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Unit 33 Small Business Enterprise Assignment
Diploma in Business
Unit Number and Title
Unit 33 Small Business Enterprise
Small business enterprise assignment report will give the essence of the business management in the context of the small business enterprise. For understanding different approaches a small business organisation is consider in this report which is a restaurant in the city of Edinburgh, Scotland. The first part will give the details of the business objectives and plans of the restaurant based on that certain analysis on the organisational performances will be measured. The second part of the report will give the solutions as well as justification towards the weakness as identified in the first part of the report. The third part of the report will give the details of the revision of the plan by evaluating the existing business plans and objectives. The last part of the report will give the emphasis on the change management as the change is needed to overcome the weakness and strengthen the business to achieve the desired profit.
1.1 Produce a profile of your chosen small business enterprise (SBE). The profile of the SBE should identify its three SMART objectives, context and competition in which it is operating, strengths and weaknesses and key performance indicators/ measures.
Small Business Enterprise (SBE) is defined as a business whose turnover is less than equal to € 10 m and has less than 50 staffs (European Commission, 2016). For the purpose of the report, the small business enterprise can be the Delicious Dish which is a small restaurant situated at the city of Edinburgh. The total number of staffs is less than 20 and the turnover is below € 5 m. The detailed profile of the business is shown below:
- Objectives: The objective of this small restaurant is to serve quality foods by maintaining hygienic condition at a reasonable price. The three objectives that can be recognised are the quality food, hygienic atmosphere and reasonable price. From the objective it can be analysed that customer satisfaction for the long term period is mainly focused.
- Context:The small sized restaurant will serve the people with several dishes at a reasonable rate. As the city Edinburgh is ideal for the tourism and setting up the restaurant at the city will increase the scope of the business for a long term period.
- Competition:The level of competition is very high in this place due to the big organisations and global chains. The size of the restaurant is small as a result it only supports only 60 guest at a time whereas the big organisations are capable to serve 100 to 120 guests at a time. For the low capacity this restaurant faces strong competition from the big organisations (Chell, Nicolopoulou and Karata?-Özkan, 2010).
- Key Performance Indicators:The performance of the staffs is observed by the supervisors and the two manager of the restaurant. The parameters that are considered in observation are punctuality, attaining the customers and working in a team. All the feedbacks are given instantly to the staffs for improvement.
- SWOT Analysis:
Table 1, SWOT Analysis
The major strength this restaurant is the location which support by providing strong customer base. Apart from that he staffs of the restaurant are experienced and thus they are serving the guests efficiently.
The organisation work process is not structured and hence there is always confusion among the staffs. Sudden guest arrivals hampers the work process which due to lack in proper planning and management. Shortfall in fund is the main reason for restricting the introduction of the new service at the restaurant
The major opportunities are the potential place where the tourist guest can also be attracted, supportive policies of the Government on the ground of funding schemes.
The major threat is the high competition among the restaurants and big fast food chains whose investment capacity is very high.
An organisation delivers superior value to the customers in order to achieve the competitive advantage from the market and also to ensure high profitability. Thus the performance of the organisation can be measured in the following three aspects that are as follows:
1.2 Carry out an analysis of your SBE using any three different comparative measures of performance.
- Customer satisfaction: In order to compare the customer satisfaction, the expectation of the product or the related service is needed to be considered. Firstly the customers will like to expect before the purchase consideration. Secondly the experience that is consumed with the related product or service will reflect the perceived quality. Assimilation will be observed when the perceived performance level is less than the expected performance level. The subjective and the objective factors determined the level of satisfaction. As per the Assimilation theory of satisfaction, the customer will consider some cognitive differentiation among the expectation towards the restaurant and the perceived performance related with the dishes and the services. The key potential of the restaurant is the cleanliness, hygienic environment and price of the dishes which is comparatively low in that area (CHUANG and Liao, 2010). From the graph it is revealed that the level of the performance exceed than the level of expectation which maximises the satisfaction but at a slow rate
Figure 1, Satisfaction Function
- Employee’s motivation: Employees are backbone of the organisation and implementing the strategy successfully is depend on the employees. Thus ensuring high motivation among the staffs is necessary. In order to measure the motivation level Mc Gregor’s Theory of X and Y can be undertaken. The employees under the category of Theory X are less motivated and do not have any commitment towards the responsibility. The employees under the Theory Y are having high motivation and committed with their responsibility which reflect the productive performances. In the restaurant the frontline staffs like two waiters used to dislike their work as per the performance report and they used to do the mistakes after being warned. In this respect it is needed to analyse the loss and understand the reason for their lack of concentration (Huczynski and Buchanan, 2010).
