Small Business Growth and Success Factors

This assignment delves into the multifaceted aspects contributing to the growth and success of small businesses. It examines various internal and external factors, drawing upon scholarly research from prominent journals like the Journal of Industrial Organization and International Small Business Journal. The analysis encompasses topics such as innovation capacity, entrepreneurial competencies, institutional readiness, and the influence of government policies on small business development.

SMALL BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Profile of selected business organisation..........................................................................1
1.2 Compare the performance measures................................................................................3
TASK 2............................................................................................................................................3
2.1 Recommendations to overcome from weaknesses...........................................................3
2.2 Methods of manage existing performance of the firm.....................................................4
2.3 Suggest new areas in which a business could expand itself.............................................5
TASK 3............................................................................................................................................6
3.1 Assessment of business objectives and plan....................................................................6
3.2 Revision of a business plan..............................................................................................7
3.3 Develop an action plan for implementing changes..........................................................8
TASK 4............................................................................................................................................9
4.1 Impact of proposed changes.............................................................................................9
4.2 Concept of change management ....................................................................................10
4.3 Improvements in performance........................................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
In today’s scenario, small business organisations play an eminent role in the growth and
success of an economy. They develop capital investment and prevent unequal distribution of
income. In the recent years, there are several small scale industries established which have taken
40% share of the total industry outputs. British government also provides them financial support
in terms of subsidies in order to enhance their market area. Small business entities are also
assistive in providing job opportunities to people so as to improve their living standard in society
(Hilmersson, 2014). Furthermore, small scale industries are liable in balanced regional
development of a country. It also focuses on the mobilisation of local resources. Such
organisations create an environment for entrepreneurship and promote innovation between
people. Apart from this, the present report will describe overview of a small business entity i.e.
Cocofina. There will be discussion upon certain areas in which a business can easily expand.
Furthermore, managers need to adopt some functions in order to get rid out from weaknesses. A
business plan is developed for implementing the major changes. The firm has to use balanced
scorecard in order to measure employees' performance.
TASK 1
1.1 Profile of selected business organisation
According to Small business Administration (SBA), a business is called to be small if it
has fewer than 100 employees. Globally, small businesses have been contributed over 90% of
total business and 50 to 60% of total employment in the UK. There is 99% of the total industries
are small businesses and they produce more effective products rather than any multinational
business.
Besides this, Cocofina is one of the famous small business firms which provides coconut
based food and drinking products. It is the 14th series of Dragon Den. In addition, the coconut
food brand focuses on investing its money in different fields and currently, it is operating in
almost 28 countries. Recently, Cocofina has sold its 30 outlets across the world; it has been
serving sine 10 years in UK's market. Basically, it focuses on taste and quality of coconut
products. At last, the main objective of this small business is to sell yummy and healthy coconut
goodies to its target audiences (Hansen and Hamilton, 2011). Its brand represents honest, healthy
as well as qualitative products. They use value added ingredients, preservatives and additives.
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Overview of Cocofina: -
Name of the
business
Cocofina
Owner structure It is an equity owned business entity in which shareholders have 5%
shares of the overall business.
History Cocofina was a region renowned entrepreneurship. It was established to
produce everything which is made from coconut i.e. chips, sugar, vinegar,
sugar, flour, etc. It launched its first coconut water in the UK in 2005.
Activities Produces food items and drinking beverages from coconut by giving it
new shape and taste.
Location England
Founder Sarah Louise Willingham
Investment sought £75,000 for 5% equity
Description Deal in coconut retailing products such as food drink, snacks, baking
items, etc.
Strengths and weaknesses of Cocofina: -
STRENGTHS WEAKNESSES
 Offers high quality and value added
products and services.
 Using online marketing and mobile
applications which help customers to
place any orders.
 New product pipeline and streamlined
process.
 Cocofina has well qualified and skilled
staff members as it organises various
training and development programmes.
 High operating costs
 Limited reach of current production
facilities
 Low sources of funding
 Challenges regarding product's taste,
quality and packaging
 High transportation costs
 Unstable delivery system
 Changing customer base
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 Effective innovation and management
abilities which help in maintaining
business activities across the world
(Forsman, 2011).
 Delicious taste of food items, they are
organic and simple to use.
 Products are reserved by the
government.
 Business expansion and market
diversification.
Low labour costs.
