Barriers to Growth in Small Firms

This assignment delves into the complexities of small business growth by examining various barriers that impede their expansion. Students are tasked with analyzing relevant literature from academic sources, including books and journal articles, to understand the multifaceted challenges faced by small firms. The focus is on identifying key factors hindering growth and exploring potential strategies for overcoming these obstacles.

Small business enterprise

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Strength and weaknesses of Cocofina company..................................................................1
1.2 Measuring business performance through using comparative measures..............................2
TASK 2............................................................................................................................................5
2.1 Appropriate actions to overcome the weaknesses.................................................................5
2.2 Present performance could be maintained and strengthened................................................5
2.3 New areas in which business could expand..........................................................................6
TASK 3............................................................................................................................................7
3.1 Assessment on existing business plans and objectives.........................................................7
3.2 Review business plans and areas where changes can be made.............................................7
3.3 Action plan to execute changes.............................................................................................8
TASK 4............................................................................................................................................9
4.1 Proposed changes will have on the business and its personnel.............................................9
4.2 Changes will be managed in business.................................................................................10
4.3 Improvements in performance of business over past two years.........................................11
CONCLUISON..............................................................................................................................11
REFERENCES.............................................................................................................................12
.......................................................................................................................................................13

INTRODUCTION
Small businesses refer to those entities in which minimum number of staff members work
for achieving short term goals in an effective manner. Small businesses are generally owned
through one person which are run with small investment as well as profit level in comparison to
large scale organisations. In the United Kingdom, there are different medium and small sized
business firms which run their business in order to contribute in national economy (Añón Higón
and Driffield, 2011). This present report is based on Dragon Den series which is introduced
through BBC and it gives a better platform for the young generation for making an investment.
In this series, Cocofina is a small company and provides coconut water, meals, baking
ingredients, etc. In this report, importance of start- ups and small businesses in development of
social economy will be discussed. The characteristics, skills and traits of successful
entrepreneurs which differentiate managers from other business will be studied as well.
TASK 1
1.1 Strength and weaknesses of Cocofina company
Cocofina is a small business firm that is established in local regions of United Kingdom.
Its main motive is to gain attention of more number of consumers with providing them better
quality of food items along with delightful drinking. This business organisation was developed
by Jacob Thundil in the year 2005. The first product which is provided by this firm is coconut
water in retail industry (Aremu and Adeyemi, 2011). This organisation provides different kinds
of food products which are prepared through coconut water and the products which this company
provides are chips, vinegar, flours, sugar etc. In the year 2017, turnover of this company reaches
at $3.6 million. Cocofina is producing more than 3000 speciality and it has many healthy outlets
in United Kingdom. But this firm has many strengths as well as weaknesses which are given as
below:
Strengths
 It provides qualitative food items along with the drinks to consumers at reasonable cost.
 The food products which are manufactured by this firm are made through coconut water
and oil. This is good for heart and liver.
 It has many outlets to stores so that this company will provide its products to people
anywhere.
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 It also sells its services and products with the help of using an online method and expand
its business in more than 29 countries in world.
Weaknesses
 This firm does not provide training and development programme to its staff members for
enhancing their skills and working abilities.
 It conducts promotional activities at a small scale.
 Its main weakness is that those people which are currently working in this firm are
mostly non- qualified and skilled (Barber, Metcalfe and Porteous, 2016).
 Because of minimum dispersion channels, Cocofina faces many problems in supply of its
products and services in an effective way.
1.2 Measuring business performance through using comparative measures
Financial accounting is helpful in knowing about the actual position of business in market
place. It is helpful in maintaining reputation as well as to compete with its strong competitors in
the market. Main competitor of this company are Worthanshaws that provides diary-free, sugar
free frozen pudding products, etc.
Profit and Loss Account
(Cocofina company)
For the year ended 30th April 2016 and 30th April 2017
2016
£
2017
£
Sales 210 300
Cost of Sales 60 40
Gross Profit 150 260
Overheads 120 150
Net. Profit 30 110
Balance Sheet 30 April 2016 and 30 April 2017
£ 2016 £ 2017
Fixed assets 50 60
Stock 34 30
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Debtors 20 35
Bank 5 5
Total 109 130
Liabilities
Creditors 17 20
Bank overdraft 2 8
Capital 100 120
Total 119 148
Current ratio = current asset / current liability
2016 2017
60000/ 19000 = 3.15 times 40000/ 28000 = 4.12 times
From the above data of Cocofina, it is stated that firm regularly increases its profit level.
According to P&L account, sale of company was £210 in the year 2016 and £300 in 2017. From
the total calculation, it has been stated that in the year 2017, current ratio is 4.12 times and in
2016, it is 3.15 times.
