Business Analysis Report: Baby Bear Nursery Home (Small Business)

This report provides a comprehensive business analysis of Baby Bear Nursery, a small business enterprise (SBE) in the UK. The report begins with an introduction to SBEs and then presents a profile of Baby Bear, including its strengths and weaknesses, using a SWOT analysis. It then analyzes the business's performance using comparative measures, including profit and loss statements and balance sheets for 2016 and 2017, calculating key financial ratios like current ratio, quick ratio, gross profit ratio, and net profit ratio. The report identifies actions to overcome weaknesses, such as improving marketing and addressing operational issues, and suggests ways to maintain and strengthen existing performance. Furthermore, it proposes areas for business expansion, revises the business plan, and outlines an action plan to implement these changes. Finally, it discusses the impact of these changes on the business and its personnel, the management of these changes, and how they can lead to improvements in business performance. The conclusion summarizes the key findings and recommendations.

SMALL BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ..........................................................................................................................................1
1.1Profile of small business with its strengths and weaknesses..................................................1
1.2 Analysis of business using comparative measures of performance......................................3
TASK 2 ...........................................................................................................................................5
2.1 Actions to overcome weaknesses of business.......................................................................5
2.2 Ways to maintain existing performance and to strengthen it ...............................................6
2.3 Areas where business could be expended.............................................................................7
TASK 3............................................................................................................................................8
3.1 Existing business objective and Plan....................................................................................8
3.2 Revise business plan to make new changes..........................................................................9
3.3 Action plan to implement changes........................................................................................9
TASK 4..........................................................................................................................................11
4.1 Impact of changes on business and its personnel................................................................11
4.2 Management of changes in business...................................................................................11
4.3 Improvement in business performance...............................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Small scale enterprise is the business that employ less number of worker. Generally it has
250 employees and does not have high volume of sales. Such type of enterprises generally
owned by private hands and in form of sole proprietorship, partnership and corporation etc. It is
important for the company to follow guideline and norms of government to obtain the status of
small business. This is advantageous for company to achieve such status because there are some
regulations and conditions that do not apply on such enterprises. Baby Bear is the nursery home
for the small kids in UK (Bridge and O'Neill, 2012). This organisation is SBE (Small business
enterprise) that provides their services in relation to day care services and care taker for children
from birth onwards. This organisation has two nurseries, both are in UK. They have independent
family run nursery. This company offers professional childcare service which is beneficial for
child's development and provide safe, secure, happy and stimulating environment for the growth
of small kids.
TASK 1
1.1Profile of small business with its strengths and weaknesses
SBE offers different kind of services to its customers and charge very limited money
from the user. This is important segment for such entity to use quality measures and effective
tools so that they can provide better services to others. Baby Bear is UK based small entity that
provides services in relation to child care form birth onwards. These services are generally taken
by working parents. Baby bear opens between 7:30 AM to 6:00 PM, Monday to Friday, 51
weeks in a year. This organisation is closed only on bank holidays along with 5 days at
Christmas. They have professional staff who are expertise in their field. All the required
amenities and facilities are available here like if child suffers from any heath issue then there is
facility of treatment. They are able to provide good and healthy environment for the healthy
growth of kids.
SWOT Analysis
It is the best medium to identify the strength, weaknesses, opportunities and threats of the
company which helps in effective planning. This is important for the organisation to plan their
strategy according to their strength and weaknesses so that it can not affect them in negative
manner.
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Strength-  Its core strength is its experienced staff.
 Staff members are trained in customer care.
 Experienced and effective management in industry.
 Establish best practice through different centres.
 Availability of sufficient cash flow (Burns, 2010).
 They have latest child care methodology.
 Quickly response on issues within specified time.
 Flexibility to adopt new changes.
 Small overheads.
Weaknesses-  They are new in local area.
 Poor awareness among the large population.
 Uncertain funds during start up.
 Lack in compliances with local, state and federal laws.
 High cost of running business including utilities and food.
 Lack of quality food and services (Stokes, DWilson and Wilson,
2010.
 Lack in maintenance of center because these expenses are very
expensive.
Opportunities-  Rich residential area with high population of dual income families.
 They can provide their services at home.
