Customer Relationship Management Process for Small Enterprises

The given report focuses on the Customer Relationship Management (CRM) process for small enterprises. It emphasizes the significance of CRM in achieving competitive advantage and its application in various business scenarios. The report also discusses the need for resource optimization and break-even analysis in small organizations like Paramount, which is highlighted as a small size organization with limited resources.

MANAGING AND RUNNING A SBE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Main considerations a small business or social enterprise.....................................................1
M1 Tools and techniques in a structured and analytical way.....................................................2
M2 Importance of planning and allocating resources.................................................................2
D1 Application of appropriate resources....................................................................................3
TASK 2............................................................................................................................................3
P2 Different processes of customer relationship management..................................................3
P3 Small business can develop transnationally and determine benefits and drawbacks............4
M3 & D2 Elements of customer relationship management process..........................................5
M4 Potential to develop transnational operations.......................................................................5
TASK 3 ...........................................................................................................................................6
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs...................6
P5 Break- even analysis could be applied..................................................................................8
P6 Financial statements for an organisation................................................................................9
M5 Quantitative and analytical techniques...............................................................................10
D3 Cash flow forecast and break-even analysis.......................................................................10
TASK 4..........................................................................................................................................11
P7 Legislation and regulations that have implications on small businesses.............................11
M6 Implications of key legislation and regulations..................................................................11
D4 Key legislation and regulations that affect small businesses..............................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
.......................................................................................................................................................13

INTRODUCTION
Small business is an independently owned and also operated through an individual. It is
an internal part of total business of any country. The size of these business firms are small and
under this many activities are covered like for an instance retailing service, manufacturing,
mining, wholesaling and many others. It is identified that the small businesses are largest
supervisors with minimum investment on the basis of job. The small business plays a necessary
role in increasing an economy of country. Paramount is a small business firm and it deals in the
retail sector and provides grocery products (Ali and Babiker, 2017). In this given report mentions
about main considerations social enterprise and small business requires to develop planning as
well as allocate resources. It is necessary for organisations to follow all necessary regulation and
legislations in an effective manner. Various process of the consumer relationship management
for small firm will also be discussed under this given report.
TASK 1
P1 Main considerations a small business or social enterprise
Under this, there are several factors which are available in this business environment and
affects functions of small firms. Generally these types of factor are come under macro
environment and management has no control over them. On the other hand, firm can control all
internal or micro factors because they affect on business activities from outside of firm. At the
time of developing a better plan, it is essential for firm to consider all these two factors. It will be
helpful in attaining the targets or objectives of firm with in specific period of time. Paramount is
a small firm and it provides grocery items to consumers in exchange of money. Main objective
of this business firm is to offer better quality of grocery products which can satisfy needs of
consumers and develop healthy relationship with them (Bridge and O'Neill, 2012). With the help
of using effective resources such as staff members, finance, this organisation can achieve its
objectives in better manner. In context to this, Paramount requires top be address several factors
before allocating effective resources:
Human resource- It is an integral part of firm and also helpful in finishing every
activities with in set time period. The main motive of this department is to develop better policies
or strategies and implement them at workplace. Lack of planning affect on products of business
sand products are not sell in effective way. This department provides training and development
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to staff members in addition to increasing their abilities and core competencies. Through this
they can perform well and try to achieve organisational objectives in better manner.
Funds necessity- It is one of the most necessary resources to doing all business activities
in a systematic manner. In context to this, it is a responsibility of manager to determine
requirements of finance through each department for carrying all activities in systematic manner.
If funds will not be arranged in proper manner then in this case all departments of Paramount
firm will not able to perform all activities in better manner (Burns, 2016). As Paramount
organisation is small size firm and it does not have sufficient funds for perform all activities so
there is a requirement to this organisation to arrange and manage funds on the basis of activities.
There is a requirement to this firm to interpret financial statements in order to understand
regarding income, outflow, inflow, expenses etc. It gives better opportunities by developing
policies to remove an unnecessary expenses.
