Evaluating CRM Processes for Social Enterprises

The assignment evaluates various CRM processes for social enterprises and small businesses. It discusses the advantages and disadvantages of becoming a transnational company, including monthly cash flow analysis and interpretations to manage funds. The document also highlights different regulations and legislations that have implications on social enterprises and provides references from books and journals.

MANAGING AND
RUNNING A SMALL
BUISNESS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1 Overview of selected small business activities along with current situations.....................1
2 How small business plan and allocate resources to attain business objectives...................1
3 Evaluation of customer relationship management for small business along with challenge
and benefits of transnational operation ..................................................................................3
4 Development and analysis regarding cash flow forecast, Break-even analysis, budget and
interpretation of key financial statements...............................................................................5
5 Implication of regulations and legislations on small business............................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Small businesses are partnerships, sole proprietorships and corporations which are
privately owned and have few employees. These companies usually have ten to fifty employees
working under them. An entrepreneur is a person which prefers to run a small business
organisation rather than working as a worker. All the risks and rewards associated with business
are assumed by entrepreneur only. This assignment is written in context with Rowlinson
Knitwear which is a private firm based in Woodbank Mills Turncroft lane, London. Company is
a manufacturer of school-wear and corporate-wear. This report involves main consideration of
small enterprises while resource allocation. Also, different process of CRM and process to
develop transnational in respect with organisation is mentioned. Monthly cash flow forecast and
break even analysis is also carried out along with the interpretations. At last, key legislations and
regulations having implications on small business is mentioned.

MAIN BODY
1 Overview of selected small business activities along with current situations
Rowlison Knitwear is a private retail organisation which is situated in Woodbank mills
lane, UK. At present company is employing nine workers to perform business activities and
operations. This firm was established in 1972 and sustains a firm place within marketplace.
Company is a manufacturer of crocheted and knitted apparel and offer corporate-wear and
school-wear to their customers. At present, there are five individuals which posses a significant
control over company operations. Other products offered by company are hooded tops,
sweatshirts, polos, knitwear and embroidery. At present company is offering brands such as
performa cottons, woodbank signatures, woodbank seats, performa 50 etc. As per the latest
reports and data collected, company has a turnover of around £12,147,616. Gross profit earned
by company is £3,967,447. Beside this, firm has overdrafts and bank loans of £ 580,421. Total
assets and liabilities of Rowlinson Knitwear are near about £8,976,000 and £2,062,000.
Company have made full accounts up to 30 September, 2016.
2 How small business plan and allocate resources to attain business objectives
To achieve a firm position within marketplace, it is very essential for every organisation
to utilize their resources optimally and desirably. This will help the company in performing their
business operations in an appropriate and profitable manner. Different kind of organisation have
different ways in which they plan and allocate their resources. This is because of difference in
their financial and human resources. It is very essential for small firms to allocate and organise
their resources in an appropriate manner so that no problems can be faced while performing
business activities and operations. Rowlinson Knitwear is a small but widely successful
organisation in UK which offer school uniforms and office wears to their customers. As firm is
small, limited funds and human resources are available for company. Their are few
considerations by which concerned company can plan and allocate resources are mentioned
below:
 Financial resources: To plan and allocate resources in a desired manner, it is very
important for an organisation to manage their finance and funds. If the finances are
managed properly, in that case it will be easier for company to perform desired business

activities. If funds are not managed properly, budget will be mismanaged and Rowlinson
Knitwear will face loss of revenues and barrier in performing work.
 Human resources along with capabilities and skills: Another aspect which manager in
Rowlinson Knitwear needs to consider before allocating resources is managing human
resource. This can be possible by hiring skilled and capable staff. This will helps in
enhancing overall productivity of the firm.
 Vision, targets and goals of company: If the owner of company will clearly define the
goals, objectives and vision of company to the employees then it will became easy for
company to allocate work and resources to employees in an efficient manner. If vision of
company will be cleared then every employee will have idea about their roles and
resources will also be utilised properly.
To allocate resource in a small business, manager of company needs to make space for
strategic reallocation at first in which replacements are done to properly manage extra work.
Maintaining appropriate resource calender will helps in specifying how much resources are
needed for a particular process and in accordance with that resources will be allocated to
different departments. By installing different software and applications also, employees in
Rowlinson Knitwear can allocate and plan resources in a proper manner.

