Managing and Running a Small Business

This report examines the key considerations for managing and running a small business, using SuperDry as a case study. It explores resource allocation, customer relationship management, transnational operations, cash flow forecasting, break-even analysis, and relevant legislation. The report provides insights into the challenges and opportunities faced by small businesses in today's competitive market.

UNIT 29 – MANAGING AND
RUNNING A SMALL
BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................3
LO 1 ...............................................................................................................................................3
P 1 The main consideration of small business that need to address when planning and
allocating resources to achieve business objectives...............................................................3
LO 2.................................................................................................................................................5
P 2 Different processes of customer relationship management for small business ..............5
P 3 Developing transnational operation for small business ..................................................6
LO 3.................................................................................................................................................9
P 4 Annual monthly cash Flow forecasts...............................................................................9
P 5 Break even analysis can be applied to organisational situation ...................................11
LO 4...............................................................................................................................................12
P 6 Key legislation and regulation that have implication on Small businesses....................12
CONCLUSION .............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
Managing and operating a small business requires various skills and knowledge to
perform various activities of organisation. Small business require less human resource and they
are established using fewer equipments. This study will provide information about various
operations performed by Small businesses. SuperDry is a UK fashion retailer and is improving
its performance to become a market leader in fashion Industry. The organisation has earned
revenue of £752.0 million In the year 2017. This assignment will include needs of small retailers
when planning and allocating resources to achieve business objectives. Moreover, It will provide
understanding of different processes of customer relationship management for a small business.
Furthermore, This study will contain the forecasted cash flow of organisation to determine its
growth in future and will also show the break even analysis of the small organisation.
LO 1
P 1 The main consideration of small business that need to address when planning and allocating
resources to achieve business objectives.
SuperDry is a small retailer operating in fashion retail industry. This organisation is
working towards achieving its various goals and objectives and for this the organisation need to
make planning for aching its aims and objectives. The organisation for achieving its targeted
goals have to make plans and strategies for effectively and efficiently achieve those goals.
Fashion retail organisation have to make planning of performing its various activities which
includes planning of human resource, equipments etc (Burns, 2016). Organisation have make
planning for managing its activities in order to perform the activities in the planned manner
which will be beneficial for organisation. SuperDry has the following Aims and Objectives :
Aim:
To increase its sales by 5% in every quarter along with acquiring huge market share in fashion
retail industry.
Objectives:
 To provide high quality products to customers.
 To gain high market share and increase sales by 5%.
 To enhance brand image and positioning in industry.

SuperDry in order to achieve these objectives is making various strategies and planning
to achieve this targeted goals. It has planned for its human resource in which it will hire the
qualified and skilled employees to improve its performance in industry and achieve higher
results (Doppelt, 2017). The organisation have to making effective planning regarding the
operations it will carry and the ways through which it will manage its various operations. The
organisation have to plan for its activities such as people required for various job roles. The
Business have to plan its activities such as it has to make planning for marketing of its products
and services, planning regarding sales of products and services etc (Epstein, 2018). Moreover,
SuperDry ensure that workers are utilised to the fullest capacity in order to achieve
organisational objectives. Small business also have to consider various factors such as pricing,
supply of inputs etc.
The resources for which organisation have to plan includes premises and equipment,
people and skills. Moreover, SuperDry have to ensure proper organisational structure and must
adopt flat organisational structure as its is small business and there are no such level of
management. Small organisation have to adopt a flat organisational structure which has no level
of management and thus there is effective communication between management and employees.
Moreover, Small business have to ensure proper techniques of recruitment and selection of
candidates for performing various activities (Rainnie, 2016). The small organisation must ensure
that employee are provided with right job role in order to motivate them to work towards
achievement of common goal of organisation.
The business planning is required by SuperDry for its various future activities such as
brand extension, diversification etc. The SuperDry provide proper training to its new employees
in order to provide them better understanding of various activities which are undertaken by this
organisation. SuperDry by planning effectively for its various activities such as recruitment and
selection, marketing, quality of products, better customer experience can achieve its set goals and
objectives. It is important for organisation to make planning and allocating the resources in the
effective manner to achieve organisational objectives. Planning is important as it assists in
efficient use of resources.
Moreover, It assists in managing the risk and uncertainties which can hamper business
operation in the future. Planning for resources is required to build effective team for allocating
the resources in efficient manner to achieve organisational objectives. Planning for resources

