Managing and Running Small Business

This document discusses the importance of effective allocation of resources in managing and running a small business. It also explores various tools and techniques for resource allocation. Additionally, it examines different processes of customer relationship management and the benefits and challenges of transnational operations. Finally, it provides recommendations for overcoming challenges in transnational operations.

MANAGING AND
RUNNING SMALL
BUSINESS

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.Allocation of resources.............................................................................................................3
2.Apply relevant tools and techniques to allocate resources.......................................................4
3.Different process of customer relationship management in Star Textile.................................5
4. Benefits and challenges related to transnational operation......................................................6
5.Recommendation for overcoming challenges in transnational operations...............................7
TASK 2............................................................................................................................................8
Cash Flow Projections of Star Textile for the year 2019.............................................................8
Key financial Statements contributing in the successful management of the organisation.......11
Legislations and regulations having implications over small businesses..................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Small business is an indecently owned company. It can be defined as that business in which
there are few number of employees and also there is low amount of investment. It can be a
creative start-up or any other new or innovative idea that has been given shape of business.
Present report will lay emphasis on the Star Textile which is a new start-up by entrepreneurs.
Report will focus on effective allocation of resources. It will also show the various tools and
techniques of resources allocation. Assignment will also highlight the different types of customer
relationship management process.
TASK 1
1.Allocation of resources
It has been analysed that most important
aspect in running today’s business is the
effective allocation of resources. There are a
lot of profits if the resources are allocated
usefully and it will make the business be in
the market also for a longer run, and they
will be effective in their work. Effective and
efficient allocation of resources can assist
business in growing and achieving their
goals and objectives. It will help business in
running in long run.
Main considerations which entrepreneurs
should focus before allocating resources
Identifying resources-
Entrepreneurs while allocating resources
must engage in identifying how much
resources are available to them. This will
help them in easily achieving objective and
also identification of resources at first can
support them in reducing chaos in
organization which might appear if
resources are not properly allocated. This
will help them in making their startup grow.
Knowing Scope- It has also been
analyzed that before allocating resources
entrepreneurs must also involve in knowing
the scope of project which they are going to
start. They must forecast future and know if
their business is going to be liked by
individuals or not. Only this aspect will help
them in achieving goals and objectives
(Slemrod and et.al., 2017).
Importance of effective allocation of resources
Boost productivity- Effective
allocation of resources can help Star Textile
organization in enhancing productivity. In
this aspect firm can have idea about when
they are overloaded with work and they
have to make effective use of resources.
This will also help them in reducing the

operational cost and increasing the growth
aspect.
Improve time management- Proper
allocation of resources can also help the new
start-up in managing time. As when
resources are effectively allocated all
employees knows where they have to invest
time. Goals and objectives also become
clear to them. This helps and sports
organization in enhancing their operational
proficiency. Also proper allocation of
resources assist firm in prioritising the task
which is of most importance.
Improve staff morale: Allocating
resources wisely can also help Star Textile
firm in boosting up morale of employees. In
this organization can identify and monitor
which is employee is involve in which task
and which one is lagging. It also helps in
leading team in effective and efficient way.
Organization can achieve their goals easily
and firmly when proper allocation of
resources has been done (Rainnie, 2016).
Strategic planning: Star Textile can
also involve in doing strategic planning by
allocating resources effectively. In this firm
needs to sets its vision and goal clearly and
then involve in strategic planning to make
efficient use of resources.
Manage team work load: Proper
allocation of resources can help Star Textile
in managing the work effectively. In this
employer can have an idea about who has
more workload and who has ideal capacity
so more work can be allotted to that
employee. This aspect can support
organization in increasing their efficiency
and also achieving their goals and
objectives. It can support new start-up in
growing.
2.Apply relevant tools and techniques to allocate resources
There are various tools and techniques
that can be used by Star Textile so that they
can achieve their goals, objectives, mission
and vision set up by them. These tools and

