Managing Small Business: Planning, CRM, Transnational Growth & Finance

This report provides a comprehensive analysis of managing and running a small business, focusing on Softwire Ltd, an IT sector enterprise. It covers key considerations for planning and resource allocation, including resource planning, organizational structure, performance management, employment legislation, and business plan development. The report also examines Customer Relationship Management (CRM) processes, such as assessing customer value, acquiring and retaining customers, and utilizing effective communication channels. Furthermore, it explores strategies for transnational business development, including partnerships and exporting, along with their benefits and drawbacks. Financial aspects are addressed through an annual itemized monthly cash flow forecast and a break-even analysis. The report also discusses key financial statements and relevant legislation affecting small businesses. Desklib provides access to this and many other solved assignments for students.

Managing and running a
small business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main consideration a small business or social enterprise needs to address......................1
TASK 2 ...........................................................................................................................................3
P2 Different processes of CRM for small business or social enterprise................................3
TASK 3............................................................................................................................................5
P3 How Small business can develop transnationally and determination of benefits and
drawbacks...............................................................................................................................5
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs set against
income for specific organisation............................................................................................6
P5 How break- even analysis could be applied to an organisational situation.......................8
P6 Key financial statements for an enterprise in accordance with their contribution to
successful business management............................................................................................9
TASK 4..........................................................................................................................................14
P7 Key legislation and regulations that have implications on small business or social
enterprise..............................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

Index of Tables
Table 1: Cash flow statement...........................................................................................................7
Table 2: Break even analysis...........................................................................................................9
Table 3: Profitability ratio analysis................................................................................................12
Table 4: Liquidity ratio analysis....................................................................................................13

INTRODUCTION
Managing and running a small business is an activity that implies to effective and
efficient operation of a business. This analysis will tend to examine the role of small business in
context of management. Different areas of small business will be covered starting up with the
key definitions of small business (Hatten, 2015). Management concept will be defined in order to
highlight its importance on this study. Present report is based on analysis of Softwire Ltd, a small
business enterprise in IT sector. Company usually provides its software development services to
some large scale business enterprises in UK. In accordance with this, main considerations
thatsmall business or social enterprise needs to address when planning and resource allocation is
discussed. Further, different procedures for Customer Relationship Management (CRM) for
Softwire are also evaluated along with forecast of cash flow showing fixed and variable costs. At
last, key legislation and regulation are also discussed that provide implication on small business
enterprise.
TASK 1
P1 Main consideration a small business or social enterprise needs to address.
Prior to establishment of business, it is essential for every business enterprise to make
effective planning and allocation of resources as it helps in understanding the requirements and
enables the organisation to achieve the business objectives. In present context, there are also
some important aspects have been identified which Softwire Ltd needs to address at the time of
planning and resource allocation. These essential considerations are mentioned as follows: Planning resources: It is the most important aspect which implies that every small
business enterprise needs to determine the resources which are required to accomplish a
specific project and achievement of business objectives (Bridge and O'Neill, 2012).
Planning of activities in organisation involves the utilisation and management,
identification of resources and skills required to create appropriate job specification. In
this context, Softwire also needs to identify the resources such as finance, material and
skilled employees for completion of specific business project. They also need to ensure
that resource must be effectively utilised and managed in order to achieve business
objectives.
1

 Organisation structure: It is considered as a system which determines how the activities
will be directed in order to achieve the aims and objectives of organisation. In Softwire, it
is essential for employers and manager to develop an appropriate and suitable
organisation structure at the time of planning to accomplish business project (Burns,
2016). Effective delegation of responsibilities and authorities will help them in providing
proper direction to business activities and understanding to employees to complete those
activities effectively. In addition to this, organisation also needs to identify the effective
ways to manage their human resources and fulfil the present requirements. For this, they
need to apply proper recruitment and selection procedure for hiring qualified employees
at workplace which provide them support in accomplishment of business objectives. Performance management: It is also important consideration which implies that
management of Softwire needs to manage the performance of its employees when
planning for new business project. It helps in them in analysing capabilities of their
employees and requirement of skills to complete the project. Training needs to be
provided to employees to enhance their skills and knowledge related software
development. This aids the management in development of teams at work that will work
together effectively. Employment legislation: Key aspects of employment legislations are also need to be
analysed and addressed by organisation at the time of hiring and managing human
resource. For example: All rights and welfare facilities need to be provided to employees
by Softwire.
 Business plan: At the time of planning and resource allocation, it is essential for
employers of Softwire to articulate their business vision, goals and objectives because it
provides them direction to accomplish business activities (Weske, 2012). Further, they
also need to determine the key components of their business plan and needs to apply
effective project management techniques involving Gantt charts and critical path analysis
in order to complete the project on specific time duration and achievement of business
objective effectively.
There are various resources have been used by organization in order t achieve objectives such as:
2

