L/508/0566 Unit 29: Small Business Management Report Analysis

This report provides a comprehensive overview of small business management, focusing on the case of Davison Canners, a food manufacturing company. It explores critical aspects such as resource allocation, customer relationship management (CRM) processes, including customer lifecycle stages, and the development of transnational business strategies. The report includes an analysis of cash flow forecasting, break-even analysis, and the interpretation of key financial statements. It also discusses relevant legislation and regulations impacting small businesses. The report highlights the importance of effective planning, financial management, human resource management, and customer loyalty for the long-term survival and success of a small business, offering insights into how these elements contribute to achieving business objectives and generating profit.

The toolkit for small
business management

Executive Summary
This report involves the concept of small business management by the entrepreneur so that
they can achieve they there target effectively in the business and can earn more profit in the
business. This report is based on a food manufacturing company Davison Canner Various
resource allocation plan will be discussed in this report also how company manages the
customers relationship, break even, cash flow, and financial statement of the business will be
analysed also various legislation which is given by the government will be discussed in this
report.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
P1 Discuss the main considerations a small business or social enterprise needs to address
when planning and allocating resources to achieve business objectives.....................................4
P2 Explain and evaluate different processes of customer relationship management for a small
business or social enterprise........................................................................................................5
P3 Explain how a small business can develop transnational and determine the benefits and
drawbacks....................................................................................................................................7
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
set against income for a specific organisation.............................................................................9
P5 Explain how break-even analysis could be applied to an organisational situation..............10
P6 Interpret key financial statements for an organisation in relation to how they contribute to
the successful management of the organisation.........................................................................11
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprises..................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Small business management helps in increasing the growth opportunities for the economy so that
goals development of the country can also take place in the economy. Satisfying the needs of the
customers helps in increasing the goodwill of the company so that goals of the company can take
place effectively in the marketplace. if the company wants to earn profit in the market then it is
important for the business to enhance its services in the marketplace so that more revenue can be
generated in the economy revenue of the business can be enhanced in the market. Small business
provides the services as per the demand of the customers so that goals of the company can be
achieved that effectively. The main objective of every organisation is to earn more profit so that
they can earn more profit in the market as compared to other organisation in the market. the
selection organisation in this report is Davison Canners which is the best food manufacturing
company in UK. It provides variety of foods services to the customers. In this report it will be
discussed that how small business management helps in the long term survival of the business in
the market by developing its goodwill (de Haan, 2020).
MAIN BODY
P1 Discuss the main considerations a small business or social enterprise needs to address when
planning and allocating resources to achieve business objectives.
To achieve the objective of the business it is important for the business to allocate its resources
effectively if the firm will not allocate its resources effectively then it can affect the services of
company. Entrepreneur of the business have to plan its accordingly so that proper management
in the business can take place. If strategies will be formulated properly then it will give the new
direction to the business. Davison Canners is focusing on its target market so that they can
provide the better services as per the demand of the customer. Company should focus on its
target market so that they can develop the services of the company. if the company will identify
the need of the customers they will be able to provide the innovative product and services to
them which will helps in increasing the overall productivity of the customer. Below are few
different factors which should be considered while allocating the resources.
Future goals and objectives: To achieve success in business it is important to set object which the
business wants to achieve. Leaders and managers of the business should also guide their

employees accordingly so that they perform their duties accordingly. The main aim of Davison
canners is to provide the best quality of services to the clients so that the customer’s loyalty of
the business can be increased. Developing the healthy bond with the customers helps in
increasing the profit of the business in the marketplace so that positive image of the business can
be maintained in the economy. Buyers are the main source of increasing profit of the company in
the marketplace. if customers will not be satisfied with the product and services of the business
then it can affect the goodwill of the firm.
Financial resources management: Managing the funds of the business helps in enhancing the
overall performance of the firm because to operate any task in the business funds is very
important without funds company cannot perform its duties effectively in the marketplace.
Financial department should be concerned with the financial transaction taking place so that
financial stability of the company. Financial resources helps in achieving the growth of the
business.
Human resources management: This department helps in providing the best candidates to the
business so that performance of the firm can be improved in the marketplace. if well skilled
employees will not be hired in the organisation then it can affect the sustainability of the business
in the marketplace. Due to which whole revenue generating power of the company will get
affected. Davison canner motivate its employees so that performance of the employees cannot
get affected and revenue can be earned more in the business. Providing the proper training
programs to the employees helps in achieving the goals of the business effectively (Qiu, 2020).
P2 Explain and evaluate different processes of customer relationship management for a small business or
social enterprise.
Customers are the main source of generating income in the business they helps in increasing the
profit of the company in the market. If firm will not fulfil the demand of the customers then it
will force the business to switch the company which can create issues for the business in the
marketplace. CRM is the technology which is used by the business to interact with the customers
so that better services can be given. Various data of the customers is analysed through this
software. For the long term survival of the business maintaining a proper relationship with the
employees is very important.
Five stages are there in customer life cycle:

