Managing and Running a SME: Analysis and Strategies Report

This report provides a comprehensive analysis of managing and running a Small to Medium Enterprise (SME). It begins with an introduction to the importance of SMEs in economic development, using Austin Fraser as a case study. Task 1 delves into key considerations for planning and allocating resources, including financial resources, manpower, and business plan development, as well as identifying customer needs. Task 2 evaluates different Customer Relationship Management (CRM) processes for small businesses, explaining how a small business can develop transnationally and the benefits and drawbacks. Task 3 focuses on financial planning, including producing an annual itemized monthly cash flow forecast, break-even analysis, and interpreting key financial statements. Finally, Task 4 discusses key legislation and regulations impacting small businesses. The report concludes with a summary of findings and a list of references.

MANAGING AND
RUNNING A SME

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Discuss main considerations small business or social enterprise needs to address when
planning and allocating resources to achieve objectives........................................................1
TASK 2............................................................................................................................................3
P2 Evaluate different processes of customer relationship management for a small business or
social enterprise......................................................................................................................3
P3 Explain how a small business develop transnationally and determine benefits and
drawbacks...............................................................................................................................5
TASK 3............................................................................................................................................7
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
set against income for organisation........................................................................................7
P5 Break-even analysis and its implementation with in an organisation.............................10
P6 Interpret key financial statements for an organisation in relation to how they contribute to
successful management .......................................................................................................11
TASK 4..........................................................................................................................................12
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprises.............................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
............................................................................................................................................16

INTRODUCTION
Small business enterprises is a integral part of the nation and it contribute in economic
development as well. In small organisation, less number of employees are working so that
growth opportunities of each one individual is very high as compare to large organisation
because less competition at work place among staff members. In order to manage small firm in
better manner, it is very important to develop appropriate techniques and policies through this
workers has get effective direction or path of completing work Through this, all labour are able
to meet organisation objectives as well as aim in given time frame (Ali and Babiker, 2017). In
this report select Austin Fraser firm to analysis the impact of small business unit on nations and
whole society. It is a recruitment and consultancy enterprise those are provide different kind of
recruitment services in human resources, information technology, engineering department etc. In
this assignment select main consideration of social enterprise or small business plan as well as
allocating resources and evaluate customer relationship management process for small firm. Also
develop cash flow and budget with break-even points.
TASK 1
P1 Discuss main considerations small business or social enterprise needs to address when
planning and allocating resources to achieve objectives
Austin Fraser is a small business unit those are providing different kind of consultancy
like recruitment, selection etc. to clients in the field of engineering, accountancy, animation,
information technology and many more. Small business unit has increase employment
opportunities at work place through this country are able to achieve goals and objectives in
economic development. Austin Fraser has focus on providing high quality services to their
consumers it help them to improve performance as well as market image in long run. The main
objectives of small business is improve quality of product and services through this contribute in
nation development (Bridge and O'Neill, 2012). There are several elements available and
management of the company has analyse these all factor in order to develop future plan through
this firm are able to achieve common goals in limited period of time. Some important
considerations explain as follows: Outline finance resources required: It is a one of the most important resources for each
one organisation whether they are small or large in their nature. Management of the
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company has find out appropriate mode to get fund like banks, financial institute, angle
investor etc. in order to run whole business activities effectively. Money is a backbone of
firm which help to completing operational task in given time frame. Small business unit
needed less fund as compare to large because they are operating business work at lower
level. Austin Fraser providing recruitment facilities to in which they are offer financial
accounting services to their clients. It is very help full for an organisation to manage their
profits as well as loss statements effectively. Manpower and their skills: Manpower of the company help them to run whole business
activities effectively in given time. It is a management responsibilities to build strong
relationship between them so that they work together in order to achieve common goals
and objectives in limited period of time (Burns, 2016). Human resources manager has
conducting training program for enhancing staff members performance ans skills. It is a
HR manager responsibilities to deal with all staff members appropriately and appreciate
them to participating in management decision making process. Drafting a usable business plan: In small firm, management frame plan in which ideas
are put into writing. This helps them to direct employees functioning by providing them
vision and mission statement, goal and objectives. Executive of Austin Fraser draft
business plan which aid them to provide guideline to team members to complete targets.
Besides this, stakeholders that are shareholder, investor, supplier and other people are
communicated information about system functioning.
 Identifying customer's need: Management conduct market research and survey which
help them to have information about requirements and demands of people. This help
seniors of Austin Fraser to conduct business activities effectively, thereby deliver
products and services in respect to need of buyers.
