Small Business: Factors, CRM, Break-Even Analysis & Legislation

This report analyzes key factors influencing small businesses, focusing on Fusion Drink, a fruit punch business. It examines critical considerations like business knowledge, passion, target market, financing, and location. The report defines Customer Relationship Management (CRM), exploring its strategies, operations, analytics, and collaboration aspects, along with their advantages and disadvantages. Transactional development, including franchising, internet usage, and licensing, is also discussed. Furthermore, the document explains break-even analysis with a numerical example. Finally, the report touches upon relevant business legislation, providing a comprehensive overview of essential elements for small business success. Desklib provides solved assignments and past papers for students.

Unit 29 assessment
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Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Talk about the factors that a small business needs to consider when choosing the right
resources to complete their objectives/goals. Write at least 5 factors that the business will need
to consider, then explain the importance of each factor..............................................................1
2. Defining the term customer relationship management with this advantages and
disadvantages...............................................................................................................................2
3. Defining transnational development with its advantages and disadvantages..........................4
4. Explain break even analysis and how it is applied to the concern...........................................5
6. Explaining the term legislation and several legislations that affect the business....................9
CONCLUSION................................................................................................................................9
REFERENCE................................................................................................................................10
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INTRODUCTION
There are different types of businesses such as small, medium, and large which are running
by collecting resources and capital that can help to develop organizational performance. This is
important for each business concern to identify the needs and wants of people then provide kind
of products and services. Small business is defined as privately owned and operated business
where there is less number of sources and capital is required to run their business. The small
business for chosen report is Fruit punch with ice cream that will help to attract number of
customers and increase revenues (Hunt, and Raman, 2017). Due to Covid-19 people forget fruit
Punch taste where this business idea will help to influence and run business effectively. The
name of the organisation is Fusion drink. In relation to operate a business, person should have
good knowledge and understanding that are used to complete the project and maintain higher
performance. The current report is based on different aspect of business such as factor that a
small business considers, customer relationship management, and transactional development, and
financial statement that states financial condition. There are various legislations such as
employment act 1996, Data protection act, 1998, company law, 2006 is also explained in this
report.
MAIN BODY
1. Talk about the factors that a small business needs to consider when choosing the right
resources to complete their objectives/goals. Write at least 5 factors that the business will
need to consider, then explain the importance of each factor.
To start a business there is need to have proper resources and capital which are used by
business concern that helps to develop organizational performance. If there is lack of resources
then will be challenging to operate their business. There are different factors that a small
business needs to consider while choosing the right resources to complete their goals that are
explained below:
Knowledge about the business – This can be consider as important factor to start a business
as it helps to make right business planning and complete the task. The amount of information,
knowledge and ideas are needed to begin the business. If there is not having good knowledge and
skills then could be challenging to start a business. In relation to start a business of Fruit punch,
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business concern should have proper knowledge and information about each products and
services which can help to continue all functions and activities. This factor can help to convert
knowledge in to reality (Coltman, and et. al., 2015).
Passion for the business – This means to have curiosity of operation and managing a
business continuously. This is important for individual to know what people wants and then
provide kind of products and services which can help to grow a business continuously. Before
starting a business there is need to have passion about customer choice that can help to operate a
business. In relation to Fruit punch business, individual should be passionate about starting and
running a business. This can help to grow a business by managing all functions and activities.
Target market – This is another factor which can be used to start a small business and
attaining goals by identifying target market or customers. A business mainly depends on target
market where needs of customers identified by business concern and supports to increase
organizational sale. In relation to Fruit punch business, individual identify the target market or
age group who are interested to have fruit punch that will help to grow small business
continuously (Khan, and Khalique, 2014).
Financing the proposition – It has been explained that there is requirement of various funds
to start and continue the business. Capital and assets is most necessary for starting a business as
it helps to operate continuously. A business concern should have knowledge to proportion of
debt and equity that can help to make decision accordingly. In relation to starting fruit punch
business there is need to have finance planning and budget as it helps to know how to spend
money on raw material and finished products in order to generate revenues.
