Small Business Success Factors

This assignment delves into the critical factors that contribute to the success of small businesses. It examines various aspects, including innovation capacity, network effects, ethical practices, mobile technology adoption, internationalization strategies, and the role of non-financial information in risk management. The assignment draws upon academic research papers and real-world examples to provide a comprehensive understanding of the challenges and opportunities faced by small businesses.

SMALL BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Produce a profile of a selected small business......................................................................1
1.2 Carry out an analysis of the business using comparative measures of performance............2
TASK 2............................................................................................................................................9
2.1 Justification, appropriate actions to overcome the identified weaknesses............................9
2.2 Analyse ways in which existing performance could be maintained and strengthened.......10
2. 3 Recommend with justification, new areas in which the business could be expanded.......11
TASK 3..........................................................................................................................................12
3.1 Produce an assessment of existing business objectives and plans......................................12
3.2 Revise business plans to incorporate appropriate changes.................................................13
3.3 Prepare an action plan to implement the changes...............................................................14
TASK 4..........................................................................................................................................14
4.1 Impact of the proposed changes on the business and its personnel....................................14
4.2 Plan how the changes will be managed in the business......................................................15
4.3 Monitor improvements in the performance of the business over a given timescale...........16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
In the era where different organisation are operating with an end goal of achieving goals
innovation and making changes in the present working criteria is of immense importance. Small
scale companies has covered a major part in the total economy and has provided variety of
services to customers (Aremu, 2011). Zizi is a restaurant which is giving its best services to
customers since a very long time. There are many branches of same and in each of its chain best
facilities are ensured so that customers do not find any inconvenience. Following report will
discuss its strength and weaknesses of this organisation and will further continue with other
related aspects of the cited organisation .
TASK 1
1.1 Produce a profile of a selected small business
There are variety of organisations which operates in the surroundings and scale of each
varies to a great extent. Small scale companies perform their function in order to provide variety
to costumers. The given company has acquired a vary good name in the food industry and is
known for the quality of its products (Bianchi and et.al, 2010). By formulating effective policies
Zizi limited has established a good name in market. This company operates on a good profile as
it offers quality commodities in the market and give a good facility of special rooms and lounge
to its clients. In order to get an accurate idea of companies profile the text given below can be of
great help:
 Figure name : Zizzi
 Address : Hereford HR4 9HR
 Food : Italian
 Founded : 1999
 CEO : Steve Holmes
 Outlet : 140 branches in UK
 Starting time : 11.30 A.M to 11 P.M
 Menu : zizzi.co.uk
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 Reservation: bookatable. co. uk
SWOT analysis of Zizi limited
Strength – The best feature about this company is that it provide good quality of services
to all those who visit the place and has got effective working strategies (Bridge, 2012 The place
is very much attractive as the selection of interior is done in a manner that it is liked by all. After
this the selection of working staff is also done with maximum care which gives a good
impression on those who come in contact with them (O'Neill, 2012).
Weaknesses – although the process of doing operations are effective in the given
organisation it faces different sections in which the company lacks behind. The management of
company is less efficient and most of the workers are fresh recruited and hence they lack
experience which results loss of standards in many case. Apart from this the given organisation
also faces the challenge of finance as being a small company it becomes difficult for it to raise
the required amount of funds (Chittithaworn, and et.al 2011)
Threats – The biggest danger for this company is that with an increase in demand for this
type of business type more ad more new entries are taking place in this industry which increases
the competition. This further leads to the decrease in scope for the given company and therefore
the total profitability of the enterprise will further decrease (Piva, 2012).
Opportunities – The biggest positive chance with the given company is that by doing
innovation in their products company can attract to more customers which will further lead to the
increase in sales. Customer get bore when they are given the same options everything hence
modifications in the existing products can be of great help (Cerrato, 2012).