1.2 Compare the performance measures
In this competitive environment, it is very tough for companies to gain high market
growth and share. On the basis of different parameters, the performance level of the firm can be
compared in an effective manner. While measuring performance level of Cocafina, managers are
required to considered these aspects, such as- human resource management, financial planning,
profits, level of selling etc. In UK's market, there are various companies who can produce
coconut food products and services. Along with this, the firm is gaining profits since its
establishment as it manages its all activities. But in starting it was too too tough for company
manage its market position and operations cause to poor capital. In starting, Cocofina has capital
revenue of 600 billion dollars and now it has made almost 1500 million dollars. In 2012, the
profit amount of the company is $457145. then in following years the profits and sales are
rapidly increased and it is able to complete other multinational food chains.
Profit and loss account of Zizzi restaurant and Cafe finix for year ended 30th April 2017
are stated in the below table.
Particulars Cocofina Zizzi Restaurant (2017)
£
Sales 180 300
Cost of Sales 40 110
Gross Profit 160 190
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Overheads 20 10
Net. Profit 140 180
Balance sheet of Zizzi restaurant and Cafe Finix for year ended 30th April 2017
Year Cocofina
2017 (Value in £)
Zizzi Restaurant
2017 (value in £)
Fixed assets 25 40
Stock 5 10
Debtors 20 30
Bank 10 10
Total Assets 60 90
Creditors 45 50
Bank overdraft 15 40
Total Liabilities 60 90
Current ratio = current asset / current liability
2016 2017
Net profit margin = net profit/ net sales * 100
140/180*100 = 77.77%
Net margin = 180/300*100 = 60
Gross profit margin= gross profit/ net sales *
100
160/180*100 = 88.88%.
Gross margin = 180/300*100
= 60%
Quick ratio = current asset – stock/ current
liabilities
35-5/60 = 0.5
Quick ratio = 50-10/90 = 0.44
Interpretation: - As per the above mentioned data, it been analysed that the net profit ratio
of Cocofina is £140 whereas £180 is of zizzi restaurant. Apart from this, total asesst of the firm is
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60 and total liabilities are 90. but when we calculate current ratio it seems that Cocofina should
make certain improvements in business process so as to improve business condition.
TASK 2
2.1 Recommendations to overcome from weaknesses
In this competitive era, it is tough for a new industry to stay in market and perform
effectively. However, a firm has certain strengths as well as weaknesses. This can affect its
capabilities. Therefore, managers of small business entities are required to identify some ways in
order to get rid out from all weaknesses and stay in market from long term period (Dickson and
Weaver, 2011). Some recommendations are described as under -
Recognise the weakness – It is the foremost method to reduce weaknesses in an effective
manner. In Cocofina, managers are required to identify weak areas or factors; it can be
something struggled or disorganised. Afterwards, plans and policies are developed in the same
context. For example- the major weakness of small businesses are low costs of funding.
Therefore, business owners have to generate an innovative idea that is able to attract investors
and shareholders. It can increase funds or financial capital of company that also gives strengths
to its working activities.
Invest in R&D department – Due to lack of availability of funds, small business entities
cannot focus on research activities. Thus, it is required for the firm to invest certain amount of its
budget in such activities so as to recognise needs and wants of customers; it is also assistive in
getting information about competitors.
Provide training and development assistance – Another way recommended to Cocofina
is that it needs to provide training and development assistance to all levels of staff members. It
can boost their knowledge or skills in a particular field (De Silva and et. al., 2012). Thus, if
workers are able to produce in an adequate manner then small business can easily achieve its
goals and objectives. This can also improve efficiency and productivity of the firm and it can
overcome with the weaknesses of high operating costs.
Build up confidence – Managers have to boost up employee’s confidence and appreciate
them for what they have done. They have to regulate reward system for motivating staff
members; it helps them to retain people for long term period. In addition, confidence building
also involves to move beyond failures and mistakes.
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Using effective tools and techniques – Implementation of new and innovative techniques
in manufacturing will be assistive in improving the quality of products and services of Cocofina.
In this regard, the firm can make to do list or a time schedule which forces employees to
complete tasks before their time schedule. With this assistance, small business entities can easily
achieve high competitive advantage from the target market.
2.2 Methods of manage existing performance of the firm
In today's modern era, it is very essential for small business entities to manage their
current market position in target market. However, in order to manage strengthen and current
performance of Cocofina, there are some major ways that can be brought under consideration.
That are examined under in great extent: - Proper human resource management – It is very much essential for any kind of
company to manage its human resources in an effective manner by providing training and
development to people. It aids to attain and retain staff members for long time of span.
