Small Business Enterprise: Caffe Finix Performance Analysis Report

This report analyzes Caffe Finix, a small business enterprise (SBE) in the UK, examining its strengths and weaknesses through a SWOT analysis. It includes a comparative performance measure, analyzing sales, cost of sales, and financial ratios to assess the business's financial health. The assignment identifies actions to overcome weaknesses, such as addressing quality assurance, high rent, and competition, while also exploring strategies to maintain existing performance, including quality control, customer service improvements, and market analysis. Recommendations for business expansion, market analysis, and targeted strategies for growth are provided, along with a revised business plan, and an action plan to implement changes. Finally, the report assesses the impact of changes on the business and its personnel, outlining a plan for managed changes and performance monitoring.

SMALL BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Profile of small business with its strengths and weaknesses.................................................1
1.2 Business analysis with the help of using comparative measure............................................3
TASK 2............................................................................................................................................5
2.1 Actions to overcome weaknesses..........................................................................................5
2.2 Analyse the ways through which company can maintain their existing performance..........5
2.3 Recommendation for new areas for business expansion.......................................................6
TASK 3............................................................................................................................................8
3.1 Assessment for existing business plan and objective............................................................8
3.2 Revise business plan to incorporate changes........................................................................9
3.3 Action plan to implement changes......................................................................................10
TASK 4..........................................................................................................................................11
4.1 Impact of the changes on business and its personnel..........................................................11
4.2 Plan for managed changes...................................................................................................12
4.3 Monitor performance in providing time scale.....................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Economy of any country is a mixture of various number of business enterprises. Out of
them only small entities help in making any local region economy better. With assistance of this ,
a major concept is carrying out which is termed as small business enterprises. These business
segments plays an important role in generating more and more job opportunities and leads to aid
in generate more and more wealth so that many communities become able to make their living
easy (Altman, Sabato and Wilson, 2010). In this assignment, concept of small business is defined
with help of taking an example of Caffe Finix which is a local and small coffee shop business in
UK. In this investigation a valid conclusion get drawn by identifying strength and weakness of
small business with help of cited example context. Moreover, comparative measure of
performance also includes in this file. Along with that also major ways are discussed through
which existing performance can be strengthened. Further , a business have to revise their plans
on time so that an organisation can easily deal with all changes in an appropriate manner. Also,
several other things are evaluate in this assignment which signifies about the impact of change
management.
TASK 1
1.1 Profile of small business with its strengths and weaknesses
Small businesses have very limited area of operation and it employs small number of
employees in their business. Caffe Finix is local SBE in UK that offers various services to user.
This company provides finest quality coffee and other ancillary services to people. They have
focus on quality measures and pricing strategy so that they can attract people toward their offers.
This firm is very famous among people due to its quality services.
The owner of this corporate started this business with very limited fund but now it is
increasing on high level (Harris and Patten, 2014). They offers coffee, tea, breakfast and other
food items. This organisation is famous for local coffee addicts and this place is best suited to
friends and family due to its environment.
SWOT analysis
This is best way to formulate strategy according to capacity of business. It stands for
Strength, weakness, opportunity and threats. This is used by organization so that they can
identify its strength and weakness that provides assistance to make improvements.
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Strength:
It is key segment that states opportunities that are available in business. The ability of firm to
fulfil needs and demand of market is also considered in strength. It provides competitive
advantage to company in market (Audretsch and Link, 2012).
Strength of Caffe Finix as:-
 Process for producing quality product and services.
 Location of business i.e. at high street at shopping centre.
 Brand value in market. Flexibility to adopt modifications.
Weaknesses:
It is the limitation that exists in business. Sometime, it affects business in negative manner. This
creates hindrance in growth and development of business. Following are the weakness of above
firm as:-
 Lack of quality assistance.
 Weak food sector and high rent charges.
 High level of competition in market among this industry. Minimum value to future strategy.
Opportunities:
It is aspect of environment that offers advantage to organisation. It aids to secure competitive
advantage over its competitor (Bridge and O'Neill, 2012).
Opportunities are as follows:-
 Franchising of their business is one of the development opportunity.
 More investment in UK because this industry is making growth. Merge with large scale business.
Threats:
These are factors of environment that creates hindrance in the success of company. It creates
barrier in achieving goals and objectives. This is created due to unfavourable trends in market.
Threats are as:-
 Competitors of market.
 Changes in governmental policies and plan.
 Political instability which resulted into variation in tax and interest rate.