- Operation quality:In this perspective, Total Quality Management (TQM) can be determined by aligning the expectations of the customers and the delivery of the service. In case of the small restaurant, Ishikawa theory can be related in order to develop the quality of the service. The objective of the restaurant is very clear that to serve quality foods in a hygienic environment at a reasonable price. The deficiency in the planning, lack of motivation level among some staffs is negatively affecting the productivity. On this ground Cause and effect diagram can be considered in order to under the sources of the issues and its overall effect on the organisation.
2.1 Based on the findings in Task 1.1, recommend with justification, appropriate actions to overcome the weaknesses in your SBE you identified
There are some measures that can be undertaken in order to overcome the weakness are as follows:
- Assistance from Government: For the small business firm the Government is ready to extend their support in the form of the loan and advisory services. Enterprise Finance Guarantee is a scheme which has low rate of interest and it can be considered by the owner of the restaurant in order to invest in the new services (Department for Business Innovation and Skills, 2013). Regional Funding scheme by EU is also there where the restaurant can apply as it is a small enterprise business. Proper investment can enhance the service scope and influence the business towards growth
- Proper Planning:The owner of the restaurant needs to create a plan where all the activities will be recorded in a proactive manner and that will be shared to all the staffs before the execution of their performance. This will not invite any cost rather it will reduce the misunderstandings among the staffs regarding their job responsibilities and approaches.
- Controlling the activities:All the activities of the staffs should be measured properly in order to detect the deficiency in the service delivery. Feedbacks must be shared immediately for the improvement.There lies a justification that it is not involved any cost rather it will help to find the discrepancies in the work process. 2.2 Based on the findings in Task 1.1, and 1.2, analyse ways in which existing performance of your SBE could be maintained and strengthened.
The findings that are discussed in the previous section can be strengthened and maintained in the following ways:
- In the context of the satisfaction level, the owner of the restaurant needs to conduct market research in order to get insight in to the expectation level of the customers. The feedbacks from the guest need to be collected in order to implement the changes needed for the improvement of the restaurant.
- All the employees should be encouraged for giving their feedbacks or views regarding the decision making process. Generally in the small enterprise it is the owner who only takes the decision and rest used to follow. Participative leadership style is needed for motivating the employees in order to ensure productive performances (Harzing and Pinnington, 2010).
- The benchmark of the quality is to be set in order to aware the staffs regarding the target. Any deficiency found in achieving the target is to be diagnosed immediately for detecting the reasons.
- Forming the definite structure and preparing the job responsibilities of all the staffs will help them to understand their role in the organisation. Delegating the responsibilities or duties proactively is needed to remove the conflicts or misunderstandings.
- All the employees should be monitored and evaluated with the performance management tools like Performance Appraisal. The partiality in determining the performances can be overcome by this measure and help to get the real picture of the performance individually.
2.3 Based on the findings in Task 1.1, and 1.2, recommend with justification, any two new areas in which your SBE business could be expanded.
Ansoff Matrix can be applied in order to expand the business operation of the Delicious Dishes restaurant. This is a four dimensional matrix which reflect four different strategies related to the expansion and growth.
Figure 2, Ansoff Matrix
The four aspects are as follows :
- Market Penetration: This is a strategy which is generally adopted in order to maximise the current sales. The owner of the restaurant can introduce new service like online booking of the table, organising parties in order to attract more customers towards the restaurant. Sudden price reduction can be undertaken in order to attract the customers towards the Delicious Dishes.
- Market Development: This is a strategy when the organisation likes to open a new site in order to increase the business turnover. For this restaurant this strategy is not feasible as there is an issue with the fund and huge investment is needed for this strategy to make successful which is not possible at this moment.
- Product Development:Under this strategy a firm can modify its product portfolio for increasing the level of interest and also to maximise the business opportunities. This strategy can be applied for the restaurant in the form like free Wi-Fi service, new recipes, change in the interior etc. This modification will increase the cost but also expand the opportunity to grow and flourish.
- Diversification:This strategy is generally undertaken to set off the profit or loss in different divisions of an organisation. Currently the restaurant is not in a position to open a diversified business and sometimes image of the brand get diluted (Burns, 2010).
