Managing and Running a Small Business: Considerations, CRM, Transnational Development, Cash Flow and Financial Statements

This report covers the main considerations a small business needs to address when planning and allocating their business resources, different processes of customer relationship management for a small business or social enterprise, how a small enterprise can develop transnationally, produce an annual itemised monthly cash flow forecast showing fixed and variable costs, and interpret main financial statements for the organisation in relation to how they contribute to the successful management of an organisation.

Managing and
Running a Small
Business

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1. Main considerations a small business needs to address when planning and allocating their
business resources..................................................................................................................4
TASK 2............................................................................................................................................5
P2. Different processes of customer relationship management for a small business or social
enterprise................................................................................................................................5
P3. How a small enterprise can develop transnationally?......................................................7
TASK 3............................................................................................................................................9
P4. Produce an annual itemised monthly cash flow forecast showing fixed and variable costs.
................................................................................................................................................9
P5. Break even analysis could be applied to a business situation........................................10
P6. Interpret main financial statements for the organisation in relation to how they contribute
to the successful management of an organisation................................................................10
........................................................................................................................................................11
TASK 4..........................................................................................................................................12
P7. Key legislations and regulations that have implications on SME..................................12
REFERNCES:................................................................................................................................14
Books and Journals:..............................................................................................................14

INTRODUCTION
An entrepreneur possesses a significant role in the development of society and it can be
considered as a national asset as well. For any country, entrepreneurs can be a key driver for the
growth and development. The entrepreneur can be a single person who develops a new business
with creative and innovative ideas, they are getting all rewards while bearing all uncertainties
and risks. Entrepreneur can be a manager, organiser or assume the risk for the business. An
entrepreneurship signifies as the dynamic process in which new and innovative things are created
for the business. Small business organisation provides employment opportunities and creative
ideas to enhance the economy. Small medium enterprise or SME needs high grade information
along with internet solution for their enterprise. According to European Union, the headcount
number of SME is less than 50 and more than 250 (Álvarez Jaramillo, Zartha Sossa and Orozco
Mendoza, 2019). The following report will consider Yuzu which is a SME in United Kingdom.
Small business plans allocate assets and resources to achieve goals which will be shown in the
report. The procedure of customer relationship management will also determine in this study.
Budget, break even analysis, cash flow statement are utilised by organisation to identify their
financial statement which will also explain in the project. Some legislations and regulations for
SME will also be introduced in the report.
TASK 1
P1. Main considerations a small business needs to address when planning and allocating their
business resources.
A proper planning is required to accomplish the objectives of small business in allocating
their business resources and managing their business activities. Small organisations are having
limited resources and if they are not allocating their resources in a proper way then there may be
a delay in the work. So, it is essential to manage things properly to accomplish the objectives and
generate profit by making effective planning for the business (Abdullah, 2019). In case of Yuzu,
the following are some main considerations that needs to be taken by the organisation while
allocating their resources:
 Determine the project range: Before finishing any activity or project the planner needs
to consider the small targets for example documentation of project boundaries that what

its resources, objectives, budget and other considerations that can influence the project
time range.
 Identify the resources they need: Manager also required to assessing the key objective
task and deadline. They need to analyse which kind of resources are vital to the
organisation and to complete a certain task (Taylor, 2019). Moreover, it is also important
to ensure that the work done according to the plan they have made and check out the
further steps to see how things could be done better.
 Evaluate the human resources: It is important to give feedback and reviews about the
employee performance which can be either based on past or current performance. With
the help of clear communication, the managers can communicate and provide feedback to
their employees.
TASK 2
P2. Different processes of customer relationship management for a small business or social
enterprise.
Customer relationship management can be understood as a combination of practices,
technologies and strategies that organisations exploit to manage and evaluate customer
interactions and information throughout the customer life cycle (Ullah and Narain, 2020). The
main objective is to improve the customer service relationships and help in customer retention
while increasing business sales. CRM systems accumulate the information about customers
across different channels between customer and the organisation which could contain the
business website, live chat, telephone, marketing materials, direct mail and social networks. It
can also give customer facing employees detailed information on customers’ personal data,
buying preferences, purchase history and other concerns. In case of Yuzu, the company can use
this system for keeping every customer interaction personalized and useful that involves
following key stages:
 Identify target market: It is the first step of customer relationship management
technique in which target customers are identified. The company identifies its customers
in the target market. It involves various investigators to collect information about the
customers. The chosen organisation can identify likes and dislikes of the customers and
give them product or services accordingly (SAHA and SHARMA, 2020).