Vision, mission and objectives- Under this, there is more affect of vision, objectives and
mission of firm related to develop various plans regarding various aspects as well as allocation of
different resources on the basis of requirements of consumers. In context to Paramount firm, its
main focus on make improvement in quality of goods as well as modern marketing related
application techniques for improving sales.
M1 Tools and techniques in a structured and analytical way
There are several tools as well as techniques which aids in allocation of various resources
of firm according to actual needs (Chauma, 2017). Some tools which are used through
Paramount organisation given below:
Gantt chart- It is a graphical presentation related to project schedule. This type of bar
chart shows begin and complete sated of many components of project which consists milestones,
resources and tasks.
Critical path analysis- It gives information regarding various paths which are required to
finish specific project in specific time period. It assess management of firm to allocate resources
whose path takes longest duration.
M2 Importance of planning and allocating resources
Significance of planning is related with resource allocation or effective planning. It is
helpful for Paramount organisation to chive its objectives. There are some importance of
planning and allocating resources mention below:
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 It is helpful in increase growth rate and achieve large market.
 With the help of this, more consumers will be attracted towards Paramount organisation
which assess in improving sales as well as profit level (Cojoacă, 2017).
 Provide effective opportunities to business.
 Proper utilisation of resources.
D1 Application of appropriate resources
In this, there is a relation between achieving objectives and resources allocation. In
addition to this, lack resources impacts on the working ability as well as more issues which are
faced at the time of reaching to set objectives. If in case all necessary resources such as
objectives, employees, funds will be management in proper way then it will be easier for firm to
attain decided goals of firm.
TASK 2
P2 Different processes of customer relationship management
The customer relationship management is helpful for companies to develop the better
relatio0nship with consumers and the streamline procedure s that the sales can be enhanced,
maximise profitability and improvement in customer service. To achieve success and also
develop positive reputation at market place, there is a requirement to develop the healthy or
harmonious relationship with consumers by satisfying their demands. It is helpful in gaining
competitive advantages at market place in better manner. In addition to this, it is necessary for
manager of Paramount organisation to determine all preferences as well as mistakes of
consumers by interpret data of last years (Drucker, 2012). It is essential that firm should know
about the purchasing behaviour of consumers regarding grocery products regarding cost and
quality. At marketplace, there are various methods through which organisation can interact with
people and these are newspapers, social media and many others.
Customer relationship management refers to an approach to manage interact of firm with
existing consumers. The process of RM includes stratifies or activities which Paramount firm use
in order to manage communication with the potential or new customers. The CRM process given
below as above:
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Consumer portfolio analysis- It is a first stages and under this there is a need to analyse
consumer base of an organisation and identify types of consumers which can give more profit to
firm. It is helpful in defining consumer base.
Customer intimacy- It refers to procedure of getting the familiar with consumers with
company in order to target the consumer base. It is necessary that organisation should interact
with consumers in better manner and develop with them a healthy relation. Communication with
consumers is effective opportunity to make improvement in an intimacy of consumers and also
learn more regarding the target market.
Network development- IT is determination as well as develop better relationship with
firm, people and networks which help in give success to consumers. These types of relationship
will consist external partners like for an instance investors and suppliers and on the other hand in
internal includes staff members (Durst and Runar Edvardsson, 2012).
Value proposition development- Under this stage, firm needs to collect information at the
time of working on consumer intimacy. After determine target consumers then there is a
requirement to develop value proposition fort them. It will be helpful in creating effective value
for firm.
Consumer life cycle management- It refers to ideal journey of consumers from existing
to services or product advocate. It is concerned with continuing relationship to maintain better
relationship with consumers. Managing cycle needs attention as well as structure to process.
P3 Small business can develop transnationally and determine benefits and drawbacks
Transactional sales- It consists regarding capacity of the small firm to sell its goods in to
the new country as well as cities in order to capture more market share. It is helpful in giving
more opportunities related to achieving aims of firm and enhance sales. Under this, there is a
requirement to management to adopt various techniques which assess in expand its activities in
to the new market place. It gives better opportunities to Paramount business firms to develop
strong brand image at competitive market.
In order to attract consumers, there is a requirement to Paramount organisation to focus
on cost as well as quality of products (Hammer, 2015). Price and quality both are the necessary
factors which help in achieve competitive benefits in business as well as its functions. Some
advantages and drawbacks related to business expansion.
