Factors to Consider for Small Business Resource Selection and Customer Relationship Management

This report discusses factors that small businesses should consider when selecting resources, the significance of customer relationship management, ways to expand business internationally, break-even analysis, assessing financial performance, and laws affecting small businesses.

Unit 29

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1. Factors small business needs to consider when choosing the right resources to complete
their objectives and goal..............................................................................................................3
2. Customer Relationship Management and areas within customer research management........4
3. Defining transactional development, ways to expand business internationally and benefits &
drawback of each way.................................................................................................................5
4. Break-Even analysis................................................................................................................8
5. Assessing the financial performance of business by interpreting financial statements...........9
6. Legislation and different laws that affect small businesses...................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
In the current times, small business units are encouraged to attain success by offering
innovative products or services to the customers. With the motive to boost economic growth and
development government also offers financial support and assistance to small & medium sized
firm. This in turns motivates individuals to capitalize their idea and thereby gain competitive
advantage within competitive business arena. For this project, NISA has been selected, small
sized firm, which offers retail products & services to the customers. In this, report will provide
deeper insight about the factors that small business should consider at the time of resource
selection. Further, it entails the extent to which customer relationship management (CRM) is
significant for business. Report also highlights ways or modes through which business unit an
expand internationally. It will develop understanding about the concept of break-even analysis
(BEP) and ratio analysis. In this way, report depict how financial statements can be interpreted
and analysed using ratio analysis technique. It furnishes information about laws and legislation
which need to be followed by business units while performing business activities and functions.
MAIN BODY
1. Factors small business needs to consider when choosing the right resources to complete their
objectives and goal
Nature of the business: It is one of the important factors must be considered by the
organization to meet its objectives (Chams and García-Blandón, 2019). The organization must

decide the business activity and then decide the right resources to achieve the organization. The
small business can be proprietorship or it can be partnership business. The nature and size of the
business makes the human resource to choose the best resources.
Capital requirement: This is the another crucial factor which makes the organization to
decide to choose the right resources for their business. The business check that they must have
adequate capital in order to bring new resources. Choosing of right resources must consider the
availability of the capital in the business. Without availability of the capital business will not able
to buy the resources needed by them in order to achieve the objective.
Degree of risk and liability: The business must check the risk involved in order to
choose the correct resources for their business. The risk and liability depends on the size and
business activities. The risk involved in sole proprietor is less than compared to partnership
because in sole proprietor less resources are required in order to meet the objectives. The risk
and liability is also depending on the machines and equipments used by the business.
Availability of the resources: Before choosing the resources the business must check
that there is availability of the resources in that particular season. The resources chosen by the
business must be in accordance with the particular season. As some resources are not available in
the particular season so this may affect the objectives of the business (Apornak and et.al., 2021).
By considering the proper resources on the particular season the business can be run easily. This
helps the business to have proper management of the resources in order to meet its goal.
Government regulation: It is one of the major factor which can affect the goal of the
business. The resources used by the business must be legal and valid. The small business must
not use illegal resources in their business which makes their business unlawful and invalid. As
using illegal resources, the government can close the business. The business must consider the
law and regulations of the government to have the good profit.
2. Customer Relationship Management and areas within customer research management
Customer relationship management is the collection of strategies, practices and
technologies which helps the company to manage and analyse the interactions with the
customers. It aim is to improve the customer service relationship and retain the customers in
order to buy the product as this increases the sales and growth of the business (What is CRM?,
2021). It makes to have information about the customers like past purchases which provides
faster customer services to the customers. It has many benefits like it can have information about

the past purchase of the customer which helps them to provide better and faster services. The
another benefit can be that it can identify the new trends and services in the market for their
customers. Areas within the customer research management withy advantages and disadvantages
are as follows:
Technology: It includes the new applications and infrastructure. In customer research
management the use of new technology is very important as it helps to interact with their
potential customers.
Advantage- It makes the better interactions with the customers in order to clarify
their problems.
Disadvantages: Lack of new technology will affect to provide customer services.
Strategy: It includes the objectives and achievements of the business in order to provide
the best customer services (Soltani and et.al., 2018). There should be clear goal and objective to
have the best strategy for the customer research management.
Advantages- Helps the business to be more clear and specific about the achievements of the
objectives.
Disadvantages- Sometimes strategy did not work and leads to loss in the business.
Processes: It includes the rules of the business and set procedures. For customer research
management the procedures set must always be related to the customers (Dewnarain,
Ramkissoon and Mavondo, 2019).
Advantage- Proper procedure is made in order to provide better customer services.
Disadvantage- The made procedure may not be followed which results in not providing good
services.
People: It consists of structure of the organization, skills and incentives. There must be
proper and skilled staff in the organization which helps them to give the better services to the
customers.
Advantages- It creates the trust and loyalty with the customers and staff by having trained staff in
the business.
Disadvantages- Lack of proper structure and staff did not provide the better services to the
customers.

