Austin Fraser: Small Business Management and Transnational Development

This report provides a comprehensive overview of small business management, focusing on key considerations such as financial resources, human resources, and strategic planning. It examines customer relationship management (CRM) processes, including customer value analysis, communication channels, and digital marketing strategies, highlighting their importance in building customer loyalty and driving business growth. The report further explores the benefits and drawbacks of transnational business development, emphasizing the importance of adapting to international markets. It also includes practical financial analysis tools, such as cash flow forecasts, break-even analysis, and financial statements, along with a discussion of relevant legislation and regulations affecting small businesses. The report uses Austin Fraser as a case study to illustrate the application of these concepts, offering valuable insights into the challenges and opportunities of running a small business.

MANAGING AND
RUNNING A SMALL
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Main considerations a small business or social enterprise needs....................................1
TASK 2............................................................................................................................................3
P2) Various processes of customer relationship management...............................................3
P3) Small business can develop transnationally and benefits and drawbacks.......................4
TASK 3............................................................................................................................................6
P4) Annual itemised monthly cash flow forecast showing fixed and variable costs.............6
P5) Break- even analysis........................................................................................................8
P6) Financial statements for an organization.........................................................................9
TASK 4..........................................................................................................................................10
P7 Legislation and regulations that have implications on small businesses........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

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INTRODUCTION
In order to run a small business, entrepreneurs is required to face various challenges of
marketplace which depends mainly upon size and structure of business in which they operate in.
These challenges are related activities of operations like managing the work of employees,
selling and purchasing commodities, finance required to run business and more. Along with this,
major problems related with small business is to deal with less capital and human resource. For
this process, their main function is to formulate strategies regarding with company's operations
as well as to utilize limited resources in a proper way (Smit and Watkins, 2012). Employers of
organisations must possess high skilled qualities to manage work of employees in firm and fulfil
demands of customers on time. In order to see how an entrepreneur run a small business
organisation like Austin Fraser which operates its business at UK. This report reveals that
employers and managers of this firm are required to develop their skills. It is a consultancy
company which provides candidates in other firms of UK. This mention report will aslo discuss
major processes of CRM i.e. Customer relationship management, along with key regulations and
legislation which creates much impact business's operations.
TASK 1
P1) Main considerations a small business or social enterprise needs
Since technology in today's world has developed so far, therefore, entrepreneurs are
required to develop their skills and knowledge in order to run business according to trends of
marketplace. This process would help in managing and running small and big organisations in an
appropriate way. Along with this, employers should be able to make business plan and formulate
strategies to develop the same properly. In context with Austin Fraser, it is a consultancy and
recruitment firm which recruit candidates in the sector of engineering, information technology,
accountancy and mng resources to anchor. The main business of this firm is to provide
employment opportunities to other enterprises as well as give better recruitment to unemployed
citizens (Stanciu, 2015). Due to small business, such organisations have not sufficient resources
like raw materials, manpower and finance. Further, to enhance growth of company its
management requires to bring changes in operational activities and working system as well as
grab information about opportunities present at marketplace which help in the same. They need
to focus on some major points as described below:
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Financial resources- It is the main important stream of an organisation which is
necessary to run all operations in a proper way. Therefore, if a company has shortage of funds
specially in small businesses then it is not possible for them to carry out entire functions for
longer period of time. For this assistance, management of Austin Fraser needs to formulate a
plan which includes from where there can raise funds along with how to utilise available
resource in a better way. In order to measure profitability of current business, account manager
has to prepare Balance sheet, Profit and loss account, cash flow statements and more for
interpretation.
Human resource: The main asset of any business organisation is its manpower.
Therefore, it is a duty of human resource management to hire the best employees in firm as well
as provide them essential training so that they can contribute their efforts in achievement of
company's objectives on time (Weske, 2012). Along with this, to increase their productivity
managers should include them in decision-making activities which generate feeling of equality in
them also.
Goals, objectives and vision- In order to achieve growth of business in a limited period of
time, entrepreneurs are required to set achievable goals and objectives. Along with this,
managers are required to provide clear vision to workers and discuss with them about what they
have to achieve. This process would help employees to support employers in achievement of the
same. Further, managers should formulate proper guidelines so that work of people can be done
in systematic manner.
Techniques to achieve business objectives:
Outline the finance required: Since small organisations generally have insufficient
capital and resources. Therefore, Austin Fraser needs to find sources from where it can arrange
additional amount of finance for executing set plans and policies business. Furthermore, its
managers are required to formulate budget by which finance is allocated in proper manner.
