Entrepreneurship & Small Business Management

This assignment delves into the multifaceted world of entrepreneurship and small business management. It examines critical success factors for SMEs, encompassing performance evaluation using benchmarks like SPEC CPU2006, understanding business process management, and employing key financial statements such as break-even analysis. The document also highlights the importance of knowledge management and interoperability in SME databases.

MANAGING AND RUNNING A SBE

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
P1) Discuss the main considerations a small business or social business or social enterprise
needs to address when planning and allocating resources to achieve business objectives.. . .2
TASK 2............................................................................................................................................4
P2) Explain and evaluate different processes of customer relationship management for a small
business or social enterprise...................................................................................................4
P3) Explain how break even...................................................................................................5
TASK 3............................................................................................................................................6
P4) Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
set against income for a specific organization........................................................................6
P5) Explain how break even analysis could be applied to an organizational situation..........9
P6) Explain and evaluate different processes of customer relationship management for a small
business or social enterprise.................................................................................................11
TASK 4..........................................................................................................................................11
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprise..............................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Small business enterprises are a very integral part of economy as it is very helpful in
developing country and helps in bringing lots of opportunities as well. In these kinds of
companies, only few employees are being hired and they are only responsible to conduct all the
operations of management and make them grow and develop in the market. Since, small
companies normally have less operations so it is not very hectic for the managers to manage its
activities (Ali and Babiker, 2017). The organisation which will be referred here is Austin Fraser;
which is a recruiting as well as consulting agency who provide services regarding information
technology, engineering, human resources etc. This report will discuss about many factors which
a small business requires while conducting their business operations. The various processes of
customer relationship management for will also be mentioned. Also, a discussion will be done
about key regulations and legislations which have impact on small companies.
TASK 1
P1) Discuss the main considerations a small business or social business or social enterprise needs
to address when planning and allocating resources to achieve business objectives.
It is very essential for small companies to have an effective strategy and policies so that
they can perform their work in an effective manner and the management will able be able to
provide correct direction to their employees as to how they will be conducting their work. Austin
Fraser is a small sized consultancy company which is providing services related to human
resources, information technology, accountancy etc. Being a small organisation, they are not
having much resources and monetary considerations as well which they can use for enhancing
their work operations and bring growth and development in the organisation as well (Bridge and
O'Neill, 2012). It is very crucial for them that the services which they are providing should be
effective because then only they will be able to create better opportunities for their clients and
make them satisfied. But to do this, they will require support of many local suppliers as well as
retailers who will help them in increasing their business operations.
There are so many small organisations that are working in the country and all these
businesses are started with an aim to achieve their desired objectives. But they are also having an

aim to increase the living standards of people who are living in the society. The several factors
which are required to be addressed for planning the future actions of company are as follows:-
 Financial resources – It is one of the most essential resource which is required to be
present in every business so as to do their objectives in an effective manner. Moreover, it
can be said that without it can be said that no operations can be started. In small sized
companies; the amount required is also less (Burns, 2016). So, it is like a positive factor
for them as they will be able to manage their work in less funds as well. Therefore, in
Austin Fraser; managers will have to arrange their funds by their own and should keep a
look in their financial resources like Balance sheet, Profit and loss account, cash flow
statements and many others. With these, they will be able to know that how much funds
will be required by them and whether they are earning profits or losses in the company.
 Skills and capabilities of team members – The staff members are considered as major
assets of every business as they are the only ones who will be performing all the
operations of business. So it is very essential for the management to hire candidates on
the basis of their capabilities as then only they will be able to contribute in achieving the
goals of the organisation. The HR manager of Austin Fraser is required to hire right
candidate for the company and then provide them appropriate training so that they can
perform their business operations in an effective manner.
 Vision, mission and objectives - It is essential for every association to clarify their
missions, vision and objectives to those individuals which are related with business firms.
It gives better chances to director of Austin Fraser to build up a blueprint of different
activities which are required to be performed through staff employees. This type of
structure gives appropriate direction to employees to accomplish better objectives for the
company. In relation to this, administration of Austin Fraser organization is required to
give appropriate training to their workers by making use of effective methods and
technologies as well so as to make them more efficient (Chauma, 2017).

