Comprehensive Analysis of Rowlinson Knitwear's Business Management

This report provides a comprehensive analysis of Rowlinson Knitwear, a small UK-based manufacturing company specializing in school wear and formals. The report examines the company's approach to small business management, focusing on planning and resource allocation, customer relationship management (CRM), and financial analysis. It delves into how Rowlinson Knitwear allocates resources, including staff, skills, monetary resources, and the use of tools like critical path analysis and Gantt charts. The report also explores the company's customer relationship strategies, including analytical, operational, and collaborative processes. Furthermore, it assesses the benefits and drawbacks of transnational business expansion and includes a cash flow forecast and break-even analysis to evaluate the company's financial performance. The report highlights the importance of understanding market and customer needs, retaining customers, and building trust. Overall, the analysis provides insights into the challenges and opportunities faced by Rowlinson Knitwear in managing and growing its small business operations.

Managing and Running A
Small Business

1

INTRODUCTION
Small ventures are the types of firms which is operating their business with the few
operating capital and funds with the limited number of employees. It is necessary for the director
and managers to manage all the operational activities in the organisation in an appropriate
manner so that they can establish a systematic structure within the organisation(Warnes, 2018).
For such organisation, accounting principles rules and regulations must be set up so that financial
statement can be generated correctly. While running a small business, an entrepreneur is it
required to from certain strategies so that they can attend higher profitability and sale. Rowlinson
knitwear is the chosen organisation for this report, it is the manufacturing company of school
wear and formals. This report will cover the plan allocation of resources done by the small
business in order to attain their objectivity and also do the evaluation of small customer
relationship management. Analysis of cash flow forecast budget, break even point, interpretation
of financial statement legislation of small business.
TASK 1
Overview of the company
Rowlinson knitwear is the production company of school uniforms and formals that is
based in United Kingdom and operating their business in an appropriate manner. The companies
established in 1935 by Wilfred Rowlinson. All the business is successfully by director managers
and employees of the company.
P1
Planning and resource allocation is the aspects of identifying out of various sources in the
different of of the company so that they can make the best use of their resources. In context to
Rowlinson knitwear managemwnt and other executive, they have to be considered the various
factors that is necessary to be plant for the effect running of their business and all the factors are
explained as follows:
Staff members and skills: employees are the backbone of every organisation and they
are responsible for running the whole operation so they are considered as a valuable asset of the
company(Brears, 2018). Potential employer helps organisation in attaining objectives of the
company so that they can meet the the high competition in the market. In context to Rowlinson
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knitwear, manager is considering the skilled employees while planning and dividing their
resources in order to get effectiveness in the business.
Vision, mission and strategic objective: it is very important for all the business
enterprises to have a better communication with their employees and the other staff related to the
the mission vision and objectives of the company. This helps in building the trust and results in
enhancing the employee engagement in a specific job role. In context of Rowlinson knitwear,
manager is focuses on having effective communication with the employees so that they can give
their best in understanding the mission and vision of the company and work accordingly. When
the employees give their best in their specific job role it help in increasing the quality of and
leads to get a effective results in the organisation.
Monetary resources: These are the resources which are the foundation for any business
startup or activities. If the form is not having the necessary funds so it is not possible to perform
the any of organisational activities accurately. While planning and allocating that resources in the
different operational areas, Rowlinson. Knitwear have to analyse their monetary resources and
for this, the manager can under the final account life balance sheet, income statement, cash flow
statement. This helps in execution of business in an appropriate manner and attain the
organisational goal effectively.
M1
There are various tools& techniques that is used by the company in order to plan and
allocate their resources which are explained as follows:
Critical path analysis: It is the technique which is used to evaluate the best alternative
for alloacting the resources. This is helpful for the company to identify there right path so the
company's project can be completed and and efficient manner within given time.
Gantt chart: this is the horizontal bar chart which is made by the organisation in order to
schedule all the activities within the set time frame. The technique is used by the manager of
Rowlinson knitwear so that we can locate the resources in a appropriate manner as it help in
formule attractive business contribution.
M2
It is very important for all the business effective planning in order to allocate their
departments of the company as conducting the various operational activities in an efficient
manner. Manager of Rowlinson knitwear is doing a proper allotment of the worlds so that they
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can enhance the skills and competencies of their employees which present in increasing
productivity and profitability of the company(Santoso, 2019). It is important to use the resources
effectively so that department can perform the task in a successful manner and contribute in the
development of the organisation.
D1
In order to achieve the higher profitability and growth it is important to locate the resources in
the end right manner so that all the the unit of the organisation can have the the sufficient
resources in order to run their business in man approached manner. When the operational
activities are executed properly then it helps in achieving the organisation objective and also help
in increasing the sale and profitability of the company.
TASK 2
P2
Customer relationship management: it is the process of retaining the prospective
consumer in their organisation. This can be done by maintaining a good relationship with
customer so that they can contribute in increasing the profitability and sale of the company.
Rowlinson knitwear use the effective process so that they can have a better relationship with
customers by which increase their market share in the large market.
Analytical process: it is the process of analysing the customer data so that the company
can understand the needs wants demand and taste and preferences of then. This is the process
which is mainly used in the set format for conducting a market campaign by which the large
number of customer can get attracted and the Rowlinson knitwear can sale their product in an
appropriate manner. The main purpose of this process is to from the open market and convert
them into business contract for the purpose of attracting the large market.
Operational process: it is the process which help the organisation their potential
customers and the various processes include marketing sales etc. It helped the the manager of
Rowlinson knitwear to improve their targeted customers so that they can get a large pool of
customers.
Collaborative process: it is the process of communicating directly to the customers that
includes collection of feedbacks reporting to the issues and queries. For this purpose, websites
email and voicemails can also be used to improve the living process of the product.
4

