Takk Coffee Shop: Small Business Performance Analysis Report

This report provides a comprehensive analysis of Takk Coffee Shop, a small business enterprise located in the UK. It begins with an investigation into the coffee shop's performance, utilizing SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report then delves into a comparative analysis of the business's performance, using financial ratios derived from profit and loss accounts and balance sheets from 2016 and 2017 to evaluate its financial health and efficiency. The subsequent sections propose actions to overcome identified weaknesses, explore ways to maintain and strengthen existing performance, and identify new areas for business expansion, including a potential new location at London City Airport. The report assesses existing business objectives and plans, proposes changes, and outlines an action plan for implementation, considering the impact of these changes on the business and its personnel, ultimately aiming to improve the overall performance of Takk Coffee Shop. The report concludes by summarizing the key findings and recommendations for the business's future development.

SMALL BUSINESS
ENTERPRISES

Table of Contents
SMALL BUSINESS ENTERPRISES.............................................................................................1
TASK 1............................................................................................................................................1
1.1 Investigate performance of small business enterprise......................................................1
1.2 An analysis of business using comparative measures of performance...........................2
TASK 2............................................................................................................................................4
2.1 Appropriate actions to overcome identified weaknesses in business...............................4
2.2 Ways in which existing performance could be maintained and strengthened.................4
2.3 New areas in which business could be expanded...........................................................5
TASK 3............................................................................................................................................6
3.1 An assessment of existing business objectives and plans...............................................6
3.2 Business plans to incorporate appropriate changes..........................................................7
3.3 An action plan to implement changes.............................................................................8
TASK4.............................................................................................................................................9
4,1 Impact of proposed changes on business and its personnel...........................................9
4.2 Changes managed in Business.......................................................................................11
4.3 Improvements in the performance of business.............................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12

INTRODUCTION
The business that has lower volume of sales and employees lesser number of workers is
regarded as a small business enterprise. Generally, the small businesses are privately owned as a
sole proprietor. However, these can be in partnership as well. Obtaining the status of a small
business enterprise requires a firm to fulfil certain norms (Bridge and O'Neill, 2012). The present
report is based on Takk Coffee shop which is a small business enterprise in UK. Being famous
for the finest quality of coffee, this restaurant offers a variety of products and services to the
customers. This report cover, different areas in which coffee shop is preferred by the people.
Further, it covers the weakness or the issues that has to be taken into consideration so that the
performance rate can be improved.
TASK 1
1.1 Investigate performance of small business enterprise
Cafe coffee shop Takk Coffee shop was established in 2009 with aim of providing
effective and efficient products and services to all consumers. It is located near Stratford College
and Westfield Shopping Centre. It provides fresh products and services to every targeted group
which helps them to enjoy their free time with friends while studying or hanging out.
SWOT Analysis:
With the help of SWOT analysis, a small business is able to undertake its first stage of planning.
It further assists the decision makers in laying emphasis on the major issues and concerns of
organization. Hence, it serves as a useful method for a small business during formulation of
strategic plan. Takk Coffee shop needs to analyse its internal factors namely, strengths and
weaknesses. It is equally important for the coffee shop to explore the external factors such as
opportunities and threats. Being quick and easy to use, SWOT provides help to the business in
dealing with completive environment.
Strengths of Small Business Enterprise
 Due to its small size it has been in direct contact with various types of persons who
helped in developing business operations.
 It has kept a consistent effort for innovation. They are ones who have been directly
involved in bringing creativity and innovation and changes as per marketing
environment.
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 Due to small size, Takk coffee shop is capable of monitoring all the employees regarding
their benefits and motivating them to help firm in developing operations at highest level.
 It has strong commitment on providing effective and efficient products and services to
customers and also resolving their quarries at best level.
Weaknesses of Small Business Enterprise
 It has a thinking process which always remains static. It means that company always tries
to think over small operations only.
 It has no access to capital marketplace . This is due to their small business operations
which enables them to be restricted from bigger markets.