TASK 2
P2) Explain and evaluate different processes of customer relationship management for a small
business or social enterprise.
Customer relationship management can be defined as a process in which an organisation
uses all the strategies and techniques so as to develop their relationship with the customers they
are serving to. They make use of this process in analysing and handling the interactions done by
the customers as well. It is required to be used in every company and it is considered as the
responsibility of HR managers to implement these kinds of techniques in the company as then
only they will be able to attract new as well old customers towards the company (Cojoacă, 2017).
This will help the company increasing their profits and achieve competitive advantage in market
as well. If Austin Fraser will implement this process in their organisation, then they can maintain
their customers for longer period of time and thus their sales will not be affected for a certain
period of time. In this, data and information is collected by taking help of several communication
channels such as telephone, email and many others.
Customer relationship management process:
Assessment of customer value – This is a very effective process as through this they
will be able to make better relation with the customers and retain them for longer period of time.
It is considered as duty of management to identify the needs and demands of employees so that
goods and services can be produced as per their wish. By using these, organisation can also
gather feedback and viewpoints of the customers about the product they are offering to them.
Also, company will be able to gather knowledge about the latest trends going on in the market.
These kinds of activities will help in executing best practices so as to satisfy the requirements
and trust towards the goods and services.
Execution of effective communication channels- To keep up the better relation with
customers, Austin Fraser requires to make the better and helpful channels of communication. It is
useful in getting the better options and attempt to give improved business services as well. Some
of the better channel of communication are social media, websites etc. which help in reaching the
target customers in a proper manner.

Role of digital marketing and E-mail for effective relation – Both these methods can
be considered as a better medium to give information about the work that is being conducted in a
company and is also helpful for adopting some programmes which will have an impact on
behaviour of consumers (Drucker, 2012). Since, it is known that digital marketing activities are
having better connections with the consumers so it is considered as a more effective tool. Also,
the customers are also having a better connection with these type of processes so they can be use
it to get aware of the activities which is being carried out in the business environment. So, with
the help of all these two different methods firm can communicate with consumers and also
attract them in an effective manner.
P3) Explain how break even
Transactions sales can be defined as a concept which is helpful for every organisation in
analysing the profits as well as revenue. It can be said that small businesses are becoming very
famous in the global market as they are able to connect with the customers and vendors through
internet (Durst and Runar Edvardsson, 2012). So, it is very essential for the managers of small
companies to learn various methods of global interaction so as to look for opportunities for
growth and development. So, it is the duty of HR managers of Austin Fraser to implement
various types of techniques to attract various types of customers but all these tactics should be
according to the condition going on in that country. This will help them in making their image in
front of the customers and employees as well. Since, Austin Fraser is a small company so they
need to do their operations in better manner as they will have to face various kinds of difficulties
while dealing with clients of another company.
So, in context with Austin Fraser; the managers working there is required to put more
efforts and generate more opportunities at international level so that they can make use of it and
grow their business. So, they can make plans regarding giving away their services their clients at
affordable rates so that more public can get attracted towards them. This will increase their
profitability level as well and will make them more famous between the respective customers.
But, it is not at all easy for them to do these kinds of operations in an effective manner, so the
benefits and drawbacks attached with it is as follows: -
Benefits

Lifestyle- In every small organisation, a proper style of working is followed by the entire
employees of company. With this, all the operations are done in proper manner and thus it
becomes easy for the organisation to achieve their goals and objectives and gain more profits as
well (Durst and Wilhelm, 20122).
Independence - Under this, there is a right to supervisor to take the better choice for
growing the operations and activities of the organisation. There is a need to administrator to take
decisions based on consistent time interval to give better chances to run business in a proper
way.
Efficiency- Since they are following a proper business structure so all the work is being
done in a proper manner which brings efficiency in the organisation which is very advantageous
for the company (Hammer, 2015).
Drawbacks
Lengthy- With a specific end goal to conduct business activities in a better way and
increase benefits, Austin Fraser is required to make use of various innovative and creative ideas
so that all the functions are conducted within the time specified and effectiveness is achieved.
Financial risk- This risk is known to be arise every time whenever a company thinks of
extending its operations as company will have to arrange extra funds for doing all these kinds of
activities.
TASK 3
P4) Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income for a specific organization.
Sources of Funds
There are different sources which gives a chance to Austin Fraser management to arrange
finance for the execution of different business related activities. It will help in making
association stronger. The various sources of funds can be mentioned as under:
Equity finance- It comprises issue of inclination and value shared through Austin Fraser
to exchange on the stock trade. It is a compelling wellspring of expanding capital for long haul.

