Challenges and Success of Small Businesses

This assignment delves into the complexities of small business operation, examining the various factors that contribute to their success or failure. It explores the inherent challenges faced by SMEs, such as access to funding, competition, and market volatility. The analysis also investigates the crucial role of support systems, government policies, and entrepreneurial skills in fostering sustainable growth. Additionally, the assignment touches upon relevant legislation and statistics concerning small businesses in the UK.

Small Business Enterprises

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Overview of Caffe Finix and their strengths & weaknesses.................................................1
1.2 Analysis of the performance of business using different measures......................................2
TASK 2............................................................................................................................................3
2.1 Methods which has to be used for overcoming the weaknesses...........................................3
2.2 Techniques which can be adopted to maintain existing strengths and performance............4
2.3 Areas where they can grow their business............................................................................5
TASK 3............................................................................................................................................6
3.1 Assessment of the current business goals.............................................................................6
3.2 Revision business plan to incorporate suitable changes.......................................................7
3.3 Action plan to implement the changes highlighted above....................................................7
TASK 4............................................................................................................................................8
4.1 Impact of the changes which was recommended on the business and their members..........8
4.2 Managing of the changes in the business..............................................................................9
4.3 Evaluation of the improvements in the performance of the company for a time period.......9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
There are several business organisation which are small in nature through considering
their employees number, turnover, production capacity and etc. It is observed that normally these
types of organisations are called as enterprises owned and managed by entrepreneurs. They are
responsible for bring new innovation and competition in different sectors of economy. These
types of organisation has contributed in the growth of the any country's economy and gives
provides employment opportunities for the citizens (Bridge and O'Neill, 2012). The governing
regime has to understand the importance of these types of firms and should try to create an
through their policies so that such industries grow and expand. According to the criteria of UK
industries a SME is someone who has the turnover less than £25 million and the employees
number is restricted to 250 individuals. As per the data of UK government they are successfully
providing employment to 15 million people and has turnover of £1.8 trillion. This reporting will
be highlighting the importance of small scale industries in UK and how they can be managed
through various business plan (Storey, 2016). Through taking the scenario of Caffe Finix which
is a coffee shop whole the tasks will be answered.
TASK 1
1.1 Overview of Caffe Finix and their strengths & weaknesses.
It is a coffee shop which is situated in Stratford a city in the east London. It was the year
2009 when the coffee shop has introduced themselves in the market and today it has become one
of the popular choices of people who regularly consume coffee. The coffee shop provides a place
for the people who wants to spent time with their friends in a peace environment. They have
good collection of books at their shop so that the customer visiting the shop can read them while
consuming coffee. Caffe Finix is situated in the total area of 150 square foot and the shop is run
by the Peter Scott who is the owner of the shop (Burns, 2010). They have employed 8 people for
handling and managing different activities at Caffe Finix. Other than Coffee the customer can
order order tea and breakfast. The owners regularly focus on improving their business so that
they can increase their productivity and profitability. They are looking forward to analyse their
internal factors with the help of conducting a SWOT analysis.
Strengths:- It consists of certain factors and elements which are considered as the
capabilities of the company which has made them stand out of the other competitors. Through
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these capabilities they gain competitive advantage over their rivals. Each company existing in the
business environment has some or other strengths for example; company like Apple has known
for their innovative products whereas Pepsico has the advantage of having a strong brand name.
Same in the case of Cafe Finix like they give variety of option for the products to the customers.
Other than this they have made good brand image in the minds of their customers because they
are delivering quality products to their customers (Stokes, Wilson and Wilson, 2010). Their
target audiences is the youth so they are easily able to reach them as their shop is quite near to
Stratford College. Due to their quality and fresh coffee and food every year they are seeing a
hike in the sales turnover.
Weaknesses:- These are the factors which can impact the growth of the firm in negative
way. For example; in the scenario where Caffe Finix is selling is not using fine quality coffee
beans will impact their market and this can be one of the reason why they have lost their
position. Following are the weaknesses of the company:-
 The coffee brand is not very much known;
 The coffee house has to pay high rent for their shop which is affecting their business;
 From so many months they are facing issue of management where they are not able to
handle employees thus finding difficulty in retaining the staff.
1.2 Analysis of the performance of business using different measures.
Performance management program is a way to analyse the position of their business. In
this the comparison is made with the other player who are doing the business in the same
segment as Caffe Finix. There are various elements which can be considered in this and these
might range from staff, sales, production, customer services and etc. Below mentioned are soke
of the areas where performance managed tools can be analysed.