 It always faces problems regarding succession, growth and enhancement. This is because
they have slower and a small plan of action which restricts its planning progress.
 There occur to be various types of difficulties on management front which generates
conflict among families and hampers growth and development.
Opportunities of small business enterprise
 For developing effective and efficient products and services company should analyse
external factors that are essential on part of generating profits and gains.
 By investing in more developed country growth of firm will be high.
 More investment in country will help firm to expand its business operations.
Threats of Small business enterprise
 Company needs to analyse various policies developed and generated in home and host
country.
 Development of new technology will create a constraint as they require lots of finances to
buy and learn new upgraded versions of business models (Burns, 2010).
1.2 An analysis of business using comparative measures of performance
Cafe shop has a contact and link at small level with set of goals and objectives which are
also small. When organization are small then level of operations are also smaller which indicates
that all of its operations are working effectively and efficiently (Stokes, 2011) . But to analyse its
financial position company has to do various types of ratio analysis which will provide them
level of performance of company in marketing environment.
Takk coffee shop Profit and Loss Account for year ended 30 April 2016 and 30 April 2017
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Type 2016
£
2017
£
Sales 120.000 200.000
Cost of Sales 80.000 150.000
Gross Profit 40.000 50.000
Overheads 10.000 15.000
Net. Profit 30.000 35.000
Takk coffee shop balance sheet 30 April 2016 and 30 April 2017
2016
£
2017
£
Fixed Assets 15.000 12.000
Current assets
Stock 7000 18.000
Debtors 12.000 36.000
Bank 1000 0
20.000 54.000
CR = CA / CL
2016 2017
= 20000/ 6000 = 54000/ 25000
= 3.33 times = 2.16 times
In 2016, the organization was in a position to pay their liability which when compared to
current asset was approximately three times its use. In 2017, the company utilized working
capital in an effective manner. Still, the payment made by company to CA through the use of
current asset is twice. The current ratio provides an ideal value of 2.
QUICK RATIO (ACID TEST) = CURRENT ASSET – inventory / current liabilities
2016
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Q r = CA – INVENTOR / CL = 20000 – 7000/ 6000= 2.17
2017
Qr =54000- 18000/25000= 1.44
In 2016 company pay their liability twice by using CA. This indicates good position of the
company. However, it also depicts that the organization is unable to use its capital efficiently.
But, the working capital was used by organization appropriately in the year 2017. The quick ratio
was found to be 1.
TASK 2
2.1 Appropriate actions to overcome identified weaknesses in business
The company can create a higher customer base. However, it has to pay huge expenses in
the form of commercial rent. The larger expectancy of revenue can easily cover the high cost of
rent, due to higher average income in this area which will be considered as less populous or high
rented on part of generating huge income from different surroundings such as Easthampton.
There are limited parking bays, so consumers will face parking problems (Altman, 2010). To
solve this problem company can take on rent nearby shop which will help in accessing their
business more easily. Business should provide a high turnover ratio due to its raw materials
expiry tenure. It will ensure utilization of FIFO method which will be used in order to analyse
sales and stock replenishment.
There is also a requirement of developing restocking and reordering method on grounds
of maintaining and supplying right amount of materials required daily for operations. It is very
difficult to attain quality control as different types of coffees and cupcakes are made each time.
To ensure quality control taste and decorations must be similar in order to provide effective and
efficient requirements. The focus of the business is on enhancing social trends. However because
of its business being a cafe it will become effective to develop turmoil as it will help him in trend
downturn to develop various types of measures.
2.2 Ways in which existing performance could be maintained and strengthened
There are some ways which can be used for maintaining and strengthening the factors of
the company such as cultural ethics, peak performance, employee rate etc. which are discussed
below :
 More refreshing drinks are demanded by people
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 More inviting coffee house environment should be there.
 Coffee drinkers are considered affordable luxury.
 They are not affected by world events and economy.
Advantages of Takk coffee shop are.
 A significant development of products and services (Chittithaworn., 2011).