Techniques and tools in structured and analytical way
There are several action of plan used by Austin Fraser in order to allocate all resources at
work place with effective planning that has discussed as follows: Critical path analysis: It is a one of the important technique that help to identify least
time taken activities from all project and find out lowest path of entire given problem.
Through this, firm are able to completing task in limited or lest time period effectively
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and achieve goals (Chauma, 2017). In this context, always shorts path has select because
it consumes less time as compare to large.
 Gantt chart: It provide information related to project scheduling. In this, determine time
period of each one activities through this increase effectiveness of all staff members
performance about allocation task of role, responsibilities of each in individual at work
place.
Importance of allocation as well as planning of entire resources
There are various importance of allocation of resources and its planning that has explain
as follows:
 Through this rise growth of all staff members and it skills.
 Company get higher profitability by achieving goals on time effectively.
 Management of Austin Fraser has implemented change at work place in order to execute
flexibility in operational work.
TASK 2
P2 Evaluate different processes of customer relationship management for a small business or
social enterprise
Customer relationship management: It can be define as a practise, strategies and
technologies that used by organisation in order to analyse appropriate mode of interaction with
consumers with aim of developing as well as improving customer's relations. Through this, firm
are capable to increase their brand value as well as image in clients eye. It is a one of best
technique for managing healthy relationship with customers and also maintain harmonious
relations with old and new clients at market place (Cojoacă, 2017). Company has higher
profitability as well as market share by implementing this strategy at work place thus help them
to get long run sustainability. For this, enterprise has gather information as well as data by
different channels like telephone, personal mailing etc.
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(Source: Customer Relationship Management, 2018)
Process of customer relationship management Assessment of customer value: Marketing manager of the company has organising
market research to identify clients needs, wants, attitude, motivation factor, preference,
perception and many more. This help organisation to produce product and services
accordingly so that they are able to satisfy all consumers needs effectively. By this, firm
know present market trends and different techniques to develop changes in their existing
goods and services. Those kind of activities aid in organising practices to satisfy several
demand and get sustain loyalty among consumers for long period of time. Enforcement of appropriate communication channel: It is a management
responsibilities to identify best mode of communication through this they are able to
share information with buyers. Austin Fraser has grab opportunities and try to improve
quality of services related to employment. Some communication channels are social
media sites, internet, T. V. advertisement, telephone and many more.
 Role of E- mail and digital marketing: In present business scenario, several kind of
businesses has use different mode of communication in which digitalisation is a take
important place. E- mail help organisation to provide information related to product
feature, scheme etc. to clients with lowest amount. It save money, time, human efforts
and many other resources of firm (Drucker, 2012). In digital marketing enterprise used
Facebook, Twitter, Instagram, YouTube etc. to promote their goods and services. It help
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Illustration 1: Customer
Relationship Management

to increase reachability at minimum cost. By using these both approaches company can
easily interact with consumers and attract large number of individuals toward product
and firm.
P3 Explain how a small business develop transnationally and determine benefits and drawbacks
In United Kingdom, there are number of small businesses are ruining and find out new
opportunities at market place to grow. Transnational sales mean selling product and services in
different nation by this enterprise able to get global presence. In this, company has slightly
modify or change current product and services according to another country requirement. A part
from this, it is a Austin Fraser responsibility to implement various strategies as well as tactics
related to present situation which represent specific country to get more profits. It creative
positive brand image in customers eye in the same industry. It is a management responsibility to
develop effective plan for transnational business activities. For this, it is very important for them
to fully fill certain demand of another nation related to foreign trades like tariff regulation and
many more (Durst and Runar Edvardsson, 2012). Through this, enterprise easily operate their
business task in other nation and earn higher profitability as well as market share as compare to
their competitors in same industry There are some advantages as well as disadvantage of
transnationally business are explain as follows:
Advantages Lifestyle: It is define as style of working process which are followed by staff members
those are wok with in an organisation. Thus help employees to earn more profits. Independence: Management are responsible for effective decision making which help in
expending business operations. Manager of Austin Fraser take judgement on daily basis
in few time interval. It help to get opportunities for operating firm effectively.
 Efficiency: Small firm has follow some working structure to rise efficiency in business
process and provide several benefits.
Disadvantage Lengthy: In order to rise profits by transnational activities it is important for an
organisation to implemented innovative as well as creative idea at work place. This
process is very lengthy in their nature thus consume more time.
