Managing and Running a Small Business on Rowlinson Knitwear

TASK 1

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

Overview of the Company

Rowlinson Knitwear is a manufacturing cloth manufacture company which is establish in 1972 and they conduct there business operations and function in market of United Kingdom.They generally dealing in apparel and textile production industry in which they manufacture quality school wear and corporate wear (Rowlinson, 2019). There are various planning strategies and allocation of resources which is consider by respective company in order to achieve goal and objectives in effective manner, some major of them are describe below:-

Research: When a company wants to conduct or start there business or enterprise company must conduct research to identify appropriate plans and resources which they will required to full fill objectives and goal in effective manner (Bridge and O'Neill, 2012). So when Rowlinson Knitwear start there operation in manufacturing cloth for kids and corporate peoples. They will conduct research so that they know what is resent trends and requirement of market. By this they able to understand approaches need and demand of customers and according to that they can plan and allocate their resources for achieving goal and objectives.

Determine the purpose of plan: Before starting a business or enterprise it is essential for owner to identify and determine purpose why they want to establish and run business. When a person clear with there purpose they able to plan strategies in effective and appropriate manner. That directly and indirectly help them in managing and running there business in effective manner. When a person is having clear purpose they able to make strategies in appropriate manner according to need and demand of customers.

Identify the resources: When Rowlinson Knitwear is clear with there purpose they able to decide resources and plans in appropriate manner which help them in conducting there operations and functions in appropriate ways (Burns, 2016). So management of respective company identify resources which they are required to manufacture kids school wear and corporate wear. When a company identify there resource requirement they conduct their operations and function is effective and appropriate ways.

Evaluate the human resources: In this management of Rowlinson Knitwear analysis and determine human resources which they required achieve their target and goal in appropriate and effective manner. Such as according to requirement respective company hire and train employees so that they conduct work in effective and quality manner. When employees get train they can do there work or task in quality manner and in effective time.

Promotional activities: When a company decide to start a business they have to do promotional and advertisement so that target market know about product and services. So management of Rowlinson Knitwear promote there products and services so that customers know about them and purchase there products in high quantity.

By conducting all these Rowlinson Knitwear able to operate and function there plans and resources in effective manner and by this they also able to achieve goal and objectives in appropriate and effective manner.

TASK 2

P2. Explain and evaluate different processes of customer relationship management

Customers relationship management is refers to practices, technology and strategies which organization conduct and operate in order to maintain and establish relationship with customers or clients (Chiliya and Roberts-Lombard, 2012). By this company can maintain and retain customers in appropriate and effective manner. For this Rowlinson Knitwear develop and adopt various process or techniques for keeping effective customers relationship which help in maximising profit in appropriate manner. When respective company maintain and establish effective reslation there customers get loyal and purchase there products for fulfilling there needs and demand. For evaluation of this Rowlinson Knitwear adopt techniques which is mentioned below:-

Customer portfolio analysis- By this respective company can able to analysis appropriate group of customers for there business by which they gain maximum profit. Along with this according to this company can decide there target customers (Crane and Matten, 2016). It is important for Rowlinson Knitwear to develop customers portfolio so that they can evaluate and identify customers need and demand. Moreover by it respective company able to design products according to need and current trends.

Customer intimacy- It is knows as process of Customers relationship management by which Rowlinson Knitwear get familiar with their individual customer on which organisation is targeting. In this it is based on how effective company know and understand there customers, habits and other related things like birthday etc. For this respective company take feedback and suggestion with there customers and when they again develop strategies and plans they consider those feedbacks and suggestions to make effective products which attract customers in high rate or ratio.

Value proposition development- In this process company collect information or data related to there target customers. Which help company in creating value proposition for customers. When a company create value for customer it is necessary to also create value for company by which they able to get benefits for business. Such as Rowlinson Knitwear develop proposition values according to there target customers which help them in attaining success and growth in effective and appropriate manner.

Customer life cycle management- It refers to process of continuous journey of customers which include all steps starting from identifying potential customers and end at providing products and services to them in appropriate manner (Fayol, 2016). For conducting this process in effective and appropriate manner human resource manager of Rowlinson Knitwear give there full efforts and attentions. They also develop effective strategies and plans by which it can be done in appropriate and proper manner. Along with this by it company able to handle their customers in appropriate manner and also develop products accordingly. In respective company they develop appropriate strategies by using CRM system and strategy.

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

Transnational business refers to activities or business operation which help an other company in carry out there business in international market. By which a company can enhance there sales, profit and customers base which help them in obtaining goal and objectives in effective manner (Hatten, 2015). Through this Rowlinson Knitwear company able to carry out there business operations and function in global and international market. In this management of company invest there assets or funds in international countries and then conduct operations in international marketplace. In this company try to make effective tied with other countries so that they can operate there business in effective manner and make proper profit. A small business or enterprise can adopt traditionally but during this they may face various benefits and drawbacks. Some major of them which is face by respective company is explain below:-

Benefits:

Expansion of business: One of the major advantage of transactional business strategy is that it help in expanding business operations and functions of a company in international market. In other word company able to sell their products and services in world wide market by which they can enhance there profitability ratio and customers bases. By this company can also able to understand different or diverse country culture which help them in design products and services according to there need and demand. In context of respective company by adopting transactional strategy they able to enhance there business in international market in effective and efficient manner.