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1.2 Business analysis with the help of using comparative measure
Any business firm have to make a fair comparison between their present rate of
performance with past year (Burrows, 2015). This aid in making a valid conclusion through
which management can formulate effective plans and make their work effective. This leads to
make them in achieve all of their targets on time so that business can run in a proper manner. In
this context varieties of approaches are used in which comparing balance sheet, ratios and
several other things are taken into consideration (Burns, 2010). This is a major thing through
which decision makers can take proper judgements which assist in making survival of a firm
easy. Measurement of performance by using various methods are as follow:
For the year ended 30 April 2015 and 30 April 2016
2015 2016
£ £
Sales 120,000 200,00
Cost of sales 80,000 150,000
Gross profit 40,000 50,000
Overheads 10,000 15,000
Net profit 30,000 35,000
BALANCE SHEET as at 30 APRIL 2015 and 30 APRIL 2016
2015 2016
Fixed assets 15,000 12,000
Current assets
Stock 7,000 18,000
Debtors 12,000 36,000
Bank 1,000 0
20,000 54,000
Less Current liabilities
Creditors 6,000 15,000
Bank overdraft 0 10,000
6,000 25,000
Working capital 14,000 29,000
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Net Assets 29,000 41,000
Financed by capital
Opening capital 22,000 29,000
Add net profit 30,000 35,000
52,000 64,000
Less drawings 23,000 23,000
Closing capital 29,000 41,000
With proper analysing of balance sheet of Caffe Finix of year from 2015 to 2016, it is
clearly get identified that in 2015 closing stock of a company was 29,000 but at last of year
ending 2016 there closing stock leads to get increase 41,000 which shows that they are not
generating more and more profit (Chittithaworn and et. al., 2011). Hence, more amount of
inventory is remain unsold which is not a good news at all. Ratio calculation is also an another
important term through which firm current position get identified.
a) Current ratio = current asset / current liability
2015 2016
CR = CA / CL = 20000/ 6000 = 54000/ 25000
= 3.33 times = 2.16 times
As according to current ratio analysis, at the time of year 2015 company using their ratio
to pay their debts is 3 times. Hence their condition is good to pay all of their debts by using their
current ratio but on the other hand by taking ratio of 2016 into account, cited firm ratio is only
twice which signifies that they are in bad position as compared to previous year.
2) QUICK RATIO (ACID TEST) = CURRENT ASSET – inventory/current liabilities
2015 2016
Q r= CA– INVENTOR / CL
=20000– 7000/ 6000 =54000-18000/25000
= 2.17 = 1.44
Quick ratio is calculated to identify that how well a company is operating their business
to meet their short term financial problems (Buelens, 2011). In 2015, company is using their
quick ratio to pay off their short term debts and their ratio is twice which is good but in 29016
their ratio get decline and become 1.
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TASK 2
2.1 Actions to overcome weaknesses
This is important task for business to address issues that are faced by people with its
product and services. It creates hindrance in growth and development of organisation There are
some issues that are faced by Caffe Finix in market so it is essential for this company to take
effective measures so that they can address such problems. Problems are related to quality
assurance, expensive rent, enhancing goodwill of its competitor, weak food sector etc. These
falling elements affect business in negative manner (Fassin and et. al., 2015).
Quality assurance mechanism can be used by cited company to overcome to problems
related to standard quality. Effective procedure requires to established in business that ensure
taste and decoration. It is important for this company to use standardise material so that they can
provide quality services to users (Gunasekaran, Rai and Griffin, 2011). Company have faced
problems related to expensive rent. So they can run small bays in front of restaurant so that
people can reach to their services. To enhance number of customers they can provide various
offers so that consumers can attract toward it. There are many programmes and seminar that are
organised in UK in public so they can contract with them to supply best quality product and
services over there. It helps to enhance brand value of company and their business can be
recognized among people.
It is important for manager to devote their skills on internal and external environments so
that they can focus on upcoming strategy of organisation. There is one option that is available to
company i.e. to hire effective and knowledgable personnels in their organisation that they can
collectively work for common goal and attain best output out of their operation.
2.2 Analyse the ways through which company can maintain their existing performance
With the help of utilising proper strategies a firm become able to maintain their existing
performance. In this context, they have to identify the measures on which they were operate all
business activities. For this purpose, they have to maintain total quality of their products as well
as services which are provided by them. Along with that, a major concern also have to show on
atmosphere which is provided by company. Firstly, they have to identify and look upon on their
strengthened areas on which business was operating (Williams and Schaefe, 2013).
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1. Produce high quality products to their clients through which their optimum level of
satisfaction get arise.
2. Also management have to show some concern towards their services in which they can
add on home delivery etc.
3. Management have to choose such location for their outlets from where customers can
easily reach to them. In this context, they use shopping malls etc.
4. Authority have to provide strength to business by evaluating all market changes on time.
In this context, managers have to make a analysis by using marketing strategy for
improving business performance.
5. Also, work in favour of society and provide them some benefit of their business leads to
increase sales and provide strength to cited firm. In this context, they have to perform
CSR activity through which their working become effective in nature and users can
utilise their services for long term (Storey, 2016).
6. By providing quality services to all consumers, it leads to create a healthy and friendly
behaviour with all of their clients. This make in maximise business and promote in
providing strength to business through which their survival become easy and they can
sustain in market for long run.
7. Also by providing right thing at right time is a duty of supplier. If supplier provide all
goods and raw material on time then it leads to maximise their customer trust and create a
brand loyalty. Hence, this work only get done by paying all suppliers amount on time.
This factor is also work as in making a healthy behaviour with their suppliers.
