Small Business Growth: International Development and Strategies

This report provides an overview of key considerations for small businesses aiming to expand into international markets. It discusses factors such as the business idea, expertise, finance, and competition, highlighting the importance of a unique business approach and thorough market research. The report also defines and explains the role of Customer Relationship Management (CRM) in growing sales and customer retention, emphasizing the need for well-defined strategies, technology, processes, and employee engagement. Furthermore, it explores various methods for transnational development, including leveraging the internet and social media, forming joint ventures, and franchising, weighing the advantages and disadvantages of each approach. The analysis extends to break-even analysis, illustrating its use in determining the sales volume required to cover costs, and financial statements, detailing their significance in assessing business performance. Finally, the report touches upon relevant laws and legislations impacting business operations, providing a comprehensive guide for small businesses venturing into the global arena. Desklib provides a platform to access more such solved assignments and resources.

UNIT 29

TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Factors in consideration for small businesses.............................................................................3
Customer Relation Management.................................................................................................4
Transnational Development And Various Ways To Expand Business Internationally..............6
Break- even analysis...................................................................................................................7
Financial statements....................................................................................................................8
Legislation.................................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
This report discusses about the small business and their expansion in international market using
the right resources for their operations. It also defines the terms like customer relationship
management, transnational development, break-even analysis, financial statements and their use
in the business model it also signifies its importance and their drawbacks while stating various
laws and legislations which will have a direct impact on the business. The report also shows
some evidence to provide justifications of the statements given in the report. The report shows
some key areas where the business needs to focus while expanding internationally to increase
their profitability.
MAIN BODY
Factors in consideration for small businesses
It is important for the small businesses to consider various aspects and factors to be
considered when starting a new venture. These factors acts as a motivation to give people idea
about the business and its related activities. It include putting knowledge and experience required
to gain the patience that is important make the business reach at certain level and generates
profits. These factors include,
Idea behind the business: Business idea includes the way business will work and stand
out in the market. It is important that small business work with unique idea or a business
approach and determining ways that will make it all better and grab certain section in the society.
A good business idea will help in solving various problems coming in the way of business's
success. It requires listening to the frustrations as well as addressing the concerns associated with
these frustrations.
Expertise: With proper expertise, small business will gain knowledge before starting the
business. It includes conducting a lot of research and planning and all these efforts will lead to
make everything at place along with lifting the business from the ground (Calabrò, 2017). Proper
expertise will help in exploring the place of business in market and determining if it is worth and
will generate profit or not.
Finance: Every business requires money to be successful and work. This is dependent on
the business to identify the initial costs that will be generate. This factor includes the capital that

Is required to start the business. Finance related to the business is about arranging the funds
during the start- up phase. This is crucial to be considered before the start of the business and
includes the capital from savings and the funds that are to be borrowed. Funds required can be
borrowed from taking short or long term loans while keeping in mind about the terms and
conditions for doing so. These funds are cost for borrowing, rate of interest on these loans,
repayment methods and many more. This approach will help in determining which type of
funding is more beneficial for the company. It is considered ideal to opt for long term funds
while purchasing fixed assets.
Competition: Competitors will play an important part in determining if this small
business will survive in the market or not. In the case where the market runs from monopoly will
not let any competition evolve and small business will have to come up excellent strategy to fill
the gaps present in the demand and supply. Gaining market share is important to strengthening
the position of the company in the market.
Customer Relation Management
This term can be defined as a mixture of practices, strategies and technologies that can be
used by the businesses to analyse the interaction to the customers and their data from their
lifestyle . The key goal of this system is to grow sales and marketing of the business and help in
customer retention (Kumar, and Reinartz, 2018). It might include various point of contact like
telephones, television, mails, live chats, social media platform.
Key Areas Of Customer Research Management
Let's understand and find out the various elements which could influence the Customer
research management to benefit the company.
Strategies:
Building strategies for a long term run is very essential while expanding the business. It
can also help to grow the revenue and maximize the profit but will also help in cut6ting down the
cost. The company which have a good customer relationship will always put their customer first
in every situations and can be profited by doing so. There are some steps to build the CRM
strategy as follows :
 Putting up a destination