Business location – It has seen that success of small, medium and large business lies in the
ability to choose right business location that can help to attract number of people and encourage
to buying products as well as services. If location is not appropriate then will be challenging to
reach the targeted customers and attain productivity. In relation to Fruit punch business,
individual need to select right location and place to offer kind of products and services that can
help to increase organizational sales and provide competitive benefits.
2. Defining the term customer relationship management with this advantages and disadvantages
Define the term Customer relationship management. Explain the main areas within customer
research management and provide the advantages and disadvantages of each area.
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Customer relationship management is defined as an approach which is used by business
concern to manage company’s interaction with current and potential customers. The success of
business industry depends on customers as they identify their needs and wants then make
decision to buy the products as well as services that can help to increase organizational sales. In
other words, customer relationship is the connection of various strategies which are undertaken
for improving the customer interaction and completing organizational goals. To maintain
effective customer relationship various tool can be used such as live chat, telephone, direct mail,
and marketing material which supports to grow a business and attain higher productivity. This
mainly uses data analysis about customer’s history along with company in order improve
customer and business relationships. The main object behind using customer relationship is to
drive ultimate sales growth (Lamm, Tosti-Kharas, and King, 2015). There are four areas of
customer relationship management which can be elaborated as given below:
a. Strategy – This could be explained as planning which is formulated by business concern
in order to run and operate their business by influencing customers. The plan is framed
to achieve the short term as well as long term goals. In relation to fruit punch, strategy is
helpful for business concern as it helps to formulate effective planning and managing all
activities accordingly.
b. operations: For a business number of tasks need to perform properly such as sales,
campaign, marketing, management, customer services, distribution, and others that can
help to regulate a business continuously. The newly small business such as Fusion drink,
management will focus on customer service, marketing, sales, campaign, and
distribution that will help to grow a business (Owolabi, and Makinde, 2012).
C. Analytics: This is also defined as evaluation which is used by business concern to find
out the pattern through which data has been collected. CRM is used by management to
extract, capture, and store the data that can help to increase organizational sales and
productivity (Rohlfer, and Zhang, 2016).
D. Collaboration: This is the area of integrating the people with technology, and process in
order to start and run a business. This area is used by management of Fusion Drink to
remove the communication barrier and increase the organizational sales. This also helps
to bring new ideas and thoughts to complete the project and attain goals.
 Advantages of aspects of customer relationship management :
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a.) The approach to CRM is helpful to design a roadmap for staring, managing, directing,
and controlling the business activities for the purpose of achieving business goals. In
regards of Fruit Punch, various technique such as machine, financial planning, budgeting,
buying raw material and others are used to maintain effective customer relationship
which can help to increase business profits.
b.) This also help to fill the customer expectations and develop organizational productivity.
 Disadvantages of areas of customer relationship management:
a.) CRM is cost consuming process because it requires lot of marketing plans and activities for
the purpose of reaching to their customers. To maintain CRM software is also an expensive that
might be not suitable for small type business.
b.) It is not always true that CRM always will be effective to provide right results as it creates
issues in operate and renew every year. There is need to provide training to employees which
could be costly. .
3. Defining transnational development with its advantages and disadvantages.
Transactional development explained as business strategy in which all transactions of
offices and its branches are recorded in order to continue their business activities and functions.
Transactional development is the complex interplay between different types of business
transaction that can help to expand business from one place to another place. The aim of each
business organization is to go internationally where it use different ways that are explained
below:
a.) Franchising: This is an authorization granted by government or industry to individual
enabling them to carry out specified commercial activities. This can help Fruit Punch
business to expand it by using this way and managing function.
Advantages Disadvantages
 This can help to grow a business
from one place to another.
 Franchises offer the independence of
small business ownership supported
by the benefits of a big business
network.
 There is lack of privacy so anyone
can use or misuse it (Tian, and
Martin, 2014).
 The agreement could be likely
stipulate which can see by financial
management.
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Internet – Now a days people is going to digital by using internet technology as it helps
to grow business from one country to another. This is the another way which can be used
by Fruit Punch business to grow their business by using internet.
Advantages Disadvantages
 This helps to grow business via
internet method.
 Fruit Punch could be connect
number of customers within single
time.
