Managing and Running Small Business Report for Britannic Group

This report analyzes the management of Britannic Group, a small-medium enterprise (SME) in the UK, focusing on resource planning and allocation to achieve business objectives. It explores cost leadership, differentiation, and financial strategies. The report explains customer relationship management (CRM) processes, including customer portfolio analysis, network development, and customer intimacy, and evaluates the benefits and drawbacks of transnational development strategies. Furthermore, it presents and interprets cash flow forecasts, break-even analysis, and key financial statements, while also discussing relevant legislations and regulations. The analysis highlights the importance of strategic planning, resource optimization, and customer-centric approaches for sustainable business growth. The report provides recommendations for overcoming challenges and achieving optimal performance.

MANAGING AND
RUNNING SMALL
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Discussing main considerations Britannic Group needs to address when planning and
allocating resources to achieve business objectives...............................................................1
M1 Application of relevant tools and techniques for planning and allocating resources .....2
M2 Importance of planning and allocation of resources for achievement of objectives........2
D1 Critically analysing resources application in planning and allocating.............................3
TASK 2............................................................................................................................................3
P2. Explanation and evaluation of different processes of customer relationship management
for Britannic Group................................................................................................................3
P3 Explanation of how Britannic Group can develop transnationally and determination of
benefits and drawbacks...........................................................................................................4
M3 Customer relationship management process elements application in Britannic Group. .5
M4 Evaluation of potential development of transnational operations....................................5
D2 Critical evaluation of customer relationship management and recommendations for
challenges while developing transnationally..........................................................................5
TASK 3............................................................................................................................................6
P4. Annual itemised monthly cash flow forecast with fixed and variable costs set against
income of Britannic Group ....................................................................................................6
P5 Explanation of breakeven analysis and its application in Britannic Group......................7
P6 Interpretation of Britannic Group key financial statements in relation to their contribution
to successful management .....................................................................................................8
M5 Application of cash flow forecast and break even analysis.............................................9
D3 Critical evaluation of cash flow forecast and break-even analysis ..................................9
TASK 4..........................................................................................................................................10
P7 Discussion of key legislations and regulations that have implications on Britannic Group10
M6 Implications of key legislation and regulations at Britannic Group..............................10
D4 Critical evaluation of key legislation and regulations impact on Britannic Group.......11

CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management is imperative as it aligns and coordinates various functions of business
activities in an organisation. This helps in achievement of goals in such a way that resources are
optimally utilised and managed efficiently with the help of planned and organised strategies that
are coordinated and controlled (Schaper and et.al., 2014). Britannic Group is an SME that
provides communications and networking equipment in UK. It was founded in 1985 and
currently has 69 employees working in company.
This assignment will discuss how Britannic Group plans and allocates their resources so that
they are able to achieve objectives. It will explain and evaluate customer management process as
well as understand benefits and drawbacks of operations done transnationally. This will also
cover the development and analysis of cash flow forecast, budget, break even analysis and
interpret Britannic Group's key financial statements. Discussion on implications of regulations
and legislations on organisation will be done as well.
TASK 1
P1. Discussing main considerations Britannic Group needs to address when planning and
allocating resources to achieve business objectives
SMEs require proper planning and allocation of resources when running their business.
There are main considerations that have to be taken by Britannic Group in order to achieve
business objectives in an optimal manner. These include:
Cost Leadership:
Britannic Group has to consider cost leadership when planning their business operations
as it will help them in producing their products and services at low costs, which will lead to
effective achievement of business objectives (Steingold, 2017). This can be done through setting
up of facilities that helps in obtaining economies of scale and utilisation of innovative technology
that will increase productivity.
Differentiation and Focus Strategies:
Britannic Group requires consideration of differentiation strategies while planning, so
that they are able to create products and services that are innovative, which will enable them to
stay ahead of the heavy competition (Peppers and Rogers, 2016). It will help to improve their
products and build a brand name in the market. This aids in achievement of business objectives.
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Finance:
Finances have to be funded and maintained by Britannic Group so that they are able to
run business operations and achieve objectives. They need to consider sources of capital and
require to ensure availability of funds in order to function effectively.
Human Resource:
Britannic Group has to consider human resources in the company and how they have to
manage so that objectives are achieved efficiently. It will ensure that right persons are appointed
for conducting tasks, so that they can work efficiently in the organisation.