techniques will help firm in building up their
business and also it will help them in
creating their goodwill plus brand value.
Pool based approach- In this approach,
there are various amount of resources. Star
Textile can install an operating system that
can engage in checking the status of
allocation of resources. The status can be
checked on resource table. In this program
can make request for a resource and when
the resource is free, the operating system
allocates program to it. There are various
advantages and disadvantages of this
approach. Like in this approach the allocated
resources are managed effectively and are
not wasted. Also by using this approach the
resources can be utilized fully. Star Textile
may face some problem while using this
approach like by using it the overhead cost
can increase.
Resource partitioning approach- Star
Textile can also make use resource
partitioning approach so that resources can
be allocated effectively. In this approach
there exist an operating system which
decides beforehand that what resources must
be allocated to which employee. Also this
operating system divides the resources in
many partitions. Like for example 1MB
memory, disk block and a printer (Hillary,
2017). There are also various advantages
and disadvantages that can be faced by Star
Textile when using the resource partitioning
approach. Like for instance this approach is
most easy to be implemented. Also this tool
and technique of resource allocation can
lead to less overhead. There is some
weakness also which has to be faced by Star
Textile while making use of Resource
partitioning approach. Like this approach
lacks flexibility as if the resources are
involving in particular process then the
additional resources might get wasted. In
this approach the requirement of resources
must also be analysed before. So this can
become really hectic for the organization.
Hub Planner- This approach can also
be used by Star Textile for allocating
resources effectively and efficiently. It is a
software that can be used by entrepreneur
for effective management of resources. This

software can basically have used by
organization to manage human resource
(Keith and et.al., 2016). In this software it
contains time sheet which allocate work to
each employee. It analyses who has how
much work load and which employee have
ideal capacity. This software when installed
by Star Textile, can increase their
profitability aspect as human resource can
be efficiently managed after this. They can
achieve all goals and objectives set up by
them. In this software employees can check
sick days, holiday leaves, working days so
that their work become more easy. They can
also check budget in Hub planner. This tool
and technique can help and assist Star
Textile in effective utilization of resources.
It can help firm in growing. By this they can
also reduce wastage of resources.
3.Different process of customer relationship management in Star Textile
Customer Relationship management can
be defined as that approach which can be
used to manage interaction of organization
so that potential and current customers can
be managed. In this software firm can make
use of data analysis about the history of
customers so that they can enhance the
business relationship with consumers (Cole
and Mehran, 2018). This software can
support company in retaining consumer and
also sales of firm can be increased by
properly managing relationship with
customer. There is different process of
CRM, one of it which can be used by Star
Textile is discussed below:
Identifying target market: The first
step that can be used by Star Textile while
establishing their business is identifying
target market. In this they need to ensure
about to what segment of consumers they

want to target. Also company can set up
priority list like Type A consumer visit the
store often than Type B. So more focus must
be laid on potential individuals.
Define overall CRM strategy and
consider costs: This step is significantly
based on what type of customer service and
relationship management will work better
for new startup business, and customers of
the business. In this Customer relationship
management process can be re-built again
with customers. Also Social CRM process
can be used by Star Textile so that they can
build up relationship with large range of
consumers.
Defining each customer type will be
handled: The customer can be divided into
basis that is business to business and
business to consumer. So star Textile needs
to be build up different strategies for
handing these consumers. Through CRM
process the company can engage in solving
problems of consumer online. They can
involve in taking feedback from customer
through social media websites (Cortés and
et.al., 2019). This method is also price
sensitive. In Business to business the price
level can be increased. In this company can
engage in analyzing what their competitors
are serving to other business.
Selection of CRM software in order
to measure performance: It has been
analyzed that Star Textile can make use of
best CRM software and that is SAAS. In this
software they can contain the brief detail
about consumers so that firm can identify
their needs, demands and wants. This can
support firm in establishing their market
share and building up relationship with
consumers more adequately. This can help
organization in growing and enhancing
goodwill among consumers (Burns and
Dewhurst, 2016).
4. Benefits and challenges related to transnational operation
Evaluation of Stage model of
internationalization: In this model it has
been explained that when Star Textile is
going to expand its market in international