Benefits
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Independence- There is a right to management of Paramount organisation to take
effective decisions concerned with development of business related operations in other countries
without consultation.
Efficiency- Under this, small business should follow p[roper working framework for
increasing effectiveness of process of business. It provides many benefits to firm.
Drawbacks
Time period- This factor affects on expansion of plan in limited period of time. Under
this, there is a need of more time I n order to settle business which is more complex.
Minimum finance- In order to carrying out all necessary activities, there is a requirement
to Paramount firm to arrange funds (Wynarczyk, Piperopoulos and McAdam, 2013). If it will nor
be proper then in this case firm will unable to expand its business operations.
The transactional operations is related to conduct the business across boundaries of
country. Under this, firm perform its activities at global level by using the different strategies.
There are different transactional expansion strategies with their advantages and
disadvantages mention below:
Merger- It is a combination of the two firms which will work together for attaining the
specific goal. It is an agreement that unite the two existing companies into one.
Benefits
 Economies of scale is developed through shaping resources. Reduce risk of using the innovative techniques for managing the financial risks.
Challenges
 Loss of the experienced employees aside from employees in leadership positions.
 Enhance cost of operations
Strategic alliance- It is an agreement among two or more than two different parties to
pursue set of the agreed on objectives required while remaining the independent firms.
Benefits
 It helps business to take competitive benefits. It reduce manufacturing costs and developing new technology
Challenges
 One partner that handle risk must now depend on second partner.
 There is a risk to clash of corporate culture
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M3 & D2 Elements of customer relationship management process
Under this, there are several elements which contribute for develop relation which
consumers and attaining organisational objectives. Some elements are given below:
Identification of existing market needs- It is necessary for Paramount organisation to
determine the current market needs which will help in produce goods on the basis of needs of
consumers. It gives better opportunities to satisfying preferences of consumers.
Modifications in current products- Innovation is helpful in making product unique and
helpful in attract large number of consumers. It aids in achieving better quality.
Gaining consumer's trust- If firm will provide goods according to consumers needs
then people will be attracted towards firm. Through this company can develop harmonious
relation with consumers by gaining their trust.
M4 Potential to develop transnational operations
An internationalisation model develop its contribution for make improvement in business
operations to achieving organisational aims. Four necessary parts are given below:
Abilities to grab better opportunities- Paramount organisation has an ability to use
abilities for determination as well as achievement of the future related opportunities (Harmon,
2015).
Network positioning- There is a need to develop better networks with utilize various
advertisement tool.
Relationship commitment decision- It offers timely availability of goofs to suppliers as
well as consumers for fulfil their needs in effective manner.
Learning curve- Under this includes new methods related application for make
improvement in current specification of goods.
TASK 3
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs
Income sources- Under this, there are several sources which are present for small firm in
order to increase funds to make improvement in performance level of organisation. In addition to
thus, money is necessary for raising working efficiency or effectiveness by adopting the
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innovative techniques (Jenkins and et. al., 2013). Basic needs behind having proper amount of
money involve debts clearance, working capital, continuity in functions of business etc. External
and internal are the two main sources of cash management which are given below:
Internal
Sale of fixed assets: IT consists procedure of increasing funds by selling of current assets
for an objective of resolve requirement of finance. This type of sources is called as divestment.
External
IT is classified in to the short term and long term.
Short terms
Bank loans- It is regarded as an agreement among the bank as well as borrower which
requires to be repayment in certain time period in the basis of instalment. This kind of loan
carries the interest at fixed amount on annual basis.
Leasing- It is an agreement where the external parties use place in exchange of cost as
lease.
Facilities of overdraft- This type of facility is gives through bank and it gives an option to
firm top overdrawn money from bank on the basis of requirement.
Long term
Mortgages and bank loans- It consists procedure of increasing money from the private
banks where amount of mortgages as well as assets for particular time period (Jasra and et. al.,
2012).
