Small Business Enterprise: Entrepreneurship And Small Business

This study is focused on Caffee Finix Coffee shop near Stratford, which is close to school and mall. In addition, the study also describes goals, arrangements, and system used by Caffee Finix to improve its operations and increase customer base. Moreover, it also describes the marketing strategies followed by Caffee Finix in the changing UK business environment.

Small Medium Enterprises (SMEs) are one of huge majorities of industry conducted in different countries. SMEs mainly consist of small working group, which help in maintaining productivity level of the business. These businesses are conducted on innovative imaginations of small entrepreneurs who thrive to become multinationals. Countries major economy is supported by numerous small SMEs, which helps in increasing GDP of the country. These SMEs also face limitations due to lack of funds, lack of experienced employees and limited technological use. Moreover, Olson and Staley (2012, p.80) argued that few laws and legislations protect SMEs from being negatively influenced by competition and economic crises. Moreover, the SMEs could further be described as enterprises that have low yearly turnover, assets, and employees. In addition, the yearly income of these SMEs does not surpass £43 million in turnover yearly. Furthermore, Rothwell and Dodgson (1991, p.126) cited that analysing the UK government synopsis, SMEs contribute 99.9 percent and utilizes 14.4 million workforces in UK.

One of the largest SMEs in UK is the coffee shops, which almost covers 20,000 stores in UK itself. In addition, these Coffee Shop SMEs generate over £15 billion in revenue yearly. Some of the largest coffee shops in UK are sacred bistro, Nude Espresso, Workshop coffee, Taylor Street Baristas, Flat white, Kaffeine, and Monmouth. From increased number of shop in UK it can be derived that demand and utilisation of coffee is high brining opportunity of SMEs to increase their operations and profitability (Olson and Staley, 2012,p.83). The different type’s products demanded by consumers are filtered water, squash and, frosty mix drinks, coffee drink, soda pop, tea, seared goods, miscellaneous bread items and sandwiches.

Target consumers of Coffee Shop SMEs mainly between 25 to 45 years old, are focusing more on school and college students. These students majorly invest time in coffee shops with their friends conducting social interactions, studies and dating. It could be more beneficial for Coffee Shop SMEs to decrease the selling price to attract more students in their shops and increases customer base. Moreover, Jones and Rowley (2011, p.26) opined that opening coffee shops near airplane terminal, schools, industry, colleges, shopping centres and movie could help in boosting sales and attracting more customers in the shop.

Table 1: Showing the Company details

Caffee Fenix was opened in 2009 at Stratford, comprising of only £25,000 in the capital. The Owner is Mr. Khan strategically opened the shop within the radius of the Stratford College and Westfield strip mall, which could bring in more customers for the business. The Coffee Shop has 1500 square foot of space with a workforce of 7 employees having low wage rate and increased profitability for the owner. In addition, the shop serves coffee, tea, and breakfast to consumers who come to reduce their anxiety and interact with their companions. Moreover, the coffee shops also serve as a dating destination for students increasing its customer base and sales.

Strength and Weakness:

Strength:

Strength in business provides an edge for the company than its peers and helps in increasing its revenue. Caffee Fenix main strength lies in its high-quality coffee, tea, and breakfast that are served to the customers. Burns (2010, p.77) argued that strengths in business could be reduced by extensive competition and hamper profitability of the company. Whereas, other coffee shops are relatively expensive than Caffee Fenix products, which helps in attracting more customers to the business. In addition, the strategic location of Caffee Fenix is helping the shop to target more customers from nearby mall and college. The coffee shop has fabricated a great picture among its target customers to increases its revenues and customer base. Forsyth (2010, p.103) opined that giving offer and deals in services could boost revenue generations of companies.   

Weakness:

The major weakness faced by Caffee Fenix is the insufficient assets of the firm to increase its productivity and profitability. Burrows (2015, p.14) argued that weakness in business help companies innovate new ideas and overcome its weaknesses. Moreover, the rent given by Mr. Khan for the coffee shop is high due to tough competition from competitors. The brand name of eh coffee shop in not as popular as it peers and could harm revenue generations of the company. Bridge and Neill (2012, p.47) opined that weakness in business could negatively harm its revenue generations capacity and bring loss to the business. 

Refer to appendix 1

After analysing Coffee Bistro financials, it can be evaluated that the present liabilities of the company could be paid with its resources, which are 3 times its liabilities. In addition, it can be evaluated that working capital is effectively maintained to improve its operations and increase profitability. Whereas, the current market of coffee industry is at 2, however, coffee Fenix current asset is at 1. This indicates low wastage of capital and increased profitability.