 Collect and store data: The next stage in CRM system is gathering and storing the
required information. Different databases are used in order to store the information about
the customer.
 Proper communication channel: The third stage in the CRM system is to communicate
and contact the target customers so that they can be attracted towards the brand. For the
selected organisation, it is important for them to use proper communication channel to
contact more and more customers. Through communication channels, the company can
also take reviews and suggestions from the customers about the products and services.
 Analysing the sales data: In this stage, data is gathered through sales and many
customers are considered. The information is evaluated with the aim of making and
attracting more loyal and profitable customers. The chosen SME can take interviews of
such customers in order to understand their preferences.
 Provide data to staff: In this stage, the data is made open to all the employees who are
in the field and which can help in targeting the audience properly. For example, if the
salesperson is able to access the information collect it will help them to acknowledge the
behaviour and taste of the customers (Jiang and Holburn, 2018). Further, they will
implement such information while distributing their duties.
 Personalised interaction with customers: It is a final stage in which interaction has
been personalized with the customers. Information collected is utilised to correct and
modify the communication method depending on their behaviour to provide better
customer satisfaction. If any customer has any problem, issue or complaint then attempt
should be made that it may not occur again.
It is evaluated that customer relationship management process deliver benefits to the
company as it helps in getting the better knowledge of target customers which can improve the
overall sales of business. With the help of right communication tool, the company can interact
with the customers in order to understand their tastes and preferences, resolve queries or any
complaints. Moreover, it will also help in better customer retention as the company will be able
to fulfil their promises and by taking follow up email or messages, the company can rectify their
errors and deliver better services in future as well.

P3. How a small enterprise can develop transnationally?
An international expansion strategy involves market entry plans and strategy covering
important choices and regard to crucial market places of focus, channel strategy, determination
of right customers, product and service value, resource allocation, creation of an operating model
brand positioning and much more (Ledesma-Chaves, Arenas-Gaitán and Garcia-Cruz, 2020).
The following are some strategies that can be used by Yuzu to transnationally their business:
 Exporting: It is one of the most common methods to enter a foreign market in which
organisation will have contractual agreements with either distributors, marketing
agencies, vendors or mix of all three which is a crucial process in itself. The product and
services that is being vended must be advertised successfully to make an influence within
the target market. The initial benefit of this method is that the company escapes the
expenditures of launching subsidiary in foreign market. On the other hand, the drawback
is that the cost of transportation can be high and risk are involved are related with
environmental factors. Also, the company have to oppose with any tariffs which can
influence the profitability.
 Licensing arrangements: It can be a low risk method of expanding business into foreign
markets. It is also a contractual agreement for other organisations to exploit intellectual
property that can be exclusive, non-exclusive and exclusive for certain locations. Such
kind of arrangements generally come with the involved party being an established
company within a certain country, signifying they have analysed the market and been
working within it for some time (Fernandes, 2022). The benefit is that licensor does not
need much investment for this method as no new development or acquisition need to be
gained. Also, this method is quite cost effective and quick process involved within it. It
involves complex legislation concerning with intellectual property, legal taxes and much
more.
 Merges and acquisitions: Merges and acquisitions are used where two organisation
consolidate or merge with another for the expansion purpose. As organisations enlarge
and digital connectivity improves, the transition from one place to another, the range of
cross border acquisitions and merger has improved. The benefit is that it is a quick
method to expand in a new market. It also helps in improving digital connectivity.