These are some ways through which Caffe Finix can provide strength to business and
they can maintain their existing growth rate for their business. If management lead to failed in
perform any of above mention element will directly work as in decline of business and thus this
get measure by analysing last year records.
2.3 Recommendation for new areas for business expansion
At present coffee shop is located at Stratford. Now, management want to expand their
business to several other areas. For this purpose, they first have to analyse market and target
customers and after work on such issues which might get affect their business and operations.
Hence, with more and more expansion of business it promotes to success of firm. For this
scenario, company have to work on following terms which are as follow:
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1. Location: Cited entity have to choose such location which is easily convenient to their
target customers with high traffic pattern (Stokes, Wilson and Wilson, 2010). This leads
to make business survival more easy. Thus, by considering this point, coffee shop will
lead to keep in eyes of most of users.
2. Products: Also, they have to offer new range of goods and services. By serving more
quality products to target users will lead to attract more and more customers and their
satisfaction level get rises. They have to manage their coffee favours also through which
brand loyalty get maintained (Teece, 2010).
3. Employees: Another major thing which an entity have to taken into account is services
and behaviour of their employees towards customers. HR have to recruit such number of
workers who have some specialisation in making coffee and other products.
By working on all these aspects, authority have to formulate some strategies through
which their working become effective. In this context, Ansoff Matrix is consider as one of the
most beneficial strategy. By working on this scheme, decision makers have to look upon on these
some points of this matrix which are as follow:
1. Market penetration: As per this aspect, organisation tries to increase their market share in
current market prospect. For this purpose they can reduce their prices of product, use path
of acquisition etc. Company wants to increase their position at current market by finding
new customers at existing market.
2. Market development: With the help of using acquisition concept, company can expand
their business ate new market which is helpful for them in making their survival easy. In
this context, they have to target various number of groups which are beneficial for them.
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Illustration 1: Ansoff Matrix, 2017

TASK 3
3.1 Assessment for existing business plan and objective
For any organisation, it is compulsory for them to set some targets and objectives. In this
concern, they have to formulate some strategies and plans on which all execution of work get
done (Schaper and et. al., 2014). With proper formulation of all necessary things intro business,
it promotes in making a firm to successfully operate their activities. At first, cited firm have to
prepare a business plan in context of expansion of business. Objectives have to get set according
to need and requirement of business. A business plan is a framework on which all task and
targets get executed. This leads to make work easy and all projects get done in an appropriate
manner. If any of an individual or management will not formulate any sort of planning which is
related with working then they have to suffer heavy loss.
After a business plan, all objectives for a business get set. And it is a moral duty of
manager to implement these objectives in an effective manner. Some of the major objectives
which frame by decision makers are as follow:
 Become one of the most finest coffee shop of locality.
 Increase profit by using various segments.
 Maintain a 60% gross margin.
 Customer satisfaction.
Once goals and targets get formulate, management have to use several number of keys
which are helpful in success of any firm and their growth. These elements are as follow:
1. Prepare such type of interior which aid in attracting more and more customers and speed
up all operations.
2. Provide proper technique to all employees so that they can prepare quality flavour
coffee.
3. Formulate and use beneficial marketing strategies through which chances of target
achievement get rises.
These are some key elements which used by a firm in implement all of their objectives.
Hence some other points on which management have to keep their focus are as follow:
1. Provide quality products to their users at competitive prices. This support them in
engaging more and more customers (Shamuganathan and Nga, 2010).
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2. Provide more convenient method from which assistance customers can easily consume
their products. This get done while using high quality beans.
All these things have to get consider under a business plan which is become as necessity
for cited firm. Hence, they are already suffering low profit crises which is not suitable for them
while dealing with vast range of customers. According to present financial situation of a
company, their profit generation is not so high and thus this can create so much problem in
expansion of their firm. Thus financial issue is termed as one of a major crises from which Caffe
Finix is suffering very badly. All these things have to get incorporate in a business plan which
can be lead as helpful fact for them.
3.2 Revise business plan to incorporate changes
One of a most important work which have to be performed by each and every firm is to
change their business plan. This work should get done in according to demand and need of time
frame. Decision makers have to revise their plans as per requirement of time. Hence, they have
to make their strategies which is completely focused on their new customer and market. All these
factors have to get included in business plan which is serve as essential work.
In this perspective, management have to keep their focus on all their weakness. Working
on those issues is one a most important task for every management or central processing unit of
an organisation (Hilmersson, 2014).
 One of a major issue is their quality. Management have to hire such workers which are
able to make those products which leads to provide satisfactory level.
 Their prices are too high which is also not good. Hence, they have to control their rates.
 Another major factor is about finance and past records of business. Management have to
show some concern towards their previous financial statement.
All these things have to get done in according to business plans and objectives as with
support of strategies. Also, authority have to look upon on their employees and managers which
assist them in accomplishing all work in an effective manner. Some SMART objectives also
have to be formulate by business entity which are as follow:
Specific: As per this concept, management have to look such areas which really need
improvement. Cited firm have to take care about quality of product which is treated as specific in
nature.
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