 Our location is the best suitable for shopping, dining and entertainment purposes.
 Only coffee house down-town is providing effective weekend evening entertainment.
 Different and unique variety of drinks are provided to consumers.
2.3 New areas in which business could be expanded
Cited coffee shop is of UK and it is located at Stratford. As the rate of performance by
the firm is high and so they are planning to star5t up a new shop. At London City airport . this
place is selected as it highly crowed and below given are the few of this that are considered for
selecting this area: Better Availability of locations:- Location which company has chosen to provide its
products and services is effective and best in way that every consumer who travellers to
airport gets to see cafe shop located nearby (Nga and Shamuganathan, 2010). Along with
it high crowd is also welcomed as in case flight gets delayed then they can wait for some
time there and enjoy rich taste of coffee. Along with it , accessibility is also best because
there is a scheme by which consumers can enjoy coffee twice or thrice in a day by only
giving amount for once and for another one they will be provided discounts.
 Best Products:- Its products are best in way that quality of items used are effective and
efficient to be used by consumers. They are using rich quality fresh beans and high
quality pure sugar which is suitable for consumers. Along with it, there are premium
containers one is from cold and other is for hot coffee which are always filed with fresh
ingredients used. Flavours are added as per requirements of consumers in such a way that
they need to be satisfied by items company is selling and can use them next time as well. The Finest reputation:- It means that company has been providing relatively favourable
products and services to consumers that they are attracted towards it next time as well.
This helps in growing and developing business operations. There are also various types of
ways through which large number of consumers can attract is through Facebook and
What's-app. In Facebook a page has been made by them in which all products and
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services along with their information has been provided which benefits large amount of
customers in getting information and knowledge about items. This enable them to use
these products effectively. Through What's-app they can deliver pictures and information
at large scale which enables consumers to choose desired product beneficial for them.
 Friendly Services:- It will help company in getting effective and efficient amount of
customers which will increase sales of business enterprise in long run. Relations are made
not only for present benefits but also for future benefits. As if company is giving free
discounts or some types of offers they will provide it to these friendly customers. This
will generate more amount of sales.
TASK 3
3.1 An assessment of existing business objectives and plans
Blow given are the objectives of Takk coffee shop that enable to achieve the goals and
objectives.:-
 To be the most preferable hotels in UK:- This means that company should provide
effective products and services in comparison to its competitors such that they can attain
growth and development of business operations. Maintain 65% gross margin :- It means that company wants its products and services to
grow and develop in business environment (Teece, 2010). So for this , they can increase
prices of their products and services with increase in qualities which will enable
consumers to experience wide variety of different items. And it will be beneficial for
them also as large number of customers can be generated.
 Consistently providing the finest products and services:- So for developing and regularly
providing effective and efficient quality item company needs to regularly concentrate on
taste of consumers. Because it can be changed with changing time and new introduction
of business enterprises.
For achieving above types of plans and objectives Takk coffee shop needs to develop
various types of marketing strategies which are essential for developing its products and services
along with company's reputation in targeted area. Understand customers:- Firstly company should understand what is requirement of
targeted audience and then accordingly develop various types of goals and objectives.
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 Analysing SWOT:- It will enable company to identify its strength and weakness in
comparison to other business firms and develop such types of measures which will enable
in developing opportunities required for overall operational development. Market Competition:- This will enable company to analyse amount of competition it
should face when providing effective items to existing business market. For this various
types of elements should be focused on (Hilmersson, 2014). Marketing mix of different
enterprises should be evaluated and accordingly products and services should be
developed. This will help company in getting flexible alteration in marketing elements if
its required.
 Marketing Network:- Fort any product and service to develop company needs effectively
and efficiently network. Because it is an important source which should be created in
such a way that easy availability of goods can be there. For this various marketing
channels like distributor, wholesaler and retailer must be kept in such a path way that
products can easily be accessed to consumers at suitable price and quality.
3.2 Business plans to incorporate appropriate changes
Following elements are considered for incorporating changes in business plan of Takk
coffee shop.