3. Defining transactional development, ways to expand business internationally and benefits &
drawback of each way.
In the recent time, organizations are facing varied challenges and deal with each in order
to run their ventures in effective manner. They may consider the best approach and suitable
concept that is transactional development, which define as process of transferring key products
and offering services across national boundaries. This procedure is quite beneficial for
companies that are running and managing their varied operations whether it is related to local or
international level. It is one of those strategic decisions that drive their attention toward business
expansion, which in return contribute to enhance performance and increase profitability of firms
whether it is small or large.
In the world of business, there are varied ways accessible that has been utilized or may
use by a company to take pleasure of increasing consumer base and generating sales, more than
other brands or enterprises that are sustaining in same market from longer time.
Basis Internet Joint venture Franchise
Description Most of the companies
in today's era are using
this approach to
expand their venture
globally, which is
quite essential for
them to so as it may
help to increase profits
margin and also
contribute to enhance
consumer satisfaction.
By using internet, they
may collaborate and
communicate with
international
consumers easily.
It is one of the best
and highly utilized
business expansion
technique that drive
the attention of
company toward
making agreement
with other parties or
companies that are
effectively running
their businesses in
specific market or
sector.
It is a method of
distributing quality
goods and offering
services including an
franchisor, who may
effort to establish their
brand's name, image or
trademark in another
nation effectively.

Benefits 1. The key benefit
of this
approach is
that it may
provide user
wide
demographic
or geographic
area, where
they may reach
without using
number of
human
resource as it is
not required.
2. It may provide
them chance to
gain
competitive
edge.
3. The another
benefit is that it
is not time-
consuming.
4. It may easily
give access to
enter into new
market.
5. It may give
access to
utilize greater
or wide
resource.
6. Offer
innovative way
to companies
to exit from
non-core
ventures.
7. It offers high
rate of growth
and success
more than
start-up
ventures.
8. It provides
benefit of less
failure.
9. It encompasses
low risk as
compare to
other approach
of global
expansion.
Drawbacks  Technical
issues may lead
to decrease
productivity
and
performance.
 Require
 Lack of
limitations to
take decision
independently.
 Poor
integration.
 The worst
thing about this
method that put
negative
impact on
company is
may do not

strategic
management
skills.
 Consume time
and effort to
develop
understanding
about people
needs in new
market.
 High
complexities
regarding tax
arrangements.
provide full
control in term
of taking
decisions and
implementing
strategies.
 It can be said
that
implementation
and
development of
a better
training plan is
needed that
requires key
resource and
time, when
company enter
into new nation
or market.
 Increasing cost
and risk.
4. Break-Even analysis
Break-Even analysis is the calculation of the point at which the cost of goods sold by the
business is equal to the revenue. It is also said as the analysation of the point at which the
business is earning neither profit nor loss. Break-Even analysis is also the analysation of the
calculation of the examination of the margin of safety which is helpful for the business for an
entity which is based on the revenue collected and associated with the costs (Matakena, 2021).
This information generated from this business is considered to very influential for the business in
the management as it used by them for setting the price of the product. This is because the

business is always able to sell its products in profit the products are sold at a higher price than
the break-point. In this method all the business determines the relationship which is between the
costs, revenue and the profits which is essential for the output of the organization. It helps the
business in the determination of the point of production which is considered to be the output.
This is useful for a business as it then understands how many units it needs to sell for avoiding
loss.
For the calculation of the Break-Even units of an organization first the contribution per
unit is calculated which is calculated by deducting the selling price per non-variable cost per
unit. This is important because the variable costs of the organization changes due to the increase
or decrease of production. Therefore, the BEP in units is calculated with the help of dividing the
fixed costs with the total contribution per unit. Multiplication of these units with selling price per
unit will help the business in calculating the total sales of the organization.
5. Assessing the financial performance of business by interpreting financial statements
Financial statements may be served as a formal record of business activities in quantities
terms. With regards to assessment of company’s monetary position and performance financial
statements are highly significant. Hence, ratio analysis tool has been used for assessing the extent
to which company is performing well:
Particulars Formula Figures (in £) Figures (in £)