areas they must be involve in analysing
trends going in growing market. Also firm
must involve in building up their own
distribution network so that it becomes
easier for them to reach out consumers. Also
before entering into market economic
condition of area must be checked out, so
that they can know whether to enter country
or not. They must also analyse the cognitive
resource character of company.
Benefits and challenges for transnational
operations:
Transnational organization can also be
known as multinational operation company,
in this they do not have to mark their
presence in all around world, even presence
in few countries can make them involve in
transnational operations. Star Textile can
also involve in expanding their market in
few countries, but there are some benefits
and challenges attached to it. It includes the
following:
Benefits of Transnational operations:
Expanded marketing opportunities- These
type of operations can provide Star Textile
with more opportunities. They can increase
liking of their products and service in new
areas. This will help firm in increasing their
profitability. This can also support firm in
enhancing their sales aspects.
Deep culture understanding: By
expanding market in new areas, Star Textile
can also engage in understanding cultural
aspects of other countries. They must make
sure that no products and services of them
hurt sentiments of people living in other area
Challenges of Transnational operations
Increased cost: In order to expand market
Star Textile will also need to invest more
resources and cost. So this can increase
operational cost of business.
Less understanding of market- As
company is expanding to new market, there
might occur chances that they do not
understand trends which are going in and on
market.
5.Recommendation for overcoming challenges in transnational operations
 Star Textile must involve in first
doing deep market research about the
trends, consumers demand and needs
so that they do not face any loss.
 They must also be involved in
having deep understanding of
cultural aspect of consumers living
over there.
 Company also must have their own
distribution network so that it
become easy for them to reach out
large range of consumers

 Star Textile also should be involved
in taking feedback from consumers
in domestic market so that they can
improve their products and services
in international market.
TASK 2
Star Industry that is a textile company. Company is manufacturing cotton cloth by
processing raw cotton. The company been in the business of producing cotton cloth from last ten
years. Company is situated in UK an is selling the materials only within the country. It is not
having any export of the material and is running as small business. The company is complying
with all the legal requirements that are essential for the business (Turner and Endres, 2017).
Cash flow projections
Cash flow refers to money that is flowing outwards and inwards in a business month.
Cash outflows are for payments of expenses like loans, mortgages, rent salaries and various other
business for running the business. Cash flow forecasts help in estimating the spending’s of today
without running out of cash. This helps in controlling and monitoring the cash flows of company
so that the flows that are unnecessary could be prevented or controlled. Cash flow projection also
help in writing the business plans.
Cash Flow Projections of Star Textile for the year 2019
Projected Cash Flow Statement
Partic
ulars Jan Feb
Marc
h April May June July
Augus
t
Septe
mber
Octob
er
Nove
mber
Dece
mber
Openi
ng
Bal. 18000 21000 24000 27000 30000 30000 27500 31000 34500 38500 40500 45000
Cash
In
Sales 25000 25000 25000 25000 22000 22000 28000 28000 28000 27000 30000 30000

Total 25000 25000 25000 25000 22000 22000 28000 28000 28000 27000 30000 30000
Cash
Out
Varia
ble
costs
Mater
ial 6000 6000 6000 6000 6000 7000 7000 7000 7000 8000 8000 8000
Wage
s 5000 5000 5000 5000 5000 5500 5500 5500 6000 6000 6000 6000
Mark
eting 3000 3000 3000 3000 3000 4000 4000 4000 3000 3000 3500 3500
Fixed
Rent 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000
Total 22000 22000 22000 22000 22000 24500 24500 24500 24000 25000 25500 25500
Cash
Flow 3000 3000 3000 3000 0 -2500 3500 3500 4000 2000 4500 4500
Closin
g bal 21000 24000 27000 30000 30000 27500 31000 34500 38500 40500 45000 49500
The present cash flow projection is for the coming year company has made estimation on
the basis of previous budgeted cash flow statements. The projections shows that cash flow
statements are showing constant growth in the projections as the company has established good
market position in the past years. The cash flow could be negative and zero in the month of may
and June as they are off seasons (Cash Flow Projections, 2019).
Break even