1. Reaching the customer: In this stage company first connect with the customers. This con-
tact could emerge out of a Facebook advertisement, a coupon conveyed via the post of-
fice, or even a reference from a companion business should showcase in places where the
correct individuals will see the substance and become mindful of your organization. It is
essential to have the correct measurements so that demand of the customers can be ana-
lyzed accordingly through the help of various social media platform company can easily
reach their potential customers which will further help in increasing the sale of the busi-
ness.
2. Customer acquisition: Presently business have the consideration of the potential clients,
The objective of this stage is quite clear; Business is sending individuals to their site in
order to change over them into their client. It's imperative to comprehend that the vast
majority will go to the site considering a particular craving or need. so business need to
assist them with seeing how business can help them address those issues. business ought
to have a cycle set up that will manage them toward changing over to the arrangement
that will help them the most (Deschryvere, 2020).
3. Conversion: .The most ideal approach to change over your leads into p clients is to zero
in on offering some incentive and developing the relationship instead of basically selling
the item. client should feel invited and esteemed; if this occurs, the deal will occur all
alone. It will also helps the business in improving its overall performance in the market-
place.
4. Customer retention: Business need to proceed to assemble and keep up the relationship
with the client. This implies keeping in touch here and there and proceeding to carry
worth to that individual so they will consider you each time they need your item or ad-
ministration. Client maintenance ought to be a first concern for organizations as studies
have shown that diminishing client beat by only 5% can build your benefits by 25-125
percent. It is substantially more beneficial for organizations to keep on offering to the
clients they as of now have than it is to discover and market to every single new client.
Retaining the customer in the business will helps in increasing the demand of the busi-
ness in the marketplace.
5. Customer loyalty: A definitive objective of this lifecycle is to transform your customer
into a companion which routinely purchases from the company and prescribes the item or

administration to any individual who will tune in. customer loyalty helps in increasing the
goodwill of the business in the market place so that more people can get attracted towards
the business. If the organisation will not achieve its objective effectively then it can affect
the sustainability of the company in the marketplace. due to which profit of the company
will also get affected in the economy. company should be loyal with their customers they
should not provide the defective goods and services to them.
P3 Explain how a small business can develop transnational and determine the benefits and
drawbacks.
If the entrepreneur of the business will provide the best services to the customers then it will
helps in developing the services of the company in the economy increasing the growth chances
of the business will helps in increasing the goodwill of the company in the marketplace due to
which more profit will be earned in the marketplace every small business can achieve success if
its services will continuously satisfy the customer in the marketplace because customers are
playing the main role in achieving success in the organisation due to which the company should
identify the needs properly so that productivity of the business can be enhanced effectively (Koh,
2020).
Advantages
 If the business will grow then it will helps in enhancing the resources of the business in
due to company will able to provide the best and innovative products to the customers.
 It will helps in increasing the sale of the business in the market which will further helps
in increasing the marketshare of the business.
 It will helps in reaching the new customers in the economy due to which demand of the
business will increased more (Wellman, 2020).
 If goodwill of the business will increase then it will reducing the risk factors in the
business.
Disadvantages
 Business may face shortage of cash as they have to buy new and advance equipment in
the business.
 Business can also face loss of control as proper management is required to function the
different activities in the business.

 It will increase the staff turnover as employees will refuse to work due to the work
pressure taking place in the business.
 Increasing the production of the company can affect the quality of the business due to
which company can face loss in the business. If the quality of the product will not good
then it can create various issues in the business due to which demand of the company can
also get affected.
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set against
income for a specific organisation.

Cash received: This is the all out cash from your clients which is received by the organisation for
the services which they are providing.
Cash Paid on Goods and Services: Money paid out to providers. It is the amount which is paid by
the business on the goods and services (Kruger, 2020).
Worker Costs Paid: This is the cost which is paid to the workers for the work which they have
done for the business. It is amount which has to paid to the labour so the business can be
performed effectively.
Interest Paid: The normal expense of subsidizing exercises like bank credits. The receipt of the
advance drawdown and reimbursement of the rule goes into Financing Activities however the
genuine on-going expense in interest comes into Operating Activities (Kruger, 2020).
P5 Explain how break-even analysis could be applied to an organisational situation.
Break even analysis helps in determining the position of the business whether the business is earning
profit or not in the organisation. It is a monetary computation used to decide the quantity of items or
administrations an organization should offer to cover its costs, particularly the fixed expenses.
Fixed expenses: These are the costs that stay a similar regardless of how much the business sells,
additionally alluded to as overhead expenses. They incorporate utilities, bills, compensations and
wages, lease, and protection.
Variable expenses: Variable expenses depend on a business' deals. They can incorporate extra
work from self employed entities, materials and instalment preparing expenses.
Average price: This is the normal sum you will charge for your items and administrations.
these components make an equation known as the break even point formula the original
investment point recipe. It is a generally straightforward computation, yet it is basic in making
arrangements for productivity.
Fixed Costs/(Average Price - Variable Cost) = Break-Even Point
The expression "make back the initial investment" alludes to a circumstance where business
neither making nor losing cash, yet the entirety of business expenses have been covered. With an
equal the initial investment investigation, business can decide when organization will produce

