What is Small Business Enterprise (SBE)?
Small Business Enterprise (SBE) is an independent business which is operated by its owner or sub-owners and generally theses organizations hire very few personnel who have an affinity to operate the all function and activities of the business and attain the objective of the firm (Charantimath, 2005). This sector of the business has lower turnover but it provides huge benefits to their consumers. The current project report analyzes its external and external environment by identifying strengths and weaknesses of organization. It also focuses on comparative measures of performance. This investigation will describe importance on objectives and plans of the business in addition to observe the impact of change management. Recommendations or suggestions to thrash its weaknesses and increasing their strengths will be describing in the following paragraphs of the research. It comprises revised business plan, actions for change management and impacts of changes on businesses. The study also spotlights on the monitoring and evaluating the improvement in the performance of the business in a given time scale.
Present study mainly focuses on the Gen 2 System Ltd (GSL) and Business Enterprise Support Agency. GSL is a manufacturer of specialist test equipment used to help predict reliability in electronics. In addition Small Business Enterprises are important for community and economy because it provides various employment opportunities for the people of nation which help in society development as well as it plays an important role in economic development of the whole country (Gropu, 2013).
Profile of the business
On the basis of the financial statements of the company,This technique helps in determining various states of affairs of the organization, such as profitability, leverage, liquidity position, long term-debt paying ability to, asset utilization and efficiency conditions of the Gen 2 System Limited (Elearn, 2013).
GSL is a small business enterprise; this business firm takes advantages from its strength. As per the financial performance of the company it has efficient proficiency as compare to its existing market rivals. As per the SWOT analyses major strength of this organization is the utilization of the asset to overcome the liabilities of the firm. Its Current ratio and Quick ratio shows that company is managing its current assets and current liabilities assets very efficiently. Debt Equity ration shows its leverage capacity, it has strong ability in paying debts (Keller, 2013). It has potency in its technology solutions data base management, application management and application testing. This company also provides other comprehensive services, such as IT systems to future trends, web-enable Natural applications and maintain applications to meet changing business and technology requirement (Keller, 2013). Thus, ratio analysis of the organization shows that GSL has strong financial performance and it is enjoying lots of its strength. In other hand this firm is suffering from some weakness, such as company is facing the problem in obtaining finance for its operational development. It uses its retained earning which has high opportunity cost (Elearn, 2013). Along with this, firm is bearing various other problems for instance, lack of capital, management skills, planning and focus and poor system. As well as rapid changes in the technology have solid negative on its all operation, function and sales of the organization. It is facing strong competition from the various other large business organizations which are offering similar software and products with high technology and at lower price that Gen 2 System Limited. Thus, this small business enterprise is enjoying its strengths and improving it weakness for better performance (Buchanan and Huczynski, 2010).
Analysis of the performance through the comparative measures
Performance measurement is very essential for expansion of the business. It can define as process which comprises setting the goal, establish the performance standards, data collection for appropriate measurements, data analysis, and revaluation of the objective and implement changes. It is require for evaluating the performance of the business and employees. It is helpful for allocating the resources, motivating personnel, promote the business, and learn from mistakes and success and improving that area of the business which are not performing very well (Aaker, 2011).
As per the above dissuasion financial ratio analysis is very important tool for measuring the business performance; along with this GSL also can use some other tools, these are analysis of financial statements and balance score card. Both techniques are describing below:
Balance Score Card: This technique comprises four key performance indicators, through which company can measure the performance; these are financial, customer, internal process and innovative and learning aspects (McAuley, Duberley and Johnson, 2007).
