Introduction

A small enterprise is that which has a limited capital and do a small range of business activities. The problem faced by most small enterprise is lack of capital. There have some other limitations as professional skill limitation, lack of employees, lack of adequate human resource, lack of proper management and so on. They are unable to expand their business most time for this limitations. In this assignment it was discussed about the limitations of a small business called Capcom and the way by how they can develop the business. Capcom is a metal detector importer and do their business at a small range. The company is a flat structured company and most of the operations are done by the CEO of the business as a unified whole. So there have several problems. In this study, it was discussed about how the Capcom can overcomes these problems and side by side how can they are able to expand their current business into a larger one.

1.1 A profile of selected small business identifying its strength and weakness

Company profile

Capcom generally deals with importing technical supplies like metal detectors and related equipments into UK and supplies these to various retail outlets. Capcom is a small and private business enterprise which was founded in 2015. This small enterprise started its business with £30,000 capital, 2offices and inventory buildings, and 200 employees. The company is a flat structure business. So its operations of marketing, finance, human resource and other department are handled by its CEO. By being small in size it has no business enterprise experts and for this CEO handles all operational activities as well as decision making in the business.

Product profile

Capcom is an importer of metal detector in UK. Metal detector is being a crying need product in this era because of increasing crime and terrorism. They are used more by government and anti crime organization to prevent terrorism. There are some other brands called Garret, Fisher and Bounty Hunter are popular brands of metal detector. These products come in UK with a high shipping cost. But Capcom therefore have an opportunity here by being an importer. Within 6months of starting business Capcom found the business very profitable. Capcom use cost based pricing strategy.

SWOT analysis of Capcom

Strength 1. Capcom has its unused business resources. 2. The business has positive sales performance.	Weakness 1. Overall activities handled by CEO. 2. Unplanned structure. 3. Shortage of employee and overloaded work. 4. Unified system, no separate department. 5. Inadequate human resource
Opportunity 1. High demand of product 2. Favorable business environment 3. Possibility to expand 4. Untouched market segment	Threat 1. Brexit will affect import bused business. 2. Qualified products by other brands.

1.2 Carrying out analysis of business using comparative measures of performance

To measure performance and compare it with other business it is necessary to collect data about sales, production, HR, technology and marketing of the companies.

Profit and loss account of Capcom importers and Teknetics metal detectors

Year: January 2015 to January 2016

		Capcom 2015 (£)	Teknetics 2015 (£)
Sales		130,000	200000
Cost of sales		30000	50000
	Gross profit	40000	80000

Overheads		10000	15000
	Net profit	50000	60000

Balance sheet of Capcom importer and Teknetics metal detector

		Capcom 2015 (£)	Teknetics 2015 (£)
Fixed assets		100000	20000
Current assets		20000	55000
Current liabilities		(6000)	(25000)
Working capital		19000	30000
	Net assets	30000	60000
Financed by capital		51000	65000
Less drawings		(22000)	(22000)
Closing capitals		30000	50000

a. Current ratio= current assets/current liabilities

Capcom= 20000/6000=3.6

Teknetics= 55000/25000=2.2

b. Working capital turnover= sales revenue/net working capital

Capcom= 8

Teknetics=7

c. ROCE= profit before investment/capital employed *100

Capcom= 58%

Teknetics= 55%

d. Operating profit margin= operating profit/sales*100

Capcom= 17%

Teknetics= 25%

From this financial statement analysis and ratio analysis it is seems to be Capcom is doing better than Teknetics. Capcom has a higher ratio of liability to assets, have good working capital turn over, and have a good operating profit margin. They are improving smoothly. They the company can expand their business to get higher profit (Vos, 2011).

2.1 Appropriate actions to overcome the identified weakness in the business

The weakness of Capcom was discussed on the SWOT assessment table. Their major problems are shortage of employee and inadequate human resource, unplanned business structure, most of the activities done by CEO, have no separate department and so on.

1^st of all, they have lack of employees and they can overcome this problem by outsourcing of employees or hiring them from different sources. Their all operational activities done by CEO and they have no separate department to done this. For each activity like marketing, finance, HR and others Capcom should establish separate department.

