Managing Resources, Customer Relations, and Cash Flow: SBE Report

This report delves into the critical aspects of managing a small business, with a focus on resource allocation, customer relationship management (CRM), and financial planning. It begins by outlining the key considerations for small organizations when allocating resources, including the importance of funds, aligning with the organization's mission, and effective workforce planning. The report then explores CRM processes tailored for small businesses, emphasizing customer segmentation, building customer intimacy, and developing strong customer relationships. It also analyzes the transnational development of small businesses, highlighting the benefits and drawbacks of international expansion. Furthermore, the report provides a detailed analysis of financial management, including the formulation of monthly cash flow forecasts, the application of break-even analysis, and the interpretation of key financial statements. Finally, it examines the implications of relevant legislations and regulations on small businesses, providing a comprehensive overview of the challenges and opportunities in the small business landscape.

Managing and Running
SBE

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Main considerations need to address by small organisation while allocating resources. .3
M1 Allocate resources in an organisation..............................................................................5
M2 Significance of allocating and planning resources to achieve objectives........................5
D1 Application of resources to indicate link between achievement of business objectives and
allocation of resources............................................................................................................5
TASK 2............................................................................................................................................6
P2 Different processes about customer's relationship management for small business.........6
P3 Analysis of development of small business transnationally with its benefits and drawbacks
................................................................................................................................................7
M3 Factors of customer relationship management process...................................................7
M4 Development of transactional operations.........................................................................8
D2 Customer relationship management process....................................................................8
TASK 3............................................................................................................................................8
P4 Formulation of monthly cash flow forecast showing fixed and variable costs.................8
P5 Application of the concept of break-even analysis.........................................................12
P6 Interpretation of key financial statements and its contribution in successful management13
M5 Analytical and quantitative techniques to provide break even analysis........................14
D3 Cash flow and break even analysis.................................................................................14
TASK 4..........................................................................................................................................15
P7 Implication of key legislations and regulations upon small businesses..........................15
M6 Implications of regulations in organisation....................................................................16
D4 Key regulations that impact on small businesses...........................................................16
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
The main aim of all organisation whether small or large in nature required to build
effective strategies which helps to attain sustainability in their business operations. This task is
difficult for small organisations because limited resources are available in comparison to large
organisations. Small organisations are identified on the basis of number of employees, market
share, turnover, assets etc. There is huge contribution of small organisations regarding
development of nation through creation of job opportunities, higher flow of cash in an economy
etc. For effective management of their operations need to effectively allocate their resources
before allocating to different departments. It helps to direct employees to effectively perform
their tasks. Cash and Carry is small wholesale organisation which deals in grocery items
(Williams, 2012).
In the present report explain about, factors which are need to consider by small
organisation while planning and allocating resources, process which helps to build effective
customer relationship management, transnationally development of small organisation
simultaneously with its benefits and drawbacks and monthly cash flow forecast which shows
fixed and variable cost. Also, application of the principles break-even analysis, key financial
statements of organisation and key legislations need to follow by small organisation.
TASK 1
P1 Main considerations need to address by small organisation while allocating resources
There are many factors are present in business environment which impacts the functions
of small business organisation. Such factors are called macro-environmental upon which there is
no control of management of organisation. Also, there are many internal factors which are
present within the organisation impacts their ability to perform functions effectively. To
formulate effective plans need to consider both factors. It helps in achievement of their targets

within stipulated period of time and allocation of resources in more appropriate manner. Cash
and Carry is small wholesale organisation from where customers pay and pick their items. It
deals in grocery items. So, the main aim of organisation is to provide quality products to their
customers as per their preferences at affordable prices. It provides the opportunity to attract the
customers of their competitors and build their market base more strong. Through application of
effective policies and effective allocation of different resources like funds, employees, objectives
etc. to attain their goals. In this regard, management of Cash and Carry need to address many
factors before planning and allocating resources are defined below:
 Requirement of funds: One of the most important resource which is required to provide
their functions effectively are funds. It is responsibility upon manager of organisation is
to identify the need of funds by each and every department to carry out their functions. It
helps to determine about availability of funds. If funds are not sufficient then they have
the duty to identify the different sources through funds are raised easily for conducting
future operations. It is quite impossible for small organisation is to work without
sufficient amount of funds with full capacity. Management of Cash and Carry need to
interpret their financial statements to understand about their expenses, income, inflow
and outflow of cash etc. It provides the opportunity to frame policies which helps to
remove their unnecessary expenses (Weske, 2012).
 Objectives, vision and mission: There is huge impact of objectives, vision and mission
of organisation regarding formulation of their different plans about different aspects and
allocation of various resources as per actual needs. Cash and Carry provides grocery
items at wholesale. The main of organisation is to improve the quality of their products
and application of modern marketing techniques to improve sales. It helps to understand
that need to appoint new marketing team.
 Human resources: Work force planning is important concept which helps in timely
completion of their tasks within stipulated period of time. Lack of planning improves the
cost of product and affects their ability about attraction of large number of customers.
Identification of number of employees required, present skills and knowledges etc. It
provides the opportunity about development training programmes which helps in
improvement of their existing skills and contributes in achievement of their desired
results.