2021 2020
Gross profit 184885 152267
Net profit 10948 (8790)
Net sales 1607561 1423066
GP ratio GP / Net sales * 100 11.5% 10.7%
NP ratio NP / Net sales * 100 0.7% -0.6%

The above depicted evaluation clearly shows that GP and NP ratio of Nisa has been
increased but not to the higher level. Irrespective of increasing sales revenue company’s
profitability is lower. Hence, firm need to undertake budgetary control tools & techniques which
in turn helps in making control on unnecessary expenses and thereby improves profitability.
6. Legislation and different laws that affect small businesses
Legislation is the process of enacting and enrolling laws made by the legislature in order
to govern the body. These laws are prepared by the state legislature, local legislatures and
national legislatures. These are basically rules and regulations made by the government in order
to have smooth flow in the country. There are various purpose of legislature are: to outlaw,to
grant and sanction the plan, to declare any new law or to restrict any previous law. . Different
laws that affect the small businesses are:

Employment Act 1996: This law is made for the employees in order to protect them
from the job. It gives the rights to the employees in the situations like parental leave,
redundancy, unfair dismissal or dismissal. There must be agreement between the employer and
employee in writing before the beginning of the employment (Nightingale, 2021). This also
provides benefits to the employees at the time of retirement, health and safety. This helps the
employees to have safety regarding their job. This right provides the employees benefits related
to the health and safety needs, statutory rights and working hours of the staff. This act provides
that there must be proper and set working hours for the employees.
Data Protection Act 1998: This act provides the individuals to have a right and access
the information about themselves and to keep that information protected. This law is very helpful
for the business in controlling the personal data for the protection of the data for the customers,
employees, suppliers, partners and also clients. This is considered to be a very fairly lawful
process which helps the business with the protection of the data of the customers which is
considered to be useful for the organization in the management of the organizational
performance. Not following this law can be considered to be a criminal activity in the terms of
the business or its managers which can misuse the information.
Company Law Act 2006: The company act is the wide range of reforms which were
made towards the ways in which the company is governed (Fan, 2021). It is said to affect the
duties which the company has towards the directors that effects the simplification of the same
elements which the company has incorporated as a process for summarizing the ways in which
the key elements of the business can be governed or directed for the essential part of the
organizational success. This law has allowed shareholders to get involved in the practices of the
business. In many ways this law has providing relevancy to the way in which most of the
business companies were ran.
CONCLUSION
By summing up this report, it has been articulated that aspect pertaining to goal & objectives
attainment affect from several aspects. Accordingly, at the time of resource evaluation and
selection small sized firm should keep in mind laws & legislation, availability of capital and
other resources etc. Besides this, it can be inferred from the evaluation that by managing aspect
of CRM firm can get competitive advantage. Besides this, it can be inferred from the evaluation
that BEP helps organization in doing effectual planning about sales and profitability as well. It

can be seen in the report that business unit can enhance brand image and attract stakeholders by
complying with laws & legislation.

REFERENCES
Books and Journals
Apornak, A. and et.al., 2021. Optimizing human resource cost of an emergency hospital using
multi-objective Bat algorithm. International Journal of Healthcare Management.14(3).
pp.873-879.
Chams, N. and García-Blandón, J., 2019. On the importance of sustainable human resource
management for the adoption of sustainable development goals. Resources,
Conservation and Recycling. 141.pp.109-122.
Dewnarain, S., Ramkissoon, H. and Mavondo, F., 2019. Social customer relationship
management: An integrated conceptual framework. Journal of Hospitality Marketing &
Management. 28(2). pp.172-188.
Fan, Z., 2021. Unfair prejudice in United Kingdom Company Law. Asian Journal of Humanities
and Social Studies. 9(1).
Matakena, S., 2021. Value Added Analysis, Break Even PointAnd Profit Of Tofu Industry In
District Of Nabire Regency. Turkish Journal of Computer and Mathematics Education
(TURCOMAT). 12(12). pp.3477-3484.
Nightingale, M., 2021. Part-time employment and the gender gap in low pay for UK employees:
what changed over the period 1996–2016?. Community, Work & Family.24(3). pp.272-
290.
Parackal, M., Parackal, S., Mather, D. and Eusebius, S., 2021. Dynamic transactional model: a
framework for communicating public health messages via social media. Perspectives in
Public Health. 141(5). pp.279-286.
Soltani, Z. and et.al., 2018. The impact of the customer relationship management on the
organization performance. The Journal of High Technology Management
Research. 29(2). pp.237-246.
Online
What is CRM?. 2021. [Online]. Available through: <https://keap.com/product/what-is-crm>