Capcom should re-establish the organizational structure from flat organizational structure to functional structure. This structure will create a hierarchy based on employee’s job roles and responsibilities. Business planning should be collaborated and SMART (specific, measureable, achievable, realistic, and timely). For instance, Capcom’s marketing and finance department can plan a combine product planning to achieve own divisional objective. SMART objective is required to done a business planning effectively. It can be make a plan to sell another 500 metal detector in the next month (Schultz, 2004).

2.2 Ways in which existing performance could be maintain and strengthened

In order to strength a company needs to be more organized and strategic in handing their business operations. In the earlier section business performance was measured by the observation of financial reports.

At first company should re-evaluate their business model which brought their current business success. They should also conduct a customer satisfaction survey to find out how much their customers are satisfied. Capcom’s metal detectors have a good demand in the market and they should take initiative to retain this demand to be success in the long run. To be successful they should implement their plan related with customer satisfaction and fulfillment of demand of them (Roberts, 2011).

Capcom should divide their activities under separate department. It can help them in divisional operation and plan to one direction. The objective of all separate department will enhance the performance separately but it will bring a greater benefit to the company. An organization can improve their performance through hiring of more employees and by providing proper human resource. Company can do this by recruiting part time employees, hiring employees from outside of the company or recruit full time employee. After recruiting Capcom should provide them proper training in order get expected return and performance from them (Perera, 2010).

2.3 New areas in which the business could be expanded

Capcom started their business by importing metal detectors to the UK. This is a profit making business for them but they can expand their business to get more profit. Now they are the importer of metal detectors, they can also import related products such as adventure bags, camps, hiking tools, hill climbing apparels and parts of deferent electric product side by side their previous business. They can sell their product in terms of both wholesaling and retailing. Diversification is a great tool to expand a business. A company can diversify from agro based sector to industry based sector to make more profit. Capcom can also diversify their business from importer to another form in order to adapt with the changes caused by Brexit. Capcom can develop new market with their existing product. This called development strategy and by development strategy Capcom will be able to expand their market. They are now the importer of UK. They can expand their market by being importer of other European Union countries (Philip Kotler, 2009).

3.1 An assessment of existing business objectives and plans

Business primary objective for Capcom is to be a popular brand for supplying metal detectors. The plan and objective of existing business are including:

· Establishing market goals and objectives: A company’s market goals and objectives can be their plan for increase sales performance, increase productivity and increase business growth.

· Increase sales performance: Sales increase profit. More selling generates more profit. So every organization has an objective to increase their selling amount. Sells also indicates quality of the product.

· Increase business growth: Growth is the major factor of all the objectives desired by the company. Growth indicates how well a company running their business activities.

· Increase productivity: If the sales are increase the company will need to increase their productivity in order to face higher demand. Productivity can be increase by changing flat structure organization to functional structure (P.R Smith & Jnathan Taylor, 2005).

· To expand business: a company’s is to expand their business from current form to a larger one. To expand their business Capcom can diversify their business or import related product.

Capcom can follow KPI (key performance indicators) to make plan their business according their objective orientation.

3.2 Revising business plans to incorporate appropriate changes

Business plan refers to setting future plan for a business including business expansion and market development strategy. Capcom can set up their business plan by changing their organizational structure from flat structure to functional structure. The plan should be appropriate with current business condition and capacity to implementation should be consider when making the plan. Business plan can be presented numerically considering budget, forecast and past performance (Hunt, 2011).

Business forecasts:

Determining the future of the business or product based on current condition and information. Capcom can forecast their business condition for 2017 on the basis of financial condition of 2015 and 2014. In 2014 their growth rate was 5% and it’s increased in 10% in 2015. Now they can forecast for 2017 is their business will grow 15%.

Budget considerations:

Capcom can set up their budget to expand their business. Their current net asset worth £60000 and their closing capital is £50000. Capcom has a liquidity ratio of 2.2. The company can expand their current business by their asset. It requires £30000 to £40000 to set up a store in London. They will need some additional fund and they can manage it from financial institution.

It can be concluded by saying that plan for a business is depends on its current business conditions and past financial performance.

3.3 An action plan to implement the changes

To implement the changes, Capcom requires answering following questions.