Along with this, Cocofina needs to hire qualitative and well skilled people; it could
increases firm's efficiency and productivity in a certain time period. In this regard, higher
authorities have to make proper decisions in order to improve performance level of their
employees. Hence, effectively management of human resources is liable for overall
growth and success of a firm (Forsman, 2011). Determine vision and mission – While performing in external environment, it is essential
for small business entities have to identify its mission and vision. However, vision and
mission state of Cocofina is related with its business activities. For example- the mission
statement of SME is to provide healthy and qualitative products, in this sense firm has to
use effective production tools. Maintaining employee performance – Performance level of existing employees should
be managed properly and controlled by the company. In this regard, certain training,
motivational and placement sessions are implemented in high extend (Chow and et. al.,
2011). As the overall performance of small business are totally rely upon its employees,
so that they should be managed in a systematic manner. Managing effective communication – Effective communication also have to be regulated
at level, helps managers and employees as they can easily interact with each other. With
this assistance, people can also share their innovative ideas and thoughts in an effective
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manner at workplace (Dickson and Weaver, 2011). Free flow of communication is really
helpful in order to manage current performance of the firm.
 Improve the quality of products – Business owners also required to emphasis on
improving quality of their products and goodies; it helps in attaining and retaining
customers for long time of span by increasing its sales and profitability.
2.3 Suggest new areas in which a business could expand itself
At present, business of Cocofina is going well but now its owners want to increase their
market area in order to gain high competitive advantage. In this regard, higher authorities have to
implement such strategies and policies which can gives them maximum returns.
Expand in domestic market – Cocofina a British company which deals in coconut based
products and services. To flourish any kind of business organisation, it is essential for decision
makers to concentrate and flourished on their local market. Therefore, the refereed small
business entity should prioritized its domestic market as there is a wide range of customers
(Mitchelmore and Rowley, 2013). Due to the popularity of the location firm can easily expand its
business activities in local market areas.
Expand in international market – As Cocofina is currently operated in 28 countries, in
this sense firm has to more emphasis on business activities of foreign market. Growth
opportunities are much wider in international market rather than domestic market. Furthermore,
in order to reach foreign customers business organisation have to use effective tools of
communication.
In order to improve its market share and gain high growth, Cocofina have to adopt an
adequate business strategy, i.e. limited market growth strategy. It is classified into four parts
which are described as under: -
 Market penetration - Market penetration strategy is the preferred route to growth for
many businesses because it appears safe. It emphasis on selling more of the existing
products of the company.
 Market development - In product development, businesses continue to focus on the needs
of current customers and the wider customer market they represent but they seek to
understand their underlying needs and wants better so they can see opportunities for new
products:
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 Product development – In this stage, firms can adopt new marketing and distribution
channels. Making a product available on the Internet with the necessary search engine
optimisation means that anyone looking can find it, rather than rely on your marketing
message to reach them by convention means.
 Diversification - Diversification into unrelated markets using existing resources and
capabilities – while the customers and products are different, they all rely on the existing
strengths of the business.
TASK 3
3.1 Assessment of business objectives and plan
It is very much necessary for small business enterprises to determine business objectives;
it helps them to develop a business plan. As objectives should be interrelated with business plan.
It also helps managers in effective completion of their working activities which are related with
market growth and vitality (Mason and Brown, 2013). Along with this, a business plan is a
formal statement of a set of business goals, it determines the reason why they become attainable.
It contains executive summary, overview of the business, research activities, operation,
management, project management and marketing plan etc. Business plan is assistive in providing
clarity of thoughts and purpose; it also highlights future risks and challenges. So that managers
can make strategies in order to deal with these uncertainties. While developing a business,
decision makers have to make some objectives which they want to achieve. There is described
some aims and objectives of Cocofina: -
 To be world's largest brand of coconut food items.
 Increasing market share by 5% in forthcoming period.
 Maximise profits and sales by 10% in international market.
 Enhance the business operations in domestic as well as foreign market.
Below mentioned certain major steps which are involved in business plan: - Idea generation – It is the foremost step of in the process of business plan. An
impressive and adequate idea can differentiate entrepreneurs from others. This can add
value in products and services of the company. There are different sources of idea
generation, such as- research, employees, dealers, retailers, customers etc. Therefore, an
unique idea can improve business performance in a minimum period of time.
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 Environmental scanning – Once the idea is generated then decision makers have to
analyse internal and external environment situation which might be hamper business idea.