sufficient income to cover its costs and procure a benefit. Similar remains constant for a specific
item or administration. This information is regularly utilized for monetary projections.
There are various benefits of break even analysis which are given below:
 It helps in analysing the profitability: Ups and down are always there in the organisation
due to which organisation has to analyse the profit and loss in the organisation so that
they cannot face any loss in the business and can achieve their goals effectively in the
business. It helps in identifying which product helps the business in generating profit so
that business can enhance its services in the marketplace.
 It helps in ensuring whether the profit is priced properly or not: with the help of break
even analysis company can price their product effectively in the marketplace. because if
the product will not be priced properly then it can affect the growth of the business in the
marketplace. Pricing the product properly will helps in increasing the revenue margin of
the company in the economy. At the time of pricing the product business should the
identify the quality of the product so that they cannot face any loss after selling the
product in the market. keeping the right price for the product will helps in developing the
positive image of the company by increasing the goodwill of the business in the
economy. it will also helps in providing competitive advantage to the business so that
profit margin of the business can be increased.
 It helps in effective planning of strategies: with the help of break even analysis company
plan better strategies in the business which will helps in smooth functioning of the
company in the economy. strategies should be formulated effectively in the business so
that overall profit of the business can be increased in the marketplace. Utilizing break
even analysis campany can make a methodology for what's to come. On the off chance
that your business' benefit is dictated by the accomplishment of at least one items, the
make back the initial investment point for every item gives a timetable to the
organization, which can help you carry out a superior by and large monetary
methodology that fits the projected expenses and benefits. This investigation can likewise
assist business with deciding approaches to accelerate organization's make back the initial
investment point, like diminishing business general fixed expenses, decreasing the
variable expenses per unit, improving the business blend by selling a greater amount of
the items that have bigger commitment edges, and expanding the costs

P6 Interpret key financial statements for an organisation in relation to how they contribute to the
successful management of the organisation.
Financial statement in the business helps in analysing the profit and loss in the business so that
business can improve its performance and achieve profit in the market. financial statements helps
in the success of the business by identifying the various risk factors which can affect the
performance of the company due to which it is important for the business to analyse the various
key financial statement so that more profit can be earned by the business.
Balance sheet gives a preview of an organization's monetary wellbeing for a given period. It
records the resources, liabilities, and value line by line for the period so partners can comprehend
the breakdown (Crothers, 2020).
Income statement, It is also called P&L, gives an outline of the pay and costs during a set
period. Regularly introduced yearly or quarterly, the pay articulation permits organizations to
analyze patterns in pay and costs over the long haul.
Cash flow statement :It provides the details about the inflows and outflow of money for a
particular period. Broken into working exercises, contributing exercises, and financing exercises,
the income explanation exhibits the business' capacity to work in both the short and long haul.
Benefit of financial statement:
 It helps the identifying the impact of loss in the business so that various activities can be
planned accordingly in the business. if loss will be identified properly then business can
plain various strategies accordingly which will help in developing the growth chances of
the company in the marketplace.
 It helps in determining the budget how the business should the budget for running their
business for the long period of time in the organisation. Setting the budget in the business
will helps in developing the services of the company in the economy.
 It helps in cutting the unnecessary cost so that various chances of loss can be eliminated
from the organisation and productivity can be earned more. While manufacturing the
product there are various unnecessary cost which is involved due to which expenses of
the business can be increased in the business. and company can face loss in the business
due to this if the loss will not be eliminated on time then it can create various issues in the
company.

 It helps in motivating the employee by identifying the growth chances of the company
which helps in increasing the efficiency of the employees in the organisation so that more
profit can be earned in the business. Motivating the employees will helps in sustainability
of the business in the market because if the employees will not work properly then
company will not be able to earn more profit in the business.
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprises.
There are different laws which is given by the government which has to be followed by the
organisation so that they can perform effectively in the business these law are made for the
development of the economy so that various activities of the business cannot affect the society
and GDP of the country can also be increased in the marketplace. If the small business wants to
maintain its position in the market then it is important for the business to understand the law
effectively in the organisation.
Various rules and regulation which is given by the government are mentioned below:
 Labour law: These law is made to provide equal opportunities to the workers by paying
them as per the work done by them. It manages the connections among employer and
employee with enactment set up that clarifies how staff (and your business) should act in
a workplace. Work law can be a mind boggling matter for entrepreneurs to get their head
around on occasion, driving numerous to request a 'rundown of business laws' that they
can allude back to while dealing with their everyday tasks (Colonne, 2020).
 Data laws: In every organisation important data and information of the customers are
stored which the organisation has to keep safely. It is responsibility of the business to
keep the data safe in the business so that negative image of the business cannot be created
and good image of the business can be maintained.
 Health and safety law: In the food manufacturing organisation this law is very important
as it helps in providing the food safety to the customers it also helps in maintaining the
safe working environment for the employees. So that employees cannot suffer from any
diseases in the functioning of the business cannot get affected.