 Slow speed of internet.
 Increasing cost of internet after
changing government regulations.
Licensing: This form of business is used by an individual to give rights to use that helps
to grow a business continuously. This is kind of special permission granted by licensor to
licensee for the purpose of using their intellectual property rights that increases business
activities (Ueda, Ida, Kadota, and Tozuka, 2014).
Advantages Disadvantages
 This creates a business opportunity
by expanding business.
 This can help to give right to use the
intellectual property.
 This creates added competition in
the marketplace.
 Lack of dependency.
 Limited time period.
4. Explain break even analysis and how it is applied to the concern.
Breakeven point - Break- Even point is termed to defined as situation where sales amount
and units are sold by company considering incurred cost on production of products and services.
This analysis states a point where no profit and no loss situation is executed by business concern
by arranging all functions and activities. In this, products are equal to the revenue earned by the
company. In other words, breakeven point is the situation where goods are sold at equal prices at
which it purchased by covering fixed and variable cost.
Particular Amount Amount
Sales 49500 49500
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Direct material 27500
Direct labour 3300
Prime cost. 30800
Variable manufacturing overhead 4400
Variable selling expenses 3300
Variable administrative expenses 2200 9900
Contribution 8800
Less : fixed cost
Fixed manufacturing 1100
Fixed selling and distribution 1450
Fixed administrative 675 3225
Profit 5575
BEP for the year 2020: (in Amount)
BEP = fixed cost / PV ratio
= 3225 / 17.77%
= 18149
BEP (in unit) = Fixed cost / contribution per unit
= 3225 / 40
= 81 units
Profit volume ratio= contribution / sales *100
= 8800 / 49500 *100
= 17.77%
Margin of safety = profit / PV ratio (in amount)
= 5575 / 17.77%
= 31373
Margin of safety = Profit / contribution per unit
= 5575 / 40
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= 139 units.
In 2021:
Selling price = 225 +25%
= 281.25
Particular Amount Amount
Sales 61875
Direct material 27500
Direct labour 3300
Prime cost. 30800
Variable manufacturing
overhead
4400
Variable selling expenses 3300
Variable administrative
expenses
2200 9900
Contribution 21175
Less : fixed cost
Fixed manufacturing 1100
Fixed selling and distribution 1450
Fixed administrative 675
Fixed cost 1450 4675
Profit 16500
BEP = fixed cost / PV ratio ( in amount )
= 4675 / 34.22%
= 136.61
BEP = Fixed cost / contribution per unit
= 4675 / 151.25
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= 30 units
PV ratio = contribution / sales *100
= 21175 / 61875 *100
= 34.22%
Margin of safety = Profit / PV ratio
= 16500 / 34.22%
= 48217
Margin of safety = Profit / contribution per unit
= 16500 / 151.25
= 109.09
Interpretation: According to the above computed method, the break even analysis and
margin of safety for the years 2020 and 2021, the organization's BEP has decreased in the year
2021, which is due to a fall in production or a decrease in the commodity price. Another reason
for the BEP decline is the growth in the organization's fixed cost, which now stands at 1450. In
the year 2020, the company will be able to achieve BEP.
5. Define the term financial statements and interpret it of the organisation. Also elaborate how
the fiscal performance of the business could be improved.
A financial statement is defined as formal record which is used by business industry in
order to develop a business and calculate earned profits. This is the written record used to convey
the business activities and financial information of a company. This also helps to explain the
financial health of company by considering all income and expenses. This shows conclusion of
any business that can help to operate a business regularly.
The net benefit of the organisation has seen a substantial drop off due to the expansion in
the expense of the product sold, as can be seen from the profit and loss statement. By recognising
it from the year 2020, the income from operations has been cut in half in the year 2021. The
company's EPS has also been reduced significantly, from £14.60 to barely £3.99 per share. It is
not always profitable because it signifies that the company is rapidly losing market value. The
deals have expanded a little by around £50 million (Wang, Rieger, and Hens, 2017).
