Small Business Management Study Material

This study material provides information on small business management, including topics like business plan, entrepreneurial process, characteristics of successful small businesses, and more. It includes a company description of Softwire, a UK-based software development organization, and discusses the benefits and drawbacks of owning a small business. The material also covers feasibility analysis, financial planning, cost analysis, and market strategy.

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Small Business Management
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Small Business Management
Table of Contents
The business plan including business opportunities....................................................................................3
The entrepreneurial process .......................................................................................................................5
A) Company description: Softwire is UK based software development organization which was founded in
the 1999. In the year of 2011 cited firm has won the 3 start award in the field of small enterprise. It
provides IT solutions and internet services to the companies. It has turn over of 5 million GBP. ..............6
The characteristics of successful small businesses......................................................................................7
Consult with the primary stakeholders ...................................................................................................7
Business initiative, technologies, and policies.........................................................................................8
The benefits and potential drawbacks of owning a small business.............................................................8
Feasibility analysis and Business plan........................................................................................................10
Financial planning .....................................................................................................................................10
Cost analysis..........................................................................................................................................11
Risk and migration strategies for a business plan..................................................................................11
Role of license in small business ...........................................................................................................12
Competitive analysis, strategies and marketing tactics ........................................................................12
Business model .....................................................................................................................................13
Feasibility analysis .................................................................................................................................14
Findings.....................................................................................................................................................15
References.................................................................................................................................................16
Appendices................................................................................................................................................18
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The business plan including business opportunities
The managers and leaders have to choose the plan vision and mission for the organization
because the vision is vital for every single business plan. The managers utilize the vision detail
the precise business plan to bring a legitimate thought. The business plan incorporates objectives
and goals of the organization. As per the authority style, how the organization performs in future
days is depended on by legitimate initiative style. With the assistance of the vision, managers
have individual working and coordinating techniques including the capacity to analysis the
feasibility of the business plan of an organization. Also, the different sorts of brand vision help
an organization to decide exact evaluation(Gootnick and Gootnick, 2009).
Industry analysis:
PESTLE analyses is one of the important technique through which organizations can
identify the market and can modify their operations accordingly. As Softwire is the software
development company that provides web services to clients.
Political factor: if government makes any modifications in the legislation, trade agreement them
it may affect the entire retail industry. And cited firm will have to mold its operations so that it
can work ethical.
Economic: If there is recession or inflation then buying capacity of consumers will get affected.
Apart from his their will be shortage of funds then company will not be able to offer cheaper
products. That will impact on the Softwire to great extent.
Social: Culture, belief, test preference impact on the business of the firm to great extent. If
organizations provide goods as per the need of consumers then they will be satisfy and it will
enhance sales of the company. But test and preferences of the clients can get changed any time
so to match with it corporations have to modify its products as per the needs of the users.
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Technology: It is another factor that impact on the overall business of the industry. If there is any
technology in market which can enhance efficiency of the products then it would be necessary
for all companies to adopt it.
Legal: Softwire follows law and legislation and if government makes changes in any regulation
then cited firm also have to implement it in the workplace.
Environment: It is necessary that it offers environment friendly products otherwise it would not
be able to run its business significantly.
Market analyses
As Softwire offers number of web products to the consumers at affordable rates. Threat
of substitute products are very low. There are limited leading brands in this industry so threat of
new entrance is high. Bargaining power of suppliers is very low but threats of substitute
products are very high. Buyer have high power they can move to other brand easily if any other
company offer them better services.
to grab business opportunity, small business should focus on macro environmental
factors such as political, economic, social and technological factors. Each factor of macro
environment is considered in PESTEL analysis which directly influence feasibility study.
Political factor includes governmental role to expand the small business. Economic factor
includes exchange rate, GDP and currency value for new entrants of small business. Social factor
covers individual preference of customers. Technological factor covers technical improvement of
small business.
Internal analyses: SWOT analysis: it includes four parts such as internal (strength, weakness)
and external (opportunity, threats) factors for small business.
Strength Weakness
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 Skilled employees
 use of advanced technologies
 Good relationship with consumers
 High competition
 Market fluctuation
 Limited market share
Opportunities
 market leader so expansion opportunity in
other country
 Government assistance
Threats
 Changing Market demands
 High competition
 Changing government policies
Financial feasibility: It has potential to earn more profit in the UK market. Apart from his it has
good link with the corporate business so it can help in increasing revenues of the organization.
Team feasibility: Staff members of the Softwire are skilled, they have deep knowledge about
latest technologies and are capable to resolve quarries of clients.