With this assistance, managers can demonstrate effective methods in order to deal with
adverse marketing situation (Bernaert and et. al., 2014). In addition, external environment
consist with, social cultural, technological, economical, demographical, political
appraisals whereas internal environment involves availability of raw materials, finance,
human resource, customers etc. Feasibility analysis – In this stage, managers are required to conduct a detailed
assessment of every factor relevant to business; they also have to find out its credibility
for company. Feasibility analysis involves market and technical analysis, develop a
marketing, production and financial plan. Project report preparation – Afterwards, a project report is preparative which represents
all necessary steps and strategies which are included in staring and functioning of a
commercial entity.
 Evaluation, control and review – At last, the overall plan is executed and it should be
regularly controlled or reviewed bi higher authorities.
3.2 Revision of a business plan
Business plans and policies are one of the crucial need for any kind of commercial entity
as like Cocofina. In this sense, decision makers often have to develop an effective plan with an
aim of getting ultimate and rapid growth of the company. In market competition, business
environment is enhancing day by day so that small enterprises should endorse new technologies
and required plans for incorporate appropriate modifications (Acs, Audretsch and Lehmann,
2013). Apart from this, to deal with adverse situations in effective manner decision makers are
required to revise their business plan. It will be helpful for managers to identify all hidden issues
that could affect working operations. It contains, regular review of activities so as to measure
existing performance of the firm.
While revising a business plan, employers are needed to predict management
responsibilities and various predicts because it aids in reformation of existing business in order to
make it more impressive or effective. In modern times, customers needs and wants are quickly
changing therefore, managers have to determine their desires and try to fulfil them in the best
possible manner (Hansen and Hamilton, 2011). However, revision of a business plan also
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involves internal and external analysis in order to find out those factors which could influence
firm's efficiency and productivity. It is beneficial for them to grab future opportunities by
decreasing financial risk,
Furthermore, revision of a business plan suitable for Cocafine in order to gain proper
information about external rivals. However, it is must for the company to keep revise all working
activities and implement changes effectively. It build up strong market image by achieving all
goals and objectives of the firm. Regarding this sense, managers need to make changes regarding
popularity of its products and services in target market.
3.3 Develop an action plan for implementing changes
Changes are inevitable matter for every business organisation, i.e. Cocofina. So that, it is
too hard for companies to remove of these modifications. In this context, an action plan have to
prepared so as to implement any type of change at workplace. While developing an action plan,
decision makers have to demonstrate short term and long term goals which could aids in
evaluating the effectiveness of tasks.
Furthermore, the foremost part of action plan is developing a good provision and regular
up-dation of organisational system for making recruitment and selection at high extent. The thing
which is mostly required – managing and executing modifications systematically. A competent
and effective workforce is required while leading any change. In this regard, small business
entities have to hire well qualified and skilled employees (Barber, Metcalfe and Porteous, 2016).
In this stage, a fair examination system should be considered properly. In addition, changes
could be related with adoption of modern technology in era of organisation. But this can put a
company into difficulties just because of huge amount of customers and production. In order to
overcome with this barrier, visual presentations and CCTV could be set through which all
activities can be easily observed. There are given some steps which are involved in action plan -
 Firstly, managers have to measure the effectiveness of all required changes whethre they
are suitable for business or not. In this case, decision makers can determine all required
possibilities in which can easily expand itself.
 Afterwards, managers have to start collect data and relevant information from different
sources. For instance- monitor a specific situation. It is generate various problems and
issues then managers need to reduce them as soon as possible (Dickson and Weaver,
2011).
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 In third stage, a goal statement have to written that is interlinked by business growth and
vitality. Goals and objectives always have to be SMART, i.e. specific, measurable,
attainable, relevant and time bound.
 At last, overall plan is executed and its effectiveness should be monitored by the
managers. Implement solutions in order to reduce all barriers and obstacles. In other
words, execution of an action contains transferring imagination in to a reality.
Below mentioned certain activities which are involved in an action plan:
Tasks Duration
1. Business Plan of Cocafine 6 – 8 days
2. Collection of data and information 10 – 12 days
3. allocation of resources 8 – 15 days
4. Recruit knowledgeable and skilled people 15 days
5. Determination of cost for each task 5 – 10 days
6. Review and feedback 3 – 6 days days
7. Date of action Begins at 31st October 2017
8. Date of completion Ending at 28th November 2017
TASK 4
4.1 Impact of proposed changes
As there is an expansion of demand of organic food products in market, therefore some
happening alterations are very essential. The overall matter have to be brought by taken into
account. Regarding this matter, Cocofina is has to take certain business plans so as to respond
quickly. These proposed changes can brings from different areas that put a huge impact on
organisational as well as personal growth.
