Managing and Running a Small Business: Resource, CRM, and Finance

This report delves into the core aspects of managing and running a small business, addressing crucial elements for success. It begins by examining resource allocation strategies, emphasizing the importance of optimal utilization for achieving business objectives, especially for small and medium-sized enterprises (SMEs). The report then explores customer relationship management (CRM) processes, evaluating different strategies and their benefits, such as identifying target markets, defining CRM strategies, and improving customer service. Furthermore, it analyzes the potential for transnational business development, outlining the advantages and disadvantages of expanding into international markets. The report also includes a detailed cash flow forecast, break-even analysis, and interpretation of key financial statements to assess the financial health and sustainability of a small business, providing a comprehensive overview of essential business management concepts and practical applications.

Managing and running a small business

Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
P1.....................................................................................................................................................3
P2.....................................................................................................................................................4
P3.....................................................................................................................................................5
P4.....................................................................................................................................................7
P5.....................................................................................................................................................8
P6.....................................................................................................................................................9
P7 ..................................................................................................................................................11
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................12

INTRODUCTION
A small business can be defined as any company which has less than 500 employees and the
revenue of the business is less than $25 million. For example a small garage that employs around 10
people is an example of small business. For managing a business any small company has to have a
business plan as without a business plan the company would not be able to manage there finance,
time, technology, human resources etc., The small business must make sure that for successful
running of there business they should focus on their customer needs and demands as for them
Customer is the king so they should focus on the customer relationship management. Also, small
business have to arrange the finance to run there business as they will find a lot of problems in
raising finance, there source of finance is limited to bank and financial institution only. Small
business must have good communication system available for the effective working of the
organization. They must timely identify the customer needs and demands by asking there customer
what they want. Small business must also have to change with the changing technology in there
industry so that they can maintain there customer share in the market and also to compete within
such dynamic environment.
MAIN BODY
P1 Discuss the main considerations a small business or social enterprise needs to address when
planning and allocating resources to achieve business objectives.
Small business always try and allocate their resources in a way that the resources are utilized
optimally, as small business have limited resources and if they are not allocated properly then they
will face problems like non completion of the projects being allocated to them which will disrupt
the work of the whole organisation. So the SME must allocate there resources according to the
importance of the work. For the proper allocation of resources SME like Captify they should use the
following techniques discussed below.
Determine the resource available
Firstly Captify should evaluate what resources they have in their organisation and on the
basis of these resources they should identify the basis of the scope of the project they are going to
undertake. This will help Captify in analysing that the project undertaken is feasible or not, so the
company can make their decision whether they can proceed with the project or not.
Identify the resource needed(Storey, 2016)
The next thing Captify should keep in mind is that they should identify what resources they
are going to need in the project and if they can get there hands on these resources. This will include
any specific tools, machinery, expert required to perform the task etc. once the company has

identified this they can proceed to procure these resources.
Evaluate the human resource
For any operation, one of the main point to keep in mind is that every project require a
particular type of human resource. Since SME do not have much workforce therefore they must
carefully allocate their human resource and maximize the benefit they can get from them. This is
very important for Captify in order to be successful in the current and future environment.
Draft a resource plan
This is the point of action as Captify will draft a plan to allocate the resource identified and
allocated in the previous steps. This will help the organisation to form a layout so that the company
could achieve their goals. This is an important step as the whole organisation will follow what this
step says.
Be ready for emergencies
Captify should always be ready for any emergencies that they might face during the course
of action in the organisation. The manager working their must have a backup plan to deal with any
emergencies. For example if an important person of the project fall sick or for any other reason is
not able to come to work then the manager must step in the company and should lead the team
toward the achievement of the organisational goals.
Control over the organisation
Captify should keep an eye over the operations of the company and if any employee or
manager is facing any problem then they should be guided in order for the smooth working of the
organisation.
P2
Explain and evaluate different processes of customer relationship management for a small business
or social enterprise.
Customer relationship management is a process by which the Captify can manage their
interaction with the current and the potential customers. Customer relationship can be maintained
by using the customer data from a variety of channel including telephone, email, social media etc.,
CRM helps the company to know about the feedback of the customer and improve their product and
services in order to provide the best customer experience.
Benefits of customer relationship management
Identification of target market
Initially Captify should establish CRM process to identify the market that they want to
target. The small business must identify this because they have limited resources so they must