It is observed from the above discussion that the process followed by the Rowlinson
knitwear to manage their customer relationship management as it help in maintaining existing
and large pool of customers.
P3
Transnationally development of the business is defined as conducting their business
activity in the international market.. It is main concerned with the international busienss the
business supply on the related product to increase their profitability. When a business want to
expand their market in can you can treat is very important to analyse the market condition and
also understand the expansion strategies. Rowlinson knitwear can access their business by
offering their product in the different countries so that they can increase the sale and profitability
of the company by which the people get attracted towards their organisation. There are various
benefits& disadvantages in launching the business transnationally which are explained as
follows:
Benefits-
Foreign trade: when the organisation promote itself on international platform between the
foreign great and results increasing the profitability and points for the various operational
activities. When the Rowlinson knitwear is applying their product worldwide then it will help in
increasing the liquidity(Clair, 2019).
 Independence: directors and managers of the company have full power to make all the
the major decision regarding expansation of their business. Rowlinson knitwear free to
make their decisions like expansion which results in increasing the profitability.
Drawbacks-
 Long time period: it includes the long time in establish their business in the different
part of the world. Rowlinson knitwear also have to wait for a more period of time that
expand their business globally.
 Risk in terms of finance: financial risk is the major risk associated with the Rowlinson
knitwear while expanding their business in the international market as the small business
to not have enough fund to operate their business no they are having a enough money to
spend on the various promotional activities.
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M3
There are various aspects which play a vital role in the customer relationship management
and this help in achieving the organisational goal and all the elements are explained as follows:
 Understanding market and customers: if the companies able to attend the objectives of
the company then it is very important for the firm to understand the needs and wants of
the customer that what they want to buy so that the company can offer the production
services accordingly.
 Retaining customers: the organisation need to use the specific strategy so that they can
retain their customers. This includes the discounted rates and various sales offers to them.
 Gain customer's trust: organisation of to let the trust of their customers by opening the
quality clothes to them so that they can retain their loyal customers within the
organisation.
D2
It is very important for all the business to access the customer relationship at all the stages.
Effective customer relationship help in getting higher retention of the customer with the highest
sale. When the organisation is launching its business in the international platform done there are
various challenges which is faced by the organisation and the main challenges are insufficient of
financial resources.
TASK 3
P4
Cash flow statement: it is defined as statement in which the data is collected regarding the
cash inflows and outflows. It is generally made for a particular period of time and also help their
stakeholders to analyse the financial position of the company. When the Rowlinson knitwear is
willing to increase their business in the different part of it is very important for the manager to
forecast expensive that take place in the future. A forecasted cash flow for Rowlinson knitwear is
as follows:
Forecasted Cash flow Statement
Cash
distributed Jan Feb
Marc
h April May June July
Augu
st
Septe
mber Oct. Nov. Dec Total
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Total
revenues 8000 6500 5500 5000 8500 9000 9200 8750 8250 8000 8520 8925
9414
5
Direct
material 1500 1250 1250 1300 1450 1580 1650 1458 1589 1685 1985 1785
1848
2
Direct labor 1250 750 500 500 1350 1400 1435 1445 1474 1458 1568 1589
1471
9
Overhead 1000 500 500 700 2700 2850 2950 2987 2250 1850 1650 1250
2118
7
Selling and
distribution 750 750 750 800 850 950 850 650 720 715 785 795 9365
Total
variable
expenses 4500 3250 3000 3300 6350 6780 6885 6540 6033 5708 5988 5419
6375
3
Fixed
expenses 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000
2400
0
Total cost
use 6500 5250 5000 5300 8350 8780 8885 8540 8033 7708 7988 7419
8775
3
Surplus/
Deficit 1500 1250 500 -300 150 220 315 210 217 292 532 1506 6392
From the above table of cash flow, it is analysed that the organisation can receive a surplus
of 6392 in the comming year, total variable expenses are 63753 and total fixed cost is 24000 .
Total estimated revenues of the comapny are 94145.
P5
Break even analysis is defined as a point in which the organisation is not in profit and not in loss
