SME Management Report: Resource Allocation and Customer Relations

This report analyzes the core aspects of managing a Small and Medium Enterprise (SME), using Café Yum-Tum as a case study. It begins with a detailed examination of resource allocation, emphasizing the critical considerations for a small business, including financial resources, objectives, human resources, and external influences. The report then evaluates different processes of Customer Relationship Management (CRM), highlighting customer portfolio analysis, customer intimacy, network development, value proposition statements, and customer life cycle management. Furthermore, it delves into financial planning, including the formulation of a monthly cash flow forecast, break-even analysis, and interpretation of key financial statements. The report also explores the implications of key legislations and regulations on small businesses. The report concludes by summarizing key findings and recommendations for effective SME management.

MANAGING AND
RUNNING SME

INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................3
P1 Main considerations a small business needs to address when allocating resources....................3
TASK 2....................................................................................................................................................6
P2 Evaluate different processes of customer relationship management...........................................6
P3 Analysis of development of small business transnationally with its benefits and drawbacks.......7
TASK 3....................................................................................................................................................9
P4 Formulation of monthly cash flow forecast showing fixed and variable costs..............................9
P5 Break even analysis ....................................................................................................................12
P6 Interpretation of key financial statements and its contribution in successful management......13
TASK 4..................................................................................................................................................15
P7 Implication of key legislations and regulations upon small businesses.......................................15
CONCLUSION.......................................................................................................................................17
REFERENCES.........................................................................................................................................18

INTRODUCTION
In this ever dynamic business environment, every organization, i.e. small or large is
tend towards creating strategies and policies which helps them to obtain maximum
sustainability at marketplace. The number of small businesses is rapidly increasing in UK but
they also face huge market competition cause of wide presence of large corporations. In this
manner, while running a SMEs managers are required to ensure about all necessary resources
which helps in effective completion of all business activities and tasks (Wynarczyk,
Piperopoulos and McAdam, 2013). It also helps small businesses in expanding their market
share and increasing sales as well. Café Yum-Tum is the chosen organisation for completion
of this report which is located in Queen street of London and offers variety of coffee and
other beverages to people. The main motive of the café is to sells moderately priced food to
an upscale casual dining market. This assignment is going to be described major factors that
should be considered while managing a small business. There will be a discussion upon
process of customer relationship management and the concept of break-even analysis,
TASK 1
P1 Main considerations a small business needs to address when allocating resources
In business environment, different factors are being presented which can affect
business functions or processes and firm’s don’t have any control upon these factors. In order
to prepare a business plans for small businesses managers should assess these elements so as
to accomplish goals in stipulated time frame. It also helps them in planning and allocating
resources in the best possible manner. There is colossal connection among compelling
allotment of assets with achievement of targets. Lack of resources can influences the working
capacity and generate vast of issues are occurred towards achieving objectives. In this way, if
all resources like assets, representatives, vision and mission and so forth oversaw in
compelling way which facilitates the process to attaining vision and mission of the company
(Williams, 2012). Café Yum Tum is a newly establish café which is located in Queen street,
here wide range of people usually come in a day. The venue features brewed coffee and
espresso-based beverages, granita ices, fruit smoothies and juices, and other beverages
typically associated with a coffee shop. A dessert bar will serve a range of freshly prepared
desserts, as well as baked goods associated with breakfast.

Following are the main features which must be considered by Café Yum Tum is
stated as under: -
 Requirement of funds: Working capital is one of the most imperative resources that is
required to complete all functions or operations effectively. It is prime obligation of
association is to recognize the need of funds by every department to do their working
activities and tasks. It decides about accessibility of assets. In the event that if funds
are not adequate then they have the obligation to recognize the distinctive sources
through assets are raised effortlessly to conduct future tasks. It is very unimaginable
for small business association is to work without adequate measure of working capital
with full limit. So that management of Café Yum Tum need to decipher its financial
articulations to comprehend about their costs, wage, inflow and outflow of cash
money and so on. It gives the chance to outline strategies which expels their
superfluous costs. For example: If company wants to expand its size and wealth then
they have to increase level of productivity and produce number of items as well as
varieties so that more customers can be attracted. For this purpose, appropriate
financial resources are required to run entire business operations in well manner.
 Objectives, vision and mission: There is gigantic effect of goals, vision and mission of
association with respect to detailing of their distinctive plans about various
perspectives and planning of resources according to genuine requirements. The goal
of Café Yum Tum is to serve tasty and delicious food to customers’ by valuing their
money and always focus on generating something new. For this purpose, management
is required to use of current promoting procedures to enhance deals. It comprehends
that need to hire a new marketing team (Weske, 2012). For example; company must
be sure about their visions and mission that are to be achieved. Therefore, Café Yum
Tum required to plan for setting their major objectives and aims so that all tasks can
be divided accordingly. It also support in allocating resources among different
activities so that goals can be attaind.
 Human resources: Workforce planning is one of is critical task for management as it
fulfils the requirement of human resources in a business organisation. It helps in
auspicious fruition of their errands inside stipulated timeframe. Due to lack of human
resources reduces the production or output level which all affect sales and
profitability. Determination of number of workers required, exhibit aptitudes and