Impact on organisation –
Any kind of alteration in business strategies and policies can influence its overall
working activities. It can also hamper production process. For instance- a market research is
conducted in order to fulfil customers' needs and wants. In this context, Cocofina have to
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manufacture its products as per buyers' desires (Mason, 2015). This would enhance firm's sales
and profitability in a certain time and it can easily achieve goals and objectives. Apart from this,
changes in buyers' policies will also aids a firm to attain and retain customers for long term
period. Imperative variations could maximise the chances of achieving growth and success.
Impact on personal
Changes also put a huge impact on personal. However, if Cocofina adopt certain changes
can be implemented in order to improve sales and profitability of the company. In this context,
managers need to focus on providing training and development assistance to their staff members.
It can improve the productivity and efficiency of employees as they can perform effectively in
target market.
4.2 Concept of change management
For a small business organisation, i.e. Cocafine continuous changes are too imperative so
as to grow and diversify in target market. Business changes can be related with reshaping or re
framing overall organisational structure, operational changes, redevelop the number of routes,
changes in pricing policies and overhaul modification in its team etc. While implementing all
these changes, managers also need to develop a strategy so as to manage these changes in an
effective manner (Sharma, Chrisman and Gersick, 2012). In order to briefly understand, the
concept of change management readers have to understand the model of Kotter management.
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(Source: How to use Kotter's 8 Phases model to deliver sustainable change, 2017)
Steps of change management model: - Urgency for change – It is the first step of change management process. In which
managers firstly have to determine the urgency of changes in different tasks and
modified them accordingly. The major weaknesses of Cocofian is low sources of finance.
Therefore firm needs to implement changes in order to attract and retain the interest of
venture capitalist. Form a guiding coalition – Until, the management as well as employees does not
understand the requirement of changes, they cannot see its growth opportunities.
Therefore, management have to be supported from all of them in order to form a coalition
regarding changes. In this perspective, open communication have to be regulated which
ensures information and feedback sharing. Create a vision – In order to take effective business decision, vision and mission are
considered. So that, management level needs to create an effective and impressive vision
which is related with future changes and diversification.
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Illustration 1: Change management model

 Communicate the vision – Thereafter, the overall vision is communicated within the
company as employees can also aware about it and then perform accordingly (Wang and
Altinay, 2012). Empower others to act the vision – Execution of modifications begins with
empowerment of staff members. In which, higher authorities are classified roles and
responsibilities between all employees as they can quickly respond in order to achieve
objectives and vision. Create quick wins – In order to achieve long term goals and objectives certain short term
goals have to be prepared. These wins are interlinked with vision of the company. Build on the change – Significant change cannot be accomplished in a short time of
span; it is required constant modification. Therefore, management have to timely check
the results of one change.
 Institutionalize the change - Changes in a single unit do not affect too much so that it
should be implemented all overall the organisation in order to get best future outcomes.
4.3 Improvements in performance
Cocofina is now become one the popular food industry; it is growing day by day due to
increasing the demand of organic products in target market. In addition, firm is required to
measure its performance on continuous so as to make essential changes and goals in the
systematic manner (Hilmersson, 2014). Monitoring is a process through which managers can
determine all issues and problems which can hamper firm's market position and reputation. For
instance- in order to know to impact of training sessions on employees, managers can conduct a
performance test which can show employees skills and knowledge in a particular field. In order
to know the performance level of small business, there is described a profit and loss statement of
two years of Cocofina which is stated as under: -
Profit and loss statement of Cocofina Ltd.
For the year ended 31st March 2016.
Particulars 2016 $ 2017 $
Net revenues 50 80
Cost of reveneues 20 15
Gross profit 30 65
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Operating expenses 5 10
Income from operations 25 55
Other interest expenses 40 45
Income before provision taxes 65 105
Provision from income taxes 20 15
Net income 45 85
CONCLUSION
As per the above mentioned report, it has been concluded that now small business entities
are become an important part of economic growth. It provide various employment opportunities
to people to improve their living standard. The case study is based upon Cocofina; it is a popular
small business enterprise in UK that deals in coconut products. Apart from this, in order to
overcome from weaknesses business owners have to provide training and uses effective tools of
productions. It helps them to achieve firm's goals and objectives. The report states that mall
business entities have to focused on expansion of domestic as well as international market so as
to get high market share. Beside this, business objectives have to be decided before developing
business plan. An action plan should be prepared for managing working activities and
operations. Higher authorities have to revise the business plan before making any changes; it
helps managers to perform effectively at market place.
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