The entrepreneurial process
In order to successfully implement the business plan, there is some process have been taken part
in small business like mobile store. Besides that, with the help of marketing manager, an
effective business idea is created, but the CEO of the organization needs to approve the plan for
further process. Moreover, after getting all approvals, the marketing manager can allocate tasks
to individual employees. Thus, the marketing manager needs to focus on macro factors and
SWOT analysis for accurate decision making process.
On the other hand, the vision of an organization incorporates a few opportunities for the
organization, for example, sales improvement, financial stability, and employee empowerment.
With the assistance of appropriate vision of business plan, an organization can capable actualize
a precise strategy for future development. Along with that, small business like mobile store of
UK includes individual opportunities and they should successfully grabbed that kind of
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opportunities to expand its business. Thus, this business plan of small business like mobile store
includes a new mobile item which will be launched in the market (Barrow, Barrow and Brown,
2008).
Market research: two types of research as qualitative and quantitative includes the significance
of market opportunity. Primary data or information is collected through quantitative research
process. So, to gather accurate information regarding new entry, small business should focus on
primary data which includes customers’ requirements, complaint, suggestion and demand. With
the help of market research, small business can achieve desired goals and objectives. Before
presenting any specific service or product on the market, the market research needs to be
conducted by the small business like mobile store. Discussing the market segmentation, it will
help the marketing managers to find proper region including demographical, geographical and
social factors. At the end of the day, the market segmentation is somewhat handled where
gathering individuals with comparative needs or same portions who indicate comparative
acquiring design. For winning benefit, segmentation is done either for the verity of the item or
focus on a specific gathering of individuals (Osterwalder et al., 2007). .
A) Company description: Softwire is UK based software development organization which was
founded in the 1999. In the year of 2011 cited firm has won the 3 start award in the field of
small enterprise. It provides IT solutions and internet services to the companies. It has turn
over of 5 million GBP.
B) Mission: The main objective of the cited firm is to enhance sales of the company and expand
its business across the world.
c) Objective: Softwire wants to earn profit of 20% at the end of 2017. It wants o enhance its
market share and number of consumers up to 30% till 2017.
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D) Strategy: It is adopting market penetration strategy for the growth of the company. By this
way it will be able to attract mass audience towards the brand.
E) Business model: It uses advertising business model so that it can attract more consumers and
can make good connection with them.
The characteristics of successful small businesses
Consult with the primary stakeholders
The stakeholders are the main operational support system of small business like mobile store. To
build up an appropriate a business plan, the stakeholders are playing an enormous part. The
diverse sorts of stakeholders of an organization are creditors, customers, directors, owners,
community, employees, suppliers, and governments. Apart from that, primary stakeholders have
an immediate and economic stake in the organization and, they often create an effect on the
exchange of resources, management, and financial support (Luther, 2010). Not just they are most
open gatherings, and the Small business like mobile store has the most contact with them. On the
other side, secondary stakeholders are consistently taking an interest of the small business like
mobile store for presence, for example, government, and group, providers and exchange unions.
In order to maintain a good relationship with the stakeholders, distinctive sorts of the system are
involved in small business. Most importantly, workers are unions must be asked and supported
consistently. Aside from that, the interview with loan bosses, chiefs and proprietors need to be
finished with notice premise.
Business initiative, technologies, and policies
With the assistance of technology, every data streams quickly in this competitive market and an
organization can grab that data and increment their profitability. As per Floyd, a large portion of
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the organization use the technology for two reasons, first of all, to get accomplishment for each
business action, and another is that small business like mobile store enhances development with
the help of technology. Along with that, technology helps an organization to decide the market
needs and customer desires(Sanchez and Heene, 2005). Additionally, data technology drives an
organization to control corporate action, create operations and increasing competitive
advantages.
As indicated by the consultation with the primary stakeholders, small business like mobile store
can enhance the productivity of their business. As a matter of first importance, meeting with
representatives and union managers, the management can impact the manufacturing process.
Subsequently, the performance of laborers will be produced through the counsel(Aydogan-Duda,
2009). On the other hand, if small business like mobile store is confronting some money related
inconvenience then the discussion with the primary stakeholders including chiefs, shareholders,
and suppliers can rebelliously enhance the present conditions, and additionally, the performance
will move forward. Discussing internal issues, the key stakeholders have their separate part to
play. For a case, any assembling fault can be resolved through the dynamic communication
system, and the performance will be effectively improved(Aydogan-Duda, 2009).