M1 Apply relevant tools and techniques in a structured and analytical way to plan and allocate
resources in an organisational context.
There are mainly two techniques which can be used by the managers of Rowlinson
knitwear limited for making effective plans. Some of them are given as under:
Gantt chart- it is also known as bar chart, it gave information about the working schedule of an
activity. It also assist the managers in estimating time period in which they will be able in
completing the project along with formulating a proper structure so that the internal strength of
firm can be improved.
Critical path analysis – It is also an effective tool which helps the managers in identification of
different paths which can be used for completing the project. With the help of this, managers of
Rowlinson will be able in selecting appropriate structure so that the better results can be
received in future period.
M2 Importance of planning and allocating resources
Management of Rowlinson can take various benefits from allocating resources which are
given as under:
With the help of this , organisation can easily improve internal strength through which the
employees will be able in performing their duties in a proper manner and their efficiencies will
be improved so that the resources of firm can be utilised in proper manner.
D1.Critical analysis the application of appropriate resources
Different kinds of resources are required by the managers of firm at the time of doing
functional activities. Resources can include material, workers, funds etc. These resources also
help the firm in defeating their rivals at marketplace and attaining preset objectives of firm
successfully . If the managers of Rowlinson will not consider about the needs and wants of
employees then it increases demotivation and dissatisfaction among them which will not
beneficial for the brand image of firm. Therefore, managers have duty to fulfil the needs of
employees so that they perform their duties with full dedication.
3 Evaluation of customer relationship management for small business along with challenge and
benefits of transnational operation
Customer relationship management
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It is the combination of practices, strategies and technologies that are used by the
company for analysing and managing customer interaction and data throughout the customer
life-cycle with the objective of improving customer service relationships. In Rowlinson
Knitwear, it can be art of managing the organisation's relationship with the customers and can be
a strategy that used by company to manage interactions or healthy relations with potential
customers. CRM is important for the company because it increased customer satisfaction and
retention, improve sales matrices and enhance contact management and enriched products and
services. The aim or objective of every business is to drive maximum profitability from its
customer base. The CRM value chain describes the process that a small business must have to
follow to gain or earn profitability from its customers. This is a five stage process which is as
following:
Customer portfolio analysis- It is the first step and customer portfolio analysis is an
activity in which a company can analyse the current and future value of its consumers for
developing a balanced customer structure to different customers and their groups. In Rowlinson,
in this step, the company can analyse customer base to determine that what kind and group of
customers are profitable for their business. For example, this company manufacture uniform and
formal clothes for coronate people. With the help of it, the organisation can define its target
customer base and targeted them for the growth and profit of the company.
Customer intimacy- It is the process of getting familiar with the customers within the
organisation's target customer base. In Rowlinson, the company provide correct and appropriate
information to its consumer about the products and services that are provided by it. In this
process, company can use various promotional channels and attach the advertisement of the
products with the consumer's emotions and make them familiar with the products. The
organisation can use market analysis to finding out its consumers needs such as that they want
innovation in the design of clothes etc.
Network development- This process refers to the development and identification of
strong relationships with industry, organisations, people and networks that are necessary for the
company and its business. In Rowlinson, it can be related to the external partner and people such
as suppliers, investors and others, as well as internal partners such as employees, workers,
labours etc. For example, the company can organise campaign and other activities for the
development of the network.
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Value proposition development- In this step, the company gather or collect information
from customer itinerary and find out its targetted customer or can design a tailored value
proposition for that type of consumers. In Rowlinson, the company identified its consumers
needs and provide value products according them that can also create value for the organisation.
For example, the company can get feedback from its consumers and get information about its
clothing product and innovation related to design and fabric.
Customer life cycle management- This process is related to the continuous relationship
of the organisation to maintain with its customers. In Rowlinson, the company requires structure
and attention to process and must determine that how the organisation can organise itself to
effectively manage customer relationship. Customer life cycle management is a term that can be
used by the firm to describe the progression of steps a customer goes through when considering,
purchasing and maintaining loyalty to the products and services of the company. For example, In
Rowlinson, it is related to the loyalty of the customers towards its products such as school
uniform and corporate wear.
Transnational business:
Transnational business is an international business where a company operate its business
across the national boundaries and do global business activities. In Rowlinson, it can be related
to the business of the company when it operate its business in different nations of the world.
