Business Growth Strategies for SMEs

This assignment examines various strategies employed by Small and Medium Enterprises (SMEs) to achieve sustainable growth. It delves into financial management challenges faced by SMEs, the importance of mentorship programs for professional development, effective marketing techniques for small businesses, and the role of information technology adoption in enhancing SME performance. Additionally, it considers factors influencing business process management and explores how strategic partnerships can contribute to strengthening SME operations.

STUDENT NAME:
STUDENT ID:
SUBJECT CODE:
ASSIGNMENT TITLE: SMALL BUSINESS ENTERPRISE
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Table of Contents
Task 1...............................................................................................................................................3
Overview of the company................................................................................................................3
A.C1.1 Strengths and weaknesses of the organization....................................................................3
A.C1.2 Comparative analysis of the financial performance of the business...................................4
Task 2...............................................................................................................................................6
A.C2.1 Actions to overcome the weaknesses..................................................................................6
A.C2.2 Ways to sustain existing performance of the company.......................................................6
A.C2.3 New areas for expansion of the business............................................................................8
Task 3...............................................................................................................................................9
A.C3.1 Analysis of current business objectives and plans..............................................................9
A.C3.2 Review of the business plans and the scope for improvement............................................9
A.C 3.3 An action plan incorporating the changes........................................................................10
Task 4.............................................................................................................................................12
A.C 4.1 Impact of the changes on the business and employees....................................................12
A.C 4.2 Plan for management of the changes...............................................................................13
A.C Measurement of improvement in the performance for two years..........................................14
Reference List................................................................................................................................16
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Task 1
Overview of the company
Business name: The name of the company is Razzamataz. It is a theatre and dance company for
children.
Structure of the owners: It is a limited company that means the limited partners are not
personally liable for the investment made directly. The company has a general partner who
operates the daily operations of the company. This is a complicated process. Limited partners are
recruited or created by the company or one person. The limited partners have no such great
liability for the business activities personally.
Background of the company: The Company has gained superbly in terms of its profits after its
success on many occasions. In 2014, the company saw a peak in terms of revenue and
programmes but in 2015, its net revenue lessened and that has impacted on its expenditure as
well. The amount of assets in banks also shrank from around 94000 pounds to 59 thousand
pounds. It was established in 2000 and from there on it has been giving training in dance, drama
and other theatrical performances. It includes everything from West end theatre to street dance
and pop singing and acting.
Business activities:
It gives lessons in different types of theatrical performances and arts. Part from that it also trains
students to develop their self confidence and put their best in the task or activities that they are
doing. There are also different performance related activities done in terms of acting in front of
camera. It also teaches students how to memorize long paragraphs as speeches and what are the
necessary steps that can be taken to get good communication and language skills.
Business location:
It has schools in almost every major city in the UK and all its classes are well coordinated and
equipped with skilled teachers and facilities.
A.C1.1 Strengths and weaknesses of the organization
The strengths and weaknesses of the organization are provided here through a SWOT analysis.
Strengths: One of the strengths of the organization is that it has molded and modified its classes
according to the needs of the students in different parts of the UK. As it is a small organization, it
has also got the flexibility to work in different areas as per the demand of the students and the
professions (Silva et al. 2016, p.12). Strength of the company is that many of its schools are
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spread in many distant parts of the UK and thus the students can easily participate in those
classes as these organizations.
Weaknesses: One of the weaknesses of the organization is that it does not have any recruitment
facilities or any partnerships with any companies that recruit dancers professionally. Another
weakness is that it does not provide any classes in any other languages but English (Gibson,
2015, p.82). Another weakness of the organization is that it a limited resource and thus it cannot
fund its projects across Europe.
Opportunities: It has a great opportunity to expand its business if it ties-up with the universities
in the UK as this move will establish this company as a major company in the UK and also will
increase its fame through the academic demands and the professionals’ feedback (Safiullin et al.
2014, p.393).
Threats: The increasing popularity of the cinema and the online games has reduced the
popularity of the theatre significantly. So, meeting the huge challenge from the digital media is
one the threats for Razzamataz. There is another threat from other companies that operate
throughout Europe as they are familiar with many other forms of dance and that also attract the
native people very much (Berends et al. 2014, p.632).
A.C1.2 Comparative analysis of the financial performance of the business
Comparison with businesses in the same industry: Sylvia Young theatre school is one of the
major theatre schools in the UK and it also belongs to the same industry as Razzamataz. The
differences of these companies are shown in these parameters below.
Production: As far as production is concerned, Sylvia has a large a rather smaller number of
classes and also it operates in a rather smaller number of areas and the classes that are given by
this company are based on two types: part time and full time (Karadag, 2015, p.26). On the other
hand, Razzamataz provides classes on many things like musical classes, theatre classes and
language classes as well other than dance classes.
