Caffe Finix: A Detailed Analysis of a Small Business Enterprise (SBE)

This report provides a detailed analysis of Caffe Finix, a small coffee shop, examining its strengths, weaknesses, opportunities, and threats (SWOT analysis). The report includes a financial performance comparison with a competitor, Zizzi restaurant, using P&L and balance sheet data. It identifies key weaknesses, such as high rent and low brand popularity, and proposes actions to overcome them, including strategic location choices, product diversification, and quality control. The report also discusses strategies to maintain and strengthen existing performance through total quality management and a positive customer environment. Additionally, it explores potential expansion areas, including franchising and international investment, and revises the business plan to incorporate necessary changes, considering the impact of changes on the business and its personnel. The report concludes with recommendations for improving overall business performance and achieving a competitive advantage in the market.

Small Business
Enterprise

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1referd...................................................................................................................................1
1.1 Small business indemnifying its strengths and weaknesses..................................................1
1.2 Analysis of the business using comparative measures of performance................................3
TASK 2............................................................................................................................................4
2.1 Appropriate actions to overcome the weakness....................................................................4
2.2 Ways in which existing performance could be maintained and strengthened......................5
2.3 New areas in which business can expand.............................................................................5
TASK 3............................................................................................................................................6
3.1 Existing business objectives and plans.................................................................................6
3.2 Revision of business plan for necessary changes..................................................................7
3.2 Plan for implementing changes.............................................................................................8
TASK 4 ...........................................................................................................................................9
4.1 Impact of change on business and its personnel...................................................................9
4.2 Management of changes......................................................................................................10
4.3 Improvements in business performance..............................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Small business enterprise become plays an important role in the growth of an economy.
Government provides various types of resources which help in encouraging the business
activities of these firms. Small business enterprise reduces unemployment in the country by
providing various job opportunities to a large number of local people. It also increases their
living standard. This enterprise conducts business activities by providing high support to large
number of business enterprises (Harris and Patten, 2014). Present report is based on Caffe Finix
which is a small coffee shop that offers and provides breakfast and tea in order to fulfil
customers’ needs and wants on daily basis. In this report, there will be discussion on the
strengths and weaknesses of company. Different efforts to overcome the weaknesses and
recommendations for same will also be defined here. Along with this, expansion of small
business enterprise in new sector will be discussed in this report.
TASK 1
1.1 Profile of Caffe Finix with identifying its strengths and weaknesses
Before starting a new business, it is more important to define its aim and objectives of. In
this organizational objectives can be short term and long term. Understanding of business nature
is also important to achieve success. Caffe Finix is a small business enterprise which offers food
items to fulfil daily needs of its customers. It is built in 1600 square feet area in the city (Al-
Dajani and Marlow, 2010). In order to understand the strengths and weaknesses of business,
SWOT analysis will prove to be highly effective and beneficial tool for the organization:
SWOT analysis:
It is an important tool to measure the performance of company and helps in taking the
best decision by defining and focusing on main issues of business. This tool helps in making the
strategic plan with identifying its strengths, weaknesses, opportunities and threats. Swot analysis
of coffee shop is as follows:
Strengths:
 Strengths define unique qualities of business which are totally different from
others. With the help of strengths, company achieves aggressive and the best position
than their competitors (Altman, Sabato and Wilson, 2010). Loyal customers are the
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biggest strength of Caffe Finix as well as they are having high financial amount to run
their business in an effective manner. Its product folio is also one of the major strengths
of firm. There are some other strengths of Caffe Finix as well which are as follows:Firm
offers and provides top and fresh quality of products to its customers.
 Effective location .
 Loyalty of customers High range of product line High goodwill I delivering high quality of products
Weaknesses:
 It mainly stands for limitation of an enterprise. It defines negative factors of the
firm like lack of resource, weak product cycle, etc. There are some weaknesses of Caffe
Finix which are as follows:Rent is very high of this coffee shop.Less popularity of their
brand in the market. Quality of products is low as compared to its competitors.