the companies and their all the expenses from their sale of product and services in this stage.
Formula for calculating the BEP is given below:
BEP = Fixed cost/ selling price per unit – variable cost per unit
Calculation of BEP=
Fixed cost= 12000
Selling price per unit= 10
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Variable cost per unit= 4
BEP= 12000/10-4
BEP= 12000/6
= 3000.
The companies running there corporation in the United Kingdom with successful approach and it
is the small bencher so this is necessary for the form to evaluate the various point so that they
can meet their all the expenses by increasing their sale. With the help of break even analysis,
company can easily recover total expenses which are incurred in the manufacturing of the
product.
Application of BEP:
 It is used to get reminder at point where the organisation can achieve the higher profits.
 Manager can get the idea needs of the manufacture to recover all the cost in relation to
the production process.
 Break even point analysis help the manager to set the right prices for the product which
are manufactured bythe organisation .
Illustration 1: Break even point
It is observed from the above illustration that the revenue and the cost of the company is same
and this is the point where break even analysis takes place. Variable cost always vary according
to the production unit but the total cost remain same throughout the production period.
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P6
Financial statements are the accounts vichar made by the accountant and the director of The
organisation in order to determine the profit and losses of internal and external environment.
This helps in analysing the current performance of the company as there as various purpose for
formulating the financial statement. Various statement formed by the Rowlinson. Knitwear are
given below:
 Income statement: I it is the statement which keep record of all the expenses and income
made during the accounting year in an organisation so that the company can analyse their
profit ratio. Rowlinson knitwear can determine their profit for a specific period of time.
 Balance sheet: it is the statement which help in knowing the overall status of the
company with the help of knowing assets liabilities at today's and other elements that are
necessary for the stakeholders to make the effective decision. The external stakeholders
like investors analyse that whether they are able to get good return on there investment or
not.
 Cashflow statement: what is the statement in which all the cash related transactions are
recorded which help in knowing the actual activity of the organisation for a specific time
period. Financial statement of the firm are as follows:
 Income statement:
Particulars Amount
Sales £15,000
Cost of Goods Sold £11,500
GROSS PROFIT £3,500
Expenses
- Salary £250
- Rent £500
OPERATING PROFIT £2,750
Depreciation £1,200
PROFIT BEFORE TAX £1,550
Taxes - 20% £310
NET PROFIT £1,240
RETAINED £1,000
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EARNINGS
DIVIDENDS £240
 Balance sheet:
ASSETS Amount
Cash/Banks £3,500
Inventory £1,500
Acc Receivable £3,600
Fixed Assets
- Gross £12,800
- Acc Depreciation £2,000
- Net Value £10,800
TOTAL ASSETS £19,400
LIABILITIES
Bank Loans £8,500
Accounts Payable £1,660
TOTAL LIABILITIES £10,160
EQUITY
Capital £8,000
Retained Earnings £1,240
TOTAL EQUITIES £9,240
TOTAL EQUITY + LIABILITIES £19,400
 Cash flow statement
Particular Amount
INITIAL BALANCE £6,800
CASH IN
From Operations £1,500
From Investment £1,100
CASH OUT
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From Operations £3,500
From Investment £2,400
FIANAL BALANCE £3,500
From the above financial statement it is analysed that gross profit for the Rowlinson knitwear are
3500 & the total sale is is 15000 & the cost of sale is 11500. the company according to the
income statement are 1240 that means the company is continuously earning profit. Balance sheet
of the company is having 3500 cash & that total assets of the company are 19400. Company's
internal liabilities that includes equity of 9240 & total liabilities of 10160. Cash flow of the
company is have in the total cash of 3500. According to the analysis has been identified that
company is in good condition because they are generating profits continuous.
Ratio analysis: Following ratios are calculated for the company:
Name of ratio Formula Calculation
Liquidity ratio
Current ratio Current assets/current
liabilities
8600/1660=5.18
Quick ratio Quick assets/current
liabilities
7100/1660=4.27
Profitability ratio
Net profit ratio Net profit/sales*100 1240/15000*100=8.27%
Gross profit ratio Gross profit/sales*100 3500/15000*100=23.33%
M5
Quantitative and analytical techniques important aspect that play a vital role in analysing
the break even analysis and cash flow. These techniques are used to enhance the organisation
operations also help the stakeholders and analyse the actual performance of the comapny in the
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