Moreover, ROCE of Caffee Felix declined in 2013 at 55%, which was previously at 58% in 2012.  Whereas, gross profit margin, operating profit and working capital decreased in 2013 comparing it with 2012 financial report. This indicates that company operations were not adequate as per 2012 data.  The reduced working capital indicates expansion of business to improve operations and profitability. Pedler (2011, p.69) argued that reduced working capital could also indicate increased inventory and reduced sales. 

Coffee shop in Stanford has high access to customers, which prefer quality products at low prices. In addition, the rents of coffee shops in crowded areas are also high, which could be minimised by increased sales. Moreover, the coffee shops are visited by high-earning customers, which boost the sales and generate more revenue for the company. Beresford and Stajano (2003, p.47) opined that coffee shops are mainly located in zones having constant stops and help in attracting more customers in the shop. However, Malhotra and Temponi (2010, p.29) argued that during busy hours business individual’s are not attracted to shops and could hamper sales of the outlet. 

The brand method is important for brand name mindfulness. Community outline should be squeezed by Coffee shop. Online arrangements and observe can enlarge the brand awareness with grades of Coffee shop. As coffee shop has an elevated store turnover rate, then product reliability must to be affected for its objective market. Flexibility in the stock can be reduced during the exploitation of FIFO Method accessible to be obtained similarly shop require to accept booming refilling and reorganization methodology for provide the ideal measure of textile at an appropriate time. Online schemes or promotion approaches can be developed for brand name mindfulness.

Caffee Fenix could minimise its spending and improve its operations, which could boost sales of the company and, in turn, increases its reserves. In addition, the company could minimise its obligations to reduce the risk associated with the business. Caffee Fenix could evaluate its business operations and accordingly improve its profitability. Carraher and Paridon (2015, p.90) opined that financial obligations help in maintain the working capital required to conduct business operations. However, Gronumet al. (2012, p.258) argued that increased financial obligations could hamper and reduce the productivity of the company.

Moreover, the inventory stocks expense could also hamper profitability and working capital of the company. In addition, many coffee shops provide deals to attract more customers and in turn raise their revenue. The deals provided by the company have expanded to 24% from 22% on yearly basis. Hallet al. (2010, p.440) argued that increased deal offering could hamper profitability and decrease working capital of the company. Bank overdraft is also essential for coffee SMEs, which helps in maintaining the working capital required to conduct operations. Moreover, the SMEs could stop using bank overdraft and minimise the cash out flow from industry.

The current strategic location and services provided by Caffee Fenix are essential to increase the number of visits by potential consumers and, in turn, raise customer base of the company. The consumers targeted by Caffee Fenix usually long for good tasty coffee and calm environment where their anxiety level could cool down. These consumers mainly prefer affordable luxury items in their purchases. Wilson and Gilligan (2005, p.11) opined that innovating new idea to increase sales could help in raising market share of the company. However, Pedler (2011, p.55) argued that due to unique services provided by competitors market share of a company could be hampered. The decorations conducted by Caffee Fenix to their shop are glass decoration, art glasswork, and outdoor dining, which provides superiority ambiance for the end consumers.

In addition, to the strategic location and services Caffee Fenix could improve on its marketing skills to promote brand name of the shop. The Web promoting is one of eh essential part of conducting business in the new era. Moreover, more and more clients could be targeted with the help of web advertising. In addition, promotional offers could be promoted from the web to attract more customers and increase sales of the company. Bridge and Neill (2012, p.7) argued that small business need not spend money on increased expenditure on web advisement due to fewer target consumers. However, Burns (2010, p.9) opined that social media helps SMEs target specific locations, which could help in increasing number of consumers for the outlet.        

Scarborough et al. (1991, p.44) opined that advertisement is the backbone of increased sales for a business. Furthermore, marketing strategy also helps companies to maximise its presence among consumers and, in turn, increase sales. An effective marketing strategy could also be developed from analysing previous years earning of the business. Moreover, analysing past records help companies to identify its operational needs and future growth prospects. Caffee Fenix could also increase quality in its products, which could help in increasing the brand image among consumers. In addition, the company could also improve in cash connected location, the elevated calibre of products, flourishing workforce, concrete customer support, high recompense, practical costs, brand distinguish brand worth and open association society. Moreover, the company could also focus on the varied container of great weather, offices easily reached, concrete showcasing actions, solid online locality and progress to attract additional consumers. However, Burrows (2015, p.4) argued that improved marketing could decrease working capital of companies and hamper its operations.