Whereas, it involves expenses related with interest rates or any effect from currency
exchanges.
 Managing and expansion process In-house: The first method of international
expansion is to undergo an in house approach where an organisation creates on mobility
structure based on the needs, wants and restrictions (Picot-Coupey, Viviani and Amadieu,
2018). This is a strategy helps in maintaining the identity while determining the exact
route where the organisation want to go. If the organisation wants to use this plan or
strategy, then there are some aspects which needs to be considered such as employee
management, financial regulations, physical presence versus in-country partner or
employment versus emigration. The benefit of this strategy is that it is an open ended
structure where the exact route can be determined. The downside is that the company
requires a big amount of commitment, research and preparation.
 Partnerships: Strategic alliances with local organisations already embedded within a
particular nation is another strategy for transnationally. It is a method in which two
companies come together to achieve a common objective and together benefits by doing
activities. The local firm will most likely to have potential understanding about the
market and have experience as well. One of the major benefits of this strategy is that it
fills up the gap between home market and foreign market. But on the other side, it may
also make the organisation to make some compromises on things that they do not want to
and it also lacks from control.
By analysing all the above strategies, the recommend strategy for Yuzu is partnership as it is
valuable for such kind of small business in which big amount of capital is not needed to establish
a business by themselves. It is also required by law so with agreement it can clear out the terms
and conditions.

TASK 3
P4. Produce an annual itemised monthly cash flow forecast showing fixed and variable costs.
It has been interpreted that the cash flow arranged about would support Yuzu to interpret
the solvency and liquidity and it what manners the company can take actions to accomplish their
objectives and goals in a timely manner (Sanad and Al-Sartawi, 2021). The above cash flow is
ready for 3 years in which overall cash utilised is in negative figures at the starting phases which
is detected to waning with each passing month in prior year which handled to transform the cash
being utilised towards that inflow of cash from the month of May which signified a figure of 907
and which kept on rising till October and fall to an adverse number in November which turned
out to be unfavourable. Therefore, it is suggested to the strategic planners and managers of the
organisation to look on the aspects and enhance their efficiency and working of the business.
Second and third year the organisation recorded a negative balance which is unfavourable and
would turn out to be challenging in future.

P5. Break even analysis could be applied to a business situation.
Break even analysis can be defined as a financial tool which is used by organisation to
determine its level of services, product and business would be lucrative and beneficial. It is
regarded as a financial calculation which is taken into concentration to analyse number of
products and services an organisation must be sold for covering its expenses and cost (Liu,
2020). Break-even point at which expenditures connected with the production would be matched
with the revenues generated. In respect of Yuzu, the following are some ways through which
break even analysis could be used by organisation:
 Catch missing cost: When an individual thinks to plan a new business idea or venture,
there might be a chance that they can forget certain costs and expenditures. The break-
even analysis would support in reviewing all fiscal linked commitments in order to know
about the break-even point. Such analysis would limit the unpredictable situations and
make organisation to be ready for the risks.
 It helps in determining the selling price which would make aimed results: After
finishing the break-even analysis the company can predict that at what quantity a
business must sale to gain profitable results. The sales team is also supported by the
break-even analysis to reach and satisfy the goals and objectives of sales. It would be
beneficial in developing the pricing scale of goods better and such tools are highly
exploited for providing best price that can make good amount of profits for the business.
P6. Interpret main financial statements for the organisation in relation to how they contribute to
the successful management of an organisation.

From the above mentioned statement of profit and loss, it is interpreted that Yuzu
organisation has begun the year by facing losses in its starting year and further the company is
able to manage such losses with each passing month (Yuesti, Adnyana and Pramesti, 2020).
Therefore, the negative impacts were controlled by the company from the month of May and
profits were also made in the second year and third year where the company made a huge
amount of revenues and improve its overall profitability as well.

From the above mentioned fiscal statement, it is said that the organisation is having enough
cash along with cash equivalents. In the first year, asset is 15000 which is fall to 13000 and in
second year and in third year it is again rise to 20000 which is a good ratio (Custers and et.al.,
2018). It is suggested to the company that the organisation must handle the variations that is
facing by them. It can be a risker and threatful situation for the organisation to deal as it would
influence the sustainability and stability of the business in long range.
TASK 4
P7. Key legislations and regulations that have implications on SME.
Equality Act, 2010: It is an act introduced for the rights of employees in the organisation.
This law is made to give protection against discrimination and inequality at workplace. It further
signifies that discrimination or unfair treatment on the grounds of particular characteristics such
as ages now against the law in almost every case (Yoo and Chankov, 2018). The act of equality
is implemented towards the discrimination of person on the basis of age, cast, religion, race and
so on. This act takes into consideration provisions which would restrict or ban age discrimination
which is on the basis of aged discrimination against adults and provision of services or public
functions. In context of Yuzu, it is important for the employers to give a work environment
which is free from discrimination and harassment while providing equal opportunity to its
employees.
Health and safety at work Act, 1976: It signifies the ways organisations shall be
providing satisfactory training to their employees would be guaranteeing health and safety
processes are being agreed. It would support satisfactory welfare provisions for employees at
organisation. A safe and healthy works surrounding which is adequately being maintained and
where business activities within it are being safely conducted. There are different provisions of
relevant, reliable, instruction, supervision and information. Such legislation would be
contributing in the chosen organisation to manage working environment which is safe and
healthy for their employees.
Employment rights Act, 1996: It involves different features connected with the act such
as consolidating enactments which are connected to the rights of employees (Pelsmakers, 2019).
Such legislation includes areas which are protection towards wages, redundancy payment,
suspension from work, Sunday working, zero hour contracts, unfair dismissal, flexible working,