Core competencies:
Core competencies of Britannic Group have to be taken into consideration when making
plans and allocating resources (Löfqvist, 2017). This will help them to achieve objectives in an
optimal manner as they are aware of their areas of strengths.
Marketing Strategies:
Britannic Group will have to consider their marketing strategies for products and services
while planning and allocating available resources, so that they are able to generate sales which
will lead to achievement of organisational objectives.
M1 Application of relevant tools and techniques for planning and allocating resources
Britannic Group can use Porter's generic strategy tools such as cost leadership, focus and
differentiation strategies through a structured manner, which will help them to plan their business
activities. This aids in allocation of various resources that can be utilised in order to achieve
objectives of organisation by implementing strategic plans in an effective manner (Anderson and
Ullah, 2014). They can reduce their costs and increase sales with high levels of productivity and
proper marketing techniques.
M2 Importance of planning and allocation of resources for achievement of objectives
It is important for Britannic Group to allocate resources such as financial, natural and
human factors as they help in planning process so that optimal utilisation can be done. With cut
throat competition and high operational costs, it is vital for organisation to make strategic plans
that will help in effectively and efficiently achieving objectives (Carroll, 2016). It will provide
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direction for managers and reduce risks as well as wasteful activities along with promoting new
ideas.
D1 Critically analysing resources application in planning and allocating
Britannic Group utilises financial and human resources by proper planning that helps
them in creating differentiation and cost strategies. If correct application of these resources is not
done, the achievement of objectives will not be effective and efficient. These strategies have to
be implemented properly so that they can attain high profitability and sales of their products and
services. Core competencies have to be applied while making plans, otherwise company will not
be able to optimally utilise and allocate the resources available.
TASK 2
P2. Explanation and evaluation of different processes of customer relationship management for
Britannic Group
Customer relationship management is a process that can help Britannic Group to learn
about their customers so that they can manage as well as improve productivity of marketing
strategies. This will help them in achievement of organisational objectives and maintain a value
chain with customers. The different processes include:
 Customer portfolio analysis: Britannic Group can analyse their customers base,
so that they will be able to determine what kind of groups and individuals can
help them gain high levels of profits. This will define organisation's target
customer base (Gandy, 2015). It is generally the first step of the process.
 Network Development: Britannic Group can identify and develop secure
relationships through various networks and organisations that will help to attain
success in services provided to customer. They can utilise platforms such as
internet as well so that they can able to connect with each other.
 Customer intimacy: Britannic Group can use this process by increasing
familiarity with customers that are included in their target base. It will build a
relationship between company and buyers (Uwonda and Okello, 2015). They will
be able to know about their customer's buying habits and personal preferences
which can help in interactions.
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 Value proposition development: This is a process of customer relationship
management which helps to build relations with customer by collecting their
information, which will help in understanding them. It can help Britannic Group
in identifying customer target so that they will be able to create a tailored value
proposition for their buyers which will in return increase the worth of company.
 Customer life cycle management: Customer life cycle management can help
Britannic Group in maintaining and continuing relationships with their customers.
This cycle includes the journey of potential client to product advocate of company
(Wilburn and Wilburn, 2018). It has to be managed with proper structure and
attention so that organisation can able to determine how they can approach
customers, acquire and retain them. This will help in measuring customer
relationship management strategy of company as well.
P3 Explanation of how Britannic Group can develop transnationally and determination of
benefits and drawbacks
Britannic Group is a small business company that has been successfully selling products
and services to various customers. They can grow and expand transnationally with help of
various growth strategies and opportunities. Britannic Group can develop transnationally through
different methods that include franchise, in which they can ask individuals to operate their
business activities on their behalf and earn commission, in respective countries. They can
develop joint ventures with other companies internationally or do foreign direct investment in
them. Market research can help company to analyse the performance of their products and
customers that purchase them. It will help them to determine areas where their organisation can
develop and attain high profitability (Scott and et.al., 2015). Management can utilise new
innovative technologies for producing products and services by optimally utilising resources in
an effective and efficient manner. It will help in increasing productivity and lead to growth
transnationally.
Benefits of developing transnationally are:
 It will help Britannic Group grow and expand their business.
 There will be availability of cost effective labour and raw materials.
 Improvement in quality of products and services.
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 Increase profitability of Britannic Group.
 Creates strong trade ties between countries.
Drawbacks of developing transnationally are:
 Britannic Group can face high risks of political, legal and operational factors.