Sales:- Through looking at the sales it can be observed and analysed that whether the
company is in loss or profit. This task can be done at different time period according to their
convenience. Mostly organisation analyse the sales which has been made in one financial year.
There are lots of advantage of doing so as they will be able to improve the customer services,
quality and can also increase the market share (Down, 2010). When they feel that things needs to
be changes so they can modify the plan through different factors in mind. For the sales factors
they need to focus on employees, suppliers and the distributors.
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Finance:- It is the funds which is required by the organisation to check their performance
in the market. Return of Investment, valuation of asset, liquidity and analysis of an operating
expenses are some of parameters which are considered in this. These can impact the organisation
in large manner.
Marketing:- It is the duty of the marketing department to ensure that through performing
certain operations of marketing they make the product reach to the customers. This is the activity
which involves communication between the consumers and the organisation. With the help of
this the marketers try to convince targeted customers that they should buy their product has this
has certain benefits attached to it (Goss, 2015). The activities of marketing can increase in the
brand awareness of Caffe Finix and for that they are focusing on different advertising options
available to them. To ensure that their marketing efforts brings maximum output they need to
build a marketing strategy which is creative.
TASK 2
2.1 Methods which has to be used for overcoming the weaknesses.
Consideration of the place is significant in making profits and revenues for the
organisation, coffee house has to be situated in the market place which is easy to come for the
targeted customers. Accessibility is major for the company which can help to them to attract
more customers towards them. Rent of the cafeteria may be play a negative impact on the profits
of the Caffe Finix (Ackermann and Audretsch, 2013). Parking is the main issue for their targeted
customers because it is essential for the customers to park their vehicles in the safe area where
their cars and bikes are safe so the organisation has to take a parking area on the rent which can
help to them to provide more facilities to their targeted customers which can help to them to
increase more consumers. Another issue is that expiry of the products especially raw materials
because coffee powder, milk powder, sugar packets are having a expiry date and inappropriate
methods of stock management is creating a negative impact on their stock and profitability.
Many of the times their employees uses new input supply of raw materials (Mason, 2015). So
they have to use LIFO method (last in first out method) which can help to them to use each and
every product in their stock with in it's expiry time.
It is essential for the management to maintain the quality of the products which can help
to them to deliver a quality products and services to their customers which is needed. Beverages
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and other materials have the company which has to be stored in the cool place which can help to
them to manage their product's quality for longer time. It is essential for the coffee shop to work
on the customer's demands and provides a large variety of the products which can hel0p to them
top provide options and categories to select one of them. It can help to the cafe to attract more
customers and also to manage the interest of the people in the products (Burrows, 2015). They
can make varieties in the cupcakes, coffee, pastries and puffs by which they can attract food
lovers towards them. Services should be appropriate by their employees for their customers so
they have to use strategic selection strategy to select an employee which is having all qualities as
per the needs of the company (Smallbone and et. al., 2010). After recruiting an employee they
have to provide a better training to their targeted customers which can help to them to make a
better change in the performance of their employees for their customers.
2.2 Techniques which can be adopted to maintain existing strengths and performance.
Quality in the products and services are priority of the Caffe Finix but they are focusing
on the fact that their shop should be on better location where more number of customer can visit
their shop. The customers services should not be overlooked so they should give fine quality
coffee products and should ensure that the consumer get an environment where they can feel
relax in the cafe. These thing will help them in increasing the scope of their strengths which they
have. Coffee should be served proper with better presentation as this is the factor which attracts
the attention of the customer (Schaper and et. al., 2014). The economic factors of the nation has
very less impact on the business of coffee shops in UK. It is the customers who decide the
business of any company so to make sure that all the requirements of the consumer are fulfilled
they should introduce a feedback system where the people coming in the cafe gives their view on
their experience. After analysing those things they should do some modification in their services
and products. There are some of the other coffee houses which are situated near Stratford area
but when they are compared Caffe Finix beats them all with their taste in the products and high
class services. Other than this the location of the shop is also at the right spot as it is near college,
shopping mall and different entertainment places (Malhotra and Temponi, 2010). Keeping the
things simple does not attract much customers so keeping this in mind they have introduced
some fun activities for consumers. They can also look for a rooftop cafe which can bring more
customer to them and they should not restrict themselves to coffee they can look for other
options like food items and beverages or other items which can be taken with the coffee. In their
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menu item they can add different kinds of tea like Asian Black team. Retaining the customers
would give them more profits so they should bring the loyal customers concept through giving
discounts and offers to the customers who are visiting their shop on regular basis.
