Business Report: Managing and Running Rowlinson Knitwear Enterprise

This report provides a comprehensive analysis of managing and running a small business enterprise, specifically focusing on Rowlinson Knitwear. It begins with an introduction to small-scale enterprises and their importance, followed by an examination of key considerations for resource allocation and business planning, including financial resources, vision, objectives, and employee skills. The report then delves into customer relationship management processes, detailing strategies such as customer portfolio analysis, customer intimacy, network development, and customer life cycle management. Furthermore, the report includes an analysis of financial statements, such as a monthly cash flow statement, and the application of break-even analysis. Key regulations and legislation impacting social enterprises are also discussed. The report highlights the significance of financial resources, employee skills, and effective customer relationship management in ensuring the success of a small business and emphasizes the importance of strategic planning, financial management, and customer-centric approaches for achieving sustainable growth and profitability.

Managing and Running a
Small Business Enterprise

Contents
INTRODUCTION.....................................................................................................................................4
TASK 1.......................................................................................................................................................4
P1 Main consideration a small business needs to address when planning and allocating resources.........4
TASK 2.......................................................................................................................................................5
P 2 & 3 Different process of customer relationship management............................................................5
TASK 3.......................................................................................................................................................6
P4 Monthly cash flow statement showing fixed and variable cost...........................................................6
P5 Break-even analysis............................................................................................................................9
P6 Interpret key financial statement for an organization..........................................................................9
TASK 4.....................................................................................................................................................10
P7 Key regulation and legislation that have implication on social enterprise........................................10
CONCLUSION........................................................................................................................................11
REFERENCES........................................................................................................................................12

INTRODUCTION
Small scaled Enterprises are normally run and managed by their members only and have
small market share. Classification of such type of businesses the basis of turnover, employee’s
performance and asset of the company. These enterprises play great role in an economic growth
and development of a particular country. Like large scale organization, it is equally important for
small scale enterprises formulate and implement effective strategies to accomplish predetermined
goals and objectives. The selected company for this report is Rowlinson Knitwear which is a
small sized company deals in providing school and corporate wear clothes. It mainly covers
allocation of resources and goals and objectives, application of break-even analysis, key
employment legislation, customer relationship management process and financial statement and
its benefits.
TASK 1
P1 Main consideration a small business needs to address when planning and allocating resources
Small scale enterprises normally run their operation at small level but still various factors
that possess an impact either positive or negative on their overall business activities and
profitability ratio. For attaining business objective in an effective manner, it is primarily
important for small scale enterprises those elements and take corrective measures in order to
control them. Rowlinson Knitwear small scale manufacturing firm that deals in producing
clothes like school wear, office wear etc. As the company is operating on small level, they do not
have adequate amount of resources that is needed to offer its clothes directly to target customer.
This the main reason why the company is taking the help of or need the assistance of distributor
and retailer for supplying it's good to ultimate customer. The main focus of firm is to
manufacture high quality clothes at reasonable rate and offer to potential buyer at an economical
price that creates value for them. For running business in an effective and efficient manner it is
important to taken into account all those factors but either have direct or indirect impact on
overall operation and functions of the company. Following are some major factor needs to be
taken into consideration while planning for business process and formulating future actions are
discussed below:
Financial resources: Availability of funds plays crucial role in any organization. In fact the
entire working of a company depends upon their financial resources. Without this any business
firm cannot survive in the market. Adequate amount of funds ensure effective implementation of
business activity and also provide better results to the company in terms of managing and
controlling day to day operation. On the contrary, lack of adequate funds create disturbance or
may hamper the work. As a result in delay of commercial activities and also decreasing the
effectiveness of workflow. Before planning for its business activities and operation, Rowlinson
Knitwear analyze their financial accounts and report such as cash flow statement balance sheet
profit and loss account so as to determine their performance throughout the year. It can also be
measured on monthly and quarterly basis. After analyzing financial reports, it become easier for
their manager to interpret about the availability of fund and highlight the financial capability of
the respective company. In addition to that, managers can also provide information related with
inflow and outflow of cash. With the help of this we can easily plan its future action and
formulate effective strategies for the same.
Vision, objectives and goals: Vision statement can be defined as firm's long-term objectives or
it define the company wants to see themselves in future years or upcoming year. It also indicates