includes recruiting more staff, spending more on marketing, buying more supplies and
equipment for allocating resources in efficient manner. Resources are allocated as per their
requirement in the specific areas (Allen and Truman, 2016). If resources are allocated properly
than organisation will be able to achieve its target goals in effective and efficient manner. There
are various resources which are required to be management which consist of human resource,
financial resource, products, skills, technology etc. Resource allocation is allocating different
resources in different areas such as finance, marketing, sales etc.
LO 2
P 2 Different processes of customer relationship management for small business
Customer relationship management is a technique used by organisation to keep track of
interaction with customers. Customer relationship management assist organisation in increasing
interaction with customers which is required to identify their taste and preferences, their buying
habits etc. The CRM technique helps in gathering information about customer data which assist
small businesses in providing them, products according to their requirement at the reasonable
prices (Laudon and Laudon, 2015). Customer relationship management helps small business in
retaining providing value to their customers by gathering information about their demands and
their buying habits which assist organisation in offering products to customers as per their
requirement.
SuperDry by implementing customer relationship management technique will; be able to
improve its customer experience that will enhance their customer base and will assist in retaining
customers for the long run in business. SuperDry can build customer relationship through use of
various effective channels for communication such as social media, website, direct mail etc.
SuperDry can make use of various digital platform for increasing its customer base which will
helps in achieving the organisational objectives through use of strong customer base. Customer
relationship management techniques will help SuperDry in increasing its sales by developing
connection with its targeted and potential customers that will assist organisation in achieving its
objective effectively and efficiently.
Using Customers relationship management can support the firm in providing its
customers with better services and experience with organisation. Customer relationship
management process involves use of various activities and strategies for increase customer

interactions which will helps the firm in achieving its targeted goals (Davis and et.al., 2018).
There are different types of CRM which can be used By SuperDry for increasing interaction with
customers. It consists of Operational, Analytical and collaborative CRM.
 Operational CRM : It includes Sales Automation, marketing Automation and service
automation. The main purpose of this Type of CRM is to generate leads and convert
them into contacts and gather al details about customers and provide service throughout
customer life cycle. SuperDry by using this CRM process can build its sales automation
and marketing automation in which it will be able to provide effective channels such as
emails, mobile phones, face to face meetings etc. to reach organisation potential
customers. It includes sales automation which consist of lead management, contact
management tracking customer preference etc. This CRM is beneficial for organisation
and can provide assistance in increasing sales of firm.
 Analytical CRM : Data analysis is the main function performed by this CRM process
in which it analyses customer data to identify current status of organisation Moreover,
It provides management to make better decision for increasing sales of firm to achieve
its aims and objectives. It analyses the data by gathering customer information through
use of various channel (Rigby, Sutherland and Takeuchi, 2016). The advantages of
using this CRM is its provide higher lead conversation rate. Moreover, It helps in
providing
 Collaborative CRM : This CRM process is used by organisation to share customer
information with various other department of organisation such as sales, marketing etc.
It provides organisation to work effectively towards improving their customer service
and experience by providing them with high quality products and services.
SuperDry is a fashion retailer and is operating at small level in UK and to increase its
sales and increase its customer base must use customer relationship management technique
which will helps organisation in achieving their target goals. By increase its customer base
through use of various channels organisation will be able to increase its profitability which will
be beneficial for organisation.
P 3 Developing transnational operation for small business
The business can use transnational business strategy which will helps small business in
increasing their customer base through use of trading across boundaries. Transnational sales

refers to offering products and services in the global market to increase profitability and sales of
firm which will increase their market share. Moreover, transnational operations helps the small
business in enhancing their brand image by entering into new market. The organisation
internationalise to increase their sales and enhance the brand recognition to attract more
customers towards firm which will help the firm in increasing their profitability. Developing
transnational operation assist the firms in increasing their market share and interaction with
potential customers which is beneficial for growth of organisation. Moreover,
internationalisation of business provide small businesses chance to gain competitive advantage to
grow their market and increase their brand recognition through enhancing transnational sales.
Small businesses in order to develop transnational operations can use the stage Approach of
Internationalisation. According to Stage Approach companies start selling products in their home
countries and then enter other market for growth and success of their business. There are two
main stage approach models which consist of product life cycle theory and Uppsala
Internationalization Model.
Product Life cycle theory : The internationalisation process follows the development of
product life cycle. It includes three stages for developing transnational operation of organisation.
 New product :It means developing new products according to demands of customers
which support organisation in attracting more customer towards firm that helps
enterprises in their growth and success. By introduction a new product will assist in
increasing the sales if customers are satisfied by the product innovated.
 Product maturing : It is the stage in which manufacturer will need to consider opening
up of production plants locally. The expansion of demand determine the standardization
of product. The organisation in order to satisfy the local demand provide production
facilities in advanced countries where demand for their product is increasing (Maskell,
Baggaley and Grasso, 2016).
 Standardised product : At this stage less developed countries become attractive as
production locations, in which it allows cost saving. The new production facility can
satisfy the local demand as well as demand in foreign market.
Uppsala internationalization Model : There are four steps provided by Uppsala
internationalisation Model for entering an international market (Uppsala Internationalization
Model, 2017).