1.2 Carry out an analysis of the business using comparative measures of performance
In order to measure the performance company uses different measures. Variety of them
are given below:
(A): The Restaurant Group plc financial statements
Income Statement 2013 2014 2015
Fiscal Year Ends 29/12/13 28/12/14 27/12/15
Turnover 579.59 635.23 685.38
Expenses 504.67 547.91 596.49
EBITDA 107.79 116.83 138.76
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EBIT 74.92 80.31 99.66
Operating Profit
(reported) 74.92 87.31 88.89
Operating Profit
(adjusted) 74.92 87.31 99.66
Investment Income 3.34 9.95 2.69
Exceptional Items 0 0 0
Net Interest -2.23 -2.39 -2.05
Pre-tax Profit 72.69 84.93 86.85
Tax 16.5 17.93 17.96
Net Profit 56.19 67 68.89
Minority Interests 0 0 0
Profit For Financial
Year 56.19 67 68.89
Ordinary Dividends 24.86 36.37 32.12
Non Equity
Dividends 0 0 0
Retained Profit 31.33 30.63 36.77
Balance Sheet 2013 2014 2015
Fiscal Year Ends 29/12/13 28/12/14 27/12/15
Assets
Non Current Assets
Intangible 26.43 26.43 26.43
Tangible 337.52 368.58 403.64
Investments 0 0 0
Other 0 0 0
Total 363.95 395.01 430.07
Current Assets
Stock 5.09 5.53 6.39
Debtors 22.4 23 28.63
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Cash and Securities 7.31 0.88 2.98
Total 34.79 29.41 38.01
Held for Disposal 0 0 0
Total Assets 398.74 424.42 468.08
Liabilities and Equity
Liabilities
Current 114.96 121.63 136.4
Non-Current 67.82 58.26 48.12
Total 182.77 179.9 184.52
Equity
Share Capital 80.92 80.93 81.77
Reserves 135.04 163.6 201.79
Shareholders Funds 215.97 244.52 283.56
Minorities 0 0 0
Total 215.97 244.52 283.56
Total Liabilities and
Equity 398.74 424.42 468.08
Ratios:
Profitability
Operating Margin % 12.29 12.13 14.1
Profit Margin % 12.54 12.27 14.24
ROE % 23.35 23.04 26.21
ROCE % 29.03 28.95 32.44
Financial Health
Net Gearing % 20.87 17.11 11.18
Gross Gearing % 24.25 17.47 12.23
Dividend Cover x 2.15 2.01 2.41
Interest Cover x 35.33 36.85 55.53
Quick Ratio r 0.26 0.2 0.23
Current Ratio r 0.3 0.24 0.28
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Growth
DPS Growth % 14.09 18.33 8.42
Norm EPS Growth % 10.21 10.9 30.1
Reported EPS
Growth % 16.3 19.24 2.67
(b): Darden Restaurants Inc.
Income Statement 2013 2014 2015
Revenue 8551.9 6285.6 6764
Cost of Revenue 6661 4990.5 5341.5
Gross Operating Profit 1890.9 1295.1 1422.5
Operating expenses
Research and development - - -
Sales, general and administrative 847.8 663.5 673.5
Staff cost - - -
Depreciation and amortization 394.8 304.4 319.3
Other Operating Expenses 0 0 62.1
Total Operating Expenses 1242.6 967.9 1054.9
Operating income before interest
and taxes 648.3 327.2 367.6
Non-operating income -125.9 -152.6 -192.3
Income before income taxes 522.4 174.6 175.3
Provision for income taxes 109.8 -8.6 -21.1
Net income from continuing
operations 412.6 183.2 196.4
Net Income 411.9 286.2 709.5
Balance Sheet
2013 2014 2015
Assets
Current Assets
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Cash, cash equivalents,
and short-term
investments
Cash and cash
equivalents 88.2 98.3 535.9
Short-term investments - - -
Total cash, cash
equivalents, and short-
term investments 88.2 98.3 535.9
Accounts receivable 85.4 39.3 47.1
Inventory 356.9 196.8 163.9
Other Current Assets 234.4 1642 309.5
Total current assets 764.9 1976.4 1056.4
Non Current Assets
Not property, plant and
equipment 4391.1 3381 3215.8
Equity and other
investments - - -
Intangibles 1572.1 1447.1 1447
Deferred Income Taxes 21.3 - -
Other Long-Term
Assets 187.5 296.2 275.5
Total non-current assets 6172 5124.3 4938.3
Total Assets 6936.9 7100.7 5994.7
Liabilities and
stockholders' equity
Liabilities
Current Liabilities
Accounts Payable 296.5 233.1 198.8