The benefits and potential drawbacks of owning a small business
By having a small business, some major benefits are located such as small profit, but it comes
nonstop. In a small business, few employees are working and the total gross salary of employees
always payable by the organization(Scarborough and Zimmerer, 2000). Thus, other costs like
manufacture costs, suppliers charge, and distribution cost is reliable to be paid by the
organization. Furthermore, some potential drawbacks and risks are discussed below:
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Feasibility analysis and Business plan
There are various types of tools and techniques are utilized by the management to conduct a
successful feasibility analysis. Besides that, with the help of a business model, a small business
like mobile store can easily conduct a feasibility study. Thus, market research, market
segmentation and customer analysis are three factor of a feasibility study which is discussed for
the effective business plan(Evenson, 2011).
Financial planning
As indicated by the business plan the money is extremely basic with a specific end goal to grow
the business. In addition, with the assistance of stable support of finance, an organization can
oversee day by day operational movements. Besides that, assets are required for the promotional
activity of items like an advertisement (Ghandour, 2014). Apart from that, with the precise help
of finances, an organization can deliver a huge amount of items and ready to draw in more
workers in the organization. On the other side, discussing the strategic positions, the required
fund is a basic element for developing a marketing strategy. Besides that, an organization can
recognize the right position for their business through the assistance of the strategic positions.
Additionally, it will review the different types of competitor’s strategy, planning, and execution.
Aside from that, a business plan incorporates a cost report which helps organizations to decide
the cost management for various types of operations. The cost operating reports incorporate a
few components, for example, customer requirements, market research, competitors, and
substitutes.
Market strategy: Softwire offers quality web products to the consumers, it identify their needs
and accordingly provides them products and services. It offers cheaper products to the clients so
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that they be attached with the brand. Currently it has only limited shops in the UK market. It uses
face book and Twitter to communicate with mass audience. So that maximum public can get o
know about its services and take experience.
Cost analysis
Apart from that, this cost operating report additionally helps the management to overview
various financial decisions. One of the major parts of small business like mobile store is its
financial stability. Along with this side, the vast majority of the operational movements are
completed through this financial strength. Moreover, the funds are utilized for marketing,
promotion planning, foundation, and research(McCole, 2004).
On the other hand, cost analysis incorporate corporate structures, plants, enhancement of office.
Be that as it may, HR includes compensation, training, development, hiring process and
recruitment process of small business like mobile store. As per industry standard, the HR
incorporate some competitive advantages which make an effect on the execution of small
business.
Risk and migration strategies for a business plan
Every single small business like mobile store incorporates the risk appraisal in their business,
and the risk appraisal and migration both are exceptionally significant for the business. With the
assistance of solid risk assessment strategy, an organization can confront any issues. On the other
hand, the best possible business plan incorporates significant risk appraisals and migration plan
for that particular organization(Young and Tippins, 2009). On the other side, the risk assessment
incorporates a few phases, for example, recognizable proof of risk variables, analysis of risk
elements, the reaction in time and lastly risk resolve. Additionally, the risk migration systems are
partitioned into a few phases, for example, speculation, avoidance, hedging, postponement,
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security, transferring or sharing and control. Moreover, Small business like mobile store needs to
give careful consideration to their risks factors to maintain a smooth business.
Role of license in small business
The grants or license are basic for any new movement of small business like mobile store.
Discussing the business license, it alludes to any government registration, regulation, order or
endorsement which applies to a specific business(Kondalkar, 2009). Concerning movement, a
license gives approval to do any action at both inside and outer business situations. Apart from
that, the license is intended to secure the public interest and prevent third party excesses. In this
way, license incorporates some basic capacities, for example,
 To give insurance to employees, proprietors, consumers
 To accumulate and review personal and professional data
 To control the practice of stakeholders inside and outside of the organization.
Competitive analysis, strategies and marketing tactics
Competitors are each filed are accessible in this worldwide market. Along these lines, an
organization requires implementing the best possible business strategy keeping in mind the end
goal to sustain in this comparative world (Frey, 2005). Above all else, an organization needs to
analysis the marketing techniques of their rival organizations for improved marketing. Along
with that, small business like mobile store can extend their business in the event that they
comprehend the procedures of their rival organizations. On the other hand, discussing the
strategies of an organization, it is vital to develop the business plan according to current market
opportunities. An appropriate business plan incorporates various kinds of marketing techniques,
for example, service or product progress, the cost of service or products, process, and division of
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distribution and market segmentation. In addition, the market segmentation includes targeting
and positioning related to strategies which help an organization to more attentive of those
strategies for concentrate on the product marketing techniques. For a case, small business like
mobile store will be launched in the market, however, there are many alternatives effectively
accessible in the market. All things considered, small business like mobile store should reduce
the cost of that item and dispatch it in the market since consumers are exceptionally price
sensitive (Frey, 2005).
