Zizi Restaurant: A Comprehensive Analysis of Small Business Enterprise

This report provides a detailed analysis of Zizi restaurant as a small business enterprise. It begins with an introduction highlighting the importance of innovation and change in today's business environment, followed by a profile of Zizi, including its founding, location, and operational details. The report then presents a SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. The analysis further examines the company's financial performance through the use of comparative measures, including income statements, balance sheets, and key financial ratios. The report compares Zizi's financial data with a competitor, Darden Restaurants Inc. The report analyzes the profitability, liquidity, and growth ratios of Zizi and its competitor. Finally, it presents recommendations to improve the business. The report concludes with an overview of the key findings and a list of references.

SMALL BUSINESS
ENTERPRISE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Produce a profile of a selected small business......................................................................1
1.2 Carry out an analysis of the business using comparative measures of performance............2
TASK 2............................................................................................................................................9
2.1 Justification, appropriate actions to overcome the identified weaknesses............................9
2.2 Analyse ways in which existing performance could be maintained and strengthened.......10
2. 3 Recommend with justification, new areas in which the business could be expanded.......11
TASK 3..........................................................................................................................................12
3.1 Produce an assessment of existing business objectives and plans......................................12
3.2 Revise business plans to incorporate appropriate changes.................................................13
3.3 Prepare an action plan to implement the changes...............................................................14
TASK 4..........................................................................................................................................14
4.1 Impact of the proposed changes on the business and its personnel....................................14
4.2 Plan how the changes will be managed in the business......................................................15
4.3 Monitor improvements in the performance of the business over a given timescale...........16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
In the era where different organisation are operating with an end goal of achieving goals
innovation and making changes in the present working criteria is of immense importance. Small
scale companies has covered a major part in the total economy and has provided variety of
services to customers (Aremu, 2011). Zizi is a restaurant which is giving its best services to
customers since a very long time. There are many branches of same and in each of its chain best
facilities are ensured so that customers do not find any inconvenience. Following report will
discuss its strength and weaknesses of this organisation and will further continue with other
related aspects of the cited organisation .
TASK 1
1.1 Produce a profile of a selected small business
There are variety of organisations which operates in the surroundings and scale of each
varies to a great extent. Small scale companies perform their function in order to provide variety
to costumers. The given company has acquired a vary good name in the food industry and is
known for the quality of its products (Bianchi and et.al, 2010). By formulating effective policies
Zizi limited has established a good name in market. This company operates on a good profile as
it offers quality commodities in the market and give a good facility of special rooms and lounge
to its clients. In order to get an accurate idea of companies profile the text given below can be of
great help:
 Figure name : Zizzi
 Address : Hereford HR4 9HR
 Food : Italian
 Founded : 1999
 CEO : Steve Holmes
 Outlet : 140 branches in UK
 Starting time : 11.30 A.M to 11 P.M
 Menu : zizzi.co.uk
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 Reservation: bookatable. co. uk
SWOT analysis of Zizi limited
Strength – The best feature about this company is that it provide good quality of services
to all those who visit the place and has got effective working strategies (Bridge, 2012 The place
is very much attractive as the selection of interior is done in a manner that it is liked by all. After
this the selection of working staff is also done with maximum care which gives a good
impression on those who come in contact with them (O'Neill, 2012).
Weaknesses – although the process of doing operations are effective in the given
organisation it faces different sections in which the company lacks behind. The management of
company is less efficient and most of the workers are fresh recruited and hence they lack
experience which results loss of standards in many case. Apart from this the given organisation
also faces the challenge of finance as being a small company it becomes difficult for it to raise
the required amount of funds (Chittithaworn, and et.al 2011)
Threats – The biggest danger for this company is that with an increase in demand for this
type of business type more ad more new entries are taking place in this industry which increases
the competition. This further leads to the decrease in scope for the given company and therefore
the total profitability of the enterprise will further decrease (Piva, 2012).
Opportunities – The biggest positive chance with the given company is that by doing
innovation in their products company can attract to more customers which will further lead to the
increase in sales. Customer get bore when they are given the same options everything hence
modifications in the existing products can be of great help (Cerrato, 2012).
