Managing Small Business: Resource Allocation, CRM, and Analysis

This report examines the management and operation of a small business, using Rowlinson Knitwear as a case study. It explores essential considerations for resource allocation, including future goals, financial management, and human resource management. The report delves into customer relationship management (CRM) processes, such as customer base identification, customer intimacy, network development, and value proposition development. It also discusses the benefits and drawbacks of transnational business development. Furthermore, the report analyzes financial aspects, including cash flow forecasting, break-even analysis, and financial statement interpretation. Finally, it considers the implications of legislation and regulations on small businesses. The report provides a comprehensive overview of key business functions and strategies for small-scale enterprises.

MANAGING AND RUNNING
A SMALL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main considerations need to address by small organisation while allocating resources.......1
M1 Allocate resources in an organisation...................................................................................2
M2 Importance of planning and allocating resources.................................................................3
D1 Critically analyse the application of appropriate resources to demonstrate.........................3
TASK 2............................................................................................................................................3
P2 Various processes of customer relationship management.....................................................3
P3 Small business can develop transnationally and benefits and drawbacks.............................4
M3 Elements of the customer relationship management process..............................................6
M4 Potential to develop transnational operations.......................................................................6
D2 Process of customer relationship management.....................................................................6
TASK 3............................................................................................................................................7
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs...................7
P5 Break- even analysis............................................................................................................10
P6 Financial statements for an organisation..............................................................................11
M5 Quantitative and analytical techniques...............................................................................12
D3 Break even analysis and cash flow statement.....................................................................12
TASK 4..........................................................................................................................................13
P7 Legislation and regulations that have implications on small businesses.............................13
CONCLUSION..............................................................................................................................13
REFRENCES.................................................................................................................................14

INTRODUCTION
Small businesses play an important role in developing the economic growth of particular
country. They contribute more to develop the nation through new start ups and achieve
sustainable growth in an effective manner. Entrepreneurs always come up with unique ideas,
innovation and creativity for producing goods and services so that predetermined goals or
objectives can be accomplished (Wynarczyk, 2013). They also bring various resources such as
land, capital, manpower and many more for starting and running a small business. Their main
aim is to maximise profits and wealth by operating firm. There are require some specific skills,
knowledge and abilities for formulating better strategies as well as making favourable decision
for the purpose of attaining set targets and generate revenues. This report is based on Rowlinson
Knitwear which deals in clothing or apparel in UK. It will discuss the social enterprise needs to
plan and allocate resources and define customers relationship management process. It will also
analyse cash-flows, break-even, budget and interpret the key financial statements for small-scale
businesses. This report discuss implication regarding regulation, legislation for social enterprises.
TASK 1
P1 Main considerations need to address by small organisation while allocating resources
In the present scenario, many of organisations are establishing by individuals for the
purpose of earning profits and increasing revenues. Every firms have specific objectives and
goals that businessmen wants to achieve in proper manner. They focus on managing or
maintaining entire business operations as well as functions by formulating appropriate strategies
and action plan. These small firms contribute more in developing country and economy growth.
They have basic quality to manage business as how to handle operations and utilise available
resources in more efficient way (Piperopoulos, 2012). Rowlinson Knitwear is one of the best
small firm that provide various type of cloths such as school wear and corporate wear as well.
They focus on targeted customers and provide effective apparel as per their requirements so that
they can attracts or satisfy customers desired needs or wants. Company is trying to capturing
target market in the UK by providing better quality of products or services to the customers.
There is necessary to make effective strategies for operating business operations or functions and
achieve competitive advantages in an efficient manner. In this, they undertake the proper
optimisation of available physical aspects which requires for maintaining the business activities
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to gain best possible outcomes. Here are defined some factors that must be considered while
making plan and allocating resources among various activities such as:
Future goals or objectives: This is a major factor which must be required for formulating
business plan and take corrective actions to attain set targets. For successful organisation, it is
necessary to identify and clear particular goals or objectives and set the path towards it. Manager
and leaders play vital role in achieving best positive results by setting path and also give
directions or guidelines for attaining those in well manner (McAdam, 2013). Rowlinson
Knitwear is selling best quality of apparel such as school wears and corporates wear to the
customers for satisfying their needs or wants as well as meet desired expectation. Their main
objective is to identify customer demands and target audiences so that better decisions can be
made for satisfying their desired needs with limited time period. It is an essential for building
good relations among people and create strong position in the marketplace.
Management of Financial resources: It is very necessary for every organisation that to
manage the funds or capital in well manner for accomplishing task or objectives. Finance is the
backbone of business so without funding, its operations cannot be run. Manager always ensure
about appropriate capital for managing work and operates activities in more effective manner. It
is more important component for every organisation, therefore they focus on arranging and
maintaining funds to accomplish set goals or objectives.