Taxes Payable 158.4 134.9 128
Current Debt 164.5 222.6 15
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Other current liabilities 797 1027.9 854.9
Total current liabilities 1416.4 1618.5 1196.7
Non-current liabilities
Deferred taxes liabilities 356.4 286.1 341.8
Long Term Debt 2496.2 2481.4 1452.3
Other long-term
liabilities 608.4 557.8 670.4
Total non-current
liabilities 3461 3325.3 2464.5
Total Liabilities 4877.4 4943.8 3661.2
Stockholders' equity
Common stock - 1302.2 -
Additional paid-in
capital 1207.6 - -
Other reserves - - -
Retained earnings 998.9 995.8 1026
Minority Interests - - -
Total stockholders'
equity 2059.5 2156.9 2333.5
Total liabilities and
stockholders' equity 6936.9 7100.7 5994.7
Ratio:
Margins (% of Sales) 2013 2014 2015
Revenue
100.00
% 100.00% 100.00%
Cost of Revenue 77.89% 79.40% 78.97%
Gross Margin 22.11% 20.60% 21.03%
SG&A 9.91% 10.56% 9.96%
Research and - - -
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development
Operating Margin 7.58% 5.21% 5.43%
Net Int, Inc and
Other 13.69% 7.98% 8.03%
EBT Margin 6.11% 2.78% 2.59%
Profitability 2013 2014 2015
Tax Rate 1.28% -0.14% -0.31%
Net Margin 4.82% 4.55% 10.49%
Return on Assets 6.4 4.08 10.84
Financial Leverage 3.37 3.29 2.57
Return on Equity 21.12 13.58 31.6
Particular The Restaurant Group plc Darden Restaurants Inc.
Profit and loss statements According to the above
mentioned statements, it has
been found that total net
incomes of the company is
increasing in every year.
Under this company, total
profit generated during last
few year are quite stable and
fluctuating. 709.5 of total gain
is recorded in 2015.
Ratio analysis
Profitability ratio The profit ratio of the
restaurant company is
fluctuating in every year. They
are able to generated healthy
earning in an accounting year.
In 2015, ROA and ROE is
maximum as they are getting
high return as compare to last
couple of years.
Liquidity ratio This company is not so
effective enough to pay off
their short-term or long term
liabilities. As they are below
from ideal ratio.
After making evaluation of
liquidity position of the
company, it has been seen that
there is not much of difference
in last year of current assets
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and quick ratios.
TASK 2
2.1 Justification, appropriate actions to overcome the identified weaknesses
In the business there are various reasons because of which failure is faced and the main
among them is weakness (Donner, 2010). It will be affecting the environment in several manner
which will be including internal as well as external factors. So the different tools which are
available shall be used so that they can be overcome and by this goals and targets of organisation
will be accomplished in the least time possible (Escobari, 2010). The strategies which will be
undertaken by Zizzi in order to remove the problems which are mentioned here under:
 The main issue is improper communication among different levels of organisation.
 Inexperienced employees who are not able to conduct the operations in effective manner.
 Shortage of capital by which functioning will be affected (Sabato, 2010).
All the issues which are faced can be dealt in proper manner by making proper strategies and
some of them are explained below:
 The communication will have to be improved and by this information will be made
available to all and there will be establishment of proper coordination among them.
 The employees are not having adequate knowledge so it will be needed that proper
training shall be provided to them. For this various development and training
programmes will be launched in which their skills will be enhanced (Fassin, 2011).