3.1 Produce an assessment of existing business objectives and plans of your SBE. What are good and bad points in the existing business objectives and plans of your SBE and why?
The assessment of the existing business objectives and plans for the small restaurant can be done in the following way:
- Business Objective: The business objective of the restaurant is to attract more customers with quality dishes and hygienic environment. The business goal is to increase the profitability and to establish a reputed restaurant in the city of Edinburgh. The positive point with this objective is to set a benchmark or a direction for the staffs to maintain and follow for reaching the target. The negative point is the lack in proper guidance for following this objective in order to reach the target. The objective should also include the ways in order to reach the goal which is missing in the existing business objective.
- Process: The process is the ultimate approach which helps the teams of the organisation to maintain in order to reach the goal. The business process of the restaurant is not defined clearly which will create doubts and misunderstandings among the staffs. Unexpected guest arrival sometimes disrupts the process which implies the lack of flexibility in the process of the restaurants which are negative side. The positive side is the reporting authority which is very clear. The frontline staffs are supervised by the supervisors and the supervisors are controlled by the two managers of the restaurant. The communication process will be strong and helps to maintain a sound coordination among the staffs.
- Performance Indicators: The restaurant controls the performances of the employees by the process of observation. The positive side of the observation is the direct face-to-face approach which will reflect the true picture of the performance level. The negative side is the improper judgements of the performances due to the lack in giving time to observe individually by the manager. Thus it is needed to conduct performance appraisal where the staffs are rated by their colleagues and seniors for revealing the true picture of the performances (Wood et al, 2010).
3.2 Based on your assessment in task 3.1, prepare a revised business plan to incorporate appropriate changes to overcome weakness of exiting plan.
In order to overcome the weakness of the existing business plan, Mc Kinsey 7S Model can be applied in which will define the structure and objectives effectively for the small restaurant.
Figure 3, Mc Kinsey 7S Model
The following elements in Mc Kinsey 7s model can be highlighted in the following way:
- Strategy:The strategy of the restaurant should consider the marketing, operation, employees control and financial activities in order to increase the profitability and the scope of business. The strategy for the marketing can include the online promotional tools in order to increase the reach. One employee should be hired in order to look after the daily activities of the operation. Ensuing motivation among the staffs and controlling their performances are must be included in the strategy. Proper training and orientation can improve their performance level (Zott and Amit, 2010).
- Structure:The hierarchy of the restaurant must be defined and should be communicated to all the staffs in order to define the communication process and information flow. The centralised decision making process must be abolished in order to make a sound flow of the information (Trkman, 2010). The employees must feel that they have some importance in the organisation and it will increase the motivation level.
- Systems:Systems will give the essence smooth operation daily activities in the restaurants. The structured system like daily reporting of the staffs to their supervisor before the starting of the day, orientation session by the manager are considered in the system which will bring flow in the productivity and improve the competency level of the staffs.
- Skills:For improving the skills of the employees, adequate training and development is needed to be planned. It is the performance of the employees that makes a difference in the value addition of the organisation and thus it is needed to be focus for increasing the service quality.
- Staffs:The total workforce of the restaurant highlights the service quality and differentiation by their level of competency. Controlling the performances of the staffs and directing them towards the appropriate approach is needed by the manager of the restaurant. This will bring uniformity in the approach and help to maintain coordination among them.
- Style:The change in the autocratic leadership style is needed for the restaurant. For the alternative, participative leadership style can be followed by engaging all the staffs in the process of the decision making.
- Shared Values:The team goal of the restaurant will be to increase the Customer’s equity by maintaining certain values. Respecting all the cultures equally and prohibit the discrimination is needed from the owner of the restaurant which will help to meet the guest’s requirement effectively (Jones and Robinson, 2012).
3.3 Prepare an action plan to implement the changes you identified in order to strengthen the performance of your SBE.
The changes in the structure and system will strengthen the performance level of the organisation. These will bring confusion and misunderstandings among the staffs which can disrupt the business process of the restaurant. Thus change management is the only way that can implement the change in the organisation effectively by considering all the stakeholders. The business environment is dynamic and for that changes are required to cope up in order to manage the business successfully in the following territory.
In the perspective of the small restaurant, Kurt Lewin’s theory of Change Management can be applied which will help the restaurant to overcome the changes by restricting the resistance factors.