From effective marketing and quality products, the retail coffee maker could effectively improve its sales.

Caffee Fix Coffee shop could further be extended into Cinema, London City Airport, and Campuses to attract more customers from these locations. Moreover, the company could also expand its outlets near high-income group to increase revenue from sales. The main reasons behind for locating outlets near these areas are an availability of potential customers, which could help in generating more income for the company. Wilson and Gilligan (2005, p.9) opined that high accessibility to potential consumers could reduce the advertisement cost of the company and help in generating more revenue. However, Malhotra and Temponi (2010, p.30) argued that high accessibility to potential consumers could increase rent cost of the outlet, which could hamper profitability of the company.

New Products:

Caffee Fix Coffee shop could introduce new product line to improve its customer base and profitability. Moreover, the new addition to product line could help the company in attracting new consumers and increase the customer base of the company. Carraher and Paridon (2015, p.91) argued that introduction of new product line could increase expenditure and hamper profitability of the company.

Franchising:

SMEs could also adopt franchise of famous brand to attract more consumers and increase its revenue. The SMEs provide initial investment to the parent company, which provides merchandise and administrations for effectively conducting operations. Olson and Staley (2012, p.82) argued that adopting franchises could hamper capital of the company and, in turn, distribute income earned.  

Acquisition:

The SMEs could also improve its operations through the acquisition of other outlets and increasing its operations. Moreover, acquiring outlets could help in gathering more customer base and income for the company. Gronumet al. (2012, p.259) argued that acquisition reduces cash availability for the company and could hamper its operations.   

Strategic Alliance:

SMEs conduct strategic alliance among different business to improve is operation and target consumers based on quality products. This alliance helps in reducing negative impact on capital and increase assets of the company.    

Joint Venture:

SMEs could also conduct joint venture to increase the operations among different peers and, in turn, raise profitability of the company. Jones and Rowley (2011, p.28) opined that joint venture among SMEs helps in mixing the capital and increasing operations of the joint venture company. 

The trade goals of Caffee Fix coffee shop are:

To revolve into one of the greatest coffee shops in UK and improve operations of the company

To enlarge the output of the industry all the way through maintaining profit of 65%

To provide the premium coffee with greater excellence to its aimed consumers

To increase growth and ability in the business actions

Coffee shop has accomplished to its primary target as reliable consumers

Caffee Fenix could 500 customers every day. To be called on of the premium coffee house in the Stratford region.

Existing Plans of Coffee shop for accomplishing Objectives:

To complete its objectives and goals, Caffee Fenix house has finished the definite activities:

aggressive expenses with class stuffs were known to the aim customers

Effectiveness was prolonged in the actions to increase profit and point income tempo.

Using effective technology to reduce the cost of products sold in the outlets

Confuting effective measures could help companies increase productivity and profitability. Kotler and Armstrong (2010, p.72) opined that expanding item reliability could help in improving sales and customer base of the company.

Caffee Fix coffee shop could use effective measures to attract new customers and retaining the old customers. This retention and new addition method could help in generating more revenue for the company. One of the most vital conditions for any business is to get loyal customers, which increase sales of the company. Hallet al. (2010, p.442) argued that increased new methods increase risk for business and could hamper profitability of the company.

Furthermore, Caffee Fenix could position itself more effectively to attract more consumers to the cool and charismatic environment. In addition, the quiet and cool environment is helping the company to attract more consumers in the outlet. Hiam (2009, p.30) opined that comfortable couches, attractive music, and unwinding environment boost the consumers visits in the outlet and improve sales.    

Caffee Fenix could utilize the effective system to record the information of it, consumers. In addition, the company could also gather income information of their clients to increase the prices according to the demographic of their consumers. The company could use flags, fliers and cross advancements to attract more consumers in the outlet. Weston (2010, p.63) opined that increased advertisement could help in building the brand name and customer base for the company. Caffee Fenix could conduct the following activities to improve feasibility and growth of the company.

Market Analysis:

Caffee Fenix could analyse the neighbourhood and other competitors in the area for designing an effective marketing plan.  Moreover, the company could also analyse the number of visitors in the area and try to attract these visitors in the outlet to improve its revenues.

Market Segmentation:

Caffee Fenix could effectively segment the target group from mall and college students. The company could appropriately design its products to suit the segment wise consumers and in turn, help in satisfying consumers. Burns (2010, p.99) argued that Market segmentation could minimise the services provided by companies and could negatively affect its profitability. The company could perfectly segment its consumers among workers of the colleges, voyagers, teens, school, and workers of a few workplaces.  