 As there is high competition in the market so in order to beat this, it will be needed that
new and innovative ideas shall be used. By this products will be made with advanced
features so that they will be chosen by consumers over and above others.
The problems which are faced are because of the wrong procedure which is adopted by
the Zizzi and for that it will be required that steps shall be taken in this regard. Some of it are as
follows:
1. skilled and trained employees will be hired so that proper functioning will be made
possible.
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2. The mosses will have to be minimised and for that effective strategies will have to be
executed.
3. A team shall be established which will be responsible for resolving the issues of business.
Quality of the product will have to be improved as by that customers will be retained (Buelens,
2011).
2.2 Analyse ways in which existing performance could be maintained and strengthened
It is important not to neglect our existing customers as they are vital for company growth
and development. Some of the new initiatives are mostly disrupt current performance but they
can be managed with proper utilisation of skills and knowledge that are carried by the people at
workplace. As each and every individual working in an organisation in order to maintain the
productivity and to achieve their aims and objectives within the allotted time period (Forsman,
2011). It can be achieve only though applying effective and creative ideas that would help the
company to increase goodwill in quick time. There are some of the techniques which are use by
company in order to maintain the performance of an organisation as well as manager of
enterprises such as:
Strong and positive relation: In most of the company the communication system should be
effective so that healthy relationship would be develop among employees and top management.
As to maintain perfect interaction between customers a strong coordinative bonding should be
developed . The performance of an organisation is mostly affected if there is miscommunication
among employees relation. Like for example a effective outcomes can only be achieve if there is
healthy relationship among workers.
Development of Eco - friendly atmosphere: As per this techniques, employees should work in
such kind of environment in which there is less stress and workload. It will help to motivate
those workers those are involve in activities in an effective ways by keeping customers needs
and wants (Fassin, 2011).
Improvement seminar: Employees will be perform there role in most effective manner if they
are getting some short of training and development program. It will be more useful tool in
improvising skills and capability of an employees in order to achieve their individual as well as
group goals. Another benefit of this programmes is to encourage the ability and knowledge of
employee's so as to remove employment issues at the workplace and create awareness regarding
organisational safety and security to employee's.
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Training and development: It is said to be that aspect which are important for any company in
order to make their employees perform the work in most effective manner. As in Zizzi
Restaurant which is always tries to organise training and development programs through
appointing skill and experience persons those are going to chance the thing and increase moral of
employees to work according to there capabilities (Gronum, 2012).
Assessment program: It is said to be complete summary of program analysis and is a beginning
phase for the evaluators. Employees may organise a performance appraisal seminar that would
combines various aspects of early supervisors written appraisal with an self evaluation. On the
basis of there skills and talent they are applicable in positive manner in order to achieve
organisation objectives.
Ability to modify: Generally, in an organisation it is vital for each workers or employees to
adopt changes which is made as per the policies design by the company for the benefit of the
workers as well as company.
On the other hand Zizzi restaurant is making continuous innovation in development of
employees performance through implementing new policies in order to attract most number of
customers (Verreynne, 2012).
2. 3 Recommend with justification, new areas in which the business could be expanded
In the process of expansion which will be taken by small enterprise, there are various
factors which will have to be considered which will be important in Zizzi restaurant. There will
be both micro and macro factors which will have to be considered and are mentioned here under:
 Cost: In expansion there will be requirement of lot of funds and this will be the major
aspect to be considered as without it this will not be possible. All the operations will be
performed with the use of them so they will have to be arranged in advance.
 Current trend: In order to expand it is necessary that all the trends which are present in
respect of the customer preferences and tastes shall be identified. It is required as they
will be the one who will be consuming good so there needs are to be considered on
priority.
There are various strategies which are used and are described below:
1. ANSOFF Matrix: In this technique all the activities of business will be planned in
effective manner so that management will be able to follow them. The main schemes in it
are:
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 Market development: In this method the organisation will be having such advanced
features by which other competitors will be attracted (Rai, 2011)(Gunasekaran, 2011)
(Kastelle, 2012).
 Market penetration: In this focus will be provided on raising the share in market in the
given market trend.