 There will be a loss of control in business activities.
 Organisation can become vulnerable due to differences in economies.
 There will be more pollution that will lead to environmental damage.
 High taxes have to be paid by Britannic Group.
M3 Customer relationship management process elements application in Britannic Group
Britannic Group can achieve organisational objectives through implementation of process
of customer relationship management in which customer portfolio analysis can help them in
finding their customer base and customer intimacy can be built after gaining important
information about them. They can develop networking with important people such as suppliers,
partners as well as investors (Simpson, 2015). This will help them achieve value proposition
development, in which they increase customers as well as their own worth in the industry.
Finally, they can find out customer life cycle that will enable them to manage relationships in a
strategic manner. It will help maintain and retain customers by interaction as well as fulfilling
their needs with their products and services.
M4 Evaluation of potential development of transnational operations
With the help of stage model of internationalisation, Britannic Group can evaluate their
potential to develop business transnationally. This states that internationalisation is a low and
gradual process which will cause delays for organisation in developing their business. It will
require them to adapt with the different resources that are present in other countries and company
will have to gain knowledge about foreign activities (Peppers and Rogers, 2016). Britannic
Group's potential to emerge in the transnational areas can benefit them as they can improve the
quality of their products and services. Various countries can offer them affordable labour and
raw materials for production as well. But a major drawback is that it will be time consuming.
They can face high risks such as political and legal factors of the country in which they want to
internationalise in.
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D2 Critical evaluation of customer relationship management and recommendations for
challenges while developing transnationally
Customer relationship management at Britannic Group creates a customer portfolio that
is analysed so that they can maintain intimacy with them and develop a network through which
they can increase worth of their customers. This ensures that there is value proposition
development and measurement of their relationships can be done through customer life cycle
management (Steingold, 2017). Britannic Group can create strategies that will allow them to
develop transnationally such as proper structure for logistics, learning and understanding of
country's culture and researching respective markets in which they will operate their business.
TASK 3
P4. Annual itemised monthly cash flow forecast with fixed and variable costs set against income
of Britannic Group
The cash flow forecast of Britannic Group consists of sales that have occurred during
2017 and total revenue that has been generated. It consists of fixed costs which include adverting
expenses, salaries, rent and depreciation on machinery. Their variable costs consist of
commissions, shipping, materials, supplies and equipment. Cash flow statement is as follows:
Britannic
Group
Janu
ary
Febr
uary
Marc
h April May June July
Augu
st
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Cash flow
Cash inflow
Sales
3200
0
3200
1
3200
2
3200
3
3200
4
3200
5
3200
6
3200
7
3200
8
3200
9
3201
0 32011
Total revenues
3200
0
3200
1
3200
2
3200
3
3200
4
3200
5
3200
6
3200
7
3200
8
3200
9
3201
0 32011
Cash outflow
Fixed cost
Advertising
Expenses 100 101 102 103 104 105 106 107 108 109 110 111
Salary 6000 6001 6002 6003 6004 6005 6006 6007 6008 6009 6010 6011
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Rent 400 401 402 403 404 405 406 407 408 409 410 411
Depreciation on
machinery 500 501 502 503 504 505 506 507 508 509 510 511
Total fixed cost 7000 7004 7008 7012 7016 7020 7024 7028 7032 7036 7040 7044
Variable cost
Commissions 1500 2560 1200 2250 890 1600 2450 1800 1450 2200 3000 2450
Shipping costs 900 840 630 740 650 800 450 520 550 490 675 850
Materials 2200 2150 2475 3000 2985 2550 3050 2850 2470 3240 2800 3060
Supplies 350 320 670 480 530 600 250 840 760 620 950 560
Equipment 3000 3250 3940 2870 2500 3250 3650 2854 1650 3000 2032 4201
Total Variable
Cost 7950 9120 8915 9340 7555 8800 9850 8864 6880 9550 9457 11121
Total cost
1495
0
1612
4
1592
3
1635
2
1457
1
1582
0
1687
4
1589
2
1391
2
1658
6
1649
7 18165
Net cash flow
£170
50
£158
77
£160
79
£156
51
£174
33
£161
85
£151
32
£161
15
£180
96
£154
23
£155
13
£1384
6
Britannic Group's cash flow analysis determines that their total revenues for January was
£32,000 and they had a total fixed cost of £7,000 and total variable cost of £7950 which amounts
to £14950. Their net cash flow for the month was £17,050. In December 2017, revenues totalled
to £32,011, with total fixed cost at £7,044 and total variable cost £11,121 which amounted to a
total of £18,165. Their net cash flow at the year-end was £13,846.