Focusing on system:

Caffee Fenix major strength is the strategic location that provides access to students and mall visitors. In addition, the company could provide offers for students to increase the number of visits from students. Proctor (2005, p.399) opined that Small indulgences, and outlandish are innovative patterns for the great offers of a coffee shop. The company main target is students that come to the outlet and spend most of their time dating, studying, and interacting with other people. In addition, Caffee Fenix could improve its quality products to attract more students from the college and in turn raise its customer base. Furthermore, the company could utilise the advanced patterns to improve its operations and implement on expansion plans. Carraher and Paridon (2015, p.97) argued that expansion decreases cash reserves of the company and could negatively affect its operations.

The influence of external environment changes the principle state of the business. The local and worldwide elements like social, mechanical, lawful, financial, political components impacts on Café Phoenix coffee shop. These instruments are utilized to divide the progression which is happening in remote business. This leads to the change in general business.

Social Factors

The structural change in the society leads to many social phenomenon.  For example, the process of living a life by the customer includes taste, conduct as well as inclination. The selling of a product depends on the age and sex of the customer. The social and its contrasts are the fundamental factors to start a business procedure. The essential data regarding an effective business administration includes the process of living a life, changing taste of the customer, religion of the customer as well as customer’s inclination towards the product. In places like United Kingdom, drinking coffee is very common in societies like college, schools and offices. These sectors comprises of busy employees who work 8 to 9 hours a day and they need refreshment.

Political and Legal Factors

The political and legal factor deals with the economical control and also the control of genuine framework by the organization. The political develops as democratic governments.  It include future and present performance, administrative bodies, government standards and approaches, competition with various nations, exchange of strategies and unique gathering of mass. Politically, United Kingdom is a stable nation which consists of secured authentic background. Therefore, the small medium enterprises such as Café Phoenix do not allow any preparations.

Financial Factors

The most vital powers of any business operations are the financial variables. The operations in business are normally concerned with the earning and spending power of the customer. The financial variables of the United Kingdom includes financial structures and situations, tariff issues, money issues, swapping scale and premium, exchange cycles in business, circulation structure etc. The purchasing powers of the nation’s customers are very high because UK is one of the exceptionally created nations among all. For their everyday comfort, they spend much to meet their satisfaction regarding the product quality.

Mechanical Factors

The mechanical factors relating to any business includes the change in phenomenon regarding the hold of innovative factors by the nation. The innovative factors consist of financial investigation, substitution of old advancement, development of revolutions, challenging innovative improvement, access to innovations, innovative representation as well as international specialized technique. The change in innovative factors impacts on shop and products of tea or coffee. Therefore, Café Phoenix needs to renovate their development power to compete against their rivals.

Environmental Factors

The factor of nature includes the ecological perspectives that change the overall business. The ecological power consists of the climate change. During the United Kingdom’s cool climate, people use coffee as their beverages and in this way number of refreshment companies survives in the international market.

Café Phoenix require to receive certain outer and inner environmental in the coffee shop for dealing with the change in business. There are many signs in the progression of business, they are, advancement, development, outsourcing, globalization and expansion. The ventures which are required for dealing with the business are:

Source- www.imaworldwide.com

Representatives

The progression of any certain or negative changes are disliked by the normal workers. The representatives have fear of losing control and force. So it is very significant to investigate the environment of the employees before bring any change in Café Phoenix.

Business

The change can be naturally managed in the business with the help of the correct clarification of outer and inner environment which includes:

Rivals – Every last action of candidates should carefully view the time of their duty.

Customer behaviour–The customer behaviour includes inclination, taste, requirements as well as interest regarding the consumption of coffee.

Industry perspective –The industry standpoint consists of international, national plus nearby perspective of Coffee industry which should be viewed.

Demographic and geographic movement –It involves the change of population which is the important part of coffee industry.

Social environment –It involves the change in lifestyle of the people regarding the coffee consumption.

Technical development–The technical improvement in any business deals with the advancement of innovative future.

The report consists of the background and factors of Café Phoenix. It also includes the industrial current goals and objectives, its preparations as well as procedures. Moreover, it consists of the arrangement to create new business environment. The customers of Stratford with high-class requirement with high salary from their offices spend a lot of money on quality products. In Stratford, the most important beverage is coffee. Therefore, the medium and small business enterprises which manufacture coffee have wide advantage in their business.

Recommendation

The coffee shop should be established in such an area where there are enormous coffee lovers. In this way the coffee industry can make profit on their annual basis. The influence of the customers on the coffee industry has four key factors, they are as follows:

Quality products

Low price

Flexibility in administration

Product transportation 

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