Human resource management: This is also an important function which is requires for
performing task or work in more efficient way. Organisation focus on managing workforce and
development of people so that they can work hard for achieving predetermined gaols or
objectives with appropriate manner. HR manager play crucial role in recruiting suitable
candidates by ensuring their quality, skills and knowledge for performing tasks within limited
time period as well. Rowlinson Knitwear also consider the workforce planning and manage
employees performance for increasing profitability and productivity in the company (Williams,
2012). They also organise training and development program for enhancing skills or quality for
better performance improvement.
M1 Allocate resources in an organisation
There must be required to consider the various tools or techniques and also defines
available resources to operate business in well manner. It is necessary to make strategies for
utilising resources by allocating them among different business activities or functions so that
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particular goals or objectives can be achieved in an effective manner. Employees play vital role
in contributing more to the organisation success because they put efforts, time and work hard for
achieving predefined objectives and outcomes (Weske, 2012). Rowlinson Knitwear consider best
tool or method for increasing productivity such as:
Gantt Chart: It is a best method that represent entire business activities in the graphical
form. In this included project schedule, manpower and tasks for understanding these in an
effective manner so that goals can be accomplished.
M2 Importance of planning and allocating resources
Rowlinson Knitwear is a small-scales business that deals in cloths or apparel in the
market and provide corporates wear as well as school wear to the customers for fulfilling their
requirements. They requires to formulate better strategies and make favourable decisions for
resource allocation so that entire activities can be performed to get succeed. Through proper
planning, manager can able to manage the cost factors and maintenance of quality or quantity of
goods so that entire activities and operations can be run in an appropriate manner.
D1 Critically analyse the application of appropriate resources to demonstrate
Every organisation are needed to use better utilisation of available resources by
considering strategies and decisions regarding allocation of them among various activities in well
manner. It will support to Rowlinson Knitwear for increasing productivity and get maximum
outcomes with minimum inputs or resources. It is also an essential to build the relationship
among customers by providing quality goods and services to them so that maximum sales can be
increased in well manner (Smit, 2012). Their main objectives are analysing customers demands,
choices and preferences by conducting survey for the purpose of meeting their desired
expectations in better ways. There should be required to optimum utilise of define resources that
necessary to perform entire tasks or goals.
TASK 2
P2 Various processes of customer relationship management
Customers Relationship Management (CRM) play crucial role in gaining long term
benefits within an organisation. It is defined as the most appropriate technique for operating
business and achieve predefined goals or objectives in well manner. Every firms try to maintain
and manage the relationship among people and wining trust of customers. Therefore, Rowlinson
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Knitwear always focus on identifying and analysing consumer demands by undertaking their
views, opinion, tastes, preferences and choices regarding apparels. They receive data or
informations about customers and make decisions about production of such goods or services for
satisfying their desired needs or wants (Watkins, 2012). There are define customers relationship
management process such as:
Identification or determination of customers base: This is a first phase in which
Rowlinson Knitwear identify potential targeted groups of customers by using various methods of
strategies such as segmentations. Company categorise customers and market into small parts
which can be beneficial for analysing customers demands, choices, tastes and preferences in
more appropriate manner.
Customers intimacy: Every organisation wants to get succeed with the help of managing
and maintaining relationship among customers so that they will be loyal towards firm for longer
time period as well. It must be required to have positive relations as Rowlinson Knitwear
company also undertake this aspect and try to build strong relationship with every and each
individual who are directly or indirectly connected with business. Therefore, they are focusing
on adopting best communication procedure to create interaction among people and provide
adequate informations to them regarding business.
Network development: CRM is also beneficial in building effective network with people
for attaining set targets or goals. For every organisation, there is required to create network with
customers and interact properly so that they will be ready to get company's goods or services in
an effective way.
Development of value proposition: In this phase, company try to identify and analyse
potentials customers as well as target market so that their needs or wants can be satisfied.
Rowlinson Knitwear serve best quality of products or services to the clients and stay connected
with them for longer time period (Schaper, 2014). The development of value proposition can be
helpful in increasing goodwill as well as increasing market share with effective manner.
P3 Small business can develop transnationally and benefits and drawbacks
It is defined as the set of procedure in which businesses are started for producing goods
or services and sell in the marketplace for meeting customers neds or demands. Every
organisation wants to expands their business at various countries so always focus on identifying
the opportunities for business expansions to achieve maximum outcomes and growth as well.