proficiencies and so on. It also aids in organising training and development programs
which helps in improving current abilities and contributes of staff members in
accomplishment of their coveted outcomes. There are required adequate human
resources and manpower for performing all tasks with an effective manner. Café Yum
Tum considered its staff members and divide work as per their abilities or capacities
that facilitates in achieving success.
 Internal policies and external influences - Internal policies are based on negotiations
and bargaining affects resources allocation. Apart from this, demand of stakeholders
of the firm also hinder planning and resource allocation. Stakeholders can be –
customers, owners, employees, management, suppliers, creditors and local
communities. Law and legislations of the nation should be also taken into account
while planning resources, like - pollution control, safety and labour welfare
requirement. This is necessary to formulate various policies and rules or regulation to
run business operations in adequate ways. Café Yum Tum has to undertake several
factors as internal and external that can influence the organisation and its operations.
Therefore, manager has to plan for making effective strategies and corrective actions
for surviving from such circumstances.
Allocation of resources within organisation:
There are defined number of tools and techniques that support in effective utilisations
of available resources and their allocations in well manner. Some are as follows:
Crtitical path analysis: This path help in provide adequate information regarding different
paths that must be required for completing task and achieve objectives in an effective way.
This tool support in defining the particular time period which needed to complete project. It is
essential in allocating resources among different activities as per the time schedule so that
better gaols or objectives can be attained.
Gantt chart: This is known as graphical representation where defined the project on paper
and chart form. It is a bar chart that describe the start and finish date so that activities can be
scheduled effectively.
Importance of allocating and planning resources to achieve objectives:

 Café Yum Tum can attarcts more customers by providing number of items of foods to
the target audience. Planning will support in improving profitability and productivity
 This is helpful in optimising available resources for getting maximukm outcomes.
 It is essential in increasing market share and achieve sustainability within time frame.
Therefore, Café Yum Tum can achieve predetermined goals or objectives in an effective
manner.
TASK 2
P2 Evaluate different processes of customer relationship management
In order to attain high market viability and build up a strong goodwill over
marketplace, small business organisations are required to keep positive relation with
customers by satisfying their needs and wants in the best possible manner. Thus managing
department of Café Yum Tum should focused on determining issues which can affect value
of their products and develop policies to resolve them as soon as possible, The firm can also
acquire a system approach for that is based upon effective management of customer
relationship.
The term customer relationship management is an application which is acquired to
manage a firm’s relation or interaction with its target and potential customers; it aids in
raising cost-effectiveness. CRM is not just for sales but also helps in embedding business
from HR to consumers services as well as supply chain management. In present scenario, to
keep strong customers’ relations small firms are acquiring CRM tool which reliefs in contact
management, workflow process, sales management, productivity and so on (Jenkins and et.
al., 2013). Below is defined procedure of customer relationship management: -
Identification of clients base: It is the initial step which incorporates division of
customers on the basis of benefit. Determining client base helps in assurance of most gainful
portion of clients. Through this items are given according to such target section which helps
in change of offers too. Café Yum Tum analyse its customers’ portfolio by conducting a
market research and recognise their needs and wants and trying to satisfy them in the best
possible manner.