 Executive Summary:- Takk coffee shop is a local shop near Stratford college and
Westfield shopping centre. It has been famous coffee shop as it provides products and
services to daily consumers. It is a place where one can release stress of life and can hang
out with friends (Audretsch and Link, 2012). It was opened in 2010 with aim of
providing effective and efficient items at reasonable price. There are only 15 employees
working in cafe and its build up area is around 1500 sq. ft.
 Mission Statement:- Its mission is to provide each and every customer to drink and
experience rich quality products and services which will enable them to capture large
market share. Its another major objective is to help consumers in accessing their quality
time with friends, family and relatives which includes drinking and eating various types
of items available.
 Product description:- Products offered by cafe includes cold coffee, mock tails, hot
coffee, burgers , sandwiches and many more items. These items are developed as per
choice of consumers. And company has kept its pricing in variants .For cold coffee 150 -
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200 euros and for hot coffee 60-80 euros. Burgers and other types of beverages will be
priced as 50 euros for burger and 40 euros for sandwiches. For mock tails it will be
relatively high like 100- 120 euros. Various promotional techniques which are sued
includes Facebook pages, mouth publicity, free delivery to Stratford college students and
authorities.
 Competitor's Analysis:- It includes analysing existing and new competitors of business
which will enable company to develop marketing strategy accordingly . It will also
include various types of policies need to be developed and methods implemented at every
level of formulating effective items required by various consumers.
 Financial Planning:- To continue business operations an enterprise must analyse its
financial statements and accordingly develop various plans and objectives beneficial for
its growth and development. It includes analysis of future and current resources in hand,
various loans and grants taken from financial institutions and other types of liabilities
which are needed to be considered while developing business operations. Takk coffee
shop must consider its assets and liabilities at regular intervals along with amount of
profit organization has gained and losses made at regular intervals. This will enable them
to analyse resources which will be required in future.
3.3 An action plan to implement changes
Various strategies which are made to implement actions necessary to be taken are:-
Marketing analysis includes analysing environment on basis of various types
 Behavioural Factors:- These factors includes likes and dislikes , taste and preference
which an individual possesses in order to use any product or service. Cafe shop must
analyse it as it will help them to evaluate market and accordingly deliver its products and
services.
 Psychological factors:- These elements includes lifestyle, social norms and cultural
values which must be analysed in order to effectively develop organizational goals and
objectives. Cafe house must analyse targeted audience as it will help in analysing living
standards of persons who are using these products and services.
 Geographical Factors:- Location is an important constraint as it must be in proper
accordance with type of products being delivered. For coffee house it can include
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crowded area, mall or corporate offices which are considered top priority as more number
of consumers will be generated for effective goods and services.
 Segmentation helps the organisation to find out different customer of different need. Inn
coffee shop some consumers like cold coffee while others like hot coffee . So their needs
and demands are different in terms of single product ''COFFEE”. And this will help
marketer identifying all relevant requirements of targeted group and it will prove to be
profitable for all customers and company.
 Targeting means choosing segmented audience who will effectively and efficiently be
using these products and services. As it will also help in analysing all factors required for
developing business products and services at either low price or reasonable price as
required by that group (Williams and Schaefer, 2013). Coffee house will target
consumers who will generate revenues and profitability for business enterprises as per
requirements of these areas where consumers are provided effective and efficient items.
 Positioning means Identifying and generating a distinct place in minds of consumers
regarding products and service development. It enables companies to position level of
product and its services which are to be provided to targeted audience. In this process it
will be analysed about positioning of effective quality techniques used for promotional
measures. For Takk coffee shop it is important to position coffee products and its
attributes in such a way that they can achieve segmentation of marketing effectively and
efficiently with relevance amount of its market share.