Financial indicators of the GSL describes that company has high profitability and liquidly ratio, which shows that company’s financial position is very strong. Annual report of the Gen 2 system Limited shows that which explains that company is delivering their products on time which shows that company has reliable position in the market and it is the most significant customer perspective indicators for GSL (Company Information, 2013). Internal perspectives show that GSL has efficient working environment for employees. Entire workforce is satisfied with their job and its staff turnover ratio is very low. Innovation is the major perspective for measuring the performance in this industry (Mullins, 2010). GSL is very innovative firm which offers unique and latest technology product in the market. For this innovation company is using various employee development programs which help in improving the individual as well as organizational performance. Thus, balance score card explains that GLS has high but achievable targets and it manages its every target very efficiently by their operation and employee development programs (Charles, 2007). Thus, financial ration is the most suitable technique for the performance measuring but also with this balance score card is also very appropriate for computing the business performance.
Recommendation other areas of business that should be appraised
As per the given scenario of the business and SWOT analysis the company is facing the various problems in the different management areas for improving the overall performance of the organization. These areas are as follows:
Financial Management: As per the ratio analysis which shows that company requires various improvements in managing finance and obtaining resources from different sources. Because its liquidity capability is decreasing as compare to previous year. So company needs to focus on obtaining funds from different resources (Keller, 2013). Along with this its assets and inventory turnover is very high which reflects that company should focus on their assets management and overall financial management.
Human resources management: Financial performance shows that company does not have effective skills and knowledge for managing the entire funds for organization. So company should hire those personnel who have effective skills and knowledge for managing different functions and operations of organization (Muondo and Perkins, 2013).
Operation management: company should focus on the inventory management department because it has high inventory turnover as compare to previous year which affects the liquidity position of the organization. Therefore, company focuses on managing its stocks and operation and production system of organization (Kumar, 2008).
Recommendations to overcome business weaknesses
As per the identified weaknesses of the Gen 2 System Limited, they can take some actions to defeat these restrictions or weaknesses. Some methods are describing below (Muondo and Perkins, 2013):
Financial Methods: GSL is using its retained earnings for its business operations which has high opportunity cost. This situation of the company explains that GSL has some problems in obtaining finance. This issue can be resolve by the efficient planning of the cash and budget forecasting. By the use of Activity based costing company can cut the unnecessary operations and utilize their resources effectively (Patra, 2006). At present organization is not offering the credit sales, through the credit sales company can gain the customer loyalty and improve the corporate image in the market. Along with this the use of different investment appraisal technique helps in determining that profitable projects for the organization. Thus, all theses ways help GSL in the managing its price mechanism and increasing the customer satisfaction (Avgerou, 2008).
Non-Financial Methods: Gen System limited is facing the financial as well as non financial problems, such as lack of management skills, lack of planning and focus and poor procedure, etc. Organization can resolve these problems by the use of efficient process for hiring and recruiting of the personnel (Mullins, 2010). This process will improve the management skills of the company and employs right people for right place. Including this, some other techniques will also help resolving its weaknesses, such as hiring people for part-time or taking some suggestion from consultant for various issues. Company should develop a research and development department for improving its planning procedure. By the use of various key performance indicators company can improve their unproductive departments. Therefore, all these techniques will help Gen 2 System Limited to overcome their weaknesses (Butler, 2010).
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Maintenance and strengthening of the existing performances
Small and Medium Business can maintain and strengthen its existing performance by the various ways; some important procedures are discussed as under:
Management: By effective management SBE can improve the overall performance. For effective management organization should follow appropriate process of planning, directing and controlling of different functions and operations of the organization. Along with this appropriate management of all available resources are also helpful for improving the overall performance of Small business Enterprises (McAuley, Duberley and Johnson, 2007).
Problem solving: Effective and participative leadership style helps in resolving the problem of the organization. Employee participation provides different opinions on different problems of the business. Thus, it provides assistance in resolving distinct problems (Patra, 2006).