1.2 Carry out an analysis of the business using comparative measures of performance
In order to measure the performance company uses different measures. Variety of them
are given below:
(A): The Restaurant Group plc financial statements
Income Statement 2013 2014 2015
Fiscal Year Ends 29/12/13 28/12/14 27/12/15
Turnover 579.59 635.23 685.38
Expenses 504.67 547.91 596.49
EBITDA 107.79 116.83 138.76
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EBIT 74.92 80.31 99.66
Operating Profit
(reported) 74.92 87.31 88.89
Operating Profit
(adjusted) 74.92 87.31 99.66
Investment Income 3.34 9.95 2.69
Exceptional Items 0 0 0
Net Interest -2.23 -2.39 -2.05
Pre-tax Profit 72.69 84.93 86.85
Tax 16.5 17.93 17.96
Net Profit 56.19 67 68.89
Minority Interests 0 0 0
Profit For Financial
Year 56.19 67 68.89
Ordinary Dividends 24.86 36.37 32.12
Non Equity
Dividends 0 0 0
Retained Profit 31.33 30.63 36.77
Balance Sheet 2013 2014 2015
Fiscal Year Ends 29/12/13 28/12/14 27/12/15
Assets
Non Current Assets
Intangible 26.43 26.43 26.43
Tangible 337.52 368.58 403.64
Investments 0 0 0
Other 0 0 0
Total 363.95 395.01 430.07
Current Assets
Stock 5.09 5.53 6.39
Debtors 22.4 23 28.63
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Cash and Securities 7.31 0.88 2.98
Total 34.79 29.41 38.01
Held for Disposal 0 0 0
Total Assets 398.74 424.42 468.08
Liabilities and Equity
Liabilities
Current 114.96 121.63 136.4
Non-Current 67.82 58.26 48.12
Total 182.77 179.9 184.52
Equity
Share Capital 80.92 80.93 81.77
Reserves 135.04 163.6 201.79
Shareholders Funds 215.97 244.52 283.56
Minorities 0 0 0
Total 215.97 244.52 283.56
Total Liabilities and
Equity 398.74 424.42 468.08
Ratios:
Profitability
Operating Margin % 12.29 12.13 14.1
Profit Margin % 12.54 12.27 14.24
ROE % 23.35 23.04 26.21
ROCE % 29.03 28.95 32.44
Financial Health
Net Gearing % 20.87 17.11 11.18
Gross Gearing % 24.25 17.47 12.23
Dividend Cover x 2.15 2.01 2.41
Interest Cover x 35.33 36.85 55.53
Quick Ratio r 0.26 0.2 0.23
Current Ratio r 0.3 0.24 0.28
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Growth
DPS Growth % 14.09 18.33 8.42
Norm EPS Growth % 10.21 10.9 30.1
Reported EPS
Growth % 16.3 19.24 2.67
(b): Darden Restaurants Inc.
Income Statement 2013 2014 2015
Revenue 8551.9 6285.6 6764
Cost of Revenue 6661 4990.5 5341.5
Gross Operating Profit 1890.9 1295.1 1422.5
Operating expenses
Research and development - - -
Sales, general and administrative 847.8 663.5 673.5
Staff cost - - -
Depreciation and amortization 394.8 304.4 319.3
Other Operating Expenses 0 0 62.1
Total Operating Expenses 1242.6 967.9 1054.9
Operating income before interest
and taxes 648.3 327.2 367.6
Non-operating income -125.9 -152.6 -192.3
Income before income taxes 522.4 174.6 175.3
Provision for income taxes 109.8 -8.6 -21.1
Net income from continuing
operations 412.6 183.2 196.4
Net Income 411.9 286.2 709.5
Balance Sheet
2013 2014 2015
Assets
Current Assets
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Cash, cash equivalents,
and short-term
investments
Cash and cash
equivalents 88.2 98.3 535.9
Short-term investments - - -
Total cash, cash
equivalents, and short-
term investments 88.2 98.3 535.9
Accounts receivable 85.4 39.3 47.1
Inventory 356.9 196.8 163.9
Other Current Assets 234.4 1642 309.5
Total current assets 764.9 1976.4 1056.4
Non Current Assets
Not property, plant and
equipment 4391.1 3381 3215.8
Equity and other
investments - - -
Intangibles 1572.1 1447.1 1447
Deferred Income Taxes 21.3 - -
Other Long-Term
Assets 187.5 296.2 275.5
Total non-current assets 6172 5124.3 4938.3
Total Assets 6936.9 7100.7 5994.7
Liabilities and
stockholders' equity
Liabilities
Current Liabilities
Accounts Payable 296.5 233.1 198.8
Taxes Payable 158.4 134.9 128
Current Debt 164.5 222.6 15
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Other current liabilities 797 1027.9 854.9
Total current liabilities 1416.4 1618.5 1196.7
Non-current liabilities
Deferred taxes liabilities 356.4 286.1 341.8
Long Term Debt 2496.2 2481.4 1452.3
Other long-term
liabilities 608.4 557.8 670.4
Total non-current
liabilities 3461 3325.3 2464.5
Total Liabilities 4877.4 4943.8 3661.2
Stockholders' equity
Common stock - 1302.2 -
Additional paid-in
capital 1207.6 - -
Other reserves - - -
Retained earnings 998.9 995.8 1026
Minority Interests - - -
Total stockholders'
equity 2059.5 2156.9 2333.5
Total liabilities and
stockholders' equity 6936.9 7100.7 5994.7
Ratio:
Margins (% of Sales) 2013 2014 2015
Revenue
100.00
% 100.00% 100.00%
Cost of Revenue 77.89% 79.40% 78.97%
Gross Margin 22.11% 20.60% 21.03%
SG&A 9.91% 10.56% 9.96%
Research and - - -
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development
Operating Margin 7.58% 5.21% 5.43%
Net Int, Inc and
Other 13.69% 7.98% 8.03%
EBT Margin 6.11% 2.78% 2.59%
Profitability 2013 2014 2015
Tax Rate 1.28% -0.14% -0.31%
Net Margin 4.82% 4.55% 10.49%
Return on Assets 6.4 4.08 10.84
Financial Leverage 3.37 3.29 2.57
Return on Equity 21.12 13.58 31.6
Particular The Restaurant Group plc Darden Restaurants Inc.