Customer intimacy : In this stage, management have to familiar with customers’
nature and their feelings as well. To build strong interaction with customers is relies upon
how a firm treats its customers and how affectivity satisfy their needs or desires. In order to
increase customer intimacy towards a brand managers have to know consumer buying
behaviour and learn more about target market (Smit and Watkins, 2012). This step includes
produce a customer database to store the gathered information. Beside this, to achieve their
trust and fabricate successful client base entrepreneurs need to consistent observing in light of
the client inclinations.
Network development : It is the way toward improving interaction with different
customers which has a vital part in affluence of business activities or operations adequately in
target market. Network development incorporates about influencing connection with various
representatives to like suppliers’ workers, financial specialists, and internal parties and so on.
Value proposition statement: This procedure begins after distinguishing proof of
target clients which incorporates provision greater quality items which enhances esteem the
products more. In order to extend its value over market, Café Yum Tum is tend towards
providing qualitative and healthy products with a delicious taste; it gives maximum
satisfaction level to customers and win their trust as well. As result, it gives the chance to
enhance market image of a business association.
Customer life cycle management : It implies an ideal journey of customers, i.e. from
a potential client to become a loyal customer of the firm. In order to manage this cycle,
management requires a proper framework and attention to all processes. For this purpose,
business owners can take strides through which clients experiences will increases; it involves
considering, obtaining, utilizing and keeping up loyalty towards producing products.
Different Process of Cutomer Relationship Management
CRM process involves the activities and strategies that the organisations uses to
manage their interaction with the current and the potential customers. It involves the analysis
of organisations customer base and determines the groups and the kinds of customers are
most profitable for the company. Five Step Process for CRM includes-
 Customer Portfolio Analysis- It involves the analysis of the customers for the
organisation to determine what gropus and kinds og customer are the most profitable.

It helps in defining organisations target customer base. It assist the Cafe Yum Tum
to analyse the kinds of customers they are taregting.
 Customer intimacy- It is the process of getting familiar with the organisations target
based customer. It leads to creation of relationship building where organisation made
themselves update from buying habit of the customer to the personal information such
as remembering of birthdays and anniversaries. It usually includes building a
customer database to collect and store information.
 Network Development- It refers to building strong relationship with the
organisations customers and the networks which are critical for the success. This
helps in proper servicing of the customers and will maintain efective relationship
between the partners such as suppliers, investors as well as employees and partners
within the respective organisation.
 Value Proposition Development- This step is concerned with creating value
proposition for the customers. In creating value for the customers, respective
organisation should also create value for the organisation.
 Customer Life Cycle Management- This is considered to ideal customer journey
and maintains the continuing relationship with the customer. It determines the
organisation structure and must effectively manage the relationships with the
customer.
This is the effective process of Customer Relationship Management which includes five basic
steps of effec tively managing the relationships with the customers and thereby providing
products which creates values for the customer and assist in providing a competitive
advantage.
P3 Analysis of development of small business transnationally with its benefits and
drawbacks
The term transnational sales is associated with capacity of a small business to sale its
offerings in a new nation and identifying a new market attaining maximum market share. It
supports to provide an opportunity to firms to achieve high profit margins and sales revenues.
For this purpose, management is required to provide acquire various strategies and policies so
as to grab better future opportunities and expand market areas. It will also aids them in
building an effective market image and strong public relations (Schaper and et. al., 2014).

Therefore, it can be said that transnational sales help Café Yum Tum in attracting and for the
same its need to focus one quality and price of products; both elements will attain
competitiveness in their business activities.
Growing a small business – A small business needs to attract customers through
marketing strategies which help to make them aware about the inception of Café Yum Tum.
As customer get information about it they will allure to purcahse products and its slowly give
a growth to the business. Cafe should use social media platform that can enhance reach
towards potential customers. The firm should also provide some attractive and innovative
falvours to customers that can sustain them for a long time. They shoudl offer such
customized products that can be speciallity of cafe and that can offer customer satisfaction as
well.
Basically, transitional trade is all about exchange of goods and services across the
international boundaries in order to acquire more or more profit by maximizing the profit
level. Thus, small business can easily get succeeded in attaining their set objectives or goals
in a defined time frame by making collaboration with foreign companies. Thus, selected firm
can also come up with creative ideas for establishing positive goodwill of an organization at
marketplace by grabbing the international opportunities. In fact, various internal and external
factors are fluctuating due to changes in several other elements. For example; political rules
and regulations are getting modified due to which company needs to consider trade policies
before entering into foreign contracts. Along with this, currency rate also fluctuated which
may influence the profit level of an association. Thus, selected firm needs to design prior
strategy and install modern technology for coping up with changes that might incurred at
marketplace. Additionally, requisite to hire skilled or talented employees for handling
business operations in more effective manner as well as attain company goals in a given time
frame.
Advantages –
 Independence: The administration has the privilege to take choices in regards to
development of business activities in new nation without interview with different
gatherings.
Disadvantages -