Figure 4, Kurt Lewin’s Theory
- Unfreeze: This is the initial stage where the owner of the restaurant relates the relevant changes to the employees by showcasing the inefficiency in the existing process and plans. The scope of the business will be increase if the changes are applied. These activities are needed to be figured out and shared to the employees in order to understand the importance of the change. At this stage, several questions will arise from the employees and replying them tactfully is needed (Bos?Brouwers, 2010).
- Change:At this stage, the changes will be adopted and the staffs will follow the new process in the restaurant in order to give their best for the business growth. The positive belief of the employees will grow in this stage when they will observe the benefits of the changes in the new process and motivate them accordingly.
- Refreeze: This is the last stage in this theory where the changes will reflect the benefits in the work process. The reduction in the level of misunderstandings will be observed and the organisation can get the desired level of the productivity from the staffs (Jones and Robinson, 2012).
4.1 Now write a report on the impact of those changes on the operations of your SBE and its personnel
Changes are imperative for the organisation in order to achieve the competitive advantage. The profit maximisation goal of an organisation can only be achieved if there is flexibility in the organisation structure and functions. The major drawback of this restaurant is to attain the guest in large numbers and this can affect the business in the long run. Thus the changes are planned in the areas like structure, staff management, guest handling in order to drive the value proposition of the restaurant. The impact can be analysed by considering two sides which are as follows:
Positive Impact: The changes in the structure will define the information flow and enhances the level of coordination. The employees will be aware of the reporting authority and can get the preliminary information regarding the responsibilities. The participative style will enhance the level of motivation among the staffs without increasing any cost for the organisation. The monitoring of the performances will reflect the true productivity level of the organisation and the managers can accordingly share the feedbacks to the staffs for the improvements (de Menezes, Wood and Gelade, 2010).
Negative Impact: Apart from the positive side, there are some issues related to the changes. The changes will only be possible if all the employees equally give their contribution towards the change. The resistance is common and the staffs will be hesitated to the follow the changed process and systems. These hesitations can create conflict among the higher authority and affect the productivity level of the organisation.
4.2 Plan how you would manage those proposed changes at your SBE.
In order to manage the proposed changes in the restaurant it is needed to consider certain aspects at the initial stages that are as follows:
Active participation among the staffs in the process of the decision making. This is will help the owner and the managers to get certain valuable feedbacks for the growth of the organisation and on the other hand the employees will be motivated.
Adequate training and briefing is to be given to all the staffs in order to perform their duties correctly.
The strong bonding is required between the managers and the staffs of the restaurant for enhancing the level of the coordination.
In this context Kotter’s eight step model of the change management can be adopted in the following way:
- The first phase will be to create an urgency regarding the proposed change. The employees should feel that the changes are highly required in this moment in order to develop their future prospect as well as to grow the business.
- The second phase will be to lead the employees towards the change. Powerful leadership skills from the managers are needed to influence the employees to follow the change immediately.
- The third phase will be to design a vision for the related changes. It will support the employees to understand the need of the change in the process and systems.
- The fourth phase will give emphasis towards the communication of the vision. All the information must be shared to all the employees in each of the level.
- The fifth phase will be to address the barriers in the changes and emphasis will be given to remove the barriers from the way in order to ensure smooth operation.
- The sixth phased will be required to create a short term goals in order to observe the success. This success can motivate all the employees to follow the changed system.
- The seventh phase will be to address the positive and negative side of the changes by monitoring constantly on the progress report.
- At the last phase sticking in the culture that will support the changes. Positive efforts are needed to be ensured in order to achieve the benefits of the change for the long term period.
4.3 Write a report, how you would monitor improvements in the performance on the operations of the chosen business over next two years.
For the next two years, monitoring the improvements in the performance is needed to track the progress and to implement the improvements if needed. Balanced scorecard can be applied which will help the restaurant to align the activities with the strategy by improving the external and internal communication as well as monitoring the current performance level of the restaurant. It is one of the effective tools under the performance management which serves the organisation by contributing in the strategic planning process (Harzing and Pinnington, 2010). The balance score card for the restaurant can be prepared in the following way
Figure 5, Balanced Score Card
In order to conclude this report has given the details of the business management in the context of the small business enterprise. The identification of the business objectives and plans are done at first in order to address the deficiency. The weakness of the organisation is needed to be identified in order to overcome and enhance the level of profitability and growth. The selection of the expansion strategy is needed to be analysed in order to implement the strategy for the sake of the organisation’s growth. Lastly the changes are needed to addressed and implemented for achieving the competitive advantage.
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