Opportunities:
It is an effective process which defines favourable condition of business which helps the
firm in taking more advantages of particular situation (Battisti and Perry, 2011). In order to hold
the opportunities in this process, organization should have all the resources which are required in
expanding business in the market. There are some points which define the opportunities of Caffe
Finix shop like:
 Organization can start franchising business at the international level.
 Firm can achieve more profits by investing in developing countries. As a coffee shop the market expand in rapidly in UK so that firm can invest in this to
increase their business at international level which helps in increasing its goodwill.
Threats:
 It defines fear and trouble which affect the business organization in a negative
way. The owner of business tries to minimize the threats by making efforts (Bellucci,
Borisov and Zazzaro, 2010). Threats affect the overall performance of company. There
are some threats of this firm which are as follows:Having large number of competitors in
the marketplace.They introduce substitute products at less cost.
 Political instability
 Change in policies and government
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1.2 Analysis of the business using comparative measures of performance
Overall business performance helps in understanding the status of company. It is essential
for every business organization to measure and calculate total ROI in business activities which
affect its performance (Blackburn, Hart and Wainwright, 2013). Comparison measurement is
done by the competitive to define their products. There are some main areas in which firm can
perform their best than its challenger: Finance: It is an important element for every type of business organisation. It is
necessary to the business in order to complete their tasks and run activities in an effective
manner. It is more important to measure and calculate the return on investment in
business process such as break even analysis, asset’s valuation and many factors which
define the measurement of business. Return on investment is an important part of
organization which defined the way in which finance should be invested in these
activities which are set by the owner of business. Sales: It is also an important function which defines the actual status of business.
Measurement of sales define the success of business in marketplace. Caffe Finix tries to
increase their sales volume by delivering high quality of products to its customers and
getting higher satisfaction by them. It also sets low price of their products so that large
number of customers would get attracted to use its products and increase sales of
company effectually.
 Marketing: Marketing plays the most important role for all types of businesses which
define selling and buying of products. It assists in increasing the sales volume of
company. Firm should use effective marketing tools to increase the awareness of
customers with regard to their offered products (Blenker and et. al., 2012). The owner of
Caffe Finix does all the activities related to its services so that they can achieve
competitive advantage over its competitors.
All these areas are effective for the organization to capture a large market share and for better
satisfaction of customers’ needs which help in achieving competitive advantage.
Comparative measure of performance :
P&L account for year ended 30th April 2016 to 30th April 2017 are define in below:
Particular 2016
£
2017
£
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Sales 150 200
Cost of Sales 100 125
Gross Profit 50 75
Overheads 20 25
Net. Profit 30 50
Balance sheet of Caffe Finix for year ended beginning at 30th April 2016 to 30th April 2017
Particular/ year 2016
£
2017
£
Fixed assets 15 40
Current assets
Stock 5 10
Debtors 10 5
Bank 7 5
Total 37 60
Creditors 20 40
Bank overdraft 17 20
Total 37 60
Current ratio = current asset / current liability
2016 2017
Net profit margin = net profit/ net sales * 100
50/150 *100 = 33.33
Net margin = 55/300*100= 18.33
Gross profit margin= gross profit/ net sales *
100
40/150*100= 26.67
Gross margin = 50/300*100= 16.67
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Quick ratio = current asset – stock/ current
liabilities
30000-8000/6000 = 3.67 times
Quick ratio = 80000-10000/40000= 1.75 times
Current ratio= 30000/6000= 5 Current ratio= 80000/40000= 2
P&L account for year ended 30th April 2016 and 30th April 2017 of Zizzi restaurant is
mentioned as follows:
Particular 2016 2017
Sales 200 250
Cost of sales 50 100
Gross profit 150 150
Overheads 40 30
Net Profit 110 120
Balance sheet of year ended 30th April 2016 and 30th April 2017 of Zizzi restaurant is
mentioned as follows:
Particular/ year 2016 2017
Fixed Assets 30 25
Current assets
Stock 10 11
Debtor 15 10
Bank 5 4