Profit and loss statements According to the above
mentioned statements, it has
been found that total net
incomes of the company is
increasing in every year.
Under this company, total
profit generated during last
few year are quite stable and
fluctuating. 709.5 of total gain
is recorded in 2015.
Ratio analysis
Profitability ratio The profit ratio of the
restaurant company is
fluctuating in every year. They
are able to generated healthy
earning in an accounting year.
In 2015, ROA and ROE is
maximum as they are getting
high return as compare to last
couple of years.
Liquidity ratio This company is not so
effective enough to pay off
their short-term or long term
liabilities. As they are below
from ideal ratio.
After making evaluation of
liquidity position of the
company, it has been seen that
there is not much of difference
in last year of current assets
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and quick ratios.
TASK 2
2.1 Justification, appropriate actions to overcome the identified weaknesses
In the business there are various reasons because of which failure is faced and the main
among them is weakness (Donner, 2010). It will be affecting the environment in several manner
which will be including internal as well as external factors. So the different tools which are
available shall be used so that they can be overcome and by this goals and targets of organisation
will be accomplished in the least time possible (Escobari, 2010). The strategies which will be
undertaken by Zizzi in order to remove the problems which are mentioned here under:
 The main issue is improper communication among different levels of organisation.
 Inexperienced employees who are not able to conduct the operations in effective manner.
 Shortage of capital by which functioning will be affected (Sabato, 2010).
All the issues which are faced can be dealt in proper manner by making proper strategies and
some of them are explained below:
 The communication will have to be improved and by this information will be made
available to all and there will be establishment of proper coordination among them.
 The employees are not having adequate knowledge so it will be needed that proper
training shall be provided to them. For this various development and training
programmes will be launched in which their skills will be enhanced (Fassin, 2011).
 As there is high competition in the market so in order to beat this, it will be needed that
new and innovative ideas shall be used. By this products will be made with advanced
features so that they will be chosen by consumers over and above others.
The problems which are faced are because of the wrong procedure which is adopted by
the Zizzi and for that it will be required that steps shall be taken in this regard. Some of it are as
follows:
1. skilled and trained employees will be hired so that proper functioning will be made
possible.
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2. The mosses will have to be minimised and for that effective strategies will have to be
executed.
3. A team shall be established which will be responsible for resolving the issues of business.
Quality of the product will have to be improved as by that customers will be retained (Buelens,
2011).
2.2 Analyse ways in which existing performance could be maintained and strengthened
It is important not to neglect our existing customers as they are vital for company growth
and development. Some of the new initiatives are mostly disrupt current performance but they
can be managed with proper utilisation of skills and knowledge that are carried by the people at
workplace. As each and every individual working in an organisation in order to maintain the
productivity and to achieve their aims and objectives within the allotted time period (Forsman,
2011). It can be achieve only though applying effective and creative ideas that would help the
company to increase goodwill in quick time. There are some of the techniques which are use by
company in order to maintain the performance of an organisation as well as manager of
enterprises such as:
Strong and positive relation: In most of the company the communication system should be
effective so that healthy relationship would be develop among employees and top management.
As to maintain perfect interaction between customers a strong coordinative bonding should be
developed . The performance of an organisation is mostly affected if there is miscommunication
among employees relation. Like for example a effective outcomes can only be achieve if there is
healthy relationship among workers.
Development of Eco - friendly atmosphere: As per this techniques, employees should work in
such kind of environment in which there is less stress and workload. It will help to motivate
those workers those are involve in activities in an effective ways by keeping customers needs
and wants (Fassin, 2011).
Improvement seminar: Employees will be perform there role in most effective manner if they
are getting some short of training and development program. It will be more useful tool in
improvising skills and capability of an employees in order to achieve their individual as well as
group goals. Another benefit of this programmes is to encourage the ability and knowledge of
employee's so as to remove employment issues at the workplace and create awareness regarding
organisational safety and security to employee's.
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