 Prioritize the customer needs
 Clear and proper conversations with employees
 Getting to know the customers need before the first interactions
 Putting everything into CRM system
 Evaluate the situation and improve likely
TECHNOLOGY :
This includes infrastructures and applications which refers to the customer relationship
management system it is also used to carry the interaction to new and existing customers through
various point of contact. Collection of potential data from customer can help company to boost
their sales and help them in marketing.
PROCESS :
For CRM strategy to work the process has to be very aligned and all the internal and
external processes have to be very smooth and sorted. The process have to be customer centric so
that the company can provide best services and experiences. Customer should trust the company
for using their data to improve their sales.
PEOPLE :
This factor include the employees and people who work in different departments that
focuses on customer relations for the company. Providing people and employees with proper
incentives and bonuses will keep them happy and focused and will make them more work
oriented to maintain customer relation base (Soltani, and et.al, 2018).
The advantages for using the CRM system are getting to know the customers better
which will help the company to attract more new customers. It will also provide the better
segmentation which will minimize the cost and will enhance the brand image in the corporate
sector. It might also improve in the business growth and will control the customer deflection rate.
It also have some drawbacks like the money that is used to implement the CRM system, training
of staffs and employees can be very costly and time-consumption. Collection of personal data
can be a very risky as people might be concerned about the security issues if that got leaked or
get hacked by giving third party access.

Transnational Development And Various Ways To Expand Business Internationally
This termed can be defined as expansion of the business internationally. That means
expanding the business outside the national boundaries and developing the business considering
some of the best ways (Józsa, Török, and Stevenson, 2018).
INTERNET:
Small businesses can be very forefront to use the internet and uses of social media
platform which will increase the reach the of the business into the global market. Businesses will
adopt more creative ideas to make their work more accurate. This will make the company to
reach their customer base in international boundaries very conveniently. The company which
shows strong online presence will definitely have more international customers. There are some
specific tools which can be used by the companies to reach maximum number of customers
internationally and divert the international traffic to the company's website.
 Language translation widget
 A top-level domain
 Specific search engine optimization
 Easy and friendly UI (user interface)
the advantages are the cost effective advertisement of the business. It will reach wide number of
people as compared to any other mode of advertising. The internet will provide 24×7 services
unlike physical stores. Some drawbacks which comes with this method are facing high
competition where it is very difficult to make the difference in making market share, it lacks
direct conversation. One of the main drawback is the malware attack on the website.
JOINT VENTURE :
Entering into the new market internationally can be a very risky decision without having the
knowledge of local authorities and competition in the market. Most of the companies will
collaborate with the brand which has a better knowledge about the competition, political
influence and local authorities. Joint venture usually time bounded with contracts (ÖZORHON
and ALTUN, 2018).
The advantages are that it shares the risk with the partnering company regarding the investment
and market. It provide greater access to resources like well-trained employees and special
equipments to carry out any complex operations. But it also consume time, efforts and high

investment to build the relation with the venture partner company. Tax distribution become very
complex because of joint operations and the success rate of joint ventures are not very high.
FRANCHISE :
to put up a franchise is the strongest, healthiest and profitable way to expand the business into
the international market. UK provides the best market for opening franchises. Opening up a
franchise in the international market is not easy because it will require number of strategies and a
very planned investment (Gillis, Combs, and Yin, 2020). The advantages of this method is that it
gives the brand a recognition in the international market. The business can earn only by giving
its name to third party who will run the business for them and a share can be earned by that
company. The major disadvantages of this method is the lack of clarity on the contracts which
might lead to conflicts. It will also require high amount of investment to open the franchise and
for the ongoing operations.
Break- even analysis
This analysis is used to determine the break- even point that is the point at which the
sales will include covering its expenses. This point helps in determining the point in sales to
identify the value for different variables. Fixed costs include the costs that are independent based
on the sales volume such as the rent paid by the company. It includes variable costs that are
dependent on the volume of sales as well as manufacturing the products. It even includes the
selling price associated with the product. Break- even analysis is an area in the economics that
relates to the point where the total costs from the organisation and the total revenue are at equal
level. This analysis is used to determine number of units present in the revenue that will cover
the total costs (Sintha, 2020). This analysis in terms of business will determine the number of
units of products that is to be sold for the purpose of covering fixed and variable costs based on
the production. It helps the business in measuring the margin of safety and is used from stocks to
the options related to trading and budgeting in various projects associated wit the company. It
helps in determining the relation between variable costs and fixed costs along with the revenue
generated. Components present in the break- even analysis are fixed costs that are over head
costs that occur after the decision is made regarding the economical activity (Morano, and
Tajani, 2017). These costs are irrespective of the production and must be incurred. On the other