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Rowlinson Knitwear also requires to consider transnational within the organisation so that
maximum profits can be generated and achieve long term advantages. It is necessary for the
business development so that they formulate strategies and making better decisions regarding
adoption of tools or techniques, bring changes for producing better quality of good or services
for attracting number of customers and reach potentials targets (Jenkins, 2013). It will support in
developing firm and gain better outcomes as well. There are some advantages and disadvantages
of following process such as:
Benefits-
 Independence: There is requires an appropriate strategy for managing business and its
operations while expanding in new country. In this consider the independence move for
running the business. Therefore, Rowlinson Knitwear company also can take
advantages from these bodies and manage operations with well manner.
 Increase living of standards: it is necessary to provide better quality of services or
products to the customers. Every organisation try to improve livings standards of the
people by providing quality of products to targeted people for increasing maximum
satisfaction level. It is an essential in increasing the power of purchasing of the
customers.
 Effectiveness: Rowlinson Knitwear can maximise wealth by adoption of transnational
procedure so that business can be developed in more effective manner (Jasra, 2012). It
also support in enhancing skills or knowledge of employees for improving performance
and also increase productivity in an efficient way.
Drawbacks:- Financial risks: This is an important aspects that can be create barriers while developing
transnational process within an organisation. Rowlinson Knitwear company should
manage all available resources by utilisation of those in an effective manner. Financial
resource is one the most important that must be maintained otherwise, it can be reduce
the productivity and operations while running business.
 Time period: Transnational process operates various activities which can consume more
time in establishment and creation of an organisation in the marketplace. This can be also
create barriers or complexities if entire procedure is not as per the time or schedule.
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Franchising It helps small business to expand transnationally as it involves low capital
investment by the franchisor. It also allows the business to expand without spreading resources
across too many business units. The return on investment is much higher for small business that
expand through franchising which will help them to gain larger market share.
Export also increase ability of small business as when the company start
exporting,awareness of its product and services will increase and trading in other countries will
help to learn foreign business practices which helps in dealing with international firms.
Foreign Direct Investment (FDI) There is a significant relation between the FDI and its
potential benefits for SMes it helps in the transfer of knowledge, job creation, enhance the
development of skills of human and business capital. Suppliers are greatly benefited as they can
create new market opportunities for local companies.
M3 Elements of the customer relationship management process
Customers Relationship Management may be concern with various organisational
process that are needed to attain set targets or objectives. Positive relations play an important role
in gaining or wining trust of the customers so that they will be loyal towards organisation. In this
includes several process for analysing or identifying customers demands, choice, needs and
desired expectations so that better goods and services can be produced for satisfying their desired
expectations (Harmon, 2015). This will support in building good relations and maintain harmony
system among people. Here are another components for proper CRM such as:
 After sales services
 Marketing management
 Work flow automation
 Business reporting
M4 Potential to develop transnational operations
Transnational operations is an essential for developing the business and make its
procedure more efficient so that maximum target audiences can be captured. This is also
supportive that can increase size and growth of the business firm through business expansions
and build relationship with customers with effectively. Rowlinson Knitwear also concentrate on
expanding business by formulating strategies so that maximum outcomes can be gained.
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D2 Process of customer relationship management
Customers relationship management is play crucial role in increasing sales volume as
well as productivity through effective formulation of strategies. Many of firms try to create
wealth maximisation at the global level so it can be helpful for generating profits. Rowlinson
Knitwear have opportunity to expand business at another locations and sell more outfits by
analysing customers demands and new trends (Hammer, 2015). It also can be supportive in
building positive relationship with customers by considering these things such as:
 Determine customers base
 Customers intimacy
 Value proposition development
 Network development
 Customer life cycle management
The main aim of Rowlinson Knitwear is to capture wide market by providing best quality
of goods and services to the customers so that strong relations can be build with them.
TASK 3
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs
In every business organisation, finance play an important role for managing and
operating business functions in an efficient manner. It is necessary for entire firms that to
manage the available resources such as physical, manpower, funds, tools and techniques and
many more so that predefined outcomes can be achieved (Durst, 2012). There is requires to
consider the financial resources and focus on proper investments in the business operations while
making decisions of bringing changes and adopt suitable techniques for producing goods and
services in more effective manner. Rowlinson Knitwear also needed to concentrate on managing
entire business function or activities for the purpose accomplish set goals or targets in an
effective manner. There is required several management including working capital, human
resource, productivity, stocks, raw material and many more for getting maximum outputs. There
are define some necessary factors such as:
Internal:
 Sales of fixed assets: It is an important process which support in increasing sales
volume and gain more profits in an impressive. Every business organisation focus on
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enhancing more sales and use better tools or techniques so that maximum customers
attracts for getting goods or services. therefore, the best method is to utilise available
resources for business success.