TASK4
4,1 Impact of proposed changes on business and its personnel
Business enterprises are affected by various types of marketing environmental factors as
they are affected by competitors. These factors are known as PESTEL Analysis. Political Factors:- Means transformation in Govt. policies and laws which are to be
developed for providing benefit to consumers. It has great influence on business
operations. This has gained significant importance on part of developing effective
products and services. For example – European companies are greatly influenced
regulation of business enterprises as spending power of consumers will be less by
generation of business policies which caters to political and environmental loss.
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 Economic Factors:- All these factors which change international economy directly.
Increase in standard of living will imply increase in demand and supply of products and
services which will provide greater opportunities for making profits. In case of economic
fluctuations demand will increase and hence price will also increase in economy. For
Companies operating in EU it is necessary to develop various economic indications
which are suitable on part of developing goals and objectives. Social Factors:- It will provide insight into behavioural and social traits which will help
in analysing all factors related to economic social welfare. Takk coffee shop will help in
raising social standards of consumers by developing various types of products and
services which will enable them to generate better lifestyle, culture and societal norms
prevailing in market (Stokes, 2010). It will also help in capturing large market share as
companies need to implement all changes prevailing in society but now only coffee house
has developed fully in terms of social integration. Technological Factors:- All factors related with technical and legal aspects which needs
to be changed in accordance with changing environment. As technology and legal
relations with business enterprises needs to be developed on regular basis as they are
backbone of any business organization and it is important for Takk coffee shop to
develop it . In case if this doesn't happens consumers will switch to other companies,
 Environmental Factors:- Those factors which have marketing elements that are
changeable in terms of changes made in political and legal system of an economy. These
factors includes cost, competition and market share which an enterprise adopts in order to
provide effective and efficient development of various types of items beneficial for
sustainable development. In coffee house all environmental factors must be analysed in
which competition prevailing in market must be analysed to maintain higher standards of
performances . This will be beneficial for organizational and personal factors.
4.2 Changes managed in Business
For managing various types of changes First of all human resource must be changed in
positive or negative way which will affect business enterprise directly. But they are very must in
against of sudden changes which can impact their working structure (Burns, 2010). This is
because of the fact that these changes can bring harm to business organization and it is not
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generally beneficial for personal development and growth. There are various types of changes
that can be managed by business organisations.
 Capital:- This is an important aspect that an enterprise must utilise effective and efficient
capital which is required for developing products and services . These will help in
providing development of business items which will be essential for generating positive
results for firm. To manage this change an organization must provide relative amount of
financial support from various sources which will help in developing business products
and services catered at nominal rate of interest.
 Competition:- For developing various resources it is important to analyse competition
which will help in crafting growth and development of business enterprises. But for some
firms it is of no utilization as it generates gap between top enterprises and small
enterprises. It will hamper its sales . But those who take it as challenge will generate
positive results.
For Cafe house it’s a challenge that they are changing various strategies and policies which will
be beneficial for increasing skills and individuals mind set regarding operation's at higher level.
4.3 Improvements in the performance of business
The business can be improved by its ceaseless efforts and practices. It can increase its
growth and development in effective and efficient by continuous improvements. Below are some
points through which an organisation can be improved:
 SWOT Analysis:- It is important to know about own strength and weakness,
opportunities and threats which will analyse its profitability and sales (Burns, 2010). This
will be effective in development of business activities catered at personal benefits.
 Trend Analysis:- It will be profitable if company analyses trends of market and then
accordingly deliver its products and services . This is because trends will help in
implementing various past records and then on its basis future predictions are developed.
Sometimes it can be a loss for organization but if they are in positive manner then it will
be a huge success for firm who is operating at high level of growth and development .
CONCLUSION
From the above report it can be concluded that small and mediums size organisation
plays an essential role in the economy of the country. The investigation made on Takk coffee
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shop, a small scale organisation operating in UK in order to identify its growth and development.
It is important for the business to have innovations as per the need and requirement of customers
as it enables to make sure that business attain their goals and objectives. Further, there are many
companies that deliver their customers with similar set of products and services. It requires
proper analysis of the business so that the rate of performance can be improved. Apart from this,
employees should be trained so that high quality services can be delivered.
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