what is the main focus of the company is. The first and foremost role of any company is to set
their goals, objectives and vision statement so that they can formulate effective strategies for the
same. These three play key role in organizational growth and success. One of the main advantage
of this is it help in making manager understand where the company wants to go and what they
want to achieve in the coming years. Goals and objective of any company indicates their
potential and capability. Once the goal objective and vision statement is decided managers can
take necessary steps or action in order to accomplish it in an effective and efficient manner. For
example: Vision statement of Rowlinson Knitwear is to manufacture is to manufacture high
quality clothes and delivers the same to customer at an affordable price. For attaining this
properly, the company needs to focus more on producing high quality product that creates value
for customer and also they need to laid stress on using effective methods and techniques in order
to achieve their predefined vision in a structured manner.
Employees and their skill: Employees are considered as the main asset of any organization. The
entire profitability and success of any company depend upon how effectively and efficiently their
employees are contributing towards achieving organizational goals and objectives. They play
significant role in a business enterprise. The one who perform all task and plays various role in a
company and work incredibly hard towards accomplishing business objectives. In fact, business
can gain high competitive advantage over its rivals with its skilled and competent personnel.
They also assistant formulating business plan and strategies as well. When a company is having
skilled employees, chances of attaining higher profitability ratio substantially increases. However
in case of lack of skilled and knowledgeable employees there can be delay in completion of
business operation that impact adversely on overall performance of the company. In order to deal
with such kind of situation, company arrange training and development session for their
employees which help them in improving their overall performance and productivity in a
significant manner. Similarly, Rowlinson Knitwear also conduct training and development
program for their workers so that they can sharp their skill and knowledge in more effective
manner. Also the company believes in putting right worker at right place as per their skills and
competency and at right time.
TASK 2
P 2 & 3 Different process of customer relationship management
Customer relationship management can be defined as a process through which
organization learns more about their target customer and tries to improve marketing productivity.
The main objective of any company is to drive maximum profitability from its strong customer
base and this can only become possible if the company is well aware of all likes and dislikes of
potential customers so that they can provide for products or services accordingly. Customers are
known as the king of the market. Thus entire profitability and growth of company depend upon
how they meet customer requirement by providing them such products or services that create
higher value for them. It also help in gaining high competitive edge in the market and also
contribute in its long time success. Rowlinson Knitwear analyze the past data related with
customer likes and dislikes so ask to figure out their current behavior and preferences. This help
company in knowing what are the choices of customers regarding clothing. Once the company is
done with analyzing what are the actual needs and wants customer, they can start formulating
strategies accordingly but ultimately helping increasing the sale of respective product. There are
various platform through which company can establish strong relationship with customer such as
telephone, social networking site, email, face to face interaction etc. The customer relationship

management value chain defines the process that has mainly been taken into account by a
company in order to gain the profitability by delivering goods or services to customer as per their
needs and want. For successful implementation of a CRM strategy, there are 5 key steps that
needs to be taken into consideration:-
Customer portfolio analysis: This is the first step a that mainly deals with identifying what kind
and group of customers are the most profitable for the company. Basically at this stage company
determines their target market.
Customer intimacy: It refers to the process of getting familiar with target customer. At this
stage, company start identifying what are the current likes and dislikes of customer i relationship
building is predicted at this stage that covers all essential expect including customers buying
habit, purchasing pattern etc. Every interaction with target customer comes out as an opportunity
for the company in terms of improving customer intimacy and learn more about their target
market. With the help of this step, Rowlinson knitwear can build strong customer data base to
store the gather information.
Network development: This is the third stage that mainly deals with identification and
development of strong relationship with customers, networks and organizations. Basically at this
stage, company tries to develop their network with all internal and external partners such as
investors, suppliers, customers, employees etc.
Value proposition development: This stage deal with using the information related with
customer that has been taking into account by company. Once the company is done with
identifying their target customer they can move forward and create a tailored value proposition
for the customers that creates value for both customer and organization in an effective and
efficient manner.
Customer life cycle management: This is the last stage that mainly defines ideal customer
journey starting from being a potential client to product/ service advocate. It is related with how
a company makes an efforts towards building strong relationship with customers. Managing this
cycle requires structure and attention to process. Rowlinson Knitwear must determine what all
strategies they are going to undertake in order to be strong customer and market base that help
them in getting high competitive advantage in the marketplace. Also the company needs to
formulate strategies the concerned with customer attention and acquisition.
TASK 3
P4 Monthly cash flow statement showing fixed and variable cost
There are various sources of Finance that has been mainly used by Rowlinson Knitwear
in order to raise adequate fund for managing and controlling their business operation and
activities systematically. Following are the main sources of funding:
Bank loan: It is one of the most popular and widely used source. Every company starts taking
funding through this source only. In this, staking from bank at fixed rate. The repayment can be
done on monthly or quarterly basis depending upon the mutual consent between the company
and bank.
Equity Finance: This source of finance is very popular among private players. Trading of share
is done under this and each company offers their share to general public. This is used for raising
long term capital for the company.
Hire purchase and lease: Under this financing source, company gives their property to some

