Small Business Ent. 1. Investigate Performance of a Selected Small Business Enterprise.

Topics: Economics, Inflation, European Union Pages: 5 (1597 words) Published: October 21, 2011
1. Investigate performance of a selected small business enterprise. 1.1
J&S furniture is a furniture manufacturing company owned by two brothers John and Smith. J&S started operations in 2006 and there is a satisfactory growth in this business since then. However there are fall in turnover in some months as well. J&S import wood from Asian countries and manufacture furniture. Company had been able to get massive discounts from its suppliers because of bulk buying so this had helped them to keep their cost under control. However government policies such as taxes on imports, interest rates and exchange rates have had negative impact on this business. Taxes on imports

Since UK government is taxing heavily on imports from non EU countries this had affected J&S a lot therefore now J&S is looking whether they can find out a cheaper supplier from UK or EU. Interest rates

Recent increase in interest rates affected J&S's profit margins. So J&S is thinking of increasing the price but if they increase the price the demand may fall. Exchange rate
J&S is purchasing raw materials overseas and recent depreciation in pound had a negative impact on its cost of production. J&S currently have eight branches in London and their short term goal is to become a leading furniture manufacturer in UK by the end of 2009 and become a leading furniture manufacturer in EU by the year 2012.

J&S had been performing well from the start even though there is a fall in profits in some months. It is company's view that this is due to well trained staff and good customer service given and also company is enjoying purchasing economies of scale due to bulk buying. Competitor bench marking helped J&S to identify its minuses as well as competitor's therefore company took all possible measures to correct minuses. This is one reason why company sales rose up suddenly in last two months. J&S carried out a training program about two months ago and there seem to be a massive increase in production efficiency and workers are motivated.

*Being a leader in the furniture industry
*Wider market share
*Good customer service
*Good offers at low prices
*Attractive offers compared to competitors
*Difficulties in finding out a reliable supplier from EU or UK *Limited budget
*Place of outlet
*Lack of strength to borrow as business is still small
*Damaged reputation

2. Propose changes to improve management and business performance. 2.1
The main weakness of the company is difficulty in finding out a cheaper and reliable supplier from an EU country. Even though J&S tried they couldn’t. Therefore they should at least try to increase the discount in order to cover up their taxes. Company can examine the design of the product and make improvements. Since furniture is a product where the customers look at attractiveness management can develop alternative designs which are more attractive to the customer. Customers will have a wider choice and company can spread the risk. This is good for reputation as well. Company should try to identify what features in the design should be removed. If these unwanted features are removed then the cost of production will fall resulting in higher profits. When company is making more profits it has strength to borrow money to fund its operations. J&S should try to invest in new technology such as computer software to design the product so it may be possible to develop a design without errors. The quality of the product will be superior and product performance will be superior. J&S should try to invest on robots in manufacturing bring the product into the market earlier than the competitor then they can have an advantage over the competitor. Although this may reduce his cash flow for some time it will for sure benefit him in the long run. 2.2

Since J&S is one of the markets leader in London they should try to be number one and maintain that position. However it is not an easy task. They should...
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