There are several ways by which the organisation can operate transnational business, they are as
following:
Branches- It is the more straightforward way to expand the business of the firm
internationally. For example, if Rowlinson wants to expand its business at global level, it will
simply take some cash, get the pertinent business licenses, hire a localization team and set up a
branch in another nation or country.
Franchises- It is a type of retail business in which an individual or group is granted the
right to market a company's goods and services within a certain territory or location. It is
necessary to purchase a license from a company to use brand in an another country. Rowlinson
can also operate its business transnationally by developing franchises. It is the cheapest option
and the fastest way to established presence in foreign country with minimum risk.
Joint venture- It is a business entity that are created by two or more parties and
characterized by shared ownership, risks and returns and governance. Rowlinson can establish a
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joint venture with a foreign company that works in the same industry that is an attractive option
for the company to expand its business transnationally.
Benefits of transnational business
The benefits of transnational business are as following:
Reaching new customers- If Rowlinson, expand its business transnationally, it can
provide the information about its products to new customers. If they like the products and
services of the organisation, the company get more consumers for its products that is beneficial
for enhancing the productivity and increasing the profit of the firm.
Accessing new talent- If Rowlinson operate its business globally or in different countries,
it hire the employees and worker from that country where it operate its business. Multiple
employees and workers have different skills and knowledge that can be helpful for the
organisation's growth and can take the organisation to the next level.
Drawbacks of transnational business
The disadvantages of international business are as following:
Foreign rules and regulations- The main disadvantage of the international business.
Every country has different rules and regulation so some times it can be a disadvantage for the
business of the company because if they are operating their business in that country, it is
necessary to follow the rules of that nation. For example, if Rowlinson, expend its business
internationally, it can face problems related to the laws and legislations of another states such as
taxation law, employment law and others.
Monitoring currency fluctuations- It is an another issues which occur in the form of
threat because every nation have different currency rates and fluctuation occurs in them time to
time. This creates negative impact on business of organisation and generate in the form of
disadvantage. For example, if Rowlinson operate its business in another country and the currency
rate of that nation high that is a threats for the organisation and its business also.
M3. Elements of the customer relationship management process in relation to achieving business
objectives
There are various kinds of Customer relationship management which helps the firm in
formulating huge customer base. They are given as under:
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Customer services – For Making better relations with customers managers should provide
effective services to them. Managers have to provide better training to the employees so that they
can understand the communication skills and communicate with the customers in proper way.
Sales force automation- with the help of this, Management of Rowlinson will better provide the
services as they will know about the taste and preferences of them. Through which employees of
Rowlinson will be able in providing better services to them.
Campaign management- In this, managers of Rowlinson have to provide better discounts and
offers to their targetted customers so that new customerscan be transformed into regular
customers.
M4. The potential to develop transnational operations using the stage model of
internationalisation
Stage Model of Internationalization
This model is developed by Johanson, the purpose of this model is an association
between the knowledge of the decision makers in the company and the level of resource
commitment in foreign market. There are some stages in this model:
 No international activities
 Export activities via agents
 Export activities via the company's own sales subsidiaries.
 Enlistment of production subsidiaries in the foreign country.
Challenges of developing transnational operations
There are various challenges that are faced by transnational operations such as:
 Foreign rules and regulations
 Universal payment methods
 Currency rate
 Communication difficulties and cultural differences
Benefits of developing transnational operations
There are various advantages and benefits of developing transnational operation, they are
as following:
 provide employment
 Help in exploit natural resources
 Help in improving education and skills.
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 Help in developing economic condition of the country.
D2. Critically evaluate the customer relationship management process at all stages and provide
recommendations for overcoming challenges of developing transnational operations
Customer relationship management is an art of managing the organisation's relationship
with the customers and can be a strategy that used by company to manage interactions or healthy
relations with potential customers. There are various stages of this process such as customer
portfolio analysis, Customer intimacy, Network development,Value proposition development
and Customer life cycle management.
Recommendation
To overcome these challenges company can follow the laws and rules of that counties
where it operate its business. To overcome the issues of universal payment method, it can use
various payment methods such as online payment, internet banking etc. To resolve the
communication problem it can hire the local employees of that company where it operates its
business.