Adopting innovation: When a company expand their business in international market they able to expand their business by adopting innovative and creative techniques (Herbane, 2013). In this company can adopt innovation and new techniques according to need and demand of customers or public. When Rowlinson Knitwear adopt transactional business strategy they able to adopt new and innovative strategy according to need and demand of customers and population. By adopting new innovation company also able to conduct there operations and function in effective manner.

Deep understanding of culture: When a company expand there business in international market they they able to understand and analysis other country culture in effective and appropriate manner. Which help them in designing products and services according to need, demand and culture that leads to enhancement in profit and customers base. So when respective company adopt traditional business strategies they understand culture of different countries and then they design product and services accordingly. By which they able to design product accordingly which leads to increase in sells and profitability ratio.

Drawbacks:

Complex to implement: When a company decide to implement transactional business strategy they may face various difficulties and problems. This is so because it is complex and difficult to implement in business or company (Karadag, 2015). Due to which manager and leader has to make creative and innovative ideas in order to overcome this.

Implementation is Costly: When a company want to expand there business they have to arrange funds from various resources like bank loan, investments, financial institutes and many more. This is so because for implementation or expanding business in international market required huge funds. So when respective company want to expand in world wide market first they analysis there financial status and if required then they arrange according to requirement. So that they conduct business operations and function in effective and appropriate manner.

When Rowlinson Knitwear decide to adopt transactional business strategy or expand there business they must conduct analysis and evaluation of respective things so that they must develop strategies and plans accordingly. This will help them in operating business operations and functions in effective and efficient form.

TASK 3

P4.An annual itemised monthly cash flow forecast showing fixed and variable costs set against income

Cash flow refer to net amount of cash equivalents and cash which is transfer inside or outside of business operations. It is prepare by a company in order to identify there financial position in market place (R.A and Ullah, 2014). Every organisation estimate and try to enhance there profit as compare to there part year profit. Cash flow statement of Rowlinson Knitwear is given below:-

(Amount in £)

Interpretation- Above given cash flow is from January to December which shows continuous enhancement in profit due to increase in sales. For getting total net cash flow respective company deduct total outflow amount from total inflow amount.

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

( Source: BEP Analysis, 2019)

Break even analysis is refers to techniques which is use by production, accountant and management sections. In it total cost of variables and fixed cost are compare with whole revenue of sales through which company can determine volume of sales or production at which point business it where there is no profit and no loss situation arise (Sampaio, Thomas and Font, 2012). By this respective company can identify and analyse quality or number of products and services which a company they have to sell for achieving break even point. Break even analysis which is done by Rowlinson Knitwear are mentioned below:-

Note: To conduct this analysis respective company perceive there sales 10000 units in current situation and further Rowlinson Knitwear do analysis by considering current sales units.

Note: Break even point (In units) = Fixed Cost / Contribution per unit         

              (Amount in £)

Interpretation- it can be evaluate from above break even analysis that respective company's break even analysis is 10000 units, whether they have no profit and no loss. If they want to gain profit they have to sale more products then 10000 units because if they sell less than  respective amount they face situation of loss. So it is recommendations to company that for gaining profit they must 4reduce there variable cost or sell more units of products.

P6: Interpretation of financial statements of Rowlinson Knitwear:

Financial Account:

It refers to balance of an organisation's debt, profit, investments, cash flow, balance sheet and many more. Which is mainly use by bank, investors and financial institutes for identifying financial stability and performance of a company (Schaper and et. al., 2014). For interpretation financial account there are various method which a company can use such as cash flow, trading account, profit and loss account and many others. Below financial statement of Rowlinson Knitwear company is given:-

Income Statement of Rowlinson Knitwear for the year ended 25^th March, 2018

Balance Sheet of Rowlinson Knitwear as at 25^th March, 2018

Cash Flow of Rowlinson Knitwear for the year ended 25^th March, 2018

Interpretation of financial accounts by using ratio analysis:

(1) Current Ratio: Current Assets / Current Liabilities               

Interpretation: Relationship among current assets and liabilities is known as current ratio and it is also known as working capital ratio. Ideal ratio of  Rowlinson Knitwear is 2:1, it means current ratio is more than ideal ratio. This shows that liquidity position of respective company is better.

(2) Quick Ratio: Quick Assets / Current Liabilities

Interpretation: Quick ratio is consider as more rigorous as compare to current ratio. Ideal quick ratio of respective company is 1:1 whereas quick ratio of  Rowlinson Knitwear is  1.78:1. this shows that respective company has better quick ratio to compete and survive in market or industry.

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

Interpretation: Gross profit ratio refers to percentage of gross profit in regards of sales of units or products. Every company must enhance or maintain there gross profit as compare to there last year profit. Rowlinson Knitwear company is having gross profit ratio of 17.25% which is consider as quit better ratio.