Balance sheet of Worthanshaws
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It has been stated from the given balance sheet that Worthanshaws is achieving growth on
continuous basis. Debts of firm are enhancing but the cash of bank of this company has
minimized from some uncertainty for specific time period.
Non-financial measures: Human resource
Year ending 2014 Cocofina Worthenshaw’s Ltd (Kirsty)
Staff turnover 6.00% 9.00%
% of job offers accepted 18.00% 14.00%
Rate of Absentee 2.00% 4.00%
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TASK 2
2.1 Appropriate actions to overcome the weaknesses
Weaknesses is a determination of main obstructor as well as hindrance which develops
negative impact on the success of Cocofina in order to achieving aims and goals of firm in an
effective manner. In this context, it is essential for the manager of Cocofina to conduct or
organise different programmes to maintain its strengths in a proper way. There is the need to
firm to enhance its business in other areas for improving sales as well as maximising profit level.
It is the responsibility of manager to adopt and use correct techniques or methods so that from
this, employees can work in an effective or systematic manner (Burrows, 2015). For gaining
better outcomes, company should provide better quality of goods as well as services to
consumers at reasonable cost so that everyone can avail the same. There are some points which
will be helpful in overcoming from weaknesses of Cocofina:
Time management- Under this, Cocofina taken more time in order to delivering its order
to consumers at home. It provides late delivery and from this consumers are dissatisfied from its
services. In context to this, company should work on this and provides training to employees
regarding proper time management.
Communication barriers- This company faces many issues related to communication at
lower and high level. The manager of Cocofina does not more interact with its staff members.
From this, motivation level of employees goes down. To overcome from this weakness, manager
should create healthy and positive working environment with its staff members and from this
conflict will be reduced.
Inadequacy of talent employees- This is major weakness because in this company, there
are many employees which have less skills (Cavusgil and et. al., 2014). So, in regards to this,
manager should provide them, training for improve their capabilities, skills and knowledge.
2.2 Present performance could be maintained and strengthened
In this present time, it is necessary for company to maintain its current performance.
Cocofina's turnover increasing quickly and from this performance level of firm is better as
comparison to its competitors. There are some points mentions which helps in maintained as well
as strengthened performance:
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Maintain market share- If firm will provide better quality of profit to consumers then
from this they will be attracted swearwords company and sales will also be increased. From this,
Cocofina firm can increase its market share.
Develop harmonious relationship- Manager should work on maintaining better
relationship among management or employees from this they will work on achieving
organisational goals in an effective manner.
Increase motivation- It is an effective way to retain employees for long time period.
Manager should provide rewards to those employees which perform well. Rewards can be in the
form of monetary and non- monetary (Goss, 2015).
A Competitors business strategy is helpful for firm to sell its services and goods in a
proper manner at market place. Differentiation refers to one strategy where organisation sell its
better quality goods. In context to increasing consumers, Cocofina conducts attractive
promotions.
2.3 New areas in which business could expand
Cocofina needs to increase it business at -global level from enhancing profitability. In
regards to this company should develop effective strategies, plans and policies for expand
business functions or activities. Some factors are given below which helps in expand business:
Cost- In order to expand business in to other areas, there will be requirement of more
funds. Company should arrange this for many business activities.
Trends- Latest trends and culture of consumers need to concentrate on develop products
on the basis of consumer taste or needs (Grant and et. al., 2014). It is necessary for firm to
conduct business according to market trends.
Cocofina company uses Ansoff matrix strategy for entry in new market. This strategy is
used by company during increasing business and from this owner of firm can should on expand
areas in effective manner. This strategy is given below:
Market development- Under this, Cocofina company expand in new markets by
providing existing products.
Market penetration- In this, firm tries to develop its existing products in current market
for increasing its market share.
Product development- Firm develop new goods and sale in current market place to
attain growth.
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Diversification- Cocofina develop its market share through producing new products at
new markets.
TASK 3
3.1 Assessment on existing business plans and objectives
Objective of Cocofina company to attract large number of consumers towards company
by serving better quality goods as well as services (Laufs and Schwens, 2014). Its main motive is
to increase profit level. There are some objectives of Cocofina given below:
 To expand its business in more countries.
 To distribute the right share between share – owners.
 To develop long- team and better relationship with stakeholders.
 Work for society welfare.
 Provide training to staff members for increasing their knowledge and skills.
Business plan refers to a basic outline of ideas regards company's services, target market,
products, market share etc. for attaining aims and goals of firm. It is important that Cocofina's
manger should develop plans in a proper manner to make its position better and financial section.
It includes budget, cash flow statement etc. Firm should set its budget on the basis of marketing
activities.
It is necessary that the in business plan objectives should be SMART. Like in year 2021,
objective of Cocofina is to increase consumer based through 14% and it is measurable. There si a
particular time set by company for achieving this target.