External:- Bank loans: It is consider as the best sources of arranging financial services or
appropriate funds which is necessary for running an organisation in better ways
(Wilhelm, 2012). Banks give such services and provide proper funding to the customers
as per their requirements. This amount must be paid by the borrower within given time
period.
 Overdraft facilities: It is also related with banks services which provide funds to the
customers for the purpose of managing or operating business functions with effective
manner. With help of this facility, every firm can use financial services and overdrawn
amount as per the requirements so that set targets can be achieved.
Cash Flow budget
Particulars Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Cash inflows
Investment 6000
Credit sales 2000 3000 3000 4500 1500 3500 4200 1000 2000 800 1200 1500
Total inflows 8000 3000 3000 4500 1500 3500 4200 1000 2000 800 1200 1500
Cash outflows
Fixed:
Equipment’s 2000 2500 1500 2000 1200 1500 800 200 300 100 600 300
Variable:
Direct material 300 300 200 300 150 500 300 400 500 100 100 400
Total outflows 2300 2800 1700 2300 1350 2000 1100 600 800 200 700 700
Net cash flow 5700 200 1300 2200 150 1500 3100 400 1200 600 500 800
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Opening
balance 0 5700 5900 7200 9400 9550 11050 14150 14550 15750 16350 16850
closing balance 5700 5900 7200 9400 9550 11050 14150 14550 15750 16350 16850 17650
Functional classification of costs
Particular
Direct or
indirect Amount
Production cost:
Direct material Direct 800
Direct labour 250
Direct expenses 250
Total direct costs 1300
Research Indirect cost 3000
Designing plan Indirect cost 400
Factory overhead Indirect costs 450
Administrative costs 250
Marketing and distribution 200
After sales services 300
Total Costs 5900
Interpretation – It can be analysed that it is the 12 month cash flow budget which help company
in analysing their company sales and profitability. The total inflow is more in the January month
which is 8000 and lower in the month of October which is 800. On the other hand, the total
outflow is maximum in the month of February around 2800 and it is lower in the month of
October which is 200. At last, the net cash flow is maximum in the month of January with 5100
and lower in the month of May which is 150.
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P5 Break- even analysis
This is another effective and important technique that helps in determining the costs
factors and find appropriate profits while running an organisation. Break-even analysis support
in increasing sales revenues and also identify profits of the firm in an effective manner. It is also
beneficial in margin of safety for the firm as Rowlinson Knitwear can consider this technique for
covering over all cost. There is require to implement such procedure within the organisation that
can support in achieving best possible outcomes in well manner (Durst, 2012). Break-even
analysis help to find the exact points so that company can identify profits and loss situations in
an effective manner. It provide various opportunities to the organisation for modifying the
functions or activities within the firm. It can be calculate by applying particular formulas and
practical forms such as:
Formula of BEP= Fixed cost / Construction margin per unit or product
Particular Amount
Sale prices per product 8000
Less: Raw material 1200
Contribution 6800
Fixed cost : Production 4000
Total number of
customers 100
Profit for the year 20000
Desire profit 16400
Break even point:Fixed cost+Desired profit/Contribution margin per unit or
product=(16400+4000)/(8000-1200)= 3 units
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From the above mentioned calculation, it has been evaluated that the amount of 280000 is
desired profit of the company which must be undertake by the firm to recover their fixed and
variable cost. Under this stage, company face not profit and no loss situation. This can be
beneficial for business organization to operate activities in effective manner.
P6 Financial statements for an organisation
For every successful organisation, there is require appropriate management of various
resources that support in making entire work in easy way. It is an essential in gaining best
possible outcomes by utilising available funds in an appropriate manner. In this included
financial statements and transactions accounts which must be managed such as expenses,
incomes, profit and loss, balance sheets, journal entries and many more. These all accounts must
be managed with appropriate manner so that better decisions can be made by the Rowlinson
Knitwear (Runar, 2012). They focus on preparing and maintaining records of financial as how
much invested and needed to spend funds for adopting ideas and innovation. It also shows the
financial positions of the company in the marketplace. These activities are very effective for the
business firms because they provide accurate informations about investments of funds in the
future. There are some financial statements of the organisation such as:
Cash flow statement: This is very effective statement which support in analysing the
proper cash inflows and outflows within the firm. Financial Manager always consider the cash
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related transaction for the purpose of analysing the costs or expenses and manage entire activities
in well manner. In this included three major aspects such as operating, financial and investments
activities of particular firm. With the help of cash statements, manager can make better decisions
regarding investments of funds in business operations.
