Managing and Running a Small Business: A Detailed Report

This report provides a comprehensive analysis of managing and running a small business, using Rowlinson Knitwear as a case study. The report explores key considerations for planning and allocating resources to achieve business objectives, along with different processes of customer relationship management, and how a small business can develop transnationally, including the benefits and drawbacks. It also includes an annual itemized monthly cash flow forecast, an explanation of break-even analysis, and an interpretation of financial statements. The report concludes with a discussion of key legislation and regulations impacting small businesses. The content covers various aspects of business management, providing insights into strategic planning, financial analysis, customer relationship management, and international expansion. The report offers a practical understanding of the challenges and opportunities faced by small businesses, making it a valuable resource for students and professionals alike. The report is a contribution to Desklib, a platform offering AI-based study tools.

Managing and Running a
Small Business

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Discuss main considerations a small business needs to address when planning and
allocating resources to achieve business objectives...............................................................3
TASK 2............................................................................................................................................4
P2. Explain different processes of customer relationship management for a small business 4
P3. Explain how a small business can develop transnationally and determine the benefits and
drawbacks...............................................................................................................................6
TASK 3............................................................................................................................................7
P4. Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
set against income for a specific organisation........................................................................7
P5. Explain how break- even analysis could be applied to an organisational situation.........8
P6: Conduct interpretation of financial statements................................................................9
TASK 4..........................................................................................................................................13
P7. Discuss key legislation and regulations that have implications on small businesses or
social enterprises..................................................................................................................13
CONCLUSION..............................................................................................................................14
REFENCES ...................................................................................................................................15

INTRODUCTION
For managing and running a business operation and functions in effective manner owner
of a respective business has to plan various strategies. Business operations can be run on certain
levels like large level, middle level and small level (Schaper and et.al., 2014). All of them has to
make strategies in appropriate manner to conduct their activities in effective manner. Small
business organisation which is taken for this assignment is Rowlinson Knitwear which is
established in year 1935 and dealing in textiles and apparel industry. They are mainly
manufacturer and retailer of school wear and corporate wear with premium and best quality.
Their office is located in Manchester, United Kingdom and they have approx 40 employees at
their office. Topics explain in this assignment are plan which help small business in making
strategies and allocate resource in order to achieving goal. Along with this it include evaluation
of customers relationship management and benefits and challenges which help in transnational
operations. It also explain cash flow forecast, budget and break even analysis and also discuss
rules and legislation which is made by government to run business at small level.
TASK 1
P1. Discuss main considerations a small business needs to address when planning and allocating
resources to achieve business objectives
Rowlinson Knitwear established in 1972 at UK and build a brand which personifies the
personality of customers by providing them unique durable garments reasonable for corporate
and personalisation for school and club.
It produce clothing article for their customers and give them the best fitting to develop a
confidence in different roll of life corporate, schools and club. The purpose is to supply directly
to an individual retailers, which is available in affordable prices with high quality stuff (Hatten,
2015). The principal focus is quality in every work as the company care about the products and
services. All the garment's quality are tested by quality control system, this ensures the company
about its fabric and quality of its manufacturing
Serving customers is the vital part of the company and satisfying them by the quality is
the goal which company always keep in mind. Customer relationship management is the
foremost part of the company as it focuses on future relationship so to work with their customers

on long-term basis. Designing unique channels to communicate customers so to resolve queries
immediately and build a healthy relationship with them.
Their resources to spread in the the market are newsletter, corporate-wear Brochure,
schooling updating boards, advertisement and many more. The small scale industry needs skill,
trustable and devoted employees, who can work effectively and efficiently in the company and
fulfil its given objective in an appropriate manner. Full utilization is also needed in small scale
industry as it help in generating more revenue from the limited resources.
Rowlinson knitwear creates the brand value in the market and finds the new way to
spread across the boundaries. To understand the concept of moving towards the high peak is
equality and diversity. Company cares about their employee working around the globe and fulfil
its promise to pay a good amount in the form of salary for living. Employee's health is also a
vital part so then company provide health insurance to save their employees for unpredictable
future problems. Each department are audited rigorously to find out the issues running in the
mind of the employees, so to resolve it immediately.
Digital platforms are the best means of communication for small scale industries to grow
more, online chat, email marketing, departments which handle the real time responses and social
marketing. It includes the advertisement which creates brand and goodwill in the market (Legg
and et.al., 2015).
Generating capital for a small scale industry is savings, borrowing as a loan from bank or
from any other family member. Equity finance is also the best way in generating capital as it
allow outsiders to put their money for future investment.
TASK 2
P2. Explain different processes of customer relationship management for a small business
Customer relationship management is related to practices, technologies as well as
strategies which utilise by organisation for handling customer interaction as well as their data till
customer life-cycle, main motive behind such practices is to make better relation with customers
(Drucker, 2012). Along with this, it also assist in maintaining connection with customers and
also in their retention. Rowlinson Knitwear implement several process for managing customer
relationship and for maximising profit with the aids of understanding needs and wants of