3.2 Review business plans and areas where changes can be made
It is necessary for Cocofina company to make regularly changes in existing plan in order
to make improvement in business. It provides benefits for business (Liedholm and Mead, 2013).
Organisation should make changes in its plans on the basis of consumers taste and market trends.
There are some steps give below which are necessary at the time of reviewing plan:
Update objectives and goals- It is essential for Cocofina company to update its goals
and aims during reviewing business plan. It will helps in capture large market share.
Measure plan- Under this, firm require to be evaluation for the purpose of eliminating
loopholes which are present in the business plan. To remove any barriers, company should adopt
new technologies and develop various strategies.
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Resources rationalisation- It is necessary that firm should re- allocate its resources so
that modification can be done in a proper manner (Roomi, 2013). It will helps in minimising
wastage.
Follow up- It is a last step and under this, manager should be assure that changes are
made ion a proper manner or not, there is need to be determine deficiency which are faced
through employees at the time of changes.
3.3 Action plan to execute changes
According to stated plan, there is a need to Cocofina company to prepare an action plan
for implementing modifications which can bring successful. A better action plan is helpful in
proving competitive advantage to business. Its main objective to assign the job role to employees
in the hierarchical construction so from this they can perform their job in a better manner. Before
making an action place, there is a need to marketing department of Cocofina firm for conduct a
proper research to know about changes areas in firm (Smit and Watkins, 2012).
Action plan for Cocofina for achieving its goals and aims
Objectives Advantages Tasks Success
criteria
Time
period
Resources
Staff training It will assess
performance
of
employees
and increase
their
confidence
level.
Firm should
conduct
training on
continuous
basis for
enhancing
employee's
skills and
knowledge.
Clear training
objectives and
rising
employee's
performance.
30 to 45
days
Venue, pinnace
etc.
Enhance
consumer
base through
14% in 2022
To gain
competitive
benefits at
market place
and to make
customers
Determine
demands and
tastes of
consumers by
conducting
Taking
continuous
feedbacks
from users.
15 days to 1
month.
Implicating
new ideas and
take helps from
expertise.
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loyal
towards
company.
research.
TASK 4
4.1 Proposed changes will have on the business and its personnel
Changes impact on business on negative or positive manner. Implementing of changes
impact on development and profit level of an organisation. Staff members of firm are backbone
of an organisation, so it is necessary that company should include its staff members in the
changing process (Tolstoy, 2014). Changes are of two kinds controllable and uncontrollable.
Controllable changes are under control of firm but on uncontrollable changes, there is no control
of company.
Impact of changes on business
New opportunities- Change is helpful in developing many opportunities which is
necessary for firm to grab al them at correct time. It will provide better results to business.
Rising attitude and efficiency- It can regarded to enhance employees power from applied
changes and it learn new things as well as technologies for perform better.
Encourage innovation- This facilitates an innovation to company so that employees can
give their better ideas to its top management for making business better. It will helps in
enhancing profit level and productivity of an organisation.
Affect on Personnels
Enhanced work time- It minimizes working ability and power due to lack knowledge
related to new executions (Van Der Wijst, 2012). It will take some time to learn regarding this
and sustain performance speed of employees. So, from this gaols of firm will not achieved on
proper time.
Mental stress- After applying many changes, at workplace there is difficulty arise.
Workload of manager increased in managing work of human resources of specific firm. So, in
context to this, staff members feel mental pressure because of changing environment. It develop
negative impact on business.
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Life changes- In many cases, company require to do some changes art large level so for
this there will be need to firm of re- organised compensation criteria, re- building, branches must
shifted on another location. This process takes more time for changes.
4.2 Changes will be managed in business
Planning refers to the pre- defining task about work structure. It gives guidance to staff
members so from this they perform better in context to execute changes in an effective or
systematic manner ( Wanyoike, Mukulu and Waititu, 2012). Proposed changes are helpful in
providing benefits to firm in increase business at various areas or countries. Cocofina company
use different media for aware people about products and services of an organisation. From thsi,
organisation can analyse its current performance level in a proper way.
Kotter eight step model is helpful in managing changes to provide desired results. This model
given below:
Developing urgency sense- Under this firm aware employees about changes and develop
support.
Form a Powerful Coalition- Bring coalition or team together of people which are of
different job title, sources, status etc.
Develop Vision for Change- Manager should clear vision of company to employees. It
will helps in achieving aims and objectives of firm.
Communicate Vision- Communicate vision more powerfully and frequently to every
one at workplace and then use it on daily basis to take decision and also solve all issues.
Remove Obstacles- With the help of vision, firm can remove all the obstacles which are
arise at the time of changing.