customize their product according to their customer needs and demand. The identification is based
upon the demographics, geographic, trend etc., the customer should be listed on the basis of their
value proposition. This value proposition can be done by CRM process which will make the
operation of the customer more effective and efficient.
Define CRM strategies
In this step Captify will form the overall strategies that they are going to implement to target
their identified market. These strategies will depend upon the customer that Captify is handling and
the budget availability of the company to satisfy the demand of their customers. While devising the
strategies Captify should keep the pros and cons of the particular strategy and should evaluate the
feasibility of the strategies. These CRM strategies will help Captify in knowing the demand of their
targeted market and this will help in achieving the long term goals of the organisation.
Define method to handle the company's customer
This step involves how Captify will handle each of their customers. The feedback received
through the channel of the company shows the company different requirements of the customers so
they must identify how they will solve the grievances of each and every customers. For an instance
high paying customer should be offered high price items whereas low affordable customer should
be handled differently. Captify will then be able to identify there target customer and satisfy the
need of the customers in order to be more effective and efficient in the market.
Better customer services
The company will help improve the services as with the help of customer relationship
management the company can know exactly what product they need to develop so that it fits the
customer requirement. Improved responsiveness and understanding among the employee of the
organisation will result in better customer service. Better customer service will help Captify to build
their brand image in the eyes of the customer and this will help in the long term success of the
organisation. This will also give Captify competitive advantages over their competitors in the
market. If they are able to differentiate their product then they can also charge premium for them
increasing there revenue and sales.(Villamizar, 2016)
P3
Explain how a small business can develop trans-nationally and determine the benefits and
drawbacks.
Generally the domestic market is huge enough for any small business to gain satisfactory level of
profits but some business entrepreneur wants to diversify their business internationally to increase

their market share. These will help companies like Captify to grab global opportunities and by
entering into international market the company can increase there long term profitability.
This is generally very huge step for any SME therefore Captify should initially lay out their
plan, then they should conduct some market research in order to find out the feasibility of the option
to expand globally, then they should perform analysis like cost benefit analysis, PESTLE analysis,
SWOT analysis to identify the marco environmental factors, then the company should start looking
that how the company would be financed for expanding globally and at last they should look for
suppliers who can provide them with the goods needed in the international market.
Advantages
New market availability
One of the major advantage of expanding our business in the international market is that the
company have a whole new customer target available for them. The company will need to use a
variety of promotional techniques in order to reach their customers like social media, online
marketing, online websites etc., these all are cheap way of promoting the product and reaching more
and more customer all over the world. They have an excellent opportunity to make their brand
image all over the world when they start to expand internationally.
Diversification of business activities
Another advantage of expanding the business is the diversification of the business. The
company can take advantage of the different economic fluctuations in different countries. It may be
helpful in offsetting the losses occurred due to economical imbalances in the domestic country.
Establishment of business overseas can sustain domestic business for long term.
Disadvantages
Challenges of different culture
As trans national strategy will help to get and attract new customers, the drawback is that
cultural differences in different countries. This is one of the major challenge the SME faces as they
have to change their operations according to the different countries in which they are expanding.
They need to follow their rules and regulations in order to work in the foreign country. There are
different challenges like language differences that spoils the marketing efforts of Captify. This may
disrupt the operation of Captify and if the company cannot tackle these challenges then they will
have to face serious consequences.
Financial risk
Another major drawback is that the company takes a lot of financial risk in expanding their
business internationally as they have to take long term loans from banks and other financial
institutions in order to fund the expansion. If the expansion fails then the company can go into
liquidation as the banks have to be paid irrespective of profit or loss being made.

P4
Cash flow forecast for fixed and variable cost against set income\
There has been the analysis of the above forecasted cash flow of Captify given below
Projected Cash Flow Statement
Partic
ulars Jan Feb
Marc
h April May June July
Augus
t
Septe
mber
Octob
er
Nove
mber
Dece
mber
Openi
ng
Bal. 18000 21000 24000 27000 30000 30000 27500 31000 34500 38500 40500 45000
Cash
In
Sales 25000 25000 25000 25000 22000 22000 28000 28000 28000 27000 30000 30000
Total 25000 25000 25000 25000 22000 22000 28000 28000 28000 27000 30000 30000
Cash
Out
Varia
ble
costs
Mater
ial 6000 6000 6000 6000 6000 7000 7000 7000 7000 8000 8000 8000
Wages 5000 5000 5000 5000 5000 5500 5500 5500 6000 6000 6000 6000
Mark
eting 3000 3000 3000 3000 3000 4000 4000 4000 3000 3000 3500 3500
Fixed
Rent 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000
Total 22000 22000 22000 22000 22000 24500 24500 24500 24000 25000 25500 25500
Cash
Flow 3000 3000 3000 3000 0 -2500 3500 3500 4000 2000 4500 4500
Closin
g bal 21000 24000 27000 30000 30000 27500 31000 34500 38500 40500 45000 49500