4 Development and analysis regarding cash flow forecast, Break-even analysis, budget and
interpretation of key financial statements
Cash flow forecasting:
It is a procedure to obtain a forecast or estimate of an organisation's future financial
position. It is considered as a core planning component associated with financial management
within a company. Main deliverable associated with cash flow is considered as a cash flow
forecast. It will help Rowlinson Knitwear in controlling and managing their expenses so that they
can perform their work properly. Different sources of cash flow forecast are mentioned beneath:
dgeting, planning and forecasting: These are the key aspects that are that are adopted by the
manager in Rowlinson Knitwear to identify future trends according to the futuristic conditions.
This assists the company to determine long term plans, short term forecasts and midterm
budgets. In general, there are two techniques to budget, plan and forecast which are mentioned
below:
 Measure moving average: It is a process which will benefits Rowlinson Knitwear to
collect data and information so that objectives can be set desirably. This procedure helps
in acknowledging the current position of business.
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 Time series data or information: This process will benefits Rowlinson Knitwear to
streamline and setup production schedules within an estimated budget.
Break-even analysis: It is a tactics which is widely used by production and account
management. It categorises production costs between two aspects which are variable and fixed
production costs. These costs are compared with sales revenue so that sales volume, sale value
and production can be determined by manager in Rowlinson Knitwear easily.
This evaluation is called as profit contribution analysis that can simply be applicable in
two situations which are linear cost and revenue relation along with revenue relation and non-
linear cost (Break Even Analysis. 2018). It can be assessed that every business organisation
adopt and implement these methods so that they can be applies in contribution analysis, algebraic
methods, profit volume ratios and graphics etc. In today' scenario, managers in Rowlinson
Knitwear has chooses algebraic methods so that effective decision can be taken in complicated
situations. In context with current situation, break even analysis is calculated as:
TFC = Total fixed cost
P = Price
AVC = Variable cost per unit of outcome
Qb= TFC/ (P-AVC)
In this case,
TFC= 40000
PRICE= 20
AVC= 10
=40000/(20-10)= 4000
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Balance Sheet, cash flow statement, profit and loss account statements of Rowlinson Knitwear
Company are as follows:
Financial Statements:
It is the written document that communicates the business activities and financial
performance of an organisation through preparing different financial accounts such as balance
sheet, income statement, and cash flow statement. These financial accounts are audited by
government agencies, firms, accountants etc. in order to ensure the reliability and accuracy of
recorded data and also for tax, financing or investing purposes. Here are the financial accounts of
cited company i.e. Rowlinson Knitwear:
Income Statement of Rowlinson Knitwear for the year ended 13th February, 2019
Particulars 13th February, 2019 (In £)
Revenue 200000
Cost of sales -165500
Gross Profit 34500
Administrative Expense -3200
Other expenses -4500
Net profits before tax 26800
Income tax expense @ 20% -5360
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Profit for the year 21440
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Balance Sheet of Rowlinson Knitwear as at 13th February, 2019
Particulars 13th February, 2019 (In £)
ASSETS:
Non Current Assets:
Intangible assets 10500
Property, plant and equipment 43700
Investments 10600
Current assets:
Inventories 8500
Trade and other receivables 18900
Cash and cash equivalents 12800
Total 105000
LIABILITIES & EQUITY:
Current liabilities:
Trade and other payables 12440
Income tax payable 5360
Non Current liabilities:
Borrowings 12350
Equity:
Share Capital 62000
Retained earning 12850
Total 105000

Cash Flow of Rowlinson Knitwear for the year ended 13th February, 2019
Particulars 13th February, 2019(In £)
Net cash flow from operating activities 4522
Net cash flow used in investing activities -6720
Net cash flow from financing activities 6098
Net increase in cash and cash equivalents 3900
Cash and cash equivalents at the beginning of the year 8900

Cash and cash equivalents at the end of the year 12800
Here are the financial ratios of Rowlinson Knitwear along with their appropriate interpretation:
(1) Current Ratio: Current Assets / Current Liabilities
2017-18
40200 / 17800
2.26
Comment: This is also known as working capital ratio. It refers to the identifying
relationship among current assets and liabilities. Standard current ratio is 2:1 and in respective
company, current ratio is more than ideal ratio. This shows that company's liquidity position is
better.