2.3 Areas where they can grow their business.
The objectives and aims of almost all the small scale enterprises is to earn more profit so
that they can expand into different markets. This is a coffee house who started their journey in
year 2009 and has made a tremendous growth still now. But now they have to think of expand
their market in different locations up to now they had only one city that Stratford (Olson and
Staley, 2012). With the limited number of customers and being a small city the growth option is
restricted to some level. They can look for opening new shops in the city of London as it has
been in the list of largest cities of the world. They should also be aware of the fact that with the
expansion there will be big roles and responsibilities with them thus directly increasing the work
load of the employees. Caffe Finix should built a strategy for the expansion through analysing
different elements impacting the business of the company.
They should conduct market analysis so that they can gain knowledge about the
competitors and the suitable environment for their business as there is difference in the market
condition of both the cities. Using the same strategies in the newer market will not give them
productive and profitable results (Gronum, Verreynne and Kastelle, 2012). London is the best
place to expand their market as it is one of the most populated city and every year lots of foreign
tourist comes to see the tourist spots of the city. This will give them competitive advantage as the
lifestyle of individuals who are part of the city is much better than the other cities and they don't
need to worry about the availability of the resources. They are looking forward to ensure that
they deliver quality and fine products related to coffee and food.
They will have to face a hard competition from the rivals as there are lots of coffee
houses which has set up their market and today they are on the top spot. So, if Caffe deliver the
common products they will not able to appeal to the customers so they need that they come out
with better idea and products. They have decided that they will be offering coffee made from the
fine beans at suitable prices and on the other hand also need to look at the flavour they are
offering (Altman, Sabato and Wilson, 2010). These are some of the ways which can guarantee
them more number of customers. Certain strategies will be adopted in which they are focusing on
convincing the customers for their first visit and the reason behind this is that if the first
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experience of the customers will be good they will again like to come. They can also gain the
benefit of words of mouth advertising done by the satisfied customers.
Emphasising on the food and beverages is the one aspect of the business but other than
this services and employees comes the next and these have the same crucial role in the success of
the business. In the house shop of Caffe Finix which was present in Stratford there were only 8
staff but in London their cafe will be much bigger and they will be serving to more number of
customer so they need to recruit more employees (Fassin, Van Rossem and Buelens, 2011).. But
they don't have much experience in the recruiting and hiring process so for that they can take
services of consultancy firm who will be hiring in place of the company. They should give their
requirements to the consultancy firm and can ask them to hire skilled workers who has earlier
worked in any cafe and restaurants. After the success of the recruitment process they need to
train the newly appointed staff so that they can adapt themselves into the working conditions.
London is one of the biggest cities of the world so there are lots of new cafes, restaurants
and pubs which are available or debut in the market and most of them shuts down after some
period of time because they don't have anything new to offer (Cowling, Liu and Ledger, 2012).
Keeping this fact in the mind they need Caffe Finix should make sure that people becomes aware
about them and this thing can be also done through promotional activities. They can advertise
their coffee house in the newspaper and the local channels, they can also invite people to taste
their coffee through social media. They can adopt the concept that they will be donating 0.5% of
their whole profit to the education of the girl child thus giving them good PR.
TASK 3
3.1 Assessment of the current business goals.
Objectives of the business are the goals which they have to achieve or it is the outcome
they need from the business. It is not necessary that all the organisation has the same goals and
objectives. These things depended on the kind of the industry they are trading in and what is the
size of their business. Cafe Finix has also aimed for some of the targets which they wanted to
attain in the specific time period (Rae, 2010). They are very clear that what they wanted to
achieve from their business activities and how they will reach to it. So this gives them an extra
benefit from their competitors as they are pretty much focused. They need to analyse the scope
of all the possible ways through which they can gain competitive advantage. Caffe Finix should
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make sure that they get good responses in the various reviews sites or on the social media thus
making them know the opinion of the customers. They wanted to get the position of top trending
cafe in London. With these the tourist visiting UK will come to their coffee house and they
should ask for feedback from them. Cafe Finix has targeted to have 60% gross margin and
deliver finest coffee product according to the needs of people. They are ensuring that they
contact the survey organisations to conduct survey for them so that they can know how they are
performing (Islam and et. al., 2011). On of the main reason of their success can be the location
where they have selected. The coffee house is serving 600 people every day which shows how
they are successfully running their business. Company has appointed a quality teams who is
given the responsibility of checking the quality of the coffee and food products offered by the
company and this thing is done on regular basis (Nga and Shamuganathan, 2010). This can give
them more advantages and they are also offering products at a competitive price.