Bank loan- This is an external source through which finance can be gathered. It is useful
for Austin Fraser association to collect all types of loans from the bank at a settled rate of interest
which the company will pay on regular basis.
Hire and leader purchase- This is also an effective method from where funds can be
managed. In this basically, a property is being kept on lease to another person who will in
exchange give money to the leaser. When this money will be returned then only the property will
get back (Harmon, 2015).
Budgeting and Forecasting
Forecasting refers to a procedure in which predications of future are being made based
upon the present and past information. It is utilized by organisation to distinguish all the future
patterns. Apart from this, Budgeting can be defined as a method of building up a better method
to spend their funds in a better way. There are several tools which are used through Austin Fraser
company for forecasting and budgeting is given underneath:
Calculating moving average - It is helpful in getting preferences of existing consumers
according to current trends which are present at market place. This will be very beneficial for
company (Jasra and et. al.,2012).
Time series Data - According to this, management of Austin Fraser company gives an
emphasis related to identification of time period which will be require to finish particular project.
Balance Sheet, P&L a/c and cash flow statement of Austin Fraser organisations:
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
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. profit 24 38
Cash flow Statement
Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
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
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Overhead 900 600 600 600 600
Selling and distribution 650 700 700 700 700
Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 2515
P5) Explain how break even analysis could be applied to an organizational situation.
Break-even analysis refers to estimation of point in which costs are equivalent to income.
It is a financial tool which is utilized by the companies to recognize the profits they have earned
in a particular period of time. It is a vital technique utilized through Austin Fraser administration
to decide benefit. It is also useful in identifying the sales done by them during the monthly term
or financial term (Jenkins and et. al.,2013). This is considered as that point under which a
company achieves the no profit and no loss situation. With the assistance of breakeven analysis,
firm can build up better strategies to improve so as to increase their sales so that their goals and
objectives will be achieved. This will also help them in earning more amount of profit and
achieve higher position in market as well.

There are various kinds of techniques which is used by Austin Fraser so as to allocate resources
to different departments so that work can be accomplished in an appropriate manner. Some of
them are being discussed below:
Critical path analysis- This is a very effective method which is used by the managers of
Austin Fraser as through this they will be able to determine various ways through which project
can be accomplished in an effective manner and with time as well. Here, generally longest path
is being chosen so that they can get more time to finish their business operations.
In addition to the company, there are a few conditions which is required to be followed
by businesses so as to know about their sales which they have done during a particular period of
time. Under this, Break-even analysis is an essential part which plays an effective role in
reducing the amount of wastage and achieve betterment as well (Scold, and et. al., 2016).
For an instance:
Variable cost is Rs. 8 for every unit whereas settled cost is Rs. 16000 and offering cost is Rs. 10
for each unit. The BEP is given beneath as above:

BEP= Fixed cost/development edge per unit or product= 16000/ (10-8) = 8000.
P6) Explain and evaluate different processes of customer relationship management for a small
business or social enterprise.
There are various terms which is required to be prepared by the company for getting a
control over their operations and achieving profits in the company as well (Smit and Watkins,
2012). The managers of Austin Fraser will have to interpret their financial statements and know
about the financial position of the company as compared to their competitors. Main financial
statements prepare by Austin Fraser is given under following points:
Balance sheet – It is a kind of financial statement in which information about all the
assets as well as liabilities of the company is being mentioned. This kind of statement is very
effective and useful for the investors.
Profit and loss account – This is the kind of document which is very useful for the
management as they come to know about the profits as well as losses borne by the company at
specific period of time. Through this, the managers will also come to know about the
unnecessary areas where they are investing their money.
Cash Flow statements – It is that kind of statement which is prepared to know the inflow
as well as outflow of funds which the company is doing at a particular period of time. Mainly
shareholders and creditors remain interested in this type of financial document (Ali and Babiker,
2017).
TASK 4
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprise.
It is well known that government of every company is making some kind of rules and
regulations which needs to be followed by every company doing their operations in that country.
If they will not follow the rules and regulations, then legal actions can be taken actions against
them and they may also have to pay some kind of penalty. Major rules that impact commercial
operation of an organisation are as follows:

Healthy and safety act: In this act, it is mentioned that safe working environment is required to
be given to employees so that they can do their operations in an effective manner. It is
compulsory for all companies to apply this as it will make the employees satisfied and motivate
them as well.
Data protection act: This act state that enterprise remain liable to keep the personal data of
employees confidential and do not reveal it before third parties. This decrease employee's
turnover and provide competitive benefit to firm (Bridge and O'Neill, 2012).
Employment and tax act: It is a kind of business activity where management of every company
is required to pay tax to government and if they will not do that then they will have to pay
penalty as well. All this hamper the brand image of firm and reduce the sale of its products.
CONCLUSION
From the above report, it can be concluded that running a small business is a not an easy
task and it undertakes lots of efforts of managers to handle a whole organisation. They are also
implementing customer relationship management processes so as to attract large no. Of
customers and face their competitors as well. These employees which are working in these type
of companies are also given proper training so that they can handle their activities in an effective
manner. This report discussed about how resources should be allocated so as to make best use of
them in the organisation. There has also been an analysis about cash flow, budget, break even
analysis and key financial statements is also discussed.

REFERENCES
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Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
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of View. Informatica Economica. 21(4). pp.15-28.
Drucker, P., 2012. The frontiers of management. Routledge.
Durst, S. and Runar Edvardsson, I., 2012. Knowledge management in SMEs: a literature review.
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