Sales: As appropriate figures are not available, it can be said that Razzamataz operates with an
annual turnover of around 318,000 pounds and it has certainly been able to enter into and grab
the rural demand for such activities (Kenny and Dyson, 2016, p.132). On the other hand, Sylvia
operates only in Westminster city and thus turnover is even below that of Razzamataz.
Technology: both the companies operate in the same areas as far as the dance and theatre skills
are concerned but Razzamataz also provides classes on language and musical skills and thus the
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technologies and equipments used by Razzamataz are also somewhat different from that of
Sylvia.
Human Resource: In terms of human resource Sylvia, as per the data available, has around 230
students and it gives limited number of classes and the teachers are also small in number on
the other hand Razzamataz is quite small in terms of its reach and the number of teachers as well
as students.
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Task 2
A.C2.1 Actions to overcome the weaknesses
The steps that can be taken to overcome the weaknesses are the following:
Tie-ups with universities: This could be a game changer if implemented properly. Many of the
universities have dance classes and those are taught by the teachers there; but if for the purpose
of performance or partnership in terms of providing those classes, an understanding can happen
between a university and Razzamataz, that will not only result in a higher growth and publicity
but also sustain that growth for a long period of time. That can also add to the credentials of the
company and thus the common people will have a huge amount of trust in the company (Nguyen
et al. 2015, p.217). Adding to that if the selected university also proposes to recruit the best of
the dancers of theatre students as teachers in their classes then the problem of recruitment facility
can be overcome.
Involvement of foreign language classes: Razzamataz can also provide its teachers as well
students with foreign language classes so that they can learn the foreign forms of dance and
theatre and teach them to the other students as well. This will also solve the weakness of not
having classes in the foreign languages (Haynes, 2015, p.154). It will also open a new door of
opportunity for the foreign performances as in Germany and France there remains always a great
demand for such teaching classes and performances.
Efficient marketing: To raise funds for companies like Razzamataz is not as easy as it seems;
but it the publicity factor is achieved by the first solution provided above then the number of
students will certainly increase and that can be a great boon for generating revenue for the
company (Trugman, 2016, p.121). Creating social media blogs and interacting with the students
as well as the common people will publicize the activities of the company in a favorable way.
A.C2.2 Ways to sustain existing performance of the company
There are multiple ways by following which the existing performance of Razzamataz can be
maintained.
Efficient people:
One of the basic principles of sustaining growth of an organization is to have efficient people on
top of the company as these people are intellectual property of the company (Bennett, 2014,
p.143). Razzamataz is no exception and the teachers as well as well as the management people
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are required to be up-to-date and keep themselves abreast with the latest changes in the business
environment.
Operational efficiency: Razzamataz must increase its operational efficiency to cope with the
changes happening around and that can only come if technologies are used very efficiently.
There are also possibilities that operational efficiency can also save the spending of the company
providing greater flexibility to the company management in terms of taking some bold decisions
(Chesbrough et al. 2014, p.105).
Selecting right clients: another very important feature for sustaining the growth of the company
is that there should be selective choice of the programmes, teachers and the students as this
ensures the output of the company. There should also be good selection in terms of tasks and
clients as this will help the company get more and more number of good works and if those
works are done successfully nothing can be better than this (Chesbrough, 2013, p.102). This also
relates to the measurement of the capacity of the company if the organization has capacity to
deliver then only the projects or performances should be taken.
Efficient decision making: The decision making part is linked to almost every section of the
company as this requires to paid an extra attention. In a hierarchal system, there is always a
possibility that the top management has no connection with the workers at the lower levels
(Christensen and Raynor, 2013, p.34). In a company like Razzamataz that gives services in terms
of teaching of the dance and theatre skills and so many other things, the teachers and their
opinions hold the key in the company as this is the main resource in terms of making sound
decisions (Sala-i-Martin et al. 2013, p.48). If the top management of Razzamataz gets to know
which are the decisions that will be more fruitful than the others in terms of making the most
impact on the movement of the organization, that can be the basis for proper and sound decision
making.
Leadership: Leadership comes after the decision making as he or she should lead the company
and other people from the front. The leadership of Razzamataz will come to the fore front at
times when there is a need to change something in the existing pattern. Apart from that if strict
vigilance is not maintained on the people operating in the management, impact of the decisions
made by the leadership would not be felt on the whole company in a proper way (Eriksson, 2016,
p.121).