third party to use for some specific period of time decided by both parties. Generally funds under
this method comes in the form of rent.
Variable cost: This cost is associated with the amount of product or services produced by a
respective firm. Company’s variable cost increases whenever there is a decrease in their
production volume. Variable cost are closely linked with activity volumes. In simple words, this
cost vary with any change in production level. It encompasses direct material, sales Commission,
credit card fees etc.
Fixed cost: This cost remains same over the period of time. Thus, not vary with any change in
the level of production. It remains the same even if no goods or services are produced by the
company. For example: Rent, salaries, depreciation and utilities.
Balance Sheet, P&L and cash flow statement of the Rowlinson Knitwear:
Year 2017 (value in £) 2018 (value in £)
Fixed assets 130 210
Stock 20 35
Debtors 70 55
Bank 20 30
Total 240 330
Creditors 120 180
Bank overdraft 90 70
Total 210 300
Working capital 30 80
Profit and Loss Account at the year ended

2017 2018
Sales 20 30
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. profit 24 38
Cash flow Statement
Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 25000 32250 31750 29750 26750
Budgeted cash receipts 12400 1600 1100 1000 15000
Total cash available 37400 34850 32850 29850 28250
Cash distributed
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Overhead 900 600 600 600 600

Selling and distribution 650 700 700 700 700
Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 2515
P5 Break-even analysis
Break even analysis is a financial technique that is often used by companies in order to
determine the profitability ratio. It determines what you need to sell annually or monthly so as to
cover the cost of doing business. It is one of the most popular and widely used business tool that
assist small business enterprises to determine the level of profitability. It provide companies with
a target that they needs to accomplish in order to cover cost and make profit. It is a kind of
comprehensive guide that business entity in setting their targets in terms of units or revenue.
With the help of this tool, any organization can easily figure out at which point of time their
revenue is equal to the cost associated with receiving the revenue. It basically calculate margin of
safety, the amount where revenue exceeds total expenses. Basically it is the point where
company generates no profit and no loss. Managers can formulate effective strategies in order to
reach at break-even point that ultimately maximize the overall sales of company's product or
services. For completing the sales target that has been set by respective firm, there are various
predictions or aspects that needs to be taken into account. There are various tools available in the
market that has been used by company in order to collect data or information concerned with
finance and their sources. Break even analysis play crucial role in supporting manager so that
they can prepare budget and allocate resources in a structured and thorough manner. For
instance: If fixed cost is 40,000 and variable cost is 16 rupees per unit and selling price is 18 per
unit then break-even point will be calculated as:
BEP: Fixed cost/ construction margin per product or unit
40000/(18-16) = 40000/2= 20,000
The tool is mainly taken into consideration the Mind whether the company generate enough
revenue to cover its expenses and earn significant amount of profit. The companies used this tool
for financial projection. In addition to that, this tool also assist business in taking decisions
concerning to the following:
1. Safety margin( it describe the extent to which company can afford to decline or decrease their
sales before it started incurring loss)
2. Whether to expand production capacity or not
3. Improve performance of the company in terms of generating high profit.
4. Whether to add new product or eliminate existing product
5. Selection of production machinery that help in increasing profit for a particular volume of the
product over a specified period of time.
P6 Interpret key financial statement for an organization
Every organization prepare various financial report or statement that help in determining the
performance of the company throughout the year. With the help of these financial statement it