Cash flow analysis shows that they had a decrease in net amount of £3,204. Their total
costs increased by £3,215. This shows that there was an increase in both fixed and variable costs
at Britannic Group.
P5 Explanation of breakeven analysis and its application in Britannic Group
Break even analysis is a point that shows an organisation does not have any losses nor
profits and equilibrium of costs is achieved. It can help Britannic Group in determining a point
where their expenses get covered and generation of profits occur. This is an important tool that
can help company in making various decisions for their global growth (In Pursuit of Profit:
Applications and Uses of Breakeven Analysis, 2017). Break-even point is calculated with the
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help of fixed costs and its variable margins. Various decisions such as safety margin, changes in
price, production capacity can be made. This will help in increasing sales volume and prices
along with reducing fixed costs and variable expenses.
Break-even point = Fixed Costs/ Sales price per unit – Variable Cost per unit
For example, Britannic Group can find out its break-even point by analysing the following:
Total fixed cost: £7000
Variable cost per unit: £100
Sales price per unit: £250
Break-even point = £7000/ £250-£100
= 46 units.
Company is required to sell 46 products, after which they can attain break-even point and
cover fixed and variable costs. Britannic Group has to keep track of their sales so that they know
when their expenses will be covered and start to generate profit. This will help them to make
required changes so that they can attain high levels of profitability by selling their products at
proper price (Löfqvist, 2017). It will aid in choosing the right technique for production of goods.
Britannic Group has scope for global expansion, and with the help of break-even analysis, they
can easily determine how production has to be done, so that they are successful in developing
transnationally.
P6 Interpretation of Britannic Group key financial statements in relation to their contribution to
successful management
Britannic Group prepares various financial statements which helps them in making
decisions that lead to achievement of objectives and generation of high profits. These include:
Income Statement:
This statement presents Britannic Group's financial results for a specified period of time.
It consists of revenue earned, expenditures incurred and net loss or profit attained. This helps in
evaluating company's financial performance, so that they are able to make measurements and
implement changes that will help them in generating high amounts of profits in the future
(Carroll, 2016). As per the income statement of company, it was observed that they have a total
profit of £25,000 after attaining sales of £45,000. They had incurred a total of £20,000 expenses.
This shows that they have successfully achieved their objectives by selling 180 units of their
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products. But in order to expand their business internationally, they will have to increase their
sales to 300 units. These inflows and outflows can help in determining cash flows of company,
so that they can assess strategies and implement them successfully.
Balance Sheet:
Balance sheet is an income statement used by organisations to assess the values of their
assets and liabilities as well as determine their capital or equity (Balance Sheet, 2017). Investors,
management and creditors of Britannic Group require this so that they are able to analyse the
current position of the company. It contains current assets, investments, properties and intangible
assets. While liabilities consist of current and long term liability as well as owner's equity.
Analysing this can help management in successfully implementing strategies so that objectives
can be achieved and lead to development and growth.
Cash Flow statement:
Cash flow statements consist of operating, investing and financing activities, which show
the cash inflows and outflows that occur at Britannic Group. It includes analysing and managing
of cash flows and how effectively company earns cash so that they can pay their debts and other
organisational expenses (What Is a Cash Flow Statement, 2018). In company's cash flow
statement, they have generated a revenue of £32,000 and have fixed costs worth £7,000 and
variable costs amount to £7950 which totals to £14,950 costs. The total cash inflow of company
is £17,050. They will be required to generate more sales so that high profits can be achieved,
which will lead to overall accomplishment of organisational objectives.
M5 Application of cash flow forecast and break even analysis
Britannic Group can utilise various quantitative and analytical techniques to analyse their
cash flow statements and break-even analysis so that they are able to determine the rate at which
they can sell their products and services so that they can generate profits and ensure a smooth
inflow and outflow of cash transactions in the business (Wilburn and Wilburn, 2018). Through
break even analysis it was found that if company sells exactly 46 units, then they will attain
equilibrium as it is the break-even point and anything that they sell after that will be counted as
profits earned by them. While cash flow analysis shows that they see an increase in total costs by
£3,215 and a decrease in net cash flow of £3,204 at year end.
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