Breakeven point analysis: It is a financial tool which helps you to determine at what stage your
company, or a new service or a product, will be profitable. It will assist Captify in knowing about
how much sales must be made by them. This tool can assist firm in having knowledge about point
where company will be able to cover its loss and profitability. (Spence, 2016) This tool assist
company in making decisions. It helps them in knowing about the profitability which has been
made by them. It enables Captify in knowing about whether the investment needs to be done or not.
In order to grow firm needs to have an idea about where sales revenue will meet out its obligations.
It assists firm in making clear the relationship between revenue and cost analysis. Break even
analysis means determining the relationship between the revenue profits and the cost of an
organization at different level of output.
The break even point is the point at which the revenue and cost are the same and at this point
there is no profit no loss in the organisation. Break even analysis is used by the company to know
the feasibility of the product or service they are going to offer to the customer in the near future.
Captify can use break even analysis so that they will be able to know how many units are needed to
be produced in order to start making profit for the company. This analysis will help Captify in the
process of pricing and promotions so to control the cost being incurred. Break even analysis include
all types of cost which are fixed costs, variable costs and semi variable costs. All these cost are
subtracted from the revenue of the company to find out the break
The operating expense including administrative expense and operating expense have
significantly increased from previous year this is because since the company is planning global
expansion they will require to promote their product which will increase their administrative
expenses. The distribution cost is also increased because they will have to set up new stores to
provide there product and services. Therefore, there is an increase in the operating expense.
Also, the finance cost have increased due to the additional fund which has raised for funding
the expansion. These are expected to cover from the additional sales of the company.
The company overall performance has been increased significantly and this will be keep increasing
in the coming years as in 2020 there has been a major investment and since the company has an
excellent brand image the product will have an excellent sale in the future years. But in the short
term the company have to deal with low profits. Captify should also address this in there annual
report so that there shareholders and other investor like debenture holders and creditors will come to
know the reason of the low profits in the coming year.(Lombardi, J.M., Makhni, M.C. and
Lombardi, 2019)

Key financial Statements contributing in the successful management of the organisation
Financial statement of any organization provides an idea about the financial performance of
organization. It provides an information about the inflow and outflow of cash. It also provides
description about how effectively company is managing their task by available resources. If the
cash inflow is more investor will be interested in investing in Captify. It assists investors in
knowing about the current financial efficiency of organization. There are three main financial
statement of company that includes income statement, balance sheet and Cash flow statement.
Income statement: It is also known as profit and loss statement. It provides details about
expenses and assets of Captify. It helps firm in managing assets effectively and efefcinetly. Mian
aspect of income statement is that it assists company in knowing about how much profit remains
with after investing in various expenses.
Balance Sheet: It provides information related to assests and liabilities. It ais being used to
calculate the valuation of company. Investors will only invest in company when there liabilities will
be less and they have an appropriate cash balance. It will also present the investment which is being
made by organization in different ventures.
Cash flow statement: It provides about cash inflow and outflow. Most important task for
company is to analyse its cash flow projections as this will help them in having an idea about clear
picture of their financial position.
Fixed costs means that the cost is going to remain the same irrespective of how many units are
being produced. These fixed cost for Captify includes the rent paid by the company for their retail
stores, insurance of the company etc., all these cost are incurred by the company irrespective of the
work done by the company. These cost will incur even if the company does not work at all.
Therefore, the company must try to reduce these as much as possible.
Variable Costs are those cost which is linked to the number of unit been sold. So as the business
increases there sales these cost are increases proportionally. These cost include the salary paid by
the company to their employees, if the company stop working then these cost will not incur because
the company can kick out there employees and they do not cost them anything. These cost increase
with the increase in the company's operations.
Semi variable costs are the cost which are fixed in nature but it certainly increases when the output
reaches a particular level. This cost can be said as a combination of both the fixed and the variable
cost. These costs increases with the increase in the level of operations, so after crossing a particular
level of operations these costs will increase and then remain constant for up to another particular
level of operations.
By analysing all these cost Captify will get there break even point and they can make further