M1 Allocate resources in an organisation
There are many tools and techniques which helps in effective allocation of different
resources of organisation on the basis of actual requirement. Contribution of such tools about
effective allocation of the resources among Cash and Carry organisation is defined below:
 Critical path analysis: This tool provides the information about the different paths
which are needed to complete the particular project simultaneously with their time
periods. Through this total time period is estimated for completion of whole project. This
helps the management of organisation is to allocate the resources to such path first which
has longest duration. It helps in completion of project within stipulated period of time.
 Gantt chart: It graphical presentation of project schedule. It is a bar chart which shows
the start and finish dates of several elements of project which includes resources,
milestones, tasks and different aspects (Smit and Watkins, 2012).
M2 Significance of allocating and planning resources to achieve objectives
There are many benefits are associated with the effective planning and allocation of
resources. It helps the small organisation like Cash and Carry to accomplish their objectives. The
benefits which are gained can be understood through following points defined below:
 Through this large number of customers are attracted towards their grocery products
which helps in improvement of sales and profitability.
 Optimum utilisation of their given resources in more appropriate manner.
 Helps to attain large market share
 Provides opportunity regarding development of existing skills through use of training
programmes
D1 Application of resources to indicate link between achievement of business objectives and
allocation of resources
There is huge relation among effective allocation of resources with accomplishment of
objectives. Lack of resources affects the working ability and large of problems are faced towards
reaching goals. So, if all the resources like funds, employees, vision and mission etc. managed in
effective manner then it is easy for organisation achieve predetermined goals.

TASK 2
P2 Different processes about customer's relationship management for small business
To attain success and build their brand image in market every small organisation is need
to build good relation with their customers through satisfaction of their different requirements. It
helps to gain competitive advantage which has long term impact upon their success ratio. In this
regard, management of Cash and Carry wholesale organisation need to identify their mistakes
and preferences of customers through interpretation of past data (Five Step Process for CRM). It
helps to know about the buying behaviour of customers about grocery items in relation with their
quality and price. There are many method which helps to bring awareness among the individuals
of society includes social media, newspaper advertisements etc. But still there is a process which
helps to attach with customers includes different steps are mentioned below:
 Identification of customers base: It is the first step which includes segmentation of
customers on the basis of profitability. It helps in determination of most profitable
segment of customers. Through this products are provided as per such target segment
which helps in improvement of sales also.
 Customer intimacy: To accomplish the objective as per this step need to formulate
familiar nature with customers. The process of developing effective relationship with
customer includes identification of the needs of customers and their buying habits. In this
regard, need to improve communication and interaction channels which helps to build
bond and learn about them more. So, to attain their trust and build effective customer
base need to regular monitoring upon the customer preferences.
 Network development: It is the process of developing relationship with other clients
which plays an important role in providence of business functions effectively in market.
This includes about making relation with different intermediaries like suppliers,
employees, investors, internal parties etc.
 Value proposition development: This process starts after identification of target
customers which includes providence more quality products which improves value the
products more. As result, it provides the opportunity to improve image of organisation
(Schaper and et. al., 2014 ).
 Customer life cycle management: In the process of CRM, customer life cycle
management provides the information about different steps through which customers

goes through when considering, purchasing, using and maintaining loyalty towards
product.
P3 Analysis of development of small business transnationally with its benefits and drawbacks
Transnational sales: This includes the about the capacity of small organisation is to sale
their products across in new country and another market for capturing large market share. This
will provides the opportunity regarding accomplishment of their goals of sales and net profit. In
this regard, management is need to adopt different techniques which helps in expansion of their
activities in new market. It provides the opportunity regarding build their good brand image.
To attract customers need to focus on quality and price of product. Both these factors
helps to attain competitiveness in their business functions. There are many advantages and
disadvantages which are associated with the expansion of business functions.
Advantages
 Independence: The management has the right to take decisions regarding growth of
business operations in new country without consultation with other parties.
Disadvantages
 Lack of finance: In small organisation, finance is the important factor which reduces
their ability to expand operations.
 Time period: Another factor which effects the expansion plans is time period. As the
long period is required to settle in new market which makes the task more difficult
(Jenkins and et. al., 2013).
M3 Factors of customer relationship management process
There are many factors which contributes to build relation with customers and
achievement of objectives. Contribution of such factor includes:
 Bring changes in existing products: Make innovation in the features of their grocery
products helps in satisfaction of the needs of customers as per current trend. It also helps
in achievement of optimum quality.
 Determination of market and current trends: Identification of current trends helps to
provide products as per requirements of customers. It provides the opportunity regarding
fulfilment of their desires.