3.2 Revision business plan to incorporate suitable changes.
Caffe Finix wants to attract more number of customers and try to bring back the current
one and this they are doing through implementing marketing strategies. When they attract and
make them the loyal consumers of their shop they get an advantage of referrals. For example; a
customer has came in Caffe Finix coffee house and after consuming certain coffee he liked the
taste and the services. So there might be chances that he might refer to his friends about the
coffee house or he can put some good comments on the social media about them. They should
provide better sitting to the customers other than this they can also take care of the chairs, LED
lights and soft music thus ensuring that customers become relaxed (Chittithaworn and et. al.,
2011). The cafe has distributed different tasks to different employees like barristers will handle
the sale transactions and some of them will be looking for serving the customer. They have
created a place where people can feel peace thus giving them competitive advantage. At the same
time there will be high efficiency in the work and they also ensuring that the views of the
consumers are utilized to improve their position. In different countries they can develop banners
and fliers to advertise their products and services.
3.3 Action plan to implement the changes highlighted above.
 Market Analysis
Local residents of Stratford are the main target of Caffe Finix and other than this equal
importance is given to the tourists who are visiting the city.
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 Market Segmentation
The location where the Caffe Finix is located has college neat to it so all the marketing
operations is focused on the students, working people and various other departments. These
section of the people is going to consume more coffee so that they can feel relax and make
themselves active.
 Target Market Strategy
Most of their customer will be students or either the faculty of the college and student can use as
a study place. For this the cafe will be not charging any service fees till 3 hours thus motivating
them for the regular visits and consume coffee (Chell, Nicolopoulou and Karataş-Özkan, 2010).
The organisation will be giving certain discounts and offers to their loyal customers. They can
take the feedbacks from the client to improve their services.
TASK 4
4.1 Impact of the changes which was recommended on the business and their members.
There are some of the factors which are part of the external environment which can
impact Caffe Finix.
 Political Factors
They have to do adopt the rules and regulations framed by the EU as regulations of the
enterprises and power of the customers gets influenced by it. Political environment highly
impacts the consumers power so they should hope for the political instability.
 Economic Factors
Due to positive trends in the economy various firms are experiencing new growth thus
looking for the expansion in their market share. The demand of the coffee products may go high
if there growth in the economy (Carraher and Paridon, 2015). If Caffe Finix looks that there is
low interest rate and demand of the products are high, this will encourage them in expanding
their business through taking some sort of risk.
 Social Factors
This is one of the important factors which consists of behaviours, tastes and day to day
routine of the citizens as it is related to the social structure. If their will be improvement in the
lifestyle of the people then Caffe Finix will see increase in the sale as more number of people
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consume coffee. The age factor might be a issue as someone who is older in age might order
something else than a young age person. So both of them need to serve better quality products.
 Technological Factors
Introducing new technology in the cafe can gives them an extra advantage as through it
they can carry out the business activities in far more better way. This also reduces the cost in the
development of new products.
4.2 Managing of the changes in the business.
People:- There might be chances that employees or the customers might not adapt
according to the new chances as they may acquire the feeling of fear and ambiguity. The changes
which has been suggested or recommended is for the betterment of the business but in the
starting people might see it as unknown thing thus hesitating to accept it (Jasra and et. al., 2012).
There might be also chances that changes might not be have much potential to influence the
performance. It is the duty of the manager to check and analyse various aspects of it so that he
can manage the changes and they should pre-assume the influences on the employees.
Business:- If they need to analyse their position in the market it is necessary that they
should look at their competitors so that they can have information of the activities carried out by
them. To handle the consumer behaviour and fulfilling their demands they should go for market
research (Draycott and Rae, 2011). Analysing the business at different levels like local, national
and global level they can easily able to know the factors influencing their business. On the other
hand taking care of the environmental norms is also necessary.
4.3 Evaluation of the improvements in the performance of the company for a time period.
Through taking the goals of Caffe Finix, monitoring activity can be carried out.
Goals Period Review
They have the objective of
becoming the best coffee
house in the particular area.
By 2018 Various activities which are
focused on the market is
executed for this aim.
Service By 2018 They are putting their efforts
to satisfy the customers
through giving them a peace
environment where they feel
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relax thus offering friendly
services.
Franchise Concept By 2018 They know that they don't
have much revenues to expand
their market so they are giving
their franchise at different
locations.
Emphasising on building loyal
consumers
By 2018 The frequent visitors at coffee
shops gets certain discounts.
CONCLUSION
From the above report it can be summarised that small business enterprises have the
potential to support the economy of the nation as every year their contribution in the economy is
increasing. It is the government who takes certain action thus framing various policies and
legislation to pave the path for the success of the business of the company. Caffe Finix can create
more employment opportunities of the individuals which is considered as an opportunities.
Although it might be small coffee shop but it has the potential of expanding their business at
globe level through their market research.
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