hand, variable costs are related with having a relation with the production volume and the costs
that are directly related to the production.
Company A specialises in selling water bottles where its fixed costs is up to $100,000
while the variable costs is about producing one water bottle to be $2 per unit while the premium
bottles are sold at $12. The formula to calculate the break even point is: Break even quantity=
$100,000/ ($12- $2)= 10,000. It is important for the company A to sell 10,000 units of water
bottles in order to break even.
As illustrated, it can be seen that total fixed and variable costs are equal to the amount of total
revenue that is generated. At break- even point, business will not generate any loss or profit.
Profit is attained when the revenue generated is more than the addition of total variable costs and
total fixed costs. At break even point, this is equal while loss happen when revenue generated is
less than these costs.
Financial statements
Financial statements are the records related to the financial condition of the organisation
along with the activities that are performed within that period of time(Akin, and Akin, 2018) .
These statements will show the financial performance of the company in accordance with its
strengths. There are different types of financial statements that are linked together to create a
financial model. Analysis of the financial statements is to help in analysing and assessing the
profitability as well as liquidity of the company. These financial statements can be complex and
is best to be more familiarise with them.

This cash flow statement has depicted the changes in the cash flow statement. It showcases the
changes that are made in the cash position of the company during the fiscal period of time. Cash
flow statement is used to determine the figures regarding the net income from the income
statement while adjusting it for the purpose of non- cash expenses (Traina, 2018). Change in the
cash is calculated from the beginning till the end of the period. Cash flow statements begin with
net income along with the changes made to the balance sheets and accounts. The following cash
flow statement shows that the net earning of the company is increasing in the consecutive years.
For the expenses related with the company are the salaries that decreased in between but the
increased. While the cost for depreciation and interest is decreased. From the balance sheet it ca
be seen that the total assets for the company are increased while the liabilities for the same is
decreased.

Legislation
It is about preparing and enacting various laws such as local, state and national within the
different contexts. Legislation is used to apply municipal ordinances along with the rules and
regulations related with the administrative agencies. It is an exercise to power and function the
process of making rules and forcing the authority (Osadchy, and et.al., 2018). Employment act
1996 is to enact employment rights and covers the area of unfair dismissal, protection of wages,
and flexible working environment. The data protection act 1998 provides individuals with access
to information that is related with the organisation while setting out personal information.
Company act 2006 is an act of parliament in UK is the primary source of UK company law. The
aim of this law is to simplify company law and have improved rights to the shareholders and
simplifying the administrative burden by UK companies. This law helped in updating and
simplifying the corporate laws.

REFERENCES
Books and Journals
Akin, I. and Akin, T., 2018. Economic impact of digital dermatitis treatment on a dairy farm: an
application of the break-even analysis. Ciência Rural, 48.
Calabrò, F., 2017, July. Local communities and management of cultural heritage of the inner
areas. An application of break-even analysis. In International Conference on
Computational Science and Its Applications (pp. 516-531). Springer, Cham.
Gillis, W.E., Combs, J.G. and Yin, X., 2020. Franchise management capabilities and franchisor
performance under alternative franchise ownership strategies. Journal of Business
Venturing, 35(1), p.105899.
Józsa, K., Török, B. and Stevenson, C., 2018. Preschool and kindergarten in Hungary and the
United States: A comparison within transnational development policy. International
Journal of Educational Development, 62, pp.88-95.
Kumar, V. and Reinartz, W., 2018. Customer relationship management. Springer-Verlag GmbH
Germany, part of Springer Nature 2006, 2012, 2018.
Morano, P. and Tajani, F., 2017. The break-even analysis applied to urban renewal investments:
a model to evaluate the share of social housing financially sustainable for private
investors. Habitat International, 59, pp.10-20.
Osadchy, and et.al., 2018. Financial statements of a company as an information base for
decision-making in a transforming economy.
ÖZORHON, B. and ALTUN, H., 2018. Investigation of the Effect of Cultural Fit in International
Construction Joint Venture Performance. Teknik Dergi, 28(ek), pp.2097-2115.
Sintha, L., 2020. Importance of Break-Even Analysis for the Micro, Small and Medium
Enterprises. International Journal of Research-Granthaalayah, 8(6).
Soltani, Z., and et.al.2018. The impact of the customer relationship management on the
organization performance. The Journal of High Technology Management Research, 29(2),
pp.237-246.
Traina, J., 2018. Is aggregate market power increasing? production trends using financial
statements. Production Trends Using Financial Statements (February 8, 2018).