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A.C2.3 New areas for expansion of the business
Entering into the foreign countries so that diversification of the business can happen as quickly
as possible especially in France where the demand of the dance activities and theatre
performances have always been higher than the rest of Europe. This will also reduce the pressure
from the domestic centers. The new area can be ventured into in a joint partnership model as this
will reduce the risk (Gordon, 2016, p.08). Entering the new area of business will also make a
new opportunity as the taste and culture of the nation would certainly get attracted towards the
new flavor carried by Razzamataz. Another new area of business can be the native forms of
dance that are there in parts of Scotland and Ireland. These native forms can be amended and
inculcated upon the modern forms so that new forms of dance can emerge that would be new and
innovative (Harris et al. 2014, p.142). This will certainly grab the attention of the common
people. Another new area of business for Razzamataz can be the teaching of foreign languages as
many of the native English speakers would like to know German and French and Spanish as
these are the dominant languages in Europe and even Russian for that matter. Apart from that the
Asian forms of dance are also very popular in Europe and if Razzamataz can provide classes on
different Indian forms of dance and theatre that can be fully new there. These Indian forms are
based on the classical norms that are very different from the Western concepts of dance. Thus,
these dance forms are will be very attractive if taught and delivered properly. These are new
areas that are more or less affordable for a small business organization like Razzamataz as it has
limited resources.
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Task 3
A.C3.1 Analysis of current business objectives and plans
Razzamataz Theatre School has been in franchising business for 11 years. It has since grown and
evolved to appeal to wider sections of people in far reaching society. Its existing objectives
include reaching out to potential Principals who are ready to dedicate their energy and time into
theatre school via franchising methods. Razzamataz plans to offer an enticing package deal that
would give people an opportunity to own part-time theatre school. It has already taken in many
people with no prior experience in performing arts as partners into its business and seeks to reach
out and add more individuals as well as organization. They will be try to sell their business offers
relying on the partnership secured with Eurocamp and Disneyland Paris. Franchisees have also
been able to generate six figure turnovers for Razzamataz Theatre School.
Razzamataz is planning to celebrate 11 years of its successful franchising business in the form of
package that consist franchisee fee of £7,995 for January, February and March only. Razzamataz
will be paying the management fee for the first month along with the VAT charges that will
equate to the savings of almost £6,000 for the franchisers. For excellent candidates who meet the
criteria, Razzamataz will be offering their own finances for franchise fee (after a 30% deposit is
payable).
Its current business plans also include inducting prospective partners or franchisers who can
manage their own exclusive territorial area to run Razzamataz classes. They will be offered
incentives for extending their territory with options to develop managed centres.
A.C3.2 Review of the business plans and the scope for improvement
Business plans of Razzamataz aim to expand their business and increase franchising. Its existing
business plan to provide continual training, benefits and incentives to staffs have been proposed
to encourage long term commitment from employees. It has already transformed the world of
franchising and its latest innovative move can successfully attract more potential franchisers that
may increase its revenue. The new business management systems can be fruitful in managing
business over wider network and monitor sales and financial growth over a prolonged period
(Rosemann and vom Brocke, 2015, p.120). It has created opportunities for individuals and
organization to invest and become partners. The plan does not focus on the prospect of inclusion
of elementary schools into partnership. The plan can be tweaked a little so that schools can be
allowed to enter into partnership with Razzamataz. It may gain more potential students willing to
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enroll into its school. It would also get prebuilt facility to set up school. Razzamataz can save
huge amount of cost and invest into other prospective business setup.
Its plan to increase sales to reach almost £500,000 in current fiscal year can be jeopardized due
to its offer of allowing franchisers to retain 90% of the revenue generated from their schools. If it
seeks to increase revenue and attain potential financial target, it may have to decrease offered
share to the franchisers. It can also leverage increase in management cost for initial times and
then reduce it at later stage as there is an increased risk of failure for amateur and new
franchisers (Alviniussen and Jankensgard, 2015, p.264). It should seek out to find right
franchiser with proven business ideas and models that will be helpful in increasing their business
propositions and generate profitability. Razzamataz should also make available of training
teachers who speak other foreign languages to remove language barriers while communicating.
This would also enable it expand to foreign market areas in performing arts (Koppett, 2013,
p.83). The business plan of Razzamataz is elemental in providing prospective franchisers and
attract potential investors may not be effective in retaining current investors and partners.
A.C 3.3 An action plan incorporating the changes
ActionsMonth 1Month 2Month 3Month 4Month 5Percentage
to be
completed
Incentives to
franchises
60%
Partnering
with
elementary
schools
72.65%
Reduction of
the
management
cost
26.45%
Introduction31%44%
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of foreign
language
teaching
Research on
market
80.54%
Table1: Action plan on implementation of the changes
(Source: Created by the researcher)
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Task 4
A.C 4.1 Impact of the changes on the business and employees
The above mentioned change proposals may have positive impact on Razzamataz Theatre
School. The changes have been recommended with the desire of successful inclusion of
franchisers and expansion of business in inaccessible territorial areas (Kraak et al. 2017, p.110).