Non-current resources have decreased by around £8 million in the balance sheet, while
philanthropy has decreased by around £50 million. It means that the advantage has influenced
the company's image in both the market and the business. The stock for the period has also
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increased, which is excellent for the company because it demonstrates that it is profitable enough
to require a pre-stock for its near-term sales. The current liabilities have also increased due to the
decrease in current payables and current borrowings from £3051 and 237 in 2020 to £2837.0 and
54.0 in 2021.
In the statement of cash flow, the net inflow of the money from the working operations is
about 10.00% in 2021 of it in the year 2020. It is not great, the organization ought to zero in on
its everyday utilitarian exercises and suggest an appropriate thought to assist the enterprise. The
speculation is expanded nearly from 2020 to £ 504 of every 2021 which is the out of the cash.
The money inflow of the supporting exercises in £ 350 out of 2020 and 318 out of 2019.
6. Explaining the term legislation and several legislations that affect the business.
There are different legislations which affect the business can be discussed as given under:
1. Employment right act, 1996: This law is formulated by government for the purpose of
providing equal rights to employees. It is passed by British government in order to
give equal opportunity. This can help to maintain good relation between employer
and employee by giving equal opportunity to work. In relation to Fruit Punch,
management use this legislation to make feel good to employer and employees.
2. Data protection act, 1998: This legislation is related to secure data and maintaining
ethical code of conduct while running the business. It safeguards the data which helps
in reducing the misuse of the data (Woerkom, and Zeijl-Rozema, 2017).
3. Company law, 2006: This law contains all the rules and regulations related to
company. It includes the memorandum and articles of association details regarding
the company. It replaced the act of 1985 and 1989 companies’ law.
CONCLUSION
From the above report, it can be concluded that business activities are performed to improve
the profitability of the enterprise. A small business is one that is privately owned and operated. A
tiny business usually employs a limited number of people. For improving the earnings, it is
necessary to consider the factors of the business.
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REFERENCE
Books and journal
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Hunt, J. and Raman, S., 2017. Regulation matters: global environmental discourse and business
response. In The Business of Greening (pp. 114-133). Routledge.
Khan, M. and Khalique, M., 2014. Strategic planning and reality of external environment of
organizations in contemporary business environments. Business Management and
Strategy. 5(2).
Lamm, E., Tosti-Kharas, J. and King, C. E., 2015. Empowering employee sustainability:
Perceived organizational support toward the environment. Journal of Business Ethics.
128(1). pp.207-220.
Owolabi, S. A. and Makinde, O. G., 2012. The effects of strategic planning on corporate
performance in university education: A study of Babcock University. Kuwait Chapter of
Arabian Journal of business and management Review. 33(853). pp.1-18.
Rohlfer, S. and Zhang, Y., 2016. Culture studies in international business: paradigmatic shifts.
European Business Review. 28(1). pp.39-62.
Tian, X. and Martin, B., 2014. Business models for higher education: an Australian perspective.
Journal of Management Development. 33(10). pp.932-948.
Ueda, H., Ida, Y., Kadota, K. and Tozuka, Y., 2014. Raman mapping for kinetic analysis of
crystallization of amorphous drug based on distributional images. International journal
of pharmaceutics. 462(1-2). pp.115-122.
Wang, M., Rieger, M. O. and Hens, T., 2017. The impact of culture on loss aversion. Journal of
Behavioral Decision Making. 30(2). pp.270-281.
Woerkom, P. M. V. and Zeijl-Rozema, A. V., 2017. Improving local implementation of an
MNC's global CSR strategy: the importance of stakeholders. International Journal of
Business Environment. 9(3). pp.247-265.
Hunt, J. and Raman, S., 2017. Coltman, T. and et. al., 2015 Khan, M. and Khalique, M., 2014.
Lamm, E., Tosti-Kharas, J. and King, C. E., 2015 Owolabi, S. A. and Makinde, O. G., 2012
Rohlfer, S. and Zhang, Y., 2016. Tian, X. and Martin, B., 2014. Ueda, H., Ida, Y., Kadota, K.
and Tozuka, Y., 2014. Wang, M., Rieger, M. O. and Hens, T., 2017 Woerkom, P. M. V. and
Zeijl-Rozema, A. V., 2017.
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