Budgeting and forecasting
Forecasting is planning regarding future actions which aids to direct staff members for
performance of various actions. This planning tool aids management under its attempts in order
to cope up with future uncertainty, relying on data from current and past trends. On the other
hand, budgeting is procedure of prepare financial statements in detailed manner which cover in
set period of time in future. It consists procedure of developing various budgets to set some
standards and analyse actual performance. In addition to this, there are several techniques which
aid in forecasting as well as planning given below as above:
Identify moving average- It gives a better opportunity to understand regarding present
changes and trends which are required in potential goods. It aid in fulfil needs of consumers.
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Data of time series- It is used for ascertain an information related to time to complete
new project (Schaper and et. al., 2014). According to this, firm prepare a budget as well as set
some standards for staff members.
Balance sheet, P&L and Cash flow statement of Paramount Business Firm
Balance sheet at the year ended
Year 2017 (value in £) 2018 (value in £)
Fixed assets 130 210
Stock 20 35
Debtors 70 55
Bank 20 30
Total 240 330
Creditors 120 180
Bank overdraft 90 70
Total 210 300
Working capital 30 80
Profit and Loss Account at the year ended
2017 2018
Sales 20 30
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Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. profit 24 38
Cash flow Statement
Cash budget for the year
Particulars Jan Feb March April May
Beginning cash balance 25000 32250 31750 29750 26750
Budgeted cash receipts 12400 1600 1100 1000 15000
Total cash available 37400 34850 32850 29850 28250
Cash distributed
Variable cost
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Fixed cost
Overhead 900 600 600 600 600
Selling and distribution 650 700 700 700 700
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Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 25150
Particulars June July Aug Sep Dec
Beginning cash balance 25150 32250 31750 29750 26750
Budgeted cash receipts 1600 15000 12400 1100 1000
Total cash available 26750 47250 44150 30850 27750
Cash distributed
Variable cost
Direct material 1500 1400 1300 1150 1150
Direct labour 650 1200 650 650 650
Fixed cost
Overhead 600 900 600 600 600
Selling and distribution 700 650 700 700 700
Total cost use 3100 4150 3100 3100 3100
Cash surplus/ deficit 20200 38950 37800 24650 21550
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P5 Break- even analysis could be applied
Break-even analysis: It is a necessary tool which aids an organisation to understand
about the fact that require to sell large number of units on annually or monthly basis in order to
cover cost which are occurred in the actual (Smit and Watkins, 2012). It is helpful in
identification margin point of the safety according to cost incurred and also revenue gathered.
This tool is adopted or use through Paramount organisation to identify manufactured as well as
sales at less to assure that project does not use the minimum money (Weske, 2012). It is
calculated in the terms of Net Present Value (NPV). It gives an opportunity to develop policies in
order to improve sales and also earn more profit. It is a situation of no profit and no loss.
Particulars Amount (£)
Sales (9000*12) 108000
Less: Variable cost (9000*10) 90000
Contribution 18000
Fixed cost 18000
Profit and loss 0
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Sales Profit
5000 -8000
7000 -4000
9000 0
11000 4000
13000 8000
For achieve success, Paramount organisation requires to make plan regarding sales or
costs. Break-even analysis gives an information regarding sales level to cover the costs as well as
generate more revenue by minimising waste amount.
For an example- Fixed cost is 18000 and variable cost is 10 per unit and selling price 12
per unit. Then BEP will be:
BEP= Fixed cost/construction margin per unit or product= 18000/(12-10)=9000.
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5000 7000 9000 11000 13000
-10000
-8000
-6000
-4000
-2000
0
2000
4000
6000
8000
10000
-8000
-4000
0
4000
8000
Break even chart
Profit
Mean (Profit)
Sales
Profit

P6 Financial statements for an organisation
Financial statement of firm consists cash flow statement, profit and loss account and also
balance sheet (Williams, 2012). All these accounts give various information in context to firm. It
will be helpful in give more importance to small firms to ascertain necessary information
regarding income, liabilities, expenditure and assets. It is helpful in making the business
operations more successful. Information which is collected by an interpretation of all financial
statement below as above:
Balance sheet: It is regarded as statement that gives information about liabilities,
shareholders and assets at the time of developing plan (Wynarczyk, Piperopoulos and McAdam,
2013). It is used through an investor to understand related its position as well as reputation of
company. Under this, three various segments are mentions which contribute towards understand
regarding organisation owns and investment through shareholders.