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

Interpretation: Net profit ratio is refers to percentage of net profit which is represent in term of sales. Current net profit ratio of respective company in year 2017- 2018 is 13.40% which is viewed as good performance of Rowlinson Knitwear this is so because it is positive. Due to this company earn good net profit ratio.

TASK 4

P7. Key legislation and regulations that have implications on small businesses

Legislation is the main process that mainly focuses on the business environment which includes consumer protection act, various environmental laws and some healthy and safety rules and regulations. The main purpose of legislation and regulation in Rowlinson knitwear to meet all obligations that help to provide some certainty and priorities to conduct various activities in business that meet fair and pellucid needs.

Minimum wage Act, 1998- It is the act that provide the minimum wages to both skilled and unskilled labours. In Rowlinson knitwear, it provides the fair payments to all the labourers that include proper self-respect and maintain a good healthy environment within the organisation. This make government to fix the wages to all the labourers and meet basic needs like food, shelter and clothing (Steingold, 2017). It provides the benefits to their families like proper education to children and travelling allowances. This act is the important part of Rowlinson knitwear in which they meet all the needs of the labourers by providing the fair wage payment on time.

Equality Act, 2010- This is a law that provide the characteristics based on age, race, sex, disability etc. Rowlinson knitwear made different regulations that provide equal values to all the labourers in the organisation such as education,employment, maintaining good public relations and transportation facilities (Yeoman, 2012). It provides medical facilities in organisation. If labour is ill then it make all the payments to their illness programs.

Safety and security Act, 1974- It is a process that provides safety and security policies that helps to implement various plans and procedures. In Rowlinson knitwear, it ensure that all labourers should follow the guidelines in order to meet the requirements and follow all the rules and safety programmes. If the labour is ill then it provide the safety guideline to him/ her.

Handling the taxes- This is the very important part in which different taxes are made to implement various programmes and policies. In Rowlinson Knitwear, all labourers have to give the taxes on proper time so that they handle all the policies in the organisation. It is important to every employee to pay the taxes on time so that they receive the payments. If they will not give the tax on time then labourer have to gave more tax. The labourers have to gave the taxes on proper time.

Bonus Act, 2013-In this act if the labour is working beyond the working hours then it will receive an increment in salary I.e. bonus. According to the act that within 8 months the bonus has to be paid in the form of cash (Yeoman, 2012). It is a necessary act that employees should be inherited and plans various outcomes in the given organisation. They receive the bonuses on the festive occasions and employee should maximise the profit every year.

Conclusion

From above discussed point it can be conclude and evaluate that for running and managing a business operations and function owner has to develop various strategies and plans. Management and owner of small business enterprise conduct evaluation and decide strategies accordingly and allocate resources which is required for complete task in appropriate manner. For this company also develop and maintain customers relationship which help them in attaining goal and objective. This also help them in identifying customers need and demand and for this company conduct analysis by using methods like Customer portfolio analysis, Customer intimacy and many more. Along with this company also adopt transactional business strategy which help them in expanding business operations and functions in international market. By this they also able to enhance there profitability ratio, market shares and customers base. For this company do analysis of funds by using various methods like cash flow, break even analysis and many other. When a company expand their business in different countries they have to follow various legislation and regulation which help them in operate in marketplace in effective and smooth manner.

References

Books and journals

• Adisa, T. A., Abdulraheem, I. and Mordi, C., 2014. The Characteristics and Challenges of Small Businesses in Africa: an Exploratory Study of Nigerian Small Business Owners. Petroleum-Gas University of Ploiesti Bulletin, Technical Series. 66(4).
• Bridge, S. and O'Neill, K., 2012. Understanding enterprise: Entrepreneurship and small business. Macmillan International Higher Education.
• Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
• Chiliya, N. and Roberts-Lombard, M., 2012. Impact of level of education and experience on profitability of small grocery shops in South Africa. International Journal Business, Management, Economic Research. 3(1). pp.462-470.
• Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
• Fayol, H., 2016. General and industrial management. Ravenio Books.
• Hatten, T.S., 2015. Small business management: Entrepreneurship and beyond. Nelson Education.
• Herbane, B., 2013. Exploring crisis management in UK smalland mediumsized enterprises. Journal of Contingencies and Crisis Management, 21(2). pp.82-95.
• Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A strategic management approach. EMAJ: Emerging Markets Journal.5(1). pp.26-40.
• Anderson, A. and Ullah, F., 2014. The condition of smallness: How what it means to be small deters firms from getting bigger. Management Decision.52(2). pp.326-349.
• Sampaio, A.R., Thomas, R. and Font, X., 2012. Small business management and environmental engagement. Journal of Sustainable Tourism. 20(2). pp.179-193.
• Schaper, M T and et. al., 2014. Entrepreneurship and small business.
• Steingold, F.S., 2017. Legal guide for starting & running a small business. Nolo.
• Yeoman, I. and et.al., 2012.Festival and events management. Routledge.

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