Step 1: No regular export activities which means they operate at local level.
Step 2 : Export activities through agents
Step 3 : Export activities through company's own sales subsidiary.
Step 4 : Establishment of production units in foreign countries.
Internationalisation require general knowledge and market specific knowledge. Market
specific knowledge is gained by experience in marketplace. The internationalisation dimensions
consist of sales objects, operation method market, organisational structure, financial and
personnel etc. This dimension of organisation assist them in developing their transnational
operation. SuperDry in order to develop transnational operation can use the stage model of
Internationalisation which will helps them in entering into new market which will be profitable
for them and for the growth of their business. SuperDry can export its product to other counties
if the firm have demand for their products in that country.
The process of Exporting consist of identifying the demand of product in that country,
research about competition, analyse the market, identify barrier in entering those market and then
choose a perfect market which will be profitable for their business. The small businesses in
order to develop transnational sales must ensure that before entering any other market they must
identify competition and the risk associated with entering into new market.
SuperDry before entering any new market must ensure that it has analysed the new
market and the existing competition and also the chances of failure and success of business
before entering other market. The organisation have to identify trade regulation and other factors
which must be considered for developing transnational operations (Ward, 2016). Also, It is
required that small business must focus on increasing their product quality and enter the market
through using market penetration strategy which will support the firm in attracting customers
towards their products and services.
Benefits
 Transnational operation assist organisation in expanding their business (5 benefits of
international expansion, 2018).
 Foreign investment opportunities.

 It provides the firms to gain competitive advantage by developing transnational
operations.
Drawbacks
 There is a risk of loss of control by developing transnational operation.
 Lack of understanding about the new market.
 The organisation also have risk of failure of business due to high competition.
LO 3
P 4 Annual monthly cash Flow forecasts
Small businesses in order to perform their various operations require funds which are
needed for providing product and services to customers. The funds can be acquired through bank
loan, own savings., loans from family and friends etc. It assists organisation in performing their
various activities effectively and efficiently. The organisation in order to identify its future
profitability can use various budgeting and forecasting techniques which will assist in
determining the future profitability. Moreover, Forecasting assist organisation in developing
various strategies for reducing the risk that will hamper various operations performed by firm.
Forecasting and budgeting provide information to organisation about the difference in their
actual and budgeted performance.
Moreover, SuperDry by using forecasting and budgeting techniques will be able to
understand about the future risk associated with business. This will help the business in taking
various measurements for reducing those risk. SuperDry by using cash flow forecast can identify
the cash inflow and outflow for a period which will assist in determining the estimated cash
surplus and deficit for a period. The firm By using cash flow forecast will he able to reduce its
expenses and increase its incomes for enhancing profitability of firm. Budgets are used by small
business to monitor and control their performance as per budgeted figures to increase their
profitability. It helps in identifying deviations in performance which will affect the organisation
profitability and will hamper growth and success of business (Van der Wagen and White, 2018).
SuperDry by using cash flow forecast will be able to determine the cash inflow and outflow for a
period.
Cash flow forecast

Particulars
Janu
ary
Febr
uary
Marc
h April May June July
Augu
st
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Cash inflows
Opening cash
inflow 6000 8000
1128
4
1465
1
1810
1
2163
2
2524
4
2893
5
3270
4
3654
9
4046
9
4446
2
Sales revenue
1200
0
1224
0
1248
4.8
1273
4
1298
9
1324
9
1351
4
1378
4
1406
0
1434
1
1462
8
1492
0
Other income 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
Total cash
inflows
2100
0
2324
0
2676
9
3038
6
3409
0
3788
1
4175
8
4571
9
4976
4
5389
0
5809
7
6238
2
Cash outflows
Material 3000 1836 1873 1910 1948 1987 2027 2068 2109 2151 2194 2238
salary 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
other expenses 3000 3120 3245 3375 3510 3650
3795.
9570
5548
8 3948 4106 4270 4441 4618
Rent 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000
Total cash
outflows
1300
0
1195
6
1211
8
1228
5
1245
8
1263
7
1282
3
1301
5
1321
5
1342
1
1363
5
1385
6
Cash deficit /
surplus or closing
cash balance 8000
1128
4
1465
1
1810
1
2163
2
2524
4
2893
4.807
0584
448
3270
4
3654
9
4046
9
4446
2
4852
6