decision on this basis. Captify can use break even analysis very often because they introduce new
products every now and then so the feasibility must always be checked or other wise the company
might have to deal with different problem in the future.
.
Gross profit ratio
The gross profit ratio has increased from the previous year by 1 percent, this may be due to the
increased sales in the 2019. The reasons for this increase may be the company controlling their cost
of sales, the markup policy may have worked good for the company or there may be undervaluation
of the opening stock.
Net profit ratio
This ratio has been slightly increased in the year 2019, this is because though the company able to
increase their sales the admin and distribution expense are increased proportionately. This may be
due to increase in the expense like advertisement to promote their product. These will help the
company in the long term.
Current ratio
This has been diminished as in 2018 it was 1.18 and in 2019 it is 1.11, this might be because the
company is not able to pay there short term liability quickly and therefore the current liabilities have
been increased.(Slawsky, and Zafar, 2017) This will have a negative impact on the company
because the investor will not be happy to see this, also they are far away from achieving the ideal
ratio of 2:1.
Liquid ratio
The liquid ratio has also worsened from the previous year. The company will shortly start facing
issue with their liquidity if this continues as they will not be able to pay their liabilities and this may
damage their brand image. Although they have achieved there ideal ratio of 1:1.
Interest cover ratio
The company's interest cover ratio has increased in 2019 as compared to 2018, this might be
because the company is been able to pay its interest payment. This is because the profits of the
company is gradually increasing and the interest payments are decreasing. From this ratio it can be
concluded that the company is paying their interest obligation timely.(Nohria, 2017)
Debt to equity ratio
The company debt to equity ratio have also worsened in the current year, this is because the
company has taken long term loans for the funds they will be requiring to operate their company

Discuss key legislation and regulations that have implications on small businesses or social
enterprises.
There are many laws and regulation which are being laid down by the government that may
impact the business of Captify directly or indirectly. If Captify does not follow these laws and
regulations then they might have to face additional cost. The company should pay their taxes on
time, follow laws related to waste disposal and laws for employment management. All the
government business legislation has to be followed by all organisations because these gives a legal
existence to the business. There are some laws and regulation discussed below:
Equality act, 2010
In this Captify must make sure that no discrimination exists in workplace on basis of colour,
religion, belief and thoughts. Also they need to be engaged in making p0olicies related to promoting
equality and diversity in organization. This will assist them in engaging employees towards firm
and it will also help them in making employee relation better.
Health and Safety act, 1974- In this company needs to engaged in providing safe and secure
environment to their employees. They must make sure that workers do not work in hazardous
working conditions.
Labour laws
The labour laws can affect the working of Captify as if the labourers are not paid the right amount
that they need to be paid for the job then they will be required to pay penalties if anyone takes any
legal action against them. There are many employment laws laid down by the legislation body that
small business has to follow. These laws include the wages and hour which says that the employees
must be paid according to the hour that they have worked and they must pay extra for any overtime
worked, health and safety at workplace which says that Captify should provide an environment
which is safe for their employee to work in, law for equal opportunities which says that each and
every employee must have equal chance when it comes to promotion or recruitment of any new
members.(Senderovitz, Klyver and Steffens, 2016)
.(Njenga and Jordaan, 2016)
CONCLUSION
From this report we have come to a conclusion about a variety of things about the management of
the small business organization. There have been a brief discussion about the resource allocation in
the first task and this has been detailed in various sub tasks in which the report explains about the
customer relationships management of small business management and what are the pros and cons
of operating business at trans-national level. Then there is an analysis about the forecasted cash

flow of the company Captify and there in an interpretation of the analysis being produced. In the
report, there is also a brief discussion about the break even analysis for Captify and how can the
business use this to their own advantages. In this section we can say that in the short term the
company is performing moderately but in the long term there are chances that there performance
will improve. At last there is a discussion about the laws and regulations which the small business
must follow for the smooth functioning of the organisation. These are strict laws and regulation
imposed by international organisation so breaking any of these will have serious consequences upon
the small businesses. Comprehensively, the report shows the management of the small business
organization.
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