(2) Quick Ratio: Quick Assets / Current Liabilities
2017-18
31700 / 17800
1.78M5: Quantitative techniques to provide detail of break even and cash flow
Different kinds of analytical techniques can be used by the firm for analysing the break-even
point and cash flow statement. It also helps the firm in monitoring the spending so that
unessential part can be identified and removed accordingly. It is also considered the point in
which the organisation is stands on that position where the firm have no profit and no loss.
Comment: quick ratio is consider as more appropriate then the current ration in order to
analysis liquidity. The ideal quick ration is 1:1 and company's respective ratio is 1.78:1 which
means respective company quick ratio is good.
(3) Gross Profit Ratio: Gross Profit / Sales * 100
2017-18
34500 /200000 *100
17.25%
Comment: it refer to the percentage of gross profit in order to calculate profit and sales.
Company can enhance and improve their gross profit ratio by comparing it with last year ratio.
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Gross profit ratio of respective company is 17.25% which shows quite good conduction of
company.
(4) Net Profit Ratio: Net Profit / Sales * 100
2017-18
26800 / 200000 *100
13.40%
Comment: It shows percentage of net profit in order to represent sales. The respective
company's net profit ratio is 13.40% in year 2018-2019 which is consider as better condition of
respective company. This shows that this company will earn good net profit ratio.
5 Implication of regulations and legislations on small business
Small businesses posses a considerable impact on UK economy by making people
financially independent. But to operate these businesses in a proper manner, government has
formulated some key legislations and regulations. Following these rule and regulations will assist
Rowlinson Knitwear in performing their business operations smoothly. Some key regulations
and legislations are mentioned beneath:
 Employment law, 1996: It is a piece of legislation which has created a framework to
manage modern lay labour law in UK. It is an act of parliament which is passed by
Britain government to codify existing regulations and laws on employee rights in UK.
This act will protect the workers of Rowlinson Knitwear from unethical and illegal
practices. Thus, employers need to consider welfare of employees. Implications of this
law is that if workers will not be fairly treated, they can file case against company due to
which market reputation and revenue loss may be faced by company.
 Consumer law, 2015: It is an Act passed by UK parliament to provide consumer their
basic rights and remedies. This act will protects the consumers from unfair trade practices
which are carried out by companies in order to gain high revenues and profitability. It is
implicated that Rowlinson Knitwear needs to follow this act in a proper manner,
otherwise grieved consumers can file law suits that can results in revenue loss and
business failure in some cases.
 Enterprise Act, 2002: This Act of UK parliament has made various changes to UK
competition laws in context of mergers and laws that govern insolvency bankruptcy. This
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Act is make cartel activities illegal i.e. a penalty will be faced by individual or
organisation which will engage in cartel activities. This law implicates that if Rowlinson
Knitwear will be part of these activities then office of fair trading will take suitable
actions against the company which can results in heavy fine and criminal proceedings.
These law implicates that if any company such as Rowlinson Knitwear tries to fool and
cheat customers by asking high price or delivering them bad services and products, then victim
customer can file case against them. Due to this, reputation of firm will get affected and
company will face loss of reputation and revenues.
M5: Quantitative techniques to provide detail of break even and cash flow
Different kinds of analytical and qualitative techniques can be used by the firm for
analysing the break-even point and cash flow statement. It also helps the firm in monitoring the
spending so that unessential part can be identified and removed accordingly. whereas, break-
even point is helpful for the firm in identifying the point where the firm can get the position of
no profit or no loss. With the help of this, organisation will be able in modifying their strategies
so that the situation of break-even point can be achieved by the organisation.
D3: Evaluation of financial statement
As per the above mentioned cash flow and break-even point of the Rowlinson it has been
evaluated that the company have 4522 pound in the starting of the financial year 2018 and
at the end of the year company have 12800 pound which defines a standard position of the
organisation. Therefore, management can easily perform their operations in easy manner.
As company have enough funds so that their preset targets and objectives can be achieved
in proper manner.M6. Implications of key legislation and regulations
Employment law, 1996- This law affects each aspect of the workplace and determines thee
employees rights regarding hiring, wage and compensation, discrimination and others.
Consumer law, 2015- It provide protection to consumers from unfair, deceptive or fraudulent
practices by businesses. It create negative impact on the business of company when they provide
bad quality product to their customers.
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