customers. Because by fulfilling these satisfaction of consumer will be gained and also result in
their loyalty. Explanation of respective procedure are as follows :-
 Customer portfolio analysis - This Procedure include assessing the Rowlinson
Knitwear's customer base for identifying that which group buyers are more profitable for
the company (Crane and Matten, 2016). It play important role in making customers base
portfolio and after this need of customers will be evaluated. Because through this, taste
as well as preferences of customers will be manufactured in easy manner.
 Customer intimacy – This is the procedure of customer relationship management with
the assistance of it, Rowlinson Knitwear is taking initiate for building familiar relation
with their existing and potential customers within the company's target customer base. In
simple term it can be said that, Relationship building is generally depend on the
awareness of company about their customers such as buying habits, taste and preferences
etc. For this, Rowlinson Knitwear can ask their product consumer to fill feedback form
because with the assistance of it information or data related to consumers choice will be
collect.
 Value proposition development – Procedure of value proposition development start
when respective organisation will collect information about their target customers
through customer intimacy. This involve initiation of value proposition for their
customers. When it comes to create value for customers, it is essential to create value for
the Rowlinson Knitwear also. So that, development of value proposition development
should be advantageous for operations of business.
 Network development – This is the process in which organisation develop network as
well as build strong relation with their customers. In network development management
department of Rowlinson Knitwear play crucial role. Moreover, it is necessary process
for every company because in this they can develop good relation with customers and
such practices result in growth as well as success of business (R. Anderson and Ullah,
2014). Apart from this, in network development association build relations with external
parties such as suppliers and investors as well as internal partners also like staff members.
With the assistance of internal and external partners network development company will
get proper information about taste as well as preferences of customers. After that, as per
the gathered information goods and services will be manufactured by them.

For instance, The Rowlinson Knitwear company set value for proposition development and then
target customers according to that. Such practices will result in accomplishing business growth
as well as success.
 Customer life cycle management - In this process, Rowlinson Knitwear has assessed
the ideal customer journey which starts from potential client and end with
product/service advocate. In simple terms it can be said that, customer life cycle
management is the continuing process which assist in maintaining relation with
customers (Mrope and Mhechela, 2015). Moreover, management of respective cycle need
proper structure as well as attention of the human resource of an Organization must
determine how it will continue itself to effectively handle customer relationships
(structure). There should be a proper system in the organisation which because it will
help in maintaining the record that how they will approach customer acquisition as well
as retention, as well as the performance measurement of CRM strategy.
P3. Explain how a small business can develop transnationally and determine the benefits and
drawbacks
Transnational business help an organisation in conducting their business operations and
functions at worldwide market. In this company invest their money in foreign market or
countries and conduct their operations and functions in international marketplace. By this
company want to earn more profit and also want to enhance numbers of customers for their
products and services. A transactionally which is develop by Rowlinson Knitwear has certain
benefits and drawbacks which is mentioned below:-
Benefits:
 Innovation: By using transactionally develop respective company able to develop new
innovative products and services according to the new market place. By this they also
able to generate job opportunities for local peoples. Rowlinson Knitwear can introduce
new product which is innovative and new for market and according to demand and need
of consumers (Epstein, 2018). For testing of product they can focus on small market
which can be done with minimum investment. When respective company adopt
innovation in their working and technology it will motivate employees and encourage
them to conduct work in appropriate and effective manner.

 Deeper cultural understanding: By conducting business in international market and in
diverse culture the respective company able to know more about various culture. This is
so because before interring into market respective company conduct market analysis and
research which help them in understanding need and demand of customers on which they
are focusing. When a company deeply understand country cultural they able to develop
and design products accordingly.
 Economic: When Rowlinson Knitwear inter into international marketplace they able to
earn more profit and revenue which enhance their economic conditions in a marketplace
(Spence, 2016). This will also help them in gaining competitive advancement with their
competitors in effective and appropriate manner. This will also enhance the economic
conduction of country in which they are operating their business functions.
Drawbacks:
 Brand loyalty – When an organisation develop transactional develop they will not able
to develop personal relationship with their customers because it will influence their sales.
This will help in building loyalty of brand in order to generate revenue by conducting
sales.
 Product development – It majorly focus on the marketplace in order to identify and
determine buyers buying habits through which company able to plan and make strategies
and plans accordingly. By sometime company not able to focus on effective and
appropriate customers.
TASK 3
P4. Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income for a specific organisation
Cash flow statement is also known as statement of cash flow which represent how
changes occur in balance sheet and income influence cash and cash equivalents (Loscocco and
Bird, 2012). Cash flow statement which is develop by Rowlinson Knitwear is given below:-
Particulars January February March April May June
Sales 3500 4600 4700 5200 6200 6500
Other income 1500 2500 2600 2650 2000 2200
Total inflows 5000 7100 7300 7850 8200 8700