1 . What kind of action to be done for implementing changes?

2 . For whom the plan needs to be communicate and by whom?

3 . What kinds of training will provide?

4 . What organizational system needs to implement the plan?

5 . What kind of risk should be taken while implementing the plan?

Consideration: making a plan and implement it is not same. Its more difficult to implement a plan than make plan for it. While implementing the plan Capcom should avoid common mistakes. They should prepare the workforce related to the current business condition, asking top manager about the risk of the plan and recruit new employees to implement the plan successfully.

Manage, monitor and evaluate the changes

At first it needs to establish a chain of reporting and norm accountability to implement the change. For instance marketing team will accountable for fund spending and the financial team will accountable for fund budgeting. The second one is measures of performance through the analysis of sales report and growth. Another one is setting milestone and deadline of the plan so that the process can run smoothly and close it at a desired time (Blackwell, 2001).

4.1 Impact of the proposed changes on the business and its personnel

The impact of proposed changes will fall to the companies several aspects such as finance, morale, personnel workload and physical aspects.

Impact on finance can be occurring because of re-structure of the system. Capcom was flat structure company now they turn into a functional structure and for this they will require to spend less than significant amount which will make the company conventional finance proposed change. As the company is not now work as a unified whole the work will also divided for the each personnel. The employee who is expert in marketing related work can do now marketing related work rather than doing all work. It makes them work comfortably. In a unified work place employees loss their moral to done the job perfectly because there have a limited scope of chance to comply them about their mistake. So they do the task taking no responsibility. Another impact of change is physical changing of the organization which was done by the change of structure and this change makes the internal organizational system change as well as physical outlook of the company. This change is made happened for divisional change and other workflow framework (Belbin, 2000).

4.2 How the changes will be managed in the business

Changes will be managed in the business by ensuring productivity, communicating with the various aspects of the business, and dealing with resistance. These changes are described:

Productivity of the organization can be ensuring by several ways. Among them the best one is increase responsibility and accountability among the personnel of their task is the best one. Productivity can also be ensuring by making quality product and selling them to the customer and by this getting higher profit. Profit will make the organization run smoothly and increase productivity. Changes are happen in the executive level. It needs to reach to the bottom level of the organization in order to make the change more meaningful. Top level implement the change and if bottom have no idea about the change then this change will not happen actually. It will remain just a plan. No benefit will happen through this change. In the changing procedure resistance will occur if personnel have enough training and information about that resistance they will able to overcome this. Capcom was a flat structured business enterprise and change as a functional structured one. This change may create some confusion to the employee. To overcome this obstacle Capcom should provide relevant information to their bottom level and middle level employee and should establish a proper communication system with their employee (Becker, 2003).

4.3 Monitor improvements in the performance of the business over a given time scale

Performance monitoring is checking the activities of the business rapidly after a certain period of time and compares the process with the forecasted performance. It is very crucial to any company to find out accurate performance of their process. If the actual performance is running below the forecasted performance then company takes several actions to improve their performance. If it is continuously declining the performance then the company set up a new plan (Bass, 2001).

Performance of a business can be accurately happen when the business takes some initiatives like:

Regular measure: the business should regularly measure their actual standard and forecasted standard in order to get better performance. If any lacking happens business can solve this within a short time.

Regular meetings: business should regularly meet with their employees in order make them update about the project and learn from them about the problems they are facing while doing the task. After finding out the problem business can make solution for these problems.

Performance measurement in a table:

Identify and screen	Refine performance measure	Data collection	Institutionalize performance measure	Data management
Clear identification and description of the project	Refine through stakeholders review	Collecting data through personnel interview or use existing data	Deployment Assess value and effectiveness	Data quality Comparability Data cost

Conclusion

From above discussion it was discussed the development of a small enterprise. There have a great importance of small business in the national economy. In the above discussion it was discussed about the small enterprise activities, how they work, how can they make a business plan, how they expand their business and how they set up their objective? To develop a small enterprise the owner needs to change its structure. In the discussion we used Capcom metal detector importer as a base company of small enterprise and shown their business strategy, way of development and SWOT. The study will explain the way to develop of a small enterprise.