Managing and Running a Small Business

Task 1

P1. Discuss main considerations a small business needs to address when planning and allocating resources to achieve business objectives

Rowlinson Knitwear established in 1972 at UK and build a brand which personifies the personality of customers by providing them unique durable garments reasonable for corporate and personalisation for school and club.

It produce clothing article for their customers and give them the best fitting to develop a confidence in different roll of life corporate, schools and club. The purpose is to supply directly to an individual retailers, which is available in affordable prices with high quality stuff (Hatten, 2015). The principal focus is quality in every work as the company care about the products and services. All the garment's quality are tested by quality control system, this ensures the company about its fabric and quality of its manufacturing

Serving customers is the vital part of the company and satisfying them by the quality is the goal which company always keep in mind. Customer relationship management is the foremost part of the company as it focuses on future relationship so to work with their customers on long-term basis. Designing unique channels to communicate customers so to resolve queries immediately and build a healthy relationship with them.

Their resources to spread in the the market are newsletter, corporate-wear Brochure, schooling updating boards, advertisement and many more. The small scale industry needs skill, trustable and devoted employees, who can work effectively and efficiently in the company and fulfil its given objective in an appropriate manner. Full utilization is also needed in small scale industry as it help in generating more revenue from the limited resources.

Rowlinson knitwear creates the brand value in the market and finds the new way to spread across the boundaries. To understand the concept of moving towards the high peak is equality and diversity. Company cares about their employee working around the globe and fulfil its promise to pay a good amount in the form of salary for living. Employee's health is also a vital part so then company provide health insurance to save their employees for unpredictable future problems. Each department are audited rigorously to find out the issues running in the mind of the employees, so to resolve it immediately.

Digital platforms are the best means of communication for small scale industries to grow more, online chat, email marketing, departments which handle the real time responses and social marketing. It includes the advertisement which creates brand and goodwill in the market (Legg and et.al., 2015).

Generating capital for a small scale industry is savings, borrowing as a loan from bank or from any other family member. Equity finance is also the best way in generating capital as it allow outsiders to put their money for future investment.

Task 2

P2. Explain different processes of customer relationship management for a small business

Customer relationship management is related to practices, technologies as well as strategies which utilise by organisation for handling customer interaction as well as their data till customer life-cycle, main motive behind such practices is to make better relation with customers (Drucker, 2012). Along with this, it also assist in maintaining connection with customers and also in their retention. Rowlinson Knitwear implement several process for managing customer relationship and for maximising profit with the aids of understanding needs and wants of customers. Because by fulfilling these satisfaction of consumer will be gained and also result in their loyalty. Explanation of respective procedure are as follows :-

• Customer portfolio analysis - This Procedure include assessing the Rowlinson Knitwear's customer base for identifying that which group buyers are more profitable for the company (Crane and Matten, 2016). It play important role in making customers base portfolio and after this need of customers will be evaluated. Because through this, taste as well as preferences of customers will be manufactured in easy manner.
• Customer intimacy –This is the procedure of customer relationship management with the assistance of it, Rowlinson Knitwearis taking initiate for building familiar relation with their existing and potential customers within the company's target customer base. In simple term it can be said that, Relationship building is generally depend on the awareness of company about their customers such as buying habits, taste and preferences etc. For this, Rowlinson Knitwear can ask their product consumer to fill feedback form because with the assistance of it information or data related to consumers choice will be collect.
• Value proposition development –Procedure of value proposition development start when respective organisation will collect information about their target customers through customer intimacy. This involve initiation of value proposition for their customers. When it comes to create value for customers, it is essential to create value for the Rowlinson Knitwear So that, development of value proposition development should be advantageous for operations of business.
• Network development –This is the process in which organisation develop network as well as build strong relation with their customers. In network development management department of Rowlinson Knitwear play crucial role. Moreover, it is necessary process for every company because in this they can develop good relation with customers and such practices result in growth as well as success of business ( Anderson and Ullah, 2014).Apart from this, in network development association build relations with external parties such as suppliers and investors as well as internal partners also like staff members. With the assistance of internal and external partners network development company will get proper information about taste as well as preferences of customers. After that, as per the gathered information goods and services will be manufactured by them.

For instance, The Rowlinson Knitwear company set value for proposition development and then target customers according to that. Such practices will result in accomplishing business growth as well as success.

• Customer life cycle management -In this process, Rowlinson Knitwearhas assessed the ideal customer journey which starts from potential client and end with product/service advocate. In simple terms it can be said that, customer life cycle management is the continuing process which assist in maintaining relation with customers (Mrope and Mhechela, 2015). Moreover, management of respective cycle need proper structure as well as attention of the human resource of an Organization must determine how it will continue itself to effectively handle customer relationships (structure). There should be a proper system in the organisation which because it will help in maintaining the record that how they will approach customer acquisition as well as retention, as well as the performance measurement of CRM strategy.