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 Financial risk: Small business has more financial as compare to large because they are
run their enterprise with low cost that is why financial risk is very high. In Transnational
activities this risk has create negative impact (Durst and Wilhelm, 2012).
Process components of consumer relationship management
Some elements of consumers relationship management are explain as follows: Understanding market and consumers: It is a first priority of the company to identify
clients needs and determine present market trends and produce goods accordingly. Acquire customers trust: Its essential for Austin Fraser to develop as well as maintain
healthy relationship with clients and create trust among all consumers toward firm. Offer development: Company has modify current product and services by adding some
new feature. Through this they are capable to build satisfaction among buyers related to
goods and its quality.
 Sustain customers: It is a management responsibilities to sustain old consumer for long
time period. For this, they offer special discount as per buyer loyalty.
Potential to develop transnational operations
It is very important for an organisation to analyse their own strength and weaknesses at work
place so that they know whether they are able to develop transnational operations in different
nations or not (Hammer, 2015). Here explain some factors those are directly affect transnational
activities as follows: Knowledge opportunity: It is very important for an organisation to identify market
opportunities and Austin Fraser grab it to achieve aim and objectives in given time
frame. Relationship commitment decision: Administration of Austin Fraser has commit that
they build healthy relationship with consumers. It help to expend operational work at
transnational level. Network positioning: For better promotional activities, firm required to introduce or
established strong communication network at market place to increase reachability.
 Learning curve: It help to identify whether customers has learn from promotional
massage or not if not then change method of communication. There are needed to adopt
new program for learning not only clients but also employees so that firm are able to get
their aim effectively in limited period of time.
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Process of consumer relationship management
In order to develop strong as well as positive relationship with consumers there several
method are available which create constructive impact on organisation performance.
Management of Austin Fraser has select best process of relations development through this they
are able to get higher profits (Harmon, 2015). Here explain some step of clients relationship
management process as follows: Correlate: In this step, firm invite consumers to participate in organisation program
through this they build healthy relationship with them. For this, they develop event of
communication through which enterprise interact with number of individuals at market
place. Combine: In this step, company has identify customers needs and make it their own aim
and produce produce accordingly in order to satisfy buyers demand. So that, both clients
and organisation needs are combined. Cognise: In this step, marketing manager of Austin Fraser has find out competitors
strategies and plan to satisfy buyer and interpret it effectively in order to develop their
own action of plan to attract number of individuals toward organisation (Jasra and et. al.,
2012).
 Connect: This is a last step, in which Austin Fraser has develop healthy relationship with
consumers, third parties, employees, suppliers and many more.
TASK 3
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income for organisation
Sources of funds: There are several sources available at market place to get money in
order to run entire business task effectively. Financial manager of Austin Fraser find of
opportunities to gather fund through this they perform different enterprise activities effectively, it
very helpful to make organisation strong. Some important source of fund are explain as follows: Lease and hire purchase: It is a important sources of fund in which enterprises provide
their unused property on lease and receive rent. Through this, Austin Fraser has get fixed
amount of money every year, month etc.
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 Bank loan: It is a widely used sources of money in this company has get loan from bank
and pay variable or fix interest (Jenkins and et. al., 2013). It is a external sources of fund.
Financial manager of Austin Fraser has select best mode of to pay money whether is fix
or variable and yearly or monthly etc.
 Equity finance: Small company can not able to sell their quality share at market place
and get equity fund because they not able to full fill government requirement effectively.
But large organisation has receive fund through this mode and it is very appropriate
sources of funding for long period of time.
Forecasting and Budgeting
Forecasting is a process of identifying or predict future needs which can be analyse
through different techniques like past data. Austin Fraser used this strategies to grab future
benefits and find out trends. A part from this, budgeting is a process of constructing report
related to spending money in their activities. There are various type of tools and techniques
available that used by company in order to prepare budgets as well as forecasting, some are
explain as follows:
 Calculating moving average: This useful for preview clients present trends that shows
how they change their demand with time. Price of the product should also move
according to these calculation (Smit and Watkins, J.A., 2012).
 Time series data: Management of Austin Fraser provide linked through this firm are able
to find out customers needs and gather data to make time series in which shows with time
how clients needs are vary.
Cash flow forecast benefits firms to have information about funds required for execution
of business activities. Management of Austin Fraser frame budget which help them to allocate
cash in operations which are conducted for accomplishment of objectives. This aid them to have
information about cash surplus/ deficit through receipts and distributed money. Cash flow
statement is created which aid them to have knowledge about inflow and outflow of money.