termination of employment and much more. In respect of chosen organisation, the employees
can secure the rights for taking paid sick leave, paid holidays, life insurance, training, education
or any growth opportunities.
CONCLUSION
It is concluded from the above report is that financial statement support the business
organisations to run in a competitive business environment and provide an idea about the
performance being used in the long run. It supports the customers and investors to have an
overview about the business functioning and working. This report would support the
computation of break-even analysis along with preparation of cash budgets which would be
beneficial in understanding the outcomes which the organisation would be recording.

REFERNCES:
Books and Journals:
Álvarez Jaramillo, J., Zartha Sossa, J.W. and Orozco Mendoza, G.L., 2019. Barriers to
sustainability for small and medium enterprises in the framework of sustainable
development—L iterature review. Business Strategy and the Environment, 28(4),
pp.512-524.
Abdullah, M.A., 2019. Small and medium enterprises in Malaysia: Policy issues and challenges.
Routledge.
Taylor, P., 2019. Information and Communication Technology (ICT) adoption by small and
medium enterprises in developing countries: The effects of leader, organizational and
market environment factors. International Journal of Economics, Commerce and
Management United Kingdom, 7(5).
Ullah, I. and Narain, R., 2020. The impact of customer relationship management and
organizational culture on mass customization capability and firm
performance. International Journal of Customer Relationship Marketing and
Management (IJCRMM), 11(3), pp.60-81.
SAHA, P. and SHARMA, A., 2020. CREATING VALUE THROUGH CUSTOMER
RELATIONSHIP MANAGEMENT IN THE AUTOMOTIVE INDUSTRY IN
INDIA. CLEAR International Journal of Research in Commerce & Management, 11(9).
Jiang, G.F. and Holburn, G.L., 2018. Organizational performance feedback effects and
international expansion. Journal of Business Research, 90, pp.48-58.
Ledesma-Chaves, P., Arenas-Gaitán, J. and Garcia-Cruz, R., 2020. International expansion:
mediation of dynamic capabilities. Marketing Intelligence & Planning.
Fernandes, C.P., 2022. International expansion plan of Progest Angola (Doctoral dissertation).
Picot-Coupey, K., Viviani, J.L. and Amadieu, P., 2018. Determinants of retail store network
expansion via shop-in-shops. International Journal of Retail & Distribution
Management.
Sanad, Z. and Al-Sartawi, A., 2021, March. Financial statements fraud and data mining: a
review. In European, Asian, Middle Eastern, North African Conference on
Management & Information Systems (pp. 407-414). Springer, Cham.
Liu, W., 2020. How useful is it for banks to analyze financial statements. American Journal of
Industrial and Business Management, 10(8), pp.1488-1504.
Yuesti, A., Adnyana, I.M.D. and Pramesti, I.G.A.A., 2020. Management information systems
and the quality of financial statements in local government. Journal of Public Affairs,
p.e2462.
Custers, B. and et.al., 2018. A comparison of data protection legislation and policies across the
EU. Computer Law & Security Review, 34(2), pp.234-243.
Yoo, H.D. and Chankov, S.M., 2018, December. Drone-delivery using autonomous mobility: An
innovative approach to future last-mile delivery problems. In 2018 ieee international
conference on industrial engineering and engineering management (ieem) (pp. 1216-
1220). IEEE.
Pelsmakers, S., 2019. The environmental design pocketbook. Routledge.