 To employee those personnels who can go with parents to office
because in present time, corporate houses are proving special space to
keep child.
Threats-  Generation of new competitive business in similar area.
 Shortage of qualified and skilled staff member which result in failure
of their business plan.
 Insufficient supportive staff members.
 Employers offer in house day care center.
 Generation of licensing requirement with additional guidelines and
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conditions to provide child care services.
1.2 Analysis of business using comparative measures of performance
Analysis of business is required to conduct time to time so that additional factors that are
required for strengthen its performance can be adopted. Performance can be measured through
financial data and non financial data (Altman, Sabato and Wilson, 2010). It is important segment
that can be used to identify the area where it is required for business to devote more effort to
strengthen its position. This is important tool to make comparison of present financial data with
past. It helps to identify its current position and to formulation of future plan. Different methods
can be used by business to measure its performance as Graphic rating scales, forced ranking etc.
There is good graph of financial data in present and its increasing on high rate as shown in
graphic rating scale (Fassin, Van Rossem and Buelens, 2011).
As per the research it is identified that company has good rating among its market
competitors. They are effective in providing quality services to its customers.
Profit and loss account of year ended 30th April 2016 and 30th April 2017 of Baby Bear shows
following figures:-
2016 (value in £) 2017 (value in £)
Sales 140 200
Cost of sales 80 150
Gross profit 60 50
Overheads 20 25
Net Profit 40 25
Balance sheet for the year ended on 30th April 2016 and 30th April 2017 of Baby Bear shows
following figures:-
2016 (value in £) 2017 (value in £)
Fixed Assets 15 12
Current assets:
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Stock 8 15
Debtor 10 35
Bank 1 0
19 50
Current ratio- Current Assets / Current Liability
Year 2016
= 19000/6000
= 3.16 times
Year 2017
= 50000/25000
= 2.00 times
In year 2016, Current assets of the company is more around three time more than its liability
which is good condition but in year 2017, its current assets is more the twice of its current
liability. Wisdom is on current ratio i.e. 2.
Quick ratio (Acid test): Current assets- Inventory/ Current liabilities
Year 2016
=19000-8000 / 6000
= 1.83
Year 2017
=50000-15000 / 25000
= 1.4
In 2016, this company can pay its liability by its current assets. But this status is maintained in
next year. In year 2017, they used working capital in effective manner (Chittithaworn and et. al.,
2011). Wisdom is on ideal quick time i.e. 1
Gross profit Ratio: Gross profit / sales * 100
Year 2016
= 60/140 * 100
= 42.857
Year 2017
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= 50/200 * 100
= 25
In year 2016, company's gross profit ratio is 42.857 which is higher than its next yaer data i.e.
25. in year 2017, the cost of production is higher than its previous yaer data which resulted in
lower Gross profit.
Net Profit ratio: Net profit / sales * 100
Year 2016
=40/140 *100
= 28.571
Year 2017
=25/200*100
= 12.5
The net profit ratio for the year 2017 is lower than its previous year data. The company has faced
more expenses in 2017 so the net profit ratio for the year is 12.5.
TASK 2
2.1 Actions to overcome weaknesses of business
Weaknesses affect operation of company in negative manner. There are some factors that
create hurdle in its growth. This is important for business to use effective measures to over come
its weaknesses (Nga and Shamuganathan, 2010). It provides growth and development
opportunity to the organisation. There are some problems that are faced by them in relation to
quality mechanism, lack of maintenance, poor awareness, new in local market, increase in
competitive organisation in similar market. They faced some issue because they are new in local
area so it is important for them to use effective marketing techniques so that they can enhance
their popularity. They can approach directly to business families and working parents and can
provide information regarding their services and facilities to them. It will help to address the
problem related to poor awareness.
This is essential for this organisation to adopt effective mechanism so that they can
timely comply with the norms, rules and regulation. It is required because when it is not followed
then it has adverse impact over the goodwill of business. There is lack of qualitative food
material and services so it is required for this company to use quality food material for that they
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can link to some other businesses unit which provide better food to them. It is also identified that
there is lack in maintenance so this is important for them to expand money on Painting, repair,
replacement of furniture and other supplies so that they can attract more guardian toward Baby
Bear centre (Teece, 2010).