Human resource: Qualified employees are required in organisation which provided them support
in accomplishment of business objectives. Employees will provide support to the organisation in
accomplishment of business objectives at workplace.
Financial resources: These implies to capital which is required for Software to expand and
establish newly developed business operations.
Economic resources: It implies to resources like land labour capital and Entrepreneur which is
required to establish business enterprise. Availability of these resources tends to provide
competencies to organisation to attain growth in market.
Physical resources: Software also requires machinery, computers and other electronic gadgets for
carrying out business operations.
Technological resources: It related to technical resources and Software which are required in
their business to provide services to clients effectively.
TASK 2
P2 Different processes of CRM for small business or social enterprise.
Customer relationship management is analysed as the overall framework used by
organisation for developing and maintaining profitable relations with their target customers
through delivery of superior values and product satisfaction. Assessment of customer value: Employers of Small business enterprise needs to apply
this research method to identify how the organisation is perceived by their clients and
their competitors in industry (Jasra and Khan, 2012). Analysis of customer value is very
important for employers of Software as it allows them to gauge how they are judged by
customers in comparison with their competition. For management of customer
relationship, Software needs to provide quality software and services to their clients at
low rates in order to raise their benefits and reduce expenditure.
 Acquiring and retaining customers: It is also important procedure that involves getting
new customers and retention of previous customers through creation of brand image,
loyalty, partnerships, equity, growing share of consumers, marketing programs and
collective events etc. In this context, employers of Software needs to raise image of
organisation in IT industry through develop new and latest Software as well as cyber
security which are not available at competitors. For retention of previous customers, they
need to improve and provide their services at low cost so that expenditure of clients will
3

decrease and their benefit will increase (Vyeoman and et.al., 2012). This will tend to
create positive perception of organisation between their client business enterprise and
they will never split to another competitor in IT sector. Further, company has also
developed partnerships with their client to secure their business information and provide
cloud computing service to protect data of their large number of customers. In addition to
this, Software can also conduct various marketing programs along with their clients to
promote their business and acquiring new customers market. These marketing programs
will also provide benefits to their clients by increasing promotion in market.
 Effective communication channels: These are considered as latest technologies and
communication channels which are used by organisation in order to remain in touch with
their potential customers and providing them information about new products and service
they have launched in market (Olson and Wu, 2017). For example: Software needs to
use social media, E commerce websites, company and clients websites, digital
advertisement, Emails and telecommunication media for building and management of
customers relationship.
Survival strategy: it is most important strategy that needs to be developed by organization for
creation of business strategy at workplace. In present context, branding and relationship
marketing are two important strategies through organisation will be able to survive its business
operations in market.
Customer’s satisfaction: it is also considered as important part of relationship marketing in
which organisation focus on increasing satisfaction of their customers. It is fact that clients get
satisfaction when they will get quality products and services at low prices. Further, organisation
is high achieved by organisation to raise competition in market.
Customer’s retention: It implies to adopting high level strategy that needs to be used by
organisation for achievement of success. In this I have achieved various important business
perspectives that need to be achieved by organisation.
Telemarketing: Call centres are also established by organisation to communicate with their
customers in order to sustain business operations in market.
The CRM process includes following steps like that of:
Customer portfolio analysis- This will include analysing the base of customers of organisation
so that it become easy to determine their level or group to which they are bellowing to. So for
4