Cash flow statements: Under this, it is segmented in to three different parts such as
financing activities, investing activities and cash flow from the operating activities. It gives
information related to cash equivalents those are enter and also leave company. It will assess
management of Paramount to manage position of cash as well as generate funds to pay liabilities.
Profit and loss account: Under this involves summarised information regarding
transactions of firm about costs, expenses and revenues which are obtain in financial year.
Through an interpretation, firm can generate more profit and minimize unnecessary expenses.
M5 Quantitative and analytical techniques
Under this, there are two kinds of techniques which available to determine Break even
analysis. By this method application, firm can attain main advantages by make improvement in
financial performance as well as strengths of Paramount organisation. It will be helpful in
accomplish objectives or aims with in particular period of time. Break even analysis is
calculation of point at which expenses as well as revenues (Ali and Babiker, 2017). It is a useful
tool to identifying equal point of firm. It aids in understand regarding sales level which cover
fixed cost in better manner.
D3 Cash flow forecast and break-even analysis
Financial statement is very broad term which consists balance-sheet, cash flow statement
and profit and loss account. All statement gives information related to various aspects of
company in order to gain competitive advantage in activities of business.
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Profit and loss account- It consist information regarding transaction of firm. It depicts
information about actual income as well as expenditure.
Balance-sheet- It gives an information related to current liabilities and assets. It analyse
identification of position.
Cash-flows statement- It provides relevant information regarding outflow and inflow of
cash. With the help of this, firm can manage cash effectively.
TASK 4
P7 Legislation and regulations that have implications on small businesses
Regulations as well as legislations are set through government and these can develop
negative as well as positive affect on small organisations. Regulations are helpful in bring
effectiveness over business operations (Bridge and O'Neill, 2012). Government developed some
rules and different legislation which require to follow through social and small business
enterprise. It will help in conducting the business in a legal manner and firm will not face ANY
kind of issues. There are different legislation developed through government and company
should be apply them in its business. Here are some legislations given which are followed
through Paramount firm:
Tax and employment act: It brings an obligation on management in context to pay tax
on proper time period. It also gives better opportunity to take government support to perform
various activities in an effective or significant manner. With the help of this, image of an
organisation will be improved.
Health and safety Act 1974: This act is helpful in protect health of staff members in an
organisation. It is a primary responsibility of any firm to secure health of employees. Firm
should adopt as well as implement all necessary safety measures. Regarding machineries,
manager of Paramount organisation provides t6raining to employees because the chances of
accidents will be minimized.
Data protection Act: On the basis of this act, it is a primary responsibility of firm to
protect right, data or necessary information of consumers or staff members secure. In addition to
this, Paramount organisation does not give permission to employees to take any information
without the permission of manager (Drucker, 2012). It is helpful in gaining trust of employees
along with conusmers.
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M6 Implications of key legislation and regulations
Under this, there is more implications of regulations or rules of firm given below as
above:
Positive impact- If all rules are followed through organisation then it will gives an
effective opportunities for management in order to gain trust of society as well as staff members.
It will be helpful in improving working efficiency and also develop better brand image.
Negative impact- IF in case all regulations are not followed in proper manner then in this
case it will develop negative affect on profit level as well as sales of Paramount firm.
D4 Key legislation and regulations that affect small businesses
It is necessary for every business firm is to follow all the regulations as well as legal
system which are developed through government of country (Wynarczyk, Piperopoulos and
McAdam, 2013). It is helpful in increasing effectiveness of operations and achieving aims of
firm with in specific period of time.
CONCLUSION
From above given report it has been concluded that Paramount is small size organisation
and its main focus on using necessary resources at the time of conducting activities. It will be
helpful in achieving more advantages in an effective way. Under given report studied about
break even analysis which can be applied to situation of firm. Customer relationship
management is necessary for firm to gain competitive advantage. In mention assignment studied
about process of Customer Relationship Management for social or small enterprise.
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