Business model
A business model of an organization incorporates some critical elements which help to
accomplish the organizational objectives and goals. As per an appropriate business model,
service and products are extremely significant for the future development of a small business like
mobile store. Aside from that, the impact of effective management is extremely important, and
the consumers are the primary priority of the organization (Osterwalder et al., 2007). As
indicated by the business plan, the managers of an organization implement the business model in
order to effective focus on profit analysis, great workplace, the price analysis of service and
products, suppliers and purchasers and competitor’s analysis. Moreover, business distinguish
between business ideas and opportunity through effective feasibility analysis.
Promotional and Marketing planning: advertisement and promotion are parts of marketing
strategy. Through attractive advertisement, small business can draw the mind of their customers.
Thus, through different media like radio, TV, newspaper, magazine and internet, a small business
like mobile store can aware many prospects about the business.
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Feasibility analysis
The feasibility analysis is additionally called the business plan or concept statement. The
business plan proclamation incorporates the reasonability of a business thought. On the other
side, in order to determine the business concept is workable or not, the feasibility analysis is
playing an essential role. Aside from that, there are different categories of feasibilities which are
recognized in the accurate business plan, for example, service or product related feasibility,
market analysis feasibility, and aspects of capital ventures. Moreover, if there is no opportunity
located in the market, then there is no need of business ideas. But, in this case, the field of
mobile industry in the UK is grabbed by giant companies successfully(Evenson, 2011).
The Entrepreneurial team
Objective:
Softwire wants to enhance its market share and want to become a brand name in the
global market.
Strategy:
It has capable human resource and latest technologies to run its business significantly. Its
staff members are very talented and know about market requirements. Softwire treats its workers
well and provide them attractive wages so that they feel motivated and stay in the organization
for longer period. Culture of the organization is very good and it adopts task culture where every
one done their own work with efficiency. Company gives wages to staff members as per their
skills and education and promote them if they perform better.
Exit strategy: Company is increasing number of consumers by this way revenues of the cited
firm will get enhanced that would give better benefits to the investors and they will recover their
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invested amount. Company is investing in good projects where it can gain high profit that would
give sound monitory benefits to the capitalists.
Findings
In this business plan, various types of aspects of market opportunity have been justified on the
basis of concrete evidence. Besides that, with the help of feasibility analysis, a small business
like mobile store can determine current market opportunities in order to expand the business.
Moreover, the market research also enables the desire and expectations of the customers to the
marketing manager. As a result, an organization has a clear estimation of desired and needed
product which can attract most of the customer through a proper business idea(McDonald and
Dunbar, 2004).
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References
Aydogan-Duda, N. (2009). Innovation policies, business creation and economic development.
1st ed. New York: Springer.
Barrow, C., Barrow, P. and Brown, R. (2008). The business plan workbook. 1st ed. London:
Kogan Page.
Evenson, R. (2011). Customer service training 101. 1st ed. New York: American Management
Association.
Frey, R. (2005). Successful proposal strategies for small businesses. 1st ed. Boston: Artech
House.
Ghandour, A. (2014). Identifying Dimensions of Business Continuity Plan from Common
Expressions among Business Continuity Professionals. International Journal of Business
Administration, 5(3).
Gootnick, M. and Gootnick, D. (2009). Action tools for effective managers. 1st ed. New York:
AMACOM.
Kondalkar, V. (2009). Organization development. 1st ed. New Delhi: New Age International (P)
Ltd., Publishers.
Luther, W. (2010). The marketing plan. 1st ed. New York: AMACOM.
McCole, P. (2004). Refocusing marketing to reflect practice. Marketing Intelligence & Planning,
22(5), pp.531-539.
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McDonald, M. and Dunbar, I. (2004). Market segmentation. 1st ed. Amsterdam:
Elsevier/Butterworth-Heinemann.
Osterwalder, A., Pigneur, Y., Clark, T. and Smith, A. (2007). Business model generation. 1st ed.
Sanchez, R. and Heene, A. (2005). Competence perspectives on resources, stakeholders, and
renewal. 1st ed. Amsterdam: Elsevier JAI.
Scarborough, N. and Zimmerer, T. (2000). Effective small business management. 1st ed. Upper
Saddle River, N.J.: Prentice Hall.
Young, P. and Tippins, S. (2009). Managing business risk. 1st ed. New York: AMACOM.
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Appendices
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Illustration 1: Cash flow statement
Illustration 2: Income statement