this it is very much required to define target of company based on the customers they want to sell
their products.
Customer intimacy- This is process under which company get familiar with their individual
which is their target as well. For this company need to build up their relationship and predicting
that how well customers are buying or purchasing their products.
Network development- this will refer to as identification of stronger relationship within
organisation which will be very successful in serving their customers.
TASK 3
P3 How Small business can develop transnationally and determination of benefits and
drawbacks.
Transnational sales strategy is considered as international business structure in which
global activities of organisation are coordinates through cooperation and independence between
its head office, operational divisions and internationally located business units or outlets. In this,
transnational business strategy will offer the centralization benefits to small business enterprise
provided by the global strategy along with the local responsiveness characteristics of domestic
strategies. SMEs in UK internationalise their business with an aim to achieve benefit of first
mover, develop potential for growth, acquiring more customers, development of its own small
home market and discourage its competitors (Heidelberg, Olson and Wu, 2017). These will
provide them support in increasing their market presence and brand equity. In present context,
there are various ways through which small business enterprise can internationalize their
business such as: Partnership: It is also important strategy through which business can expand its
operation by collaborating with other organisation in different country operating IT
sector. In this, Software can internationalise their business by making partnership with
other organisation in international market to increase their sales and growth in IT sector.
Benefits- this is very easy to form or incorporate as the registration process is very
convenient.
Drawbacks- while instability which means that any partner could leave at anytime as will
forming to indefinite period of time. The death or insolvency of any partner may be leading
to dissolution of partnership.
5

 Exporting: This functional of international trade refers to transfer of good to client in
another countries where organisation needs to expand business operation (Cowling, Liu
and Ledger 2012). Software must increase its business practices by squiring new
customers in other countries and providing them product and services. This will tend to
create their market share in other country and help in expansion of business.
Benefits- Company can significantly expand your markets, leaving you less dependent on
any single one.
Drawbacks- there is high administration costs may rise as you may have to deal with export
regulations when trading outside the European Union. Setting business unit: Small business enterprise also internationalise their business by
setting new sales outlets in subsidiary nations where they have their presence or another
countries. It is possible when the company has good financial strength and capable to
generate financial resources from market.
Benefits- They are easy to form, and the owners enjoy sole control of the business profits
Drawbacks- the biggest of which being that the owner is personally liable for all business
losses and liabilities
 Joint venture: Softwire can expand its business operations at international level by
making a joint venture with large scale organisation in IT sector which has their global
business organisation. Company will be able to make it relationship with new enterprises
in international market.
Benefits- one of the biggest advantage of joint venture is as this provides the opportunity to
gain new insights and expertise.
Drawbacks- While on other hand the objectives of a joint venture are not 100 percent clear
and rarely communicated clearly too all people involved.
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs set against
income for specific organisation.
Cash flow is considered as flow of cash inside as well as out of the business enterprise.
Cash inflows are analysed as the movement of cash in to the business. The investment which is
made by employers in Softwire is a one off cash inflows whereas the payments by clients are
considered as regular source of cash. Cash outflows are movements of cash out of the business
enterprise. The most important of estimating cash flows are to ensure that prudent view must be
6

taken about the size and time of payments (Romero and Martínez-Román, 2012). In this context
cash inflows are mainly achieved by organisation from cash sales to their clients, payment
received from debtors and the cash from their other financial sources such as bank loans, equity
share payment. Further Cash outflows results from the payments given to overheads such as rent,
wages along with raw materials and other variable costs.
7

Particu
lars /
month
Jan
uar
y
Febr
uary
Ma
rch
Apr
il
Ma
y
Jun
e
Jul
y
Au
gus
t
Septe
mber
Oct
obe
r
Nove
mber
Dece
mber
Sales
revenue
170
00
1751
0
180
35.3
185
76.4
191
33.6
197
07.7
202
98.9
209
07.9
21535
.1
221
81.1
2284
6.6 23532
Cash
inflow
170
00
1751
0
180
35.3
185
76.4
191
33.6
197
07.7
202
98.9
209
07.9
21535
.1
221
81.1
2284
6.6 23532
Fixed
expense
s
Rental
expense
s
100
0 1000
100
0
100
0
100
0
100
0
100
0
100
0 1000
100
0 1000 1000
Salary
of
personn
el
300
0 3000
300
0
300
0
300
0
300
0
300
0
300
0 3000
300
0 3000 3000
Admini
stration
expense
s
170
0 1700
170
0
170
0
170
0
170
0
170
0
170
0 1700
170
0 1700 1700
Variabl
e
expense
s
Materia
l
425
0
4377
.5
450
8.83
464
4.09
478
3.41
492
6.91
507
4.72
522
6.96
5383.
77
554
5.29
5711.
64
5882.
99
overhea
ds
340
0 3502
360
7.06
371
5.27
382
6.73
394
1.53
405
9.78
418
1.57
4307.
02
443
6.23
4569.
32
4706.
4
8