P3. Explain how a small business can develop transnationally and determine the benefits and drawbacks

Transnational business help an organisation in conducting their business operations and functions at worldwide market. In this company invest their money in foreign market or countries and conduct their operations and functions in international marketplace. By this company want to earn more profit and also want to enhance numbers of customers for their products and services. A transactionally which is develop by Rowlinson Knitwear has certain benefits and drawbacks which is mentioned below:-

Benefits:

• Innovation: By using transactionally develop respective company able to develop new innovative products and services according to the new market place. By this they also able to generate job opportunities for local peoples. Rowlinson Knitwear can introduce new product which is innovative and new for market and according to demand and need of consumers (Epstein, 2018). For testing of product they can focus on small market which can be done with minimum investment. When respective company adopt innovation in their working and technology it will motivate employees and encourage them to conduct work in appropriate and effective manner.
• Deeper cultural understanding:By conducting business in international market and in diverse culture the respective company able to know more about various culture. This is so because before interring into market respective company conduct market analysis and research which help them in understanding need and demand of customers on which they are focusing. When a company deeply understand country cultural they able to develop and design products accordingly.
• Economic: When Rowlinson Knitwear inter into international marketplace they able to earn more profit and revenue which enhance their economic conditions in a marketplace (Spence, 2016). This will also help them in gaining competitive advancement with their competitors in effective and appropriate manner. This will also enhance the economic conduction of country in which they are operating their business functions.

Drawbacks:

• Brand loyalty – When an organisation develop transactional develop they will not able to develop personal relationship with their customers because it will influence their sales. This will help in building loyalty of brand in order to generate revenue by conducting sales.
• Product development– It majorly focus on the marketplace in order to identify and determine buyers buying habits through which company able to plan and make strategies and plans accordingly. By sometime company not able to focus on effective and appropriate customers.

Task 3

P4. Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set against income for a specific organisation

Cash flow statement is also known as statement of cash flow which represent how changes occur in balance sheet and income influence cash and cash equivalents (Loscocco and Bird, 2012). Cash flow statement which is develop by Rowlinson Knitwear is given below:-

Interpretation– By analysing above given cash flow statement which is from January to December is that there is continue increase in profit due to increase in sales. By this company able to identify total in flow of cash and total out flow of cash. This help company in making decision and strategies in appropriate manner.

P5. Explain how break- even analysis could be applied to an organisational situation

Break even analysis is consider as tool of finance which is use by an organisation to identify or determine the stage at which company, its product and services start gaining profit. In other word it refers to financial calculation which help in determining a company that what amount of goods and services they sell to achieve or cover their cost (Golja and Požega, 2012). It is refers to situation where a company not gaining profit nor going to loss, company only able to cover their cost. Respective company conduct break even analysis to identify the point or amount of product which they have to sell for achieving no profit and no loss situation. The evaluation and analysis which is conduct by Rowlinson Knitwear is given below:-

( Source: Break Even Point Analysis, 2019)

Note:For conducting break even analysis respective company assume its sales 10,000 units at current situation, they conduct evaluation and analysis buy taking respective current sale units.

Note:Formula of Break even point (in units) =Fixed cost / Contribution per unit

(Amount is in £)

Comment:By evaluating above given break even point which is conducted by the respective company. That they have break even point at 3000 where they will earn no profit no loss, they only able to cover their cost in effective manner. So if Rowlinson Knitwear wan to earn more profit they have to sell more units then 10000 and if they sell less then respective units they can face situation of loss. So it can recommended to management of respective company is to enhance their profit by selling more units or by reducing variable cost of products and services.

P6: Conduct interpretation of financial statements

Financial Account

Financial account refers to balance of an organisation's profit, debts, investments, cash flow and other things. It is majorly use by banks, investors, financial institutions and so on (Orobia and et.al., 2013). It is generally use by these because by it they can measure financial performance of a company. For analysing financial status of a company there are several ways such as cash flow statements, trading accounts, profit and loss accounts, balaance sheet etc. Some of them which are use by respective company are explain below:-

Income Statement of Rowlinson Knitwearfor the year ended 13^thFebruary, 2019

Balance Sheet of Rowlinson Knitwearas at 13^thFebruary, 2019

Cash Flow of Rowlinson Knitwearfor the year ended 13^thFebruary, 2019

Interpretation of financial accounts by using ratio analysis:

(1) Current Ratio:Current Assets / Current Liabilities

Comment:This is also know as working capital ratio. It refers to the identifying relationship among current assets and liabilities. Standard current ratio is 2:1 and in respective company, current ratio is more than ideal ratio. This shows that company's liquidity position is better.

(2) Quick Ratio:Quick Assets / Current Liabilities

Comment:quick ratio is consider as more appropriate then the current ration in order to analysis liquidity. The ideal quick ration is 1:1 and company's respective ratio is 1.78:1 which means respective company quick ratio is good.