Break even points refers to the point where business revenues are equal to total costs. In
simple terms it refers to the point where total inflow equals total outflow. Break even analysis
attempt to identify the break even volumes through analysis of relationship between variable and
fixed cost on one hand and on the other business volumes net cash flow and pricing. They are
required to identify the point where company will be able to cover its costs, it will help the
business organisation to plan for the further spending’s (Turner and Endres, 2017). Company
should not start investing in other activities before they have achieved the profitable margins
otherwise they would be losing their cash margins that can affect the smooth functioning of the
organisation (Break Even Analysis, 2019).
It enables the organisation to decide whether to proceed on a proposed project or not. It is
an technique of financial controls in sense that further analysis could be essential as the
conditions change. Objective of private firms is of making profit and to avoid losses to the
maximum possible extent. For making further business planning companies are required to know
the point where the sales revenues will allow them to meet the obligations that are variable and
fixed. They are also recognised as cost volume profit analysis are the useful tool which allows
Star Textile to visualize clearly revenue cost relationships at different output levels.
It enables the Star Textile to determine effects of changes occurring in sales revenues
and costs on availability of the capital. It helps company in setting the optimum selling prices .
As control techniques it provides company an objective measurement through which
performance of the organisations is evaluated. They are required for identifying the defects so
that corrective actions could be taken. Proximate cause behind high break even is high
investments in fixed assets. Again firm could incur losses if it do not have adequate control over
expenses. Break even analysis helps management of Star Textiles to identify the cause if
increasing variable costs so that they could be controlled before they exceeds the proscribed
limits. Company has to consider that all the selling prices and costs could not be controlled by
different procedures. There are several external factors that affect the cost and prices of product
of company.
Key financial Statements contributing in the successful management of the organisation.
The Financial Statements of company represents the financial health and position of
company. It represents how efficiently company is managing its operation with the available

resources. Financial statement enable the users to make decisions related to the investments in
the given country. They are also used by the stakeholders, for knowing the business enterprises
that whether continuing with the business organisation. The financial statements of the company
help in knowing whether the current operational efficiency will help them to grow in the market.
They are required for business enterprises, to know whether the company will be able to show
constant growth or not.
Three main financial statement of the company are income statement, balance sheet and
cash flow statements. All these help company to analyse the weaknesses and the core
competencies of the businesses. Financial statements beyond recognising potential shortages of
revenues help it to identify the product streams that is performing best for Star Textile.
Balance sheet
Balance sheet of Star Textile represents all the assets and liabilities that company is
having in the current year. It is used for calculating the valuation of company. Management can
recognise the current asset and current liabilities so that can it can make prior arrangements for
meeting the short term obligations of company. They enable the managers to identify the loans or
other contingent liabilities that may arise in the next year. Balance sheet also show the
investments made by the Star Textiles in different companies and whether they are generating
required return or not. Stockholder's equity is also represented in balance sheet, managers can
analyse whether company can issue further securities for expansion or growth based on the
current operations.
Income Statement
Profit or loss statement is detailed summary of the revenues & expenses over time. They
enable the company to assess whether the operations of company are being managed efficiently
or not. Management could adopt for new strategies that will help the company in reducing its
unnecessary and unproductive expenses. Most importantly it allows company to know how much
profits left after carrying out all the costs and expenses. If the company is not earning sufficient
revenues and profit it will be required to adopt for new policies and procedures that will enhance
the sales and profits of company.

Cash Flow Statements
Cash flow statements of Star Textile provide about the cash inflows and out flows over a
given year. They enable the management to assess the cash operations. Company can identify the
cash generated from its operating activities, financing activities and the investing activities. It is
essential for companies to monitor it cash flows as there situations where though company is
earning sufficient profit it may have negative cash flows that can bring down company into
losses. It enables the management to make make future cash forecasts on the base of present
forecasts.
Legislations and regulations having implications over small businesses
General Data Protection Regulation
The regulation deals with protection of data held by them. Companies are required to have strong
security protocols for the safety of the data of company as well as of the customers and clients
with which they are dealing. The legislation are higly imposed on organisation seeing the
security hacks and cyber crimes. The internal information of the company can lead the company
to lack behind and even the key competitive strategies may become public (Storey, 2016).
Equality Acts
The act is laid down for all the organisations incorporated in UK. The act states that all
the employees working in the organisation should be treated equally. Company should not make
discrimination between employees on the basis of their race, religion or gender as they can affect
the efficiency of business. This will protect the company to make discrimination between the
employees.
Wages Act
The legislation states that all the employees should be given equal pay on the basis of
their work. The act protect workers from getting low wages for the work done. Government has
laid down the minimum wages per person that company are required to pay.
CONCLUSION
From the above study, it has been summarized that company has been engaged in allocating
resources effectively so that they can achieve their goals and objectives. This has helped them in

reducing waste related to resources. It has also supported new start up in reducing operational
cost of business by properly allocating resources. There were various main considerations that
were being followed by company before allocating resources. They were deeply involved in
knowing scope of project so that only fixed resources can be invested in company.

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cash-flow-forecast-breaking-even-point-mean-translator/>.
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flow/>.
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