If Razzamataz accepts them and make amendments based on the recommended changes it can
fulfill its desire of increased sales. Reducing franchiser share by smaller fraction may see high
application and participation of interested individuals as well as organizations, thus gaining the
revenue to £500,000 in current financial year. Its other consequences are that there are also
chances that franchisers may pull out of the venture but it a risk that has to be taken to realise its
revenue goals.
Opening up scope for schools to enter into franchising can gain them more number to students
and learners that can tremendously increase their sales and revenue. The impact of it will be that
Razzamataz may well become one of the largest franchisee organizations in all of UK.
Advertising videos can feature its students showing of their dance skills and talents. Availability
of these videos on all digital channels and media platforms will facilitate more viewership and
attract more viewership and online revenue. It will create a lasting impact and may well provide
a demo of what dance forms are taught in Razzamataz schools. People can be attracted to its
ideas and enroll their children into its schools. It also gives Razzamataz the prospect of opening
new schools in other areas and neighbourhood in partnership with the local resident as Principal
and incharge of the school.
Idea of benefits and incentives for franchisors and employees will facilitate long term
engagement. Employees will give in their full efforts to their potential and make additional
contributions to gain incentives (Tarutė and Gatautis, 2014, p.1218). Employee participation may
well increase. Seeking franchiser with the right business models can also ensure that Razzamataz
identifies potential candidates to venture into partnership so that it does not incur losses and both
Razzamataz and franchisers continue healthy business relationship. This may also ensure that
franchisers remain it the business with Razzamataz for prolonged times and does not pull out
immediately. The imposed changes can overall impact organizational structure within
Razzamataz with every department or teams successfully understanding its role and functions.
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The changes may generate positive business impact and may well provide competitive advantage
over other potential theatre schools.
A.C 4.2 Plan for management of the changes
The proposed changes should be managed to ensure that they are effectively implemented. For
this plans must be drawn encompassing all employees, staffs, franchisers and students as well.
For business changes, entailing actions, objectives and processes for every group, to see the days
of light, workshops should be organised to achieve understanding, involvement, actions and
commitments. A management team may well be setup to monitor and control the implementation
of changes and encourage others to participate and accept the change (Bradley, 2016, 180).
Finance team will assess the financial status of the company and prospects of gaining or losing
on future business partnerships. The study and analysis will enable them to make necessary
adjustments in franchising fee and management cost and recommend increasing or lowering
them according to the findings.
The changes should involve people and should not be imposed on them. Employees should be
explained the necessity of changes in business perspective and their roles be properly explained
to them so that they understand what are the implications of their roles and how can they earn
incentives (Booth, 2015, p.241). Human Resource should ensure that these are not forcibly
imposed on them as it can give rise to resentment and ultimately to employee turnover. They
should monitor that employees perform their role with dedication.
For successful management, changes should be prioritized (Franklin, 2014, p.126). Decisions
should be made to apply first the most important changes and simultaneously focus on changes
with biggest potential benefits. Management plan should imply that management team clearly
communicates objectives and business plans to the staffs. It should be early communicated to
franchisers. Business heads of Razzamataz, including its founder and managers, should be
entailed with responsibility to interview and select franchisers based on assessment of effective
business models. The plan should also entail management team to reach out to schools and
institutions and make the franchisee agreement integrated, easier and fast.
The management can use Nudge Theory as tool to implement the proposed changes. Nudge
Theory involves pushing encouraging employees and staffs to successfully accept changes in
respective job roles and organizational practices. It enables the management to coax the staffs in
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understanding the benefits of changes and how they are in wider interest of their self
development and business goals as well.
A.C Measurement of improvement in the performance for two years
Figure 2: Growth trend line for 2008-2014
(Source: Razzamataz.co.uk. 2017)
Razzamataz witnessed good growth in business performance for two years. It witnessed increase
in franchiser participation and intake. This increased its business income and profitability. It had
something to give to its partners and retain considerable profit as well. Net business income
increased threefold between the periods of 2012-2013. It increased by 12% within this period
and by further 18% in the fiscal year 2013 and 2014. Net business income was calculated by
subtracting depreciation cost, management cost, sales cost and administrative cost found on the
balance sheet from the total revenue calculated for the year. Net business income was well over
£350,000 for the year 2012 and almost £400,000 in the year 2013.
Gross income total revenue generated in a year that includes all of cash, credits, cheques, lost
income payments, damages and operational costs. Gross business income of Razzamataz was at
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21% at the beginning of the year 2012. It witnesses impressive growth of 14% in its gross
income in the fiscal year 2012-2013. It procured huge marginal income and Razzamataz could
invest more in its business as result of this. The annual revenue was amounted to the value of
almost £2.75m. For the year 2013-2014, the gross business income experienced stable economy
and thus witnessed slower growth, compared to previous results growth and income. The gross
income only increased by 9.6% and total revenue stood at £3.02m. This was not very prospective
for their business growth but somehow it was able to hold onto the recession and economic
turmoil in the year 2013.
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