 Product development: In this the demand will be increased and for this new features will
be added to the product.
 Diversification: In this product will be provided in new market.
The expansion may be considered by organisation in Chinese market where new products will be
provided to attract customers and for this various tools will be adopted.
TASK 3
3.1 Produce an assessment of existing business objectives and plans
In order to prepare the strategy for the launch of any new product, proper understanding
will be required in respect of vision, mission and goals of the organisation. By this it will be
possible for the business to achieve the objective for which product is introduced which is profit
maximisation (Griffin, 2011). A plan in this regard is present here under for Zizzi restaurant:
Vision for staff:
 The employees will be able to complete their activities in an effective and efficient
manner as support will be provided to them.
 Programmes in relation to safety and security will be established for the protection of
employees.
 Training programmes will be made by which the knowledge and skills of employees will
be enhanced.
Consumer vision
 a positive relation should be developed with all the customers and staff.
 The demands of customers shall be satisfied as they are the one who will be using the
final goods.
Shareholders objectives:
4. Extra amount will be invested so that profits can be maximised.
5. The main focus will be provided to the development of the organisation.
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6. Additional benefits will be earned by the investment of capital in different sectors.
7. Market share will be increased upto 10% in the coming quarter.
8. Profits will be increasing at a rate of 20%.
Business plan: The objectives and goals of business will be achieved in minimum period and for
that plan will be made by which all the work will be carried out in the most effective manner. All
the tasks in the restaurant will be undertaken according to the manner specified in plan. In this
the time which will be taken and cost to be incurred in it will be estimated. Also the targets
which will have to be achieved by the use of it will be specified in it.
On the basis of the facts which are derived it can be said that plan which was made has
been implemented in the most appropriate manner.
3.2 Revise business plans to incorporate appropriate changes
In an organisation it will be required that planning shall be done so that activities shall be
conducted in the proper manner by which targets will be attained. The business plans will have
to be examined by the skilled people and this process is known as revision of plan. By this the
needs of customers will be satisfied by which society will also be benefited. In the market there
are some changes which takes place on regular basis and for that it will be needed that plan shall
be modified accordingly (Schaper, and et. Al 2014). The various stages which will be undertaken
in this are mentioned below:
 Research methodology: In this research will be conducted so that all the information that
will be needed in reformation will be collected. For the proper implementation all the
evidences will be gathered.
 Recruitment and selection: It will be needed that skilled employees shall be hired so that
work can be carried out in best manner.
 Diversification: all the products will have to be provided in different markets according
to needs of consumers.
 Performance measurement: It will be required that evaluation shall be made of
performance so that their role can be identified.
 Control: This will be the important aspect in which all the cost will be controlled so that
savings can be used to be invested for other purposes.
With the help of all the revisions all the objectives of business will be accomplished and
success will be achieved.
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3.3 Prepare an action plan to implement the changes
In order to do different activities company needs to prioritise its different work so that
they can achieve their long term objectives. Given below is the details of different activities that
will be performed in an organisation.
TASK Duration
Preparation of companies plan of action 4- 5 days
Collection of relevant data 12 – 14 days
Allocating different resources at distinct
activities.
3 days
Placement of appropriate employee on right
job according to the skills of an individual.
7 days
Collection of reverts from workers 2-3 days
Action date Starts on 10th July
Date of completion 30th September
As per the given above action plan of company it shows that management needs to
allocate enough time for each activity so that required results can be achieved. By doing proper
planning company can reach to its final goals and can achieve its objectives. For same it is also
necessary that proper monitoring is done so that no task go wrong and resourses are used
effectively (Storey, 2016).
TASK 4
4.1 Impact of the proposed changes on the business and its personnel
Whenever any change is made it has its positive and negative effect both on the working
of the organisation. Modifications are made with a view of receiving positing outcome and hence
mostly the result of change is favourable. The change made in the given organisation had the
following impacts on company :
Monitory – These modifications are related to the finance of company. According to this
company has the chance to achieve higher advantages by giving administration to guest. When
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the changes were done in the given organisation it experienced growth in its total sales which
further lead to rise in profitability.