Cash Outflows
Variable cost:
Materials 450 500 530 650 740 830
labour 490 540 580 750 820 940
Other variable cost 200 250 260 340 420 520
Fixed cost:
Rent 1000 1000 1000 1000 1000 1000
Salaries 800 800 800 800 800 800
Other fixed cost 200 250 250 360 320 320
Net cash flow 1860 3760 3880 3950 4100 4290
Particulars July August September October November December Total
Sales 8900 14000 18500 20000 21500 24500 138100
Other income 2250 2050 1300 2600 2750 2850 27250
Total inflows 11150 16050 19800 22600 24250 27350 165350
Cash Outflows
Variable cost:
Materials 960 1010 1090 1150 1200 1260 10370
labour 1000 1030 2030 2150 2300 2450 15080
Other variable cost 550 600 650 700 760 840 6090
Fixed cost:
Rent 1000 1000 1000 1000 1000 1000 12000
Salaries 800 800 800 800 800 800 9600
Other fixed cost 320 350 350 350 350 350 3770
Net cash flow 6520 11260 13880 16450 17840 20650 108440
Interpretation – By analysing above given cash flow statement which is from January to
December is that there is continue increase in profit due to increase in sales. By this company
able to identify total in flow of cash and total out flow of cash. This help company in making
decision and strategies in appropriate manner.

P5. Explain how break- even analysis could be applied to an organisational situation
Break even analysis is consider as tool of finance which is use by an organisation to
identify or determine the stage at which company, its product and services start gaining profit. In
other word it refers to financial calculation which help in determining a company that what
amount of goods and services they sell to achieve or cover their cost (Golja and Požega, 2012). It
is refers to situation where a company not gaining profit nor going to loss, company only able to
cover their cost. Respective company conduct break even analysis to identify the point or amount
of product which they have to sell for achieving no profit and no loss situation. The evaluation
and analysis which is conduct by Rowlinson Knitwear is given below:-
( Source: Break Even Point Analysis, 2019)
Note: For conducting break even analysis respective company assume its sales 10,000
units at current situation, they conduct evaluation and analysis buy taking respective current sale
units.
Note: Formula of Break even point (in units) = Fixed cost / Contribution per unit
(Amount is in £)
Particulars At 10000 units
Revenues in values (A) 200000
Less: Variable Cost (B) 100000
Contribution margin(A-B) 100000
Contribution per unit 10
Fixed Cost 30000
Break-even point (in units) 3000

Comment: By evaluating above given break even point which is conducted by the
respective company. That they have break even point at 3000 where they will earn no profit no
loss, they only able to cover their cost in effective manner. So if Rowlinson Knitwear wan to
earn more profit they have to sell more units then 10000 and if they sell less then respective units
they can face situation of loss. So it can recommended to management of respective company is
to enhance their profit by selling more units or by reducing variable cost of products and
services.
P6: Conduct interpretation of financial statements
Financial Account
Financial account refers to balance of an organisation's profit, debts, investments, cash
flow and other things. It is majorly use by banks, investors, financial institutions and so on
(Orobia and et.al., 2013). It is generally use by these because by it they can measure financial
performance of a company. For analysing financial status of a company there are several ways
such as cash flow statements, trading accounts, profit and loss accounts, balaance sheet etc.
Some of them which are use by respective company are explain below:-
Income Statement of Rowlinson Knitwear for the year ended 13th February, 2019
Particulars 13th February, 2019 (In £)
Revenue 200000
Cost of sales -165500
Gross Profit 34500
Administrative Expense -3200
Other expenses -4500
Net profits before tax 26800
Income tax expense @ 20% -5360
Profit for the year 21440

Balance Sheet of Rowlinson Knitwear as at 13th February, 2019
Particulars 13th February, 2019 (In £)
ASSETS:
Non Current Assets:
Intangible assets 10500
Property, plant and equipment 43700
Investments 10600
Current assets:
Inventories 8500
Trade and other receivables 18900
Cash and cash equivalents 12800
Total 105000
LIABILITIES & EQUITY:
Current liabilities:
Trade and other payables 12440
Income tax payable 5360
Non Current liabilities:
Borrowings 12350
Equity:
Share Capital 62000
Retained earning 12850
Total 105000
Cash Flow of Rowlinson Knitwear for the year ended 13th February, 2019

Particulars 13th February, 2019(In £)
Net cash flow from operating activities 4522
Net cash flow used in investing activities -6720
Net cash flow from financing activities 6098
Net increase in cash and cash equivalents 3900
Cash and cash equivalents at the beginning of the year 8900