can also be interpreted what are the total expenses that company bear over a specified period of
time and what are the profits that the gain in similar year. Generally these interpretation are done
by account manager of respective form that taken into account all transaction that has been
occurs in a particular financial year. Financial statement is a formal record of all financial
activities and position of a person business or any other entity. It includes balance sheet, cash
flow statement, profit and loss account etc. They are useful for the following reason that are
listed below:
It help in determining the ability of a company to generate cash and the sources from where they
have generated cash and use of that cash.
1. To determine whether the company is having the capability to pay back its debt or liability.
2. To determine the performance of a company throughout financial or accounting year.
3. To derive financial ratio from the statement is the actual condition of the business entity
4. To evaluate the details regarding business transaction that are outlined in their financial
statements.
Main financial statement that has been prepared by manager of Rowlinson Knitwear are listed
below:
Balance sheet: This financial statement mainly contain information related with business assets
and liabilities. It signifies financial position of the company marketplace over their rivals. This
statement play key role in supporting investor or other stakeholder to take decision regarding
investing in particular company or not. It also help in determining whether the company is
having significant short term current assets so as to pay their current liabilities within one
accounting year. It mainly covers firm's assets, liabilities and owner equity.
Cash flow statement: This is another financial statement that has been used by manager of
Rowlinson Knitwear. With the help of this statement, their manager can easily get information
related with cash inflow and outflow over a specific period of time. Variation that take place in
balance sheet and all other operating expenses are mostly covered in this. Shareholders, creditors
and investors are the one who are keen interested in knowing total cash flow of the company
throughout a year.
Profit and loss account: This is one of the most essential financial document that has been
prepared by all company no matter large or small. This consist information regarding overall
income and expense of the company. With the help of this financial statement, stakeholder can
easily find out whether the respective company has incurred profit or loss during the reporting
period. This also help manager in formulating strategies and identifying opportunities concerned
with completing similar work with minimum time and cost.
TASK 4
P7 Key regulation and legislation that have implication on social enterprise
Government of every country is different and so does their rules and legislation. Each and
every company is liable to follow all legislation and policies that has been framed by
Government Body of respective country. For running business in an effective manner and to
achieve pre-defined goals, it is important for an organization to follow all these rules and
regulation. Following are the some of the laws that needs to be taken into consideration by each
and every firm are discussed below:
Health and Safety Act: Employees are consider as the main asset of the company and their
health and safety is their primary concern that they needs to look adequately. This act is states
that an employer is the one who is responsible for the safety of their employees and other co-

worker in a particular company. For this, proper training must be given to employees regarding
using risky equipment’s at work place. This help in eliminating the chance of accident and
ultimately saves the time and inspire personnel to work incredibly hard.
Data Protection: According to this act, none of the employee is liable to share or transfer any
confidential information to third person that does not belong to the company. If in case any of the
worker found doing this, he/she is solely responsible for bearing its adverse consequence in
terms of termination. It is illegal in the eyes of law to share to data or information of one
company with another company.
Tax and employment act: According to this act, every company possess an obligation towards
the Government in terms of paying taxes that further utilize in developing the country only. The
fund generated by government bodies are used for the welfare of society and its domestic
population. In order to make it easier, Government has set various tax slabs on the basis of which
each and every employee and employer needs to pay taxes. However if in case company does not
pay tax then, legal action is to be taken against them which might diminish their brand image.
CONCLUSION
From the above mentioned report, it can be concluded that in order to achieve high
growth and success, all activities and operation of a company managed and control in an
effective and efficient manner. Customer relationship management also contributes in the growth
and development of small scale industries as it help in identifying what are the current likes and
dislikes of target customer so that company can make product according to their needs and want.
It also help in maintaining long term relationship with customer that ultimately increase overall
productivity and profitability of the company. There are various legislation that needs to be taken
into account during planning and formulating future actions accordingly.

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Five Step Process for CRM. 2018.[Online] Available through:<https://bizfluent.com/list-6531382-five-
step-process-crm.html>./