Total 30 25
Current ratio: Current Assets / Current Liability
Year 2016
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30000/6000= 5.00 times
Year 2017
25000/12000= 2.08 times
Quick ratio (Acid test): Current assets- Inventory/ Current liabilities
Year 2016
30000/8500= 3.53 times
Year 2017
25000/ 15000= 1.67 times
Gross profit Ratio: Gross profit / sales * 100
Year 2016
50/200*100=25
Year 2017
150/250*100=60
Net Profit ratio: Net profit / sales * 100
Year 2016
110/200*100= 55
Year 2017
120/250*100= 48
TASK 2
2.1 Appropriate actions to overcome the weaknesses
Every business is having its own weakness which affect the overall performance of
company. It is highly essential for the business to remove all weaknesses so that the negative
effect can be minimized easily. The main weakness of Caffe Finix is high rent of the shop
(Bridge and O'Neill, 2012). It may be covered by the large number of financial terms which
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assist in reducing weakness effectively. Company can establish at the location where more
customers would get attracted to satisfy their daily needs. It also assist in increasing the profit of
company. Location of coffee shop where are less parking areas so that customers face parking
problem. In order to remove this issue, firm uses number of bays so that it is convenience for the
customers.
For increase and invite large number of customers company can add variety of products
in their shop to its customers so that more and more service users are use their products. As a
hospitality industry firm face many problems like storing their products and their spoilage. So
that company use those products which comes first (Burns, 2010). from this they can easily
maintain expiry and spoiling of its products. It is very important for the organization to maintain
their quality in products which buy by the trustable suppliers. Best and effective process should
be used by company so that they can deliver fresh and high quality of products to its customers.
It will help in gaining trust of customers and retaining the existing service users.
For increasing the goodwill and popularity of their brand, firm should make new and
innovative products to its customers. It will assist in increasing the profitability and revenue of
firm. In order to reduce the weaknesses, company can capture a larger market share which assist
in improving their brand image at marketplace and it is positive for company to gain more trust
of its customers. Increasing profits helps in facing its expenses like rent and other expenses
2.2 Ways in which existing performance could be maintained and strengthened
In the present scenario, Caffe Finix uses total quantity management strategy in order to
deliver final products to their customers which help to attract more customers and increase its
profitability (Carraher and Paridon, 2015). Business owner tries to maintain a positive and
healthy environment in their shop so that they can motivate their customers to visit and use its
products. There are some services provided by company to its products:
 Good ambience
 Better taste of coffee
 Healthy and enjoyable environment in the shop
In order to improve their future performance, coffee shop offers and delivers following things in
order to attract and invite a large number of customers in their shop:
 They can provide fresh and top quality of products to its customers as compared to its
competitors.
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 Variety of drinks and food can be provided by company to its customers.
Being a service industry, it is more important to increase their quality of products and
maintain a healthy environment to gain high success. For this company can provide best training
and development programs to its workers so that they are able to serve services to customers.
This program also assist in understanding the way of behaving in front of service users. It also
helps in delivering fast and effective services to customers (Chittithaworn and et.al., 2011). With
the help of making an effective plan, company can improve their future performance at
marketplace. Making future plan helps the manager in deciding all resources which are required
in the firm to evaluate their activities in an appropriate manner.
Large number of competitors of Caffe Finix it is more important to the company to define
their specials and best service which is deliver by its competitors at low cost. With the help of
collecting and gathering all relevant information from different type of resources which help
enterprise to decide future activities and also evaluate effective service which is provided to its
customers in future time.
2.3 New areas in which business can expand
Caffe Finix is establishing in the centre of city (Fassin, Van Rossem and Buelens, 2011).