Drafting a business plan: Business plan refers to a document which entails background,
mission, vision, current objectives and strategies of a company. It also includes SWOT analysis
which states major weak points where enterprise needs to create modification and more.
Therefore, by developing business plan, Austin Fraser can provide information to stakeholders
about how activities will be going on in future.
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For managing work in an appropriate manner Austin Frazer has optimised various
technologies that are helping them in making proper strategies and plan of action that can be
followed in order to attain the goals and objectives (Williams, 2012).
Critical path analysis- This is an effective method that help an organisation in
identifying ways through which they can achieve their set goals and objectives in certain time
frame.
Gantt chart- This is incorporated by most of the organisation so that the have an
overview about then resources to achieve project schedule. Therefore, it will assist them in
performing the task in an systematic manner.
Importance of planning the resources for optimising its use are mentioned below:
 Assist the organisation in obtaining maximum benefits
 Help in improving the existing skills of employees
 Increase the capability of internal strength so that changes can be easily adopted.
TASK 2
P2) Various processes of customer relationship management
Customers are taken as the most important factor whose involvement with company's
products enhance growth of its business in a better manner. They are like God especially for
small organisation, therefore, in order to improve better relation with consumers, management of
a firm like Austin Frazer needs to analyse some important factors (Five Step Process for CRM.
2018). It includes customer relationship management which reflects the strategies, technology
and effective practices. CSR activities are use to measure how employers or employees interact
with customers. This process will help in improving relationship with consumers. It includes
various strategies for managing the effective interaction with customers which is useful in
developing performance of company. For this process, managers are use to grab information
through various communication channels like email, telephone and more. Some procedures
includes in CSR activities are:-
Customer value analysis- Small business organisations used to concern on priorities to
customers first. They concern more on need and demand of consumers as well as always thinks
that 'Customers are always right'. Therefore, in order to analyse perceptions of customers related
to related to commodities a research method is used named by Customer Value Analysis.
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Through this procedure management can identify preferences of customers based on quality and
price of products. Along with this, they will get feedback and opinion of consumers and make
modifications in production accordingly.
Execution of communication channels- After judging the value of customers,
companies like Austin Fraser are required to choose better communication channels for
interacting with consumers. This process would be effective in getting view point of customers
as well.
Digital marketing- To compete with rivals, a company required to digitalise its business
in a proper manner. Through digital marketing and other social media, organisations can both
easily provide information about current operations and products of them to customers (Skolud
and et. al., 2016). This would create a positive impact on behaviour of consumers as well.
The major components of Customer Relationship Management process in context with
translational process are given below:
Understanding consumers and markets- The main priority of an enterprise is to
identify needs and demands of customers at marketplace. Understanding preference of
consumers are used to provide services in a better manner.
Acquire consumer trust- The main responsibility of management of an organisation
like small business is to interact with consumers in a precise manner as well as manage effective
relations with them. This process would help in earning loyalty of customers towards company's
products.
Offer development- Translational sales and CSR activities help in creating modifications
in existing products as well as add new features in it.
Sustain consumers- For enhancement sales of a company and gaining sustainability at
marketplace, a company requires to gain retention of customers first. For this process, managers
requires to offer products at affordable price as well as provide discounts on regular basis
(Schaper and et. al., 2 014.). In addition to this, they need to interact with customers on regular
basis and get their feedback about services and quality of goods.
Management of Austin Fraser use various efforts to develop and maintain effective
relationship with customers of different regions. They take various steps as shown below:
 Correlate: In this step, managers organise various programs to interact with customers
and make strong relations with them.
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 Combine: This step relates customers with company's products.
 Cognize: Under this process, managers use various tools for collecting information about
operational activities and implement strategies accordingly.
 Connect: This is the final step in which relationship has been developed among
distributors, staff members, customers and stakeholders.
P3) Small business can develop transnationally and benefits and drawbacks
Increasing competition at marketplace forced existing companies to carry out their
business at international level. For this assistance, they need to develop effective strategies for
transnational business which help in carrying out operations in foreign countries. In order to
drive sales and enhance profitability, transnational strategies used to combine coordination and
opportunities of marketplace in a desired way. Transnational sales provides opportunity to
companies of host country in expanding their businesses operations at worldwide. In context
with Austin Fraser, this concept is used to analyse revenue and profit level of business.
Translational sales are used to sell commodities of domestic companies to foreign
markets at high price. This would help in getting high return on investment as well as increasing
revenues. For this assistance Austin Fraser needs to identify demand of customers of domestic
country as well as of international ones. This process aid to provide effective services and goods
to international clients on time. Along with this, management are required to use various type of
tactics in business operations which is based on present situations of marketplace. This kind of
tactics and strategies are used to raise productivity and profitability in a profitable way (Njenga
and Jordaan, 2016). Further, translational sales has consists some drawbacks and benefits which
are discovered before to expand business as mentioned below:
Benefits Drawbacks
Cost in production: Selling products of small
business at international marketplace helps in
reducing the time and cost or marketing. Along
with this, this process also enhances sales
performance of a firm in a better manner.
