can be attained. The changes which are introduced in the enterprise is to be
managed effectively so that it leads to attain its predetermined objectives.
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REFERENCES
Books and Journals
Aremu, M.A. and Adeyemi, S.L., 2011. Small and medium scale enterprises as a survival
strategy for employment generation in Nigeria. Journal of sustainable development,
4(1), p.200.
Barbero, J.L., Casillas, J.C. and Feldman, H.D., 2011. Managerial capabilities and paths to
growth as determinants of high-growth small and medium-sized enterprises.
International Small Business Journal, 29(6), pp.671-694.
Blackburn, R.A., Hart, M. and Wainwright, T., 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.
Broekemier, G., Chau, N.N. and Seshadri, S., 2015. Social media practices among small
business-to-business enterprises. Small Business Institute Journal, 11(1), p.37
Burrows, R. ed., 2015. Deciphering the Enterprise Culture (Routledge Revivals):
Entrepreneurship, Petty Capitalism and the Restructuring of Britain. Routledge.
Chittithaworn and et.al., 2011. Factors affecting business success of small & medium enterprises
(SMEs) in Thailand. Asian Social Science. 7(5). p.180.
Chun, H. and Mun, S.B., 2012. Determinants of R&D cooperation in small and medium-sized
enterprises. Small Business Economics, 39(2), pp.419-436.
Cowling, M., Liu, W. and Ledger, A., 2012. Small business financing in the UK before and
during the current financial crisis. International Small Business Journal. 30(7). pp.778-
800.
Curran, J. and Storey, D.J. eds., 2016. Small firms in urban and rural locations. Routledge.
Eid, R. and El-Gohary, H., 2013. The impact of E-marketing use on small business enterprises'
marketing success. The Service Industries Journal, 33(1), pp.31-50.
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.
Forsman, H., 2011. Innovation capacity and innovation development in small enterprises. A
comparison between the manufacturing and service sectors. Research Policy, 40(5),
pp.739-750.
Gorgievski, M.J., Ascalon, M.E. and Stephan, U., 2011. Small business owners' success criteria,
a values approach to personal differences. Journal of Small Business
Management. 49(2). pp.207-232.
Jasra, J.M. and et. al., 2012. Determinants of business success of small and medium enterprises.
Jones, R. and Rowley, J., 2011. Entrepreneurial marketing in small businesses: A conceptual
exploration. International Small Business Journal. 29(1). pp.25-36.
Lambert, S.C. and Davidson, R.A., 2013. Applications of the business model in studies of
enterprise success, innovation and classification: An analysis of empirical research from
1996 to 2010. European Management Journal. 31(6). pp.668-681.
Mahmood, R. and Hanafi, N., 2013. Entrepreneurial orientation and business performance of
women-owned small and medium enterprises in malaysia: competitive advantage as a
mediator. International Journal of Business and Social Science, 4(1).
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Oyedijo, A., Idris, A.A. and Aliu, A.A., 2012. Impact of marketing practices on the performance
of small business enterprises: empirical evidence from Nigeria. European Journal of
Economics, Finance and Administrative Sciences, 46, pp.130-146.
Philip, M., 2011. Factors affecting business success of small & medium enterprises (SMEs).
Amity Global Business Review, 6(1), pp.118-136.
Ratten, V., 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.
Online
Training and Development, Importance of Training and Development. 2014. [Online]. Available
Through: <http://www.edu-resource.com/training-and-development.php>
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