Profits and loss account: It is another statement that shows profits as well as losses of
the organisation because in this including all current activities regarding cash (Drucker, 2012). It
also provide adequate informations regarding income and expenses, profit and losses etc. it
generally prepare at the end of the financial year. Manager can consider this for identifying
accurate profits or loss of the firm.
Balance-sheet: This is also an important account which shows the financial position of
the company in the market. It is known as final account as manager get appropriate informations
regarding company assets and liabilities so that they can make better decisions about developing
firm. This also support in analysing the shareholder's contribution within the organisation as how
they are helping in increasing profitability and productivity in an effective manner. In this
consists various final transactions for getting best results.
Financial statement of Rowlinson Knitwear organisation:
Balance sheet
Year 2017 (value in £) 2018 (value in £)
Fixed assets 130 210
Stock 20 35
Debtors 70 55
Bank 20 30
Total 240 330
Creditors 120 180
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Bank overdraft 90 70
Total 210 300
Working capital 30 80
Profit and Loss Account
2017 2018
Sales 20 30
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. profit 24 38
Ratio analyses
Profitability ratios Formula 2017 2018
Gross profit ratio gross profit/net sales*100
(30/20*100)
150
(45/30*100)
150
Net profit ratio net profit/net sales*100
(24/20*100)
120
(38/30*100)12
6.67
Liquidity ratio Formula 2017 2018
Current ratio Current asset/current liability
(20+70+20/12
0+90)
0.52:1
(35+55+30/180
+70)
0.8:1
Acid test ratio
Current asset-inventory/ current
liabilities
(90/210)
0.428
(85/250)
0.34
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M5 Quantitative and analytical techniques
In any business organisation, they consider two methods such as quantitative and
analytical analysis which are best approaches for getting more informations regarding break-
even analysis (Drucker, 2012). In this consider various activities that can be provide benefits as
well as drawbacks which performing any tasks or objectives. These are essential for improving
particular financial performance in more effective manner. Rowlinson Knitwear can consider
these for achieving set targets.
D3 Break even analysis and cash flow statement
In every organisation, break-even analysis and cash-flows play vital role in managing the
entire activities and financial statements so that company can increase profits or productivity in
effective ways.
Break-even analysis: It is define as the financial term which represent the situations of the
firm as no profits or no loss (Burns, 2016). They can identify the actual conditions of the
business.
Cash-flows statements: In this define the cash related transactions within an organisation
by considering cash inflow or outflow as well.
TASK 4
P7 Legislation and regulations that have implications on small businesses
Health and safety act 1974: It is the main responsibility of manager and business person
that to make better policy for the purpose of providing protection of employees that is related
with their health.
Data protection act: There is a requirement that organisation protect personal data and
information of their customer's (Bridge and O'Neill, 2012). They can not revel them easily in
front of others with personal information of its owners.
Employment Rights Act (1996): This act is defined as piece of legislation which is
essential in creating better framework for labour law in the UK. This act of parliament passed by
the British government for the purpose of codify existing law on employees rights so that they
can work with comfortably and achieve predefined goal in accurate manner.
Equality Act (2010): This act is related with protection of people from any
discrimination at work place. It is associated with sex discrimination act 1975, race relation act
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1976, and disability discrimination act 1995. it formulated for employees protections within
organisation so that they can be treated fairly and equally as well.
Minimum Wages Act: According to this act, managers and owners of the small business
has the responsibility of following all the rules and regulations of this act. This act states that
every worker and employee has a right to be paid minimum wages according to the skills
required in performing the job. This act consist classification of various skills required to do the
jobs along with their minimum amount of wages.
National Minimum Wages Act 1998: this act was formulated by the government which
creates minimum wage across the United Kingdom (UK). There are some salary details and
criteria for workers as per their age group such as £7.83 per hour for 25 age of people, £7.38 per
hour for those workers who are under age of 21 to 24 and £5.90 per hour for workers age 18 to
20 as well. This act is essential in providing fair wages to the employees who put their valuable
time and efforts for completing any task or achieve targets in well manner.
CONCLUSION
It has been concluded form the above report that small organisations have to face many
challenges while providing their operations which impact their ability about achievement of
goals within stipulated period of time. There are many aspects which are required to oversee
while allocate resources such as funds, objectives and human resources. This will provides the
opportunity to get maximum results. It is important for small organisation is ton build effective
relation with customer to attain sustainability in market. It contributes in retention for long
period of time. This will helps to improve their sales and profitability. There are many
legislations are provided by government required to follow. It helps ton enhance their brand
image.
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