 Attainment of trust of customers: one of the process which helps to build effective
relation with customers through acquiring trust of customers.
M4 Development of transactional operations
Internationalisation model has huge contribution regarding improvement in their
operations for accomplishment of their objectives. The four important parts are defined below:
 Skills to grab opportunities: Manager of organisation has the ability is to use their
skills for identification and achievement of future opportunities.
 Relationship commitment decision: This provides about timely availability of their
products to their suppliers and end customers for satisfaction of demands in appropriate
manner.
 Network positioning: Need to develop effective networks wi5th use to different
advertisement tools.
 Learning curve: Application new methods for improvement of their existing features of
products (Jasra and et. al., 2012).
D2 Customer relationship management process
In the process of maintaining effective relation with customers, there is huge role is
played by 4C's which are defined below:
 Correlate: It is the process of making relation with other departmental function provided
under organisation for creation of better relation.
 Combine: Process of making relation with customers
 Cognize: Process of determination of information about different functions
 Connect: Making effective connection with suppliers and customers.
TASK 3
P4 Formulation of monthly cash flow forecast showing fixed and variable costs
Sources of income
There are many sources which are available for small organisation is to raise funds for
performance of their different functions effectively. Funds are the essential requirement which in
improvement of overall working efficiency through adoption of innovate techniques. The basic
requirement behind having the adequate amount of funds includes working capital management,
bring continuity in business functions, clearance of debts etc. The major sources which are

present before the management of Cash and Carry(Wholesale) organisation are classified as
internal and external.
Internal
Sale of fixed assets: This includes the process of raising of funds through sale of their
existing assets for the purpose of resolving the need of urgent finance. This king of sources is
also known as divestment.
External
It can be further classified into parts such as long term and short term.
Long term
Bank loans and mortgages: This includes the process of raising the funds from private
banks where some amount of their assets are mortgaged for specific period of time till such
principle amount of loan is not disbursed to bank.
Short term
Bank loans: It is considered as agreement between borrower and bank which is need to
repay within certain period of time on regular instalment basis. Such amount of loans carries
fixed amount interest charged annually basis.
Overdraft facilities: It is the facility provided by bank which provides option to
organisation is to overdrawn the amount from bank account as per their need.
Leasing: It is hire agreement where allowed external parties to use the place or any other
thing in the return of amount as lease (Harmon, 2015).
Forecasting and budgeting
Forecasting is also known as planning about future actions which helps to direct the
employees about performance of different actions. This includes the process of formulation of
different budgets which includes standards used further for measuring the actual performance.
There are many techniques which helps in effective planning and forecasting are defined below:
 Time series data: This techniques used to ascertain the information regarding time
period under which the new project should be completed by organisation. On the basis of
such information budgets are prepared and standards are set for employees. It helps in
defining their roles and responsibilities.

 Determination of moving average: It provides the opportunity to understand about
current trend and changes which are needed in their existing products. It helps to satisfy
their demands.
Balance sheet, P&L and Cash flow statement of Cash and Carry(Wholesale) Organisation
Balance sheet at the year ended
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
Particulars Jan Feb Mar Apr May June Total
Cash inflows
Investment 5000 5000
Credit sales 1000 2500 3600 4000 1200 3200 15500
Total inflows 6000 2500 3600 4000 1200 3200 20500
Cash outflows
Fixed : Equipment’s 3000 2000 2000 1500 1000 2000 11500
Variable : Direct
material 200 200 300 500 100 100 1400
Total outflows 3200 2200 2300 2000 1100 2100 12900
Net cash flow 2800 300 1300 2000 100 1100 7600
Opening balance 0 2800 3100 4400 6400 6500
closing balance 2800 3100 4400 6400 6500 7600
P5 Application of the concept of break-even analysis
Break-even analysis: It is important techniques which helps the organisation is to
understood the fact which thing is need to sell more units monthly and annually to cover the
costs which are incurred in actual. It helps in determination of the point of margin of safety on
the basis of revenue collected and costs incurred. It also helps to know about the level of sales
which helps to cover their cost of fixed assets. It provides the opportunity regarding formulation
of policies to improve the number of sales and earn more amount of revenue. Break-even point is
the situation where no profit and loss situation is achieved (Hammer, 2015).