Develop Short-Term Wins- Cocofina should develop short- term gaols for attaining
business objectives in a easy manner of specific time period (Wynarczyk and et. al., 2016).
Short- term goals are helpful in motivating staff members to perform better.
Build on Change- It is necessary that firm should do changes slowly and should be
drives in while culture of business. But it is necessary for Cocofina company require to look for
regularly improvements for establish changes.
Anchor Changes in Corporate Culture- Under this, firm need to make regular efforts
to assure that change should be better at workplace and employees or management should
support that change in an organisation.
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4.3 Improvements in performance of business over past two years
In- spite of many alteration as well as problems, Cocofina firm provide better
performance related to business operations and increase its business in last two years. In order to
know about business performance, there will be need of trend line which should about existing
performance level. At the time of implement changes at workplace, it is necessary fr manager to
involve all staff members. After changes, firm should taken feedbacks from customers or
employees on regular basis.
Balanced Scorecard model is helpful in measure performance level of an organisation in
a competitive market it is regarded as analysis of strategic performance (Zortea-Johnston,
Darroch and Matear, 2012). The main objective of Balance Scorecard model is to transform
vision and mission of firm in to an operational strategic planning. There are four main
perspectives of this model which assess Cocofina company in order to analysing performance of
business:
Financial perspective- Under this, financial data figured are depend on benchmark from
past. It provides benefits to an operational management in context to selecting better strategy.
Consumer perspective- Cocofina company regularly trying to satisfying needs and wants
of consumers as comparison to its strong competitors at market place. If in case firm will not do
this, then in this case it will develop negative impact on business.
Internal process of business- It is related to an internal activities which firm carried out.
From adding some value in business, firm will fulfil needs and preferences of consumers.
Learning and development- Staff members of Cocofina firm are very innovative as well
as creative. They have good learning skills and workers work on making regularly improvements
in changing environment. It develops a positive impact on development and sales of firm in an
effective manner.
CONCLUISON
It has been concluded from given report that the goals of small business are short term
and in this less number of workers working. Financial accounting helps in know about actual
position if business as well as profit level. Under this report studied about strengths and
Weaknesses of Cocofina. There is studied about comparison among two companies balanced.
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REFERENCES
Books & Journals
Añón Higón, D. and Driffield, N., 2011. Exporting and innovation performance: Analysis of the
annual Small Business Survey in the UK. International Small Business Journal.29(1).
pp.4-24.
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.
Barber, J., Metcalfe, S. and Porteous, M. eds., 2016. Barriers to growth in small firms.
Routledge.
Burrows, R. ed., 2015. Deciphering the Enterprise Culture (Routledge Revivals):
Entrepreneurship, Petty Capitalism and the Restructuring of Britain. Routledge.
Cavusgil, S. T. and et. al., , 2014. International business. Pearson Australia.
Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
Grant, K., and et. al., 2014. ‘Risky business’: Perceptions of e-business risk by UK small and
medium sized enterprises (SMEs). International Journal of Information
Management.34(2). pp.99-122.
Laufs, K. and Schwens, C., 2014. Foreign market entry mode choice of small and medium-sized
enterprises: A systematic review and future research agenda. International Business
Review.23(6). pp.1109-1126.
Liedholm, C. E. and Mead, D.C., 2013. Small enterprises and economic development: the
dynamics of micro and small enterprises. Routledge.
Roomi, M. A., 2013. Entrepreneurial capital, social values and Islamic traditions: Exploring the
growth of women-owned enterprises in Pakistan. International Small Business
Journal.31(2). pp.175-191.
Smit, Y. and Watkins, J. A., 2012. A literature review of small and medium enterprises (SME)
risk management practices in South Africa. African Journal of Business
Management.6(21). p.6324.
Tolstoy, D., 2014. Differentiation in foreign business relationships: A study on small and
medium-sized enterprises after their initial foreign market entry. International Small
Business Journal .32(1) .pp.17-35.
Van Der Wijst, D., 2012. Financial structure in small business: Theory, tests and applications
(Vol. 320). Springer Science & Business Media.
Wanyoike, D. M., Mukulu, E. and Waititu, A. G., 2012. ICT attributes as determinants of e-
commerce adoption by formal small enterprises in Urban Kenya. International Journal
of Business and Social Science. 3(23).
Wynarczyk, P.,and et. al., 2016. Managerial labour markets in small and medium-sized
enterprises. Routledge.
Zortea-Johnston, E., Darroch, J. and Matear, S., 2012. Business orientations and innovation in
small and medium sized enterprises. International Entrepreneurship and Management
Journal.8(2). pp.145-164.
Online
SWOT Analysis: Theory. 2017. [Online]. Available
through:<https://research-methodology.net/theory/strategy/swot-analysis/>.
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