In managerial concern maintaining relationship with Stakeholders: Small and Medium Business can improve the performance of the organization by the maintaining the effective relationship with its stakeholders. Each organization has some stakeholders, such as customers, employees, suppliers, shareholders and government. Efficient working environment and valuable employment policies will help in maintain good relationship with the employees of the SBE (Mullins, 2010). It will enhance the productivity and performance of the organization. Through the effectual price mechanism Small and Medium Business can get a strong bond with their customer which leads the higher sales for the future. Following appropriate taxation policy and financial reporting standards will improve the connection between Small and Medium Business and government. Clear, transparent and honest relations with supplier improve its production and operation management. Thus, by the effective connection between organization and stakeholders can improve the existing performance of the association (Wood, 2006).
Strategies planning as per the review of the past performance: Through the performance measurement company can identify the gap between set targets and actual results. Small and Medium Business can review its existing performance by the use of various methods such as review of the annual records, total sales and financial statements, etc. So, according to this evaluation company can plan its strategies to boost the sales revenue. It will augment its capability as well as performance also (Wood, 2006).
Human Resource Development: Entire workforce development also increases the existing performance of the Small and Medium Business. It can be done by the efficient training, development, motivation, and communication program. Hiring trained and experienced person also augment the quality and maintain the quantity of products (Kumar, 2008).
Small business enterprises can strengthen their existing performances by various ways which are as follows:
- Appropriate recording of each and every in going tasks and functions.
- Regular monitoring of each activity of organization.
- Develop flexibility in operations for make adjustments.
- Focus on research and development.
- Identification of different ways for maintaining effective market share position in the Small business market (Kumar, 2008).
- Maintain customer relationship.
- Effective relationship with stakeholders of the organization.
Recommendations and justification about business expansions in new areas
Small business enterprises can use their strength for expand its business; it has various expansion opportunities. It can expand its operation in the Niche and international markets. There are various options, such as expansion in its existing product line or new product line. They can export their products in the international markets. Small business enterprises can enlarge its technologies and comprehensive services; offer the new consultancy and supports for the entire market, expand its training courses, etc. Thus, by the use of effective marketing planning company can promote a position its product into the international market. Advertisement on social networking site and use of latest technology for their marketing activities will increase its awareness in customer’s mind. For the exporting company should use merger and acquisition strategies in foreign countries. Firm can adopt altered processes of the market enlargement for the same (Peltier and Naidu, 2012).
Various aspects of a business plan
Key elements of business plan:
Business plan is the blue print for attaining objectives. Major Key elements of the business plan are mission statement, back ground, product description, SWOT analysis, marketing and financial plans, development plan, operation plan, growth plan, competitive advantages, team management, operations and financial planning and appropriate time scale for the company (Muondo and Perkins, 2013).
Assessment of existing business objective and plans
Objective can define as that desired position which organization wants to achieve in coming future (Company Informatio, 2013). Deciding objective is very crucial decision for every organization, whole success and performance is based on those objectives. Thus, each SBE must have a SMART objective; Specific, Measureable, Achievable, Realistic and Timely. A SMART business objective provides a proper direction to the all operation and planning function of Small business enterprises to improve its market presence. Entire strategic planning of the Small business enterprises to improve is depending on the objectives of the firm. Effective objective helps in determining the different strategic goals and planning, operation planning, tactical planning, etc. Thus, by the use of objective based planning business can earn sufficient profit for future development (Sian and Roberts, 2009). As per the critical assessment on objectives and plans major business objectives of the Small business enterprises are as follows:
- To designing and developing training packages for small and medium enterprises organizations.
- Business growth and sustainability development.
- Expand their business in few near location within ten years.
Revise business plan to incorporate appropriate changes
Small business enterprises can improve its business plans by its SMART criteria of the business goals and objectives. This standard helps this SBE in attaining its objective on specific time.
An additional object is to offer substantially improving the ability to use and maintain the products into the future (Wood, 2006). Small business enterprises should do high research for attaining the objectives of business growth and development program. Along with this objective of the organization comprises high market share and growth. Thus, for attaining all these objective company can develop unmistakable timescale, accessibility of monetary resources and effectual management skills and knowledge.