Besides this, profit & loss statement and balance sheet provide information about net profit and
total assets and liabilities.
Profit & Loss, Balance Sheet and cash flow statement of Austin Fraser company:
Balance Sheet
Year 2017 ( in £) 2018 ( in £)
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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 & Loss Account at the ended year
2017 2018
Sales 20 30
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
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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
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P5 Break-even analysis and its implementation with in an organisation
Break even analysis: It is a method of analysing situation or point where revenue and
expenses are equal. Austin Fraser used this financial tool in order to find out profitability ratio.
Through this, management are able to identify whether profits is made or not and if not then find
out gap between earning profits and break even point. It help management to take right decision
to enhance profits by implementation several strategies. Break even analysis is useful for find out
whether sales are done by effective manner (Stanciu, 2015). By taking help from break event
point, Austin Fraser has implementing best techniques with the aim of enhancing sales at
minimum cost along with this they contribute in enhancement of operational works and high
earnings in an effective ways. Through this, overall sales are boost in long period of time.
Illustration 2: Break even analysis
(Sources: Break even analysis, 2014)
According to diagram it is shows three cost variable, fixed and total and one total revenue
line cut all these three lines resulted get break-even point. It is point where total cost and total
revenue has interact with each others.
For example: Product selling cost is 10 £ per unit. Here variable cost is 8 £ and fixed is £16000.
the break even point has calculating as follows:
BEP = Fixed cost/contribution margin per unit
=16000/(10-8)
=8000
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P6 Interpret key financial statements for an organisation in relation to how they contribute to
successful management
Fund manager of the company is prepare financial statement in which they are includes
profits & loss account, balance sheet, cash flow statements etc. It help management to take right
decision related to firm productivity and market position (Weske, 2012). Some components of
financial statements are explain as follows: Balance sheet: In this, fund manager explain about all assets and liabilities of the
company in a given period. Investor has analyse entire balance sheet appropriately and
take right decision in order to invest their money. Company has also used this report to
get loan from banks, financial institutions and many more. Cash flow statement: Fund manager of Austin Fraser has gather information related to
cash inflows as well as outflows in a specific period of time. All these data help
management to take right decision related to supporting financial resources and entities
which are utilised by organisation in order to run whole business activities effectively.
Mostly shareholders and creditors has interested in this statement.
 Profits and loss account: Profits and loss account shows in a particular year what is a
firms earnings as well as losses. It also shows area in which expenses has very high due
to unnecessary spendings, through this enterprise motivating manager to reduce expenses
by accomplishing tasks with minimum prices.
Analytical and qualitative techniques: Analytical as well as qualitative techniques has
very important to find out break even point, profits, cash flows etc. Both strategies used by
company to develop internal strength and performance (Williams, 2012).
TASK 4
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprises
Government of the national has introduce several legislation and policies in order to
control business function effectively. It is a firm obligation to implemented all regulation at their
work place. Some are explain as follows:
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Healthy and safety act: Government authority has develop policies in order to protect
citizen life at work place. Austin Fraser has implemented these regulation at their work place
through this they are able to motivated staff members and provide them full job satisfaction.
Discrimination act: Discrimination on the basis of colour, age, education, gender,
nationality, religion and many other. It is a punishable offence for an organisation if they recruit,
select, promote, transfer etc. on the basis of discrimination according to government policies
(Winarno and Wijijayanti, 2018). Management of Austin Fraser focus on these all working
activities so that not one person at work place use unethical practices which are negatively
affected company performance and image in employees eye.
Equal employment opportunities act: It s a candidates right to get equal employment
opportunities by each one firms. Government of United Kingdom has develop rule related to
equal employment with in a nation so that individual has receive fair chance to get job,
promotion, transfer and other benefits. Administration of Austin Fraser has implemented equal
opportunities regulation at their work place so that all workers are completing their work
effectively and achieve goals as well as objectives in limited period of time.
CONCLUSION
From the above report it is concluded that small business has lots of growth opportunities
at market place. In order to build strong as well as positive relationship with clients customers
firm has develop various strategies and plan. Through this, they are easily run their whole
business activities and get higher market share. Transnational techniques is used by Austin
Fraser to expend their market and earn high profitability. There are several individuals have
available those curious to know firm financial position at market like shareholders, clients,
employees, stakeholder, suppliers, vendors and many more.
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