(3) Gross Profit Ratio:Gross Profit / Sales * 100

Comment:it refer to the percentage of gross profit in order to calculate profit and sales. Company can enhance and improve their gross profit ratio by comparing it with last year ratio. Gross profit ratio of respective company is 17.25% which shows quite good conduction of company.

(4) Net Profit Ratio:Net Profit / Sales * 100

Comment:It indicate percentage of net profit in order to represent sales. The respective company's net profit ratio is 13.40% in year 2018-2019 which is consider as better condition of respective company. This shows that this company will earn good net profit ratio.

Task 4

P7. Discuss key legislation and regulations that have implications on small businesses or social enterprises

When a small businesses or social enterprise owner conduct business operation and function within national and international boundaries they have to follow various legislation and regulation. Legislation refer to law and rules which is develop by government of countries which leads to conducting business operations and function in appropriate and effective manner (Trevino and Nelson, 2016). Their are various type of rules and regulation which an organisation has to follow such as laws related to salary, health and safety, competition, production and many other. Their are several regulation and legislation which Rowlinson Knitwear has to follow, some major of them are explain below:-

Equality Act- This Act is implement and establish in united kingdom in year 2010. It is establish to protect and secure employees form various misbehaving which happen in at a workplace. Some of them are discrimination on basis of cast, gender, income, age, colour, disability, marriage etc. Along with this it protect staff from harassment or victimisation which happen in an organisation. Employer of Rowlinson Knitwear adopt equality act at their workplace and make rules and regulation accordingly. Such as if any person do discrimination and other related activities, management will punish them or rusticate him or her. By adopting this act they able to avoid this type of unpleasant activities in appropriate manner.

Minimum wage Act- Government of united Kingdom develop minimum wage act in year 1998 ant it it applicable to across UK (Olusegun, 2012). Form 1 April 2018 minimum wage is £7.83 per hour for employees whose age if over 25 years. For person whose age is between 21 year to 24 years minimum salary will be £7.38 per hours and for staff whose age is 18 year to 20 years they will get minimum salary of £5.90 per hour. Respective manager fix their employees or salary on the basis of their skills and ability for particular task or job. They provide salary to employees by considering minimum salary act.

Working hours Act- It is establish by government of United kingdom in year 1998. This act is also known as working time directive act or working time regulation act. It is consider issues related to holiday, daily break or lunch break, night work, extra working and maximum working days. According to government of United Kingdom maximum working hour is near by 48 hours in a week. Management of respective company develop and decide working hour of employees by considering this legislation. According to this they decide that every employees will get proper time for lunch and holidays (Olusegun, 2012). If any employees will do extra work or extra time they will get pay for respective work. By this they able to reduce issues and conflict which arise due to salary and working working hours.

Conclusion

Form above discussed point it can be conclude and evaluate that for running and managing a small business an organisation owner need to develop various strategies and plan. Which include several activities such as arranging fund, conduct promotional activities, plan goal and objectives and many other activities. Their are various factors which a small business owner has to consider when they plan to run a enterprise in order to attain goal and objective in appropriate and effective manner. To maintain and develop effective relationship with customers, in order to that employers has to develop various procedures and activities. To expand business on worldwide level they have to develop various strategies and they may face some challenges while expanding. They have to prepare budget for launching and expanding business and evaluate break even analysis. Their are certain rules and regulation which a business owner, employees has to follow in order to run business in effective and appropriate manner.

References

Books and journals

• Schaper, M.T.,and et.al., 2014.Entrepreneurship and small business.
• Hatten, T.S., 2015.Small business management: Entrepreneurship and beyond. Nelson Education.
• Legg, S.J., and et.al., 2015. Managing safety in small and medium enterprises.
• Drucker, P., 2012.Managing in the next society. Routledge.
• Crane, A. and Matten, D., 2016.Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
• Mrope, G. and Mhechela, J., 2015. Micro and Small Enterprises Challenges in Managing Loan at Mbeya, Tanzania.The International Journal of Business & Management.3(10). p.622.
• Epstein, M.J., 2018.Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Routledge.
• Spence, L.J., 2016. Small business social responsibility: Expanding core CSR theory.Business & Society.55(1). pp.23-55.
• Loscocco, K. and Bird, S.R., 2012. Gendered paths: Why women lag behind men in small business success.Work and Occupations.39(2). pp.183-219.
• Golja, T. and Požega, S., 2012. Inclusive business-what it is all about? Managing inclusive companies.International Review of Management and Marketing.2(1). pp.22-42.
• Orobia, L.A., and et.al., 2013. How do small business owners manage working capital in an emerging economy? A qualitative inquiry.Qualitative Research in Accounting & Management.10(2). pp.127-143.

UPTO50%

Avail The Benefit Today!

To View this & another 50000+ free

Enter Email

Submit