As per the above discussion completion of all business objectives require some appropriate changes in strategic planning. A business plan is an official statement of setting up the objective and way to attain theses goal. It may be long term and short term. Business plan of SBE comprises mission and vision of the company, background, product description, marketing plan, competitor analysis, SWOT analysis, operation and production plans, financial plan and timeline (Charantimath, 2005).
For implementing every changes in the business plan requires effective strategic planning. It starts from the setting a mission which can be decided by the past records of the small business enterprises. Review of the existing product and planning for the new product is very essential section for the developing business plan and attaining all objectives. Use of the latest technologies and innovative ideas are the best strategy for new product and service development (Charantimath, 2005). Effective marketing plan is an important part of the business plan which comprises strong promotional and positioning strategies. SWOT analysis assists in determining strength, weaknesses, opportunities and threats of the company in its internal and external environment. Monitoring, controlling and time scale are some major section of the business plan, theses are essential for the execution stage of the business plan.
Impact of the proposed changes on the business and its personnel
The entire progress and incorporation of the all changes in the business plan comprises operational and personnel management, so theses project will affects the business as well as employees also. Proposed action plan may have negative and positive impact on the business performance of the organization (Mullins, 2010). In other hand by incorporating such type of changes in the action plan Small business enterprises can attain the competitive advantages against its rivals.
All these changes will help in improving the overall performance of the company and improve the productivity of the operation and production system of the organization. This business plan resolves the all weaknesses of the Small business enterprises and uses its strength very effectively. It will help in expand Small business enterprises business in the internal market and cover all opportunities. SMEs can create a loyal brad image by the new promotional policy and marketing activities. Thus, all these changes will help the Small business enterprises in attaining its all objectives on time (Bass and Riggio, 2008).
Change Management in the business
Above described business plan implemented various changes in the different planning section of the Small business enterprises, company requires effective change management process. Managing the changes is not specific process for a special department of the organization; it is designed for the entire organization and its employees. Change management can define as specific process which includes three major steps, theses are unfreezing, changing and refreezing (Green, 2007).
Unfreezing: This step of the change management model determines the resistance level of the workforce regarding the proposed changes. Management of the Small business enterprises should use appropriate motivation, communication and monetary and non-monetary performance appraisal techniques for the workforce for resolve this resistance problem (Green, 2007).
Changing: After unfreezing the all changes Small business enterprises requires implementing business plan with proposed changes. For effective change management Small business enterprises should focus upon the team work, effective leadership style, valuable recruitment and selection process, appropriate motivation and communication between employees and management (Mullins, 2010).
Refreezing: In this step, management should assure about the all changes are implemented in the business planning of the Small business enterprises. Along with this, all employees have knowledge about the all conversions which are happening in the business organization.
This procedure of change will help in the development of Small business enterprises and generate its brand image along with high profit (Green, 2007).
Monitoring improvements in the performance of the business over a given timescale
Monitoring and controlling are main parts of the execution process of implementation of business plan and change management process. It minimizes the risk and time and enhances the performance of the organization (Wood, 2006).
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For effective monitoring, Small business enterprises needs to observes all the augmentations over a given time scale contained by the association. Monitoring process comprises the performance measurements and takes action against the required changes. Performance can be measured by the balance score card and Gantt chart of the all activities of the organization. It shows all activities and their time. Through this chart company will show the all stages of the revolutionize management process to achieve its goals and objectives in a competent manner (Kumar, 2008.).
The present report concludes that GSL has strong financial position in the electronics subject field. It has various strengths such as its profitability, liquidity and long term debt paying ability, etc. In other hand it is suffering from the problem of obtaining finance form the external sources. Small business enterprises Limited can measure its performance by the SWOT analysis and Balance score card techniques which shows that performance of this SBE is very high. Along with this project also finds out that company has SMART objective and business plan which is flexible to adopt the all changes for the expansion of the business and improvement of the performance.
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