Workloads: Activity configuration is thought to be a great degree unmistakable part in business
affiliation which keeps up work environment and achieves picked goals as well. Feasible
alterations in firm help to diminish the workload from staff individuals and furthermore,
coordinates getting ready and change programs for improving working execution of authorities.
Association structure : Some major changes are required in structure and in like manner work
profile of labours, so there will be creating of sound and welcoming condition by which all
authorities effectively serve organizations to customers as indicated by their essentials.
Close by this, movements and progression expect a fundamental part in affiliation change
and gather a brand picture in external economic situation. Starting at now clients require some
appealing administrations with better quality. So should be immediate investigation in business
place for fittingly looking at and evaluating market examples and customers needs.
4.2 Plan how the changes will be managed in the business
Most of the free business tries does not want any changes in their working environment
and methodologies due to the fear of failure which increases when employees are provided with
fresh technology (Terziovski, 2010). If movements and advancement handle is coordinated by
the orchestrating, it improves work for works. In the cabin endeavour for making and upgrading
serving structures so need to coordinate advancement get ready in entire business life to
sufficiently achieve picked vision and mission of the firm by using appropriate methodologies
and frameworks. On the other hand, before executing any modifications in firm, should really set
up a feasible game plan by then requested by their necessities after that should influence a
reasonable time to get ready for effectively whole. Masterminding is the best way to deal with
administering and controlling wherever all through the business practices and moreover keep up
all agents by which they can working in think way and finish picked targets similarly they will
be serve better organizations to customers as pet their essentials, that gives honest to goodness
satisfaction to them.
Zizzi eatery needs to receive a fitting method of progress that is change administration
which is a powerful device for transforming the association by understanding the need and
necessity of progress. Aside from this Zizzi eatery will apply the kotter eight model of progress
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administration for execute the effective renewal process. Compelling eight stage of this model is
specified beneath:
 Preparation of necessity – In order to start a new task the first need is of realising the
need for change.
 Strong Coalition – In order to bring change in the work place the basic requirement is
that there should be a strong relation among the employees with the higher authority so
that they can cooperate with change and develop learning towards it (Zortea-Johnston,
2012)
 Vision – In order to achieve the long term goals company needs to estimate the position
of establishment after a particular time period so that those can be achieved.
 Communicate the goals – In order to get work done from the employees it is necessary
that future of company is achieved as expected. For same the another requirement is of
transfer of information to all those who has value for same.
 Removing barriers – After estimating the future of company and setting goals for same
company must work on eliminating barriers from its path so that work can be continued.
 Attainment of short term goals – It is advisable to divide the future goals of company in
short intervals so that performance can be judged and corrective actions are taken
accordingly.
4.3 Monitor improvements in the performance of the business over a given timescale
Working execution and organization standards expect a basic part in entire business plan.
It is very fundamental to fittingly screen and separate certifiable execution of workers and
undertaking too. Since this is particularly influencing on advantage level and furthermore photo
of the firm in external business focus. After completed changes in affiliation should be screen
and choose veritable result and execution, if there is required any more changes and use, so need
to set up a game plan at that point as per essentials should make in move. For enough checking
execution organizations can use distinctive methods, like discernment, association, audit, giving
assorted task hence more. Aside from this, given organisation will receive a fitting technique for
observing which is expressed beneath:
Balance score card : According to this an association can without much of a stretch measure the
standards of work done by administration which helps in planning strategies.
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CONCLUSION
From above report it has been concluded that with the help of innovation in the
organisation company can achieve higher profits and can increase its total scale to a great extent.
The above text shows how small scale organisations contribute in providing variety to customers
and work towards providing satisfaction to customers. In order to ensure growth in long term
company needs to do adopt variety of new options as this way an organisation can give a tough
competition to other firms too. Business plan given in the report shows how through planning
each activity company can achieve its objective and goals and can also utilise its resources to
their full capacity.
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