Brand name of other similar business is well known in market so it is very difficult for
this organisation to enter in new area. For that they can adopt effective marketing strategy and
may focus on quality services. They are also required to employ expert personnels in their
company who have experience in this filed so that they can address these issues in better way.
This is key part for this business centre to use above mentioned recommendation in their
organisation so that they can address their problem in effective manner. It is important because if
it is not clarified then it may cause negative impact over the performance of company.
2.2 Ways to maintain existing performance and to strengthen it
This is important task for Baby Bear Nursery home to maintain their existing
performance and try to strength it. This provides growth opportunity to business as it can run
more effectively in competitive market. It is required for this organisation to make new
improvements in their operation so that they can attract large number of people toward them and
help to take stand in new competitive market. Effective marketing techniques can be adopted by
them so that they can secure effective position in new area (Hilmersson, 2014).
The organisation can adopt effective ways to maintain and strengthen their existing
performance:- Always try to provide large consumer satisfaction: It is important for cited company to
use effective mechanism as qualitative food material and services so that they can
provide maximum satisfaction to its customers. Professional employees can be employed
by them which help to provide effective services which result in consumer satisfaction. Be adaptable to change: This is essential for this company to adopt new changes that are
in market so that they can secure competitive advantage. There are many changes as new
technological up-gradation, additional activities for children that help in the growth of
kids can be adopted by them. This factors are required to adopt by the company because
it aids to take stand in market. Assess competitor's strategies: It is required for cited company to take a look of
competitor's plan and policies so that they can plan their activities in accordance with
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other's. This provides helps to maintain their existing position and to strengthen their
market position for future period (Audretsch and Link, 2012). Manage Interruption: There are many factors that create hurdle in the growth of
business so it is essential for organisation to manage such interruption so that their exiting
performance can not be affected in negative manner. When these factors are not
considered in correct way then it affects performance in adverse way.
 Organise and Prioritize: This factor can be used by business to manage their operation in
growth oriented manner. It is required for cited company to organise and prioritize
different task so that it can not be overlapped to each other. This tool is one of the
effective way to complete the work in effectual manner and provide quality services to its
customers (4 Simple Strategies to Improve Your Business Success Rate, 2017).
2.3 Areas where business could be expended
This is an important segment for business to expand their areas to new level. It helps the
company to enhance their market share and increase its profitability. Presently, Baby Bear is
providing their services in nursery. It is important for this business to expand their area into new
segment so that they can offer more services to its customers.
Following are the area where they can expand their business as:- 24 hours day care: In present, this organisation provides their services between 7:30 AM
to 6:00 PM so it is required for them to provide such services to 24 hours and 7 days.
Sometime, working professionals are required to go outside city for some days for
business tour (Williams and Schaefer, 2013). So it is the good opportunity for this
business to provide their service to 24 hour and 7 days. It helps to strength their market
area. To open pre school: People contracted with this organisation because they provide their
services in effective manner and parents are satisfied with them. There is one area where
they can expand their business i.e. Pre school. This is beneficial for this organisation as
well as for parents. They can open pre school where they can provide education to
children. This helps to expand their business into new area. Health and care centre: They can open health care centre in their organisation where
they can provide effective treatment to kids. It is important for them to employ those
personnels who are expertise in this field to provide treatment with playing activities.
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This segment of business will provide them growth and development opportunity to
them. Sports activities: They can improve their market to new segment by expanding their
activities to sport activities. In present time, parents have focus on such activities also
because it is required for the growth of child. There are many opportunities that are
available in sport sector so it is important for this business to consider these activities to
expand their business (Gunasekaran, Rai and Griffin, 2011).
 Employ other curriculum activities: There are many area where they can expand their
operation. It is required for this business to consider other activities as painting, dancing,
singing, drawing etc. so that more and more people can be attracted toward their services.
Parents are encouraged toward the such centres where they offer other activities for the
growth and development of child. So it is important for this company to consider other
activities which helps to expand their business area.