Independence: Using concept of translational
sales helps manager to make better decision in
Lengthy: For enhancing production of business
of a company like Austin Fraser, its
management are required to adopt new concept
and innovative ideas in production which takes
much time to carry out operations in a desired
way.
Financial risk: In expanding business at
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business related to expansion at international
market (Winarno and Wijijayanti, 2018).
Activities based on decision making process
should be conducted on regular basis which
provide various opportunities to run business
in an appropriate manner.
international level includes high risk. As small
business has less funds thus, to carry out
operations in other countries required much
finance which shows major drawback of
translational sales.
With above process, it is necessary for management of small businesses like Austin
Fraser to prepare an action plan. This plan is helpful in conducting entire business operations in a
systematic manner. Along with this, they can use an internationalisation model which consists
four basic parts as given below:
Knowledge opportunity- It is first model of internationalisation which states that a
company should have better knowledge and skills used to grab opportunities of marketplace of
different regions (Njenga and Jordaan, 2016). This process will be helpful in accomplishing
business objectives with in short-interval of time.
Relationship commitment decision- In order to improve relationship with customers a
company needs to provide services and goods on time.
Network positioning- For promotional activities, firms are required to use effectively
marketing skills as well as establish proper distribution network at market place of international.
Learning curve- According to demand of various clients, enterprises are required to
adopt various programmes for new product implementation.
TASK 3
P4) Annual itemised monthly cash flow forecast showing fixed and variable costs
The concept of cash flow forecast aid enterprises to measure finance required to carry out
operations in a proper way. It consist information about budget how to utilise cash in various
departments in order to meet demands on time.
Sources of Funds- For getting required funds, there are various sources available at
marketplace which helps in carrying out business operations in a required way. Some source
used by Austin Fraser as mentioned below:-
Equity finance- Through this process, a company can raise capital through exchange of
share.
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Bank loan- This is an external finance source which proves beneficial small companies
like Austin Fraser organisation to take loans from commercial and private bank (Kumar, Petersen
and Leone, 2013). These financial institutions offers at a fixed rate of interest.
For planning budget, Austin Fraser used budgeting procedure which helps in utilising the
cost in better manner. This firm use various tools for forecasting and budgeting as given below:
Calculate moving average- This tool is used measure preferences and demands of
existing consumers based on current trends of market place.
Time series data- This data is beneficial for management to accomplish a project in given
period of time.
Balance Sheet, P&L and cash flow statement of Austin Fraser organisations:
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
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2017 2018
Sales 20 30
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. Profit 24 38
Cash flow Statement
P5) Break- even analysis
Break-even analysis is a method used to calculate expenses of a company on production
and various operations. It is a crucial method that is optimize by Austin Frazer so as to gain
maximum profit. Therefore, it will help the organization in identifying the ways through which
sales and productivity can be increased whether annually or monthly (Jenkins and et. al., 2013).
Condition of no loss and no profit is generated under this situation and with the help of this a
better strategies can be implemented so that it can be applied for effective outcomes. Thus,
break-even analysis is very affective when an organization wants to increase their sales and
profit.
Apart form this, there are some conditions which every company can determine while
forecasting their figure of sales and production. Other than this, it helps an organization in
making proper plan of action through which they can reduce the wastage for modifying their
commodities so that they can increase the value of the product at market place. \
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Illustration 1: Break even analysis of Austin Fraser
Sources: Break even analysis of Austin Fraser, 2018
The different situation of an organisation can be taken as illustration for analysing BEP. In
context with Austin Fraser, this company needs to provide services by which business can earns
monthly profit of 100000. Therefore, to attain this, managers need to identify break even point
for recovery of fixed and variable cost. This would help in measuring unit contribution margin
which refers to amount of additional revenues and can be calculated by using following formula:
Unit Contribution Margin = Sales Price-Variable Costs
Break-even points in units-
Break-even units= Fixed Cost/Contribution margin per unit
In terms of sales value-
Contribution margin= (Sales Price- Variable Cost)/ Sales Price per unit
Illustration: Variable cost is Rs. 10 per unit in which fixed cost is Rs. 20000 and selling cost is
Rs. 12 per unit. Therefore, BEP can be calculated as:
BEP= Fixed cost/construction margin per unit or product= 20000/(12-10)= 10000.
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