 Lack of fund: In small business, lack of capital is the critical factor which lessens their
capacity to extend activities.
 Time period: Another factor which impacts the extension plans and policies are time
period. Due to intense market competition, a business takes long time to settle into
market which is quite difficult task.
Customer relationship management process:
In this considered the procedures for managing and managing customers relations
with organisation so that they can be loyal towards company's products or services in an
effective manner.In this consider the model of 4C's which described the stages of customers
relationship management process such as: Correlate: This can be considered as the procedure for building good relationship
with other organisational department and their function for effective collaborations. Combine: It is a phase where customers relationship are to be made with well
manner. Cognize: In this defined the procedure where information are to be provided
regarding different functions.
 Connect: In this make strong connection and create synergy with supplier and
customers for achieving long term objectives.
Development of transactional operations:
Skills to grab opportunities: There are required to grab opportunities for achieving
success and business growth as manager have to apply their skills, abilities and knowledges
for attaining long term objectives.
Relationship commitment decisions: It provide the available time factor for
producing various products or servics and fulfil demands of suppliers and customers in
adequate way.
Networking positioning: there are required to develop effective networks by using
different types of advertisement tools and channels.
Learning curve: In this consider the application of new methods for the purpose of
improving existing feature of particular products.
Small business should develop the business transnationally by the following ways-
 Licensing- licensing is a legal relationship where business is granted a limited right to
use a particular trademark or technology in exchange for the royalty fee. this is a great

way in which small business can come under licensing with a big organisation and
can develop the business transnationally which helps in incurring major profits for the
company.
 Franchising- It is a contractual agrreement which takes place between a Franchisor
and Franchisee. Franchisor authorises franchisee to sell their products, goods and
services and give their rights to use their trade mark and brand name. This is a
effective way of expanding business at a global level.
 Development of Strategic Alliances- Strategic Alliance refers to the agreement
between two or more firms which works collaboratively towards the achievement of
the common set of goals but works independently after the formation of alliance. In
normal terms it can be described as when two companies works together to achieve
common objectives by sharing the resources, technology with each other is known as
Strategic Alliance. This is an effective way of enhancin the small business
transnationmally.
 Merger or Joint Venture- In order to enhance the business transnationally business
can come under merger agreement that unites two existing companies into a new
comapny. Merger is commonly done to expand company's reach and enhance its
market share and acquisition refers to take over of one entity by other. These are the
effective ways which helps the small business to expand their business transnationally
and enhances their brand image.
Advantages of expanding business transnationally
 Enhances Brand image and sales- When small business expands business
transnationally it leads to the enahncement of the brand image as well as incrwase
sales for the company as customers becomes aware about their product and
automatically increases profits for the company.
 Business becomes less vulnerable to chnaging trends- As business trends changes
from time to time. Customers demands innovative and new products because of the
changing trends. Expanding the bussiness transnationally will allow smal business to
provide goods according to the demands of the customer.
Disadvantages of expanding business transnationally

 Currency Fluctuations can completely eliminate profits- When the business
expands business transnationally, it leads to the fluctuations in the currency rates. It
becomes difficult for the company to anticipate the profits as becuse of the
fluctuations in the international curriences.
 Unawareness about the market- It becomes difficult for the the organisation to
expand the business internationally when they do not have proper knowledge
regarding the market in which they are operating.
These are the advantages and the disadvanatges of the expanding business transnationally
which the respective organisation should take care off which assi them in operating the profit
successfully.
TASK 3
P4 Formulation of monthly cash flow forecast showing fixed and variable costs
In order to fulfil their day to day business transactions, small businesses are required
certain amount of capital which also helps in improving functional areas of the firm as well as
improving performance. Having sufficient avaialablty of finance aids Café Yum Tum to
improve quality of its goods by adding value in them and make them to satisfy needs and
wants of customers (Jasra and et. al., 2012). Strong funding also helps in acquisition of new
and innovative techniques as well. It can be additionally characterized into parts, for example,
internal and external, such are described as under: -
Internal sources of finance -
 Sale of fixed assets – If a firm has strong assets then it can sell it in order to increase
its financial credibility. It also helps in resolving needs of instant finance; the king of
internal sources is divestment. .
 Reducing working capital – It is a procedure in view of dealing with accessible cash
all the more intently. If managers can arrange shorter charging times with customers
and longer instalment terms with suppliers, they will get subsidizes faster and pay
them out more gradually, it abandoned a firm with more cash for completion of
everyday tasks. This approach relies upon solid associations with these partners
(Harmon, 2015). Along with this, decreasing working capital needs by keeping less