TASK 3
3.1 Existing business objective and Plan
This is important for the organisation to establish their goals and objective in effective
manner. It is required to make the regular assessment so that it can be identified that such
objective can be attained or not. This helps in formulation of plan and strategy to attain such
target.
The main objective of Baby Bear is to provide better services to parents who are working.
They always try to make necessary changes through that they can make growth and development
of kids. This company always try to adopt new measures that are required for the betterment of
children (Stokes, DWilson and Wilson, 2010). It has goal to employ skilled professionals in their
business who are expertise in their area of operation. The objective of company should be
SMART so that they can achieve their target within time. It is the objective of organisation to
adopt quality material to feed child. They always try to provide good and healthy environment to
kids so that their mental and physical growth can be on high graph.
This firm not only focus on growth of children but also on other factors as to provide
basic education, to teach manners and basic things that they can use. Assessment of objective is
one of the important task that provides clear idea about the company and it helps to identify that
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its objective can be attained in effective manner or not. Through this, it is discovered that it is
required for the company to establish some improvement in their services so that they can target
more people and achieve its objective (Burns, 2010).
The above stated objective can be attained by the company when they make focus on
their future strategy and plan. It is required to adopt quality services and to make focus on health
growth of children. This can be possible when they are able to provide good environment to kids.
3.2 Revise business plan to make new changes
It is essential for business to revise their business time to time as per the market trends.
This provides competitive advantage to business and through this, they can attain their goals and
objective in effective manner. There are many changes that arise in environment and when
organisation adopt such changes then it is beneficial for them to attain their objective in more
effectual manner (Williams and Schaefer, 2013).
In present time, choice of people are changing day by day. Previously, parents prefer to
focus on education only but now they want to admit their child in the organisation where they
focus on education as well as on extra curriculum activity. It is required for Baby Bear Nursery
home to employ such changes in their business so that they can attract large number of customers
toward them. This aids to run operation in more effective manner and to secure competitive
advantage in market. Previously, they have very limited personnels who were working with them
to provide these services but now the market area of company is increasing so it is required to
make some alteration in its business plan as require to employ best qualified professional for
different post.
It is required for this company to maintain reputation and untarnished reputation in
society and to provide quality care so that they can attain maximum support from community.
Competitive pricing and flexibility hours are the two strategy that can be adopted by business to
compete with new market changes. Now a day, there are many competitors in market with
similar services so it is required for Baby Bear to adopt frequent changes of environment so that
they can provide better services as comparison to its competitor.
3.3 Action plan to implement changes
Changes are important to adopt by business for the betterment of their organisation.
There are many changes came in force that require to address by the company. This can be the
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reason for sustain in market and can be the ground to kick out from market. These factors
strengthen the market position (Storey, 2016).
It is essential for this company to implement action plan so that they can address new
market changes in more effective manner. There are many technological development, social
standard of people has enhanced at higher level in present time. So it is required for this
company to follow such changes so that they can make development in business.
Following are the factors of action plan:-
1. To consult market research so that area of improvement can be identified by the business.
2. To identify the factors that can be covered.
3. Out all the factors, it is required to choose those factors which are on priority so that
necessary improvement can be made.
4. To identify the benefit that can be achieved through new change as larger customers
satisfaction.
5. All the resources that are required in effective implementation of plan require to consider
as time scale that require to complete.
6. After considering all the above factors, action plan is developed. Implementation of plan
is made so that desired result can be achieved (Stokes,Wilson and Wilson, 2010).
In the present case, cited company want to adopt new changes as planning to provide educational
as well as other activities as sports, painting, drawing, dancing etc. To implement this plan in
action, it is required to adopt action plan as:
1) Conducted market research and it is identified that there are many competitors in market
who are providing these services at lower rate.
2) It is identified that they have to focus on recent development, environmental changes,
parents have focus to admit their child in organisation where there is focus on education
as well as on other activities.
3) It is discovered that there is requirement to consider other curriculum activities.
4) For such change, it is identified that it will take 2 month to make necessary arrangement
as to build sport ground, arrange tutor for drawing, sports, painting and dancing activity,
requirement of separate room for these activities etc (Teece, 2010).
5) When these requirements are fulfilled, it is identified that company has achieved more
customers satisfaction and many people are toward the services of this organisation.
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