New area in which company locates their stores should be near to the airport of London as it is
one of the most crowed areas where more travellers and workers visit. Along with this, business
define their process in an effective manner and offer a variety of products to its customers which
help in expanding the business easily. In this, the skills and capabilities of workers are also an
important part to increase their productivity at marketplace. If business delivers high quality of
products at reasonable price then it will help in increasing sales of shop at the same time provide
loyalty of customer Expansion of business activities in other areas not only motivates and
increases the customers but also achieve a lot of revenue in their business which help in
capturing a large market share from its competitors (Forsman and Temel, 2011). Before
expanding business in different areas, it is very important to collect all information about the
location. This research requires large number of funds but it provide effective returns in their
process. it assist in maintaining their brand image at marketplace.
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TASK 3
3.1 Existing business objectives and plans
Caffe Finix coffee shop is a small business enterprise that has certain objectives in order
to achieve success. these objectives are as follows: In order to become the best coffee shop at local area location guide: They are targeting
to open their coffee shop in an area where they can attract approximately 600 customers
in a single day. For increasing customers base, they has to topped their restaurant in
local area (Gill and Biger, 2012). They use the best and effective marking strategies such
as lower cost of the products.it is best choice of coffee shop in local area so that they
attract more and more customers in their shop. Maintain 70 to 80% of gross margin: Caffe Finix is having an objective to achieve 75%
gross margin on an average which will help in gaining higher profits and defining
considerable changes. They also focus on the marketing mix so that they can increase
their profits and gross margin.
 To maintain consistency in providing best coffee items: They use high quality of coffee
beans and deliver the best quality of coffee and services to its customers. This coffee
shop does not compromise their products and qualities so that it is main function of this
company to provide best quality of products and service in effective manner. The main
strength of this company is its packaging and presentation (Gorgievski, Ascalon and
Stephan, 2011). With the help of positive aspect the company invite and attract large
number of customers in order to attain higher profitability.
 With the use of advanced technology and advertising tools, company plans to expand
their business process and reach to different customers. In recent time, use of social
media has become an attractive tool of marketing in order to invite more customers.
 This company provides the best convenience to its customers by providing high quality
of services. They also increase some effective and best machine of making different
compositional coffee products.
 To open and establish a new coffee shop at different locations in the upcoming year is
also one of its major objectives. It is possible by investing high profits in expansion
policies. Tie up with the Stanford university they also open their coffee shop to achieve
more profits.
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Caffe Finix expands their business by providing variety and high quality of products to
youngsters. They also add some extra feature in their coffee shop to provide effective services
(Gronum, Verreynne and Kastelle, 2012).
SMART objectives of Caffe Finix:
Specific: Goals and objectives should be specific which is more important to the
organization in order to achieve effectively. It may define the example of specific objectives that
is reduce the uncertainty and increase customers in their process which assist in increase the sale
of the company.
` Measurable: In this objectives the goals are measurable which shows the overall
progress of the business in appropriate manner. Caffe Finix set their goals in order to evaluate
the business performance which assist in making best process in order to achieve it effectively.
Attainable: It is more important for the company is that the goals and objectives should
be attainable. In this the workforce done all the works according to the guideline it provided by
the top level management in order tom achieve higher success at marketplace.
Relevant: All goals and objectives should be relevant to the organization process. The top
management level set their objectives according to the whole activities which is perform within
the business.
Timely: The objectives and goals should be attain in time period which is set by the
organization. It can be evaluate the whole process with the framing time and workers also attain
in this specific time period which helps in attaining higher success at marketplace.
3.2 Revision of business plan for necessary changes
The market strategy of this coffee is focused on inviting and adding new customers in
their list and also, in retaining its existing customers. It has defined its marketing plan so that
customers spend their time in this restaurant and come back again. It helps in increasing the
selling of its products. Define and adding large number of customers is more important to
company as they maintain their loyal customers over their competitors. These loyal customers
are also important so that they would give referrals to other people which increases the sale
volume of organization.
It provides attractive and positive ambience to its customers in order to operate in a
unique way which encourages people in spending more time in their restaurant. Firm not only
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