Interpretation : From the above forecasted cash flow it can be interpreted that cash
inflow For SuperDry is increasing in every month which means that the organisation will have
more incomes in the future. The cash flow provide that organisation will increase cash inflow
every month which means that organisation will be able to cover its fixed and variable cost
through the incomes. The business is beneficial for SuperDry fashion retailers as its shows
increase in income in every month.
Cash flow can be managed effectively through regular monitoring which will help in
reducing the cash outflow and increasing cash inflow which is beneficial for small firms to
increase their sales. It gives understanding about various expenses and the ways through which
firm can reduce those expenses to increase organisation profitability.
P 5 Break even analysis can be applied to organisational situation
Break even analysis is required to determine the amount of sales in order to cover
organisation cost. This analysis helps in identifying the point at which firm will start masking
profits. This tool assist organisation in monitoring and controlling their performance (Ross,
2017). The break even analysis help in identifying break even point at which the firm have no
profit and no loss. Break even point for SuperDry is calculated by using its fixed cost, variable
cost and the selling price. Organisation by using Break even analysis is able to measure its
profitability.
Break even analysis
Particular Total
Selling price per unit 100
Variable cost per unit 50
Fixed cost 7000
Break even point = fixed cost / selling price per
unit – Variable cost per unit
7000/ (100-50) = 20 units
From the above analysis it can be interpreted that SuperDry in order to recovered its cost
have to sell 20 units. It is identified that organisation by selling 20 units will be at a point where

it will have no profit and no loss. Also, It will assist provide understanding to enterprise
regarding the number of units to be sold to earn profits for business.
There are various financial statement used by Small business which consist of profit and
loss statement, balance sheet and cash flow statement. Profit and loss statement is prepared by
organisation in order to determine the incomes and expenses for a period (Financial Statements
for a Small Business, 2018). It includes the incomes and expenses which are incurred by
organisation in offering the product and services to customers. The profit and loss statement
prepared by firms helps in identifying the profits earned by organisation by subtracting the
expenses from various incomes earned.
The another financial statement which is required for small businesses is balance sheet
which consist of assets and liabilities. This statement is prepared by organisation to get better
understanding of various operation performed by firm. SuperDry in order to determine its
position in industry is required to prepare this statement. Moreover, cash flow statement is also
prepared by Small business for determining the cash inflow and outflow for a period. It assists in
ascertaining cash deficit and surplus for a period. Financial statements assist in management of
business. It provides understanding about organisation incomes and expenses which assist in
controlling the future expenses through help of these statements (Deasy and et.al., 2016). It
provides information to firm regarding their liabilities and assets which assist in improving their
performance and position of firm.
LO 4
P 6 Key legislation and regulation that have implication on Small businesses
The government in order to protect the interest of customers impose various rules and
regulation on enterprises to operate their business in that industry. There are various legislation
which small business have to comply with in order to provide their products and services to
customers. The legislation which SuperDry have to follow consist of health and safety laws,
data protection laws, Environmental laws, taxation laws, employment laws, Insurance laws etc.
 Employment laws : These are the laws which small business have to comply in order to
hire workers for performing various operations of firm. SuperDry when hiring employees
for job roles it is required that it must pay their workers with fair wages and comply with
of the rules and regulation as per the employment legislation (Deresky, 2017). SuperDry

must provide equal opportunities to its employees and must not discriminate between
them on basis of age, gender, religion etc.
 Consumer protection laws : SuperDry have to employ with various consumer
protection laws and legislation. It must provide its customers with fair prices of products.
Moreover, It is required that it must provide customers with high quality products.
Consumer protection laws are made ton protect the customers from various unfair trade
practices.
 Data protection laws : There are various rules and regulation which small business have
to follow in order to perform its various activities (Kerzner and Kerzner, 2017). The
organisation must ensure that the data of their customers is protected and must provide
their customers with security of their personal information such as name, number address
etc.
 Health and safety laws : SuperDry have to adhere to health and safety laws for
performing its various activities. The product offered by organisation must not harm the
health of their customers (Storey, 2016). These laws are made to protect customers from
various harmful diseases. It restricts organisation to provide customers with harmful
products.
 Taxation laws : SuperDry have to ensure that proper taxation laws are followed
regarding their taxation liabilities. Taxation laws contains the rules and regulation
regarding tax obligation of organisation.
CONCLUSION
From the above study it has concluded about consideration of small business regarding
planning and allocating it resources. The different resources consist of human resource, financial
resource, skills, equipments etc. Moreover, It has concluded about the process of Customer
relationship management which has provided information regarding operational, Analytical and
collaborative CRM. Furthermore, This assignment has shown about stages model of
internationalisation which has includes Uppsala stage model.

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