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Managing and Running a Small Business- Hawthorn international

University: Regent College London

  • Unit No: 29
  • Level: Undergraduate/College
  • Pages: 18 / Words 4410
  • Paper Type: Assignment
  • Course Code: L5080566
  • Downloads: 523
Organization Selected : Hawthorn International


Small business is known as an integral part of total business of every country. From various activities such as manufacturing, retailing, wholesaling and many more they cover almost every area. With lower investment, small businesses are known as largest employers, these play a big role in economic growth of a nation. In situations such as economy recession, SBEs play a vital role such as they provide employment to individuals and contribute in economy stability (Schaper and et. al., 2014). All this help improve standard of living of people and that's why government also provide its support to small businesses. Hawthorn international, leading manufacture of clothing based in UK that produce and distribute products of good quality of all small brands of fashion is consider in this report for study. Major consideration that require to be address by a small and social enterprise when allocate resources for achieve set business objectives is given in this report. Further various process utilise by firms to maintain good relationship with customer is also included in this. In addition to this, various financial statements that a firm use and its contribution in success of enterprise is all mentioned under this report.


P1 Major considerations that require to be address by small enterprises when plan and allocate resources

Small business enterprises are the one that operate on a small level. One of the main feature of these firms is that it provide featured products to its customers and also provide employment to large number of people. Major elements that require to be consider by while plan for business process are as follows:

  • Vision, goals and objectives:Vision statement of firm is the one that indicate what is the position that company wants to achieve in coming years. Goals and objectives are the end goals for which different activities are execute by enterprise (Bridge and O'Neill, 2012). This is known as one of most important factor that require to be consider by during process of planning and allocation.
  • Workers and their skills:Employees are known as one of the most valuable assets of every enterprise as these are the one that perform various job roles and manufacture products to satisfy the needs and wants of customers. It is very important for manager to conduct training programmes for employees so they can perform their job roles in an effective manner and can contribute more in success of enterprise.
  • Financial resources: This is another most important factor that require to be consider by manager of Hawthorn international during plan and allocate resources. Different sources are there that can be use by firm to raise funds to operate in business environment

M1 Tools and techniques in a structured plan to allocate resources

Different techniques and tools are there that can be utilise by the manager of firm to decide future decisions (Stokes, Wilson and Wilson, 2010). One of the main benefit of this is that it help in identify the resources require to achieve set business objective and this increase ease of allocation process. Most popular techniques are given as follows:

  • Critical path analysis: This is an effective method this remain in the form of bar chart and offer data that reveal the time of every project activity. With help of this, manager can easily gather data about the resources require to achieve end objectives. Effective communication channels should be use by firm as this help in bring cooperation among various business operations.
  • Gantt chart: This is another tool that help in identify the various paths available to complete the project. With this, manager can ascertain the longest path available to attain set objectives.

M2 Significance of planning and allocating resources to achieve business objectives

Planning is known as essential function of every business enterprise, without this a company cannot achieve its set business objectives. With help of this, manager can utilise all available resources at an optimum level and entity can generate more number of profits. Planning is very important as with this firm offer featured products to its customers at affordable prices.

D1 Application of appropriate resources

Large number of resources are there that are use by business firms to provide featured goods to its customers and to attain its business objective. When entity have all the resources require to execute commercial operations then it bring smoothness in business activities and improve efficiency (Burns, 2016). On the other hand lack of resources create obstacles and unnecessary delays in satisfy the needs of customers. It is important for manager to formulate a plan that contain information about the resources require to complete business operations.


P2 Evaluation of various process of customer relationship

Customer relationship management is the strategy for maintaining good relationship with customers. It is the process of interaction with customers and managing company's relationship. This helps in improve organisation's profitability (Drucker, 2012). There are various type of resources which is used by firm to interact with customer like email, telephone, social sites. Hawthorn international uses customer relationship management to know more about customer's behaviour and preferences related to their products. Advantage of customer relationship management is improved information arrangement which means complete information about customer that leads to positive experience in the firm. There is step by step process which is used by the company is given below:

  • Analysis of customers portfolio: This is the first step which involves evaluation of customer's base to know which type of customers are more profitable. It provides target customer base of organisation.
  • Customer intimacy: It is the second step of the company which involves the process of understanding the target customer base. Organisation has to maintain relationship with customers on the basis of how well firm know about its customer which includes all the buying habits of consumer (Nickels, McHugh and McHugh, 2008). Each and every interaction with consumer is a chance to improve customer intimacy and know more about target market. This step involves establish customer data base to store gathered information.
  • Network development: This is the third step which includes identification and building of relationship with people, networks and company. These relationship includes both external partners and internal partner such as suppliers, investors and employees.
  • Value proposition development: This is the forth step which refers to the information assembled while working on customer intimacy. After identifying target customer, create a value proposition for consumers as well as create value for organisation.
  • Customer life cycle management: This is the last step of the customer relationship management which refers to the journey of customer. For managing of cycle requires proper structure and attention to process. It is also related to continuing relationship with customers.

These are the important steps which is used by Hawthorn international to build good relations with customers.

P3 Development of business transactionally

It refers to the sale strategy that includes focus on achieving quick sale to create a long term customer relationship. This strategy is commonly used for business which offers generic products and services with the purpose of increase in profitability by making high volume of sales (Sara Carter and Jones-Evans, 2009). This highlight the sale of organisation's product take place across national boundaries. It is very essential for firm to build and implement strategy according to the conditions exist in market. This leads to huge amount of profits and at the same time it develops brand image in new market. In this, various efforts taken by the company for expansion of business operations at international level. Expansion leads to increase the profit of enterprise and ensure long term survival. There are various benefits and drawbacks to company related with it are as follows:


  • Independence: Manager of company has the right to take different kind of decisions related to expansion of business activities. This helps in increase in profits and improve brand value of organisation.
  • Efficiency: Standard process of working followed by small firm helps in increase their effectiveness and efficiency of enterprise process and provides various advantage to company.


  • Financial risk: Financial risk is the major risk faced by entity during expansion and upgradation of organisation operations in new areas (Hutchinson and Quintas, 2008). Therefore, small enterprise does not have sufficient resources to operate on large level.
  • Lengthy: For expansion of business operations in an effective and proper way and to generate more profits, firm needs to adopt creative & innovative ideas and this is time consuming and lengthy process.

M3 Elements of customer relationship management process in achieve business objectives

Different elements are there that impact customer relationship management and that require to be consider by firm before take any decision or actions.

  • Modification take place in service and product: Whenever a firm introduce a change in its offering then it either affect the customer relationship either positive or negative manner.
  • Difference take place in tastes and preferences of customers:This is another element, whenever a change take place on needs and wants of consumers then it also impact on customer relationship management.

M4 Potential to develop transactional operations

When a business organisation perform its commercial operations with help of internationalisation model then it provide so many benefits. It is very essential that this model should be utilise in an effective manner, for this it is very important that manager should have information about the following:

  • Knowledge opportunity: Proper research should be carry out so that manager can collect information about the opportunity exist in market and firm can get a competitive position in market.
  • Relationship commitment decision:This aspect indicate that quality products should be offer to all customers in given time as this help in retain them for a long time period.
  • Network positioning:Various marketing and promotional tools are utilise by firm to communicate with customers and maintain a good relationship with them.
  • Learning curve:Manager identify and highlight the areas that require improvement.

D2 Evaluate the customer relationship management process

Various steps are involve in the process of customer relationship management and it is very essential that every step should be manage by manager so company can retain them for a long time period.

  • Correlate: In this, manager conduct a program and invite employees working in various departments of enterprise for create and maintain a good relation with target audience.
  • Combine: Under this, a connection is develop by enterprise with customers.
  • Cognize: In this, manager collect and analyse information related with different function perform by business enterprise.
  • Connect: Relation is develop with suppliers and customers.


P4 Monthly cash flow forecast fixed and variable cost

Financial resources are known as one of the most important source of a business organisation as without this a firm cannot attain its set business objectives. Adequate amount of funds help in complete all commercial operations in effective manner and also provide competitive advantage to company (Gronum, Verreynne and Kastelle, 2012). Major sources that can be utilise by Hawthorn international to develop funds for business operations are as follows:

  • Bank loan:This is the source use by different firms to generate funds to carry out business operations. Banks provide loan to enterprise in fix interest rate.
  • Equity finance: This is most popular and effective source use by companies to raise funds. In this company trade its share for raise funds.
  • Hire purchase and lease:It is another method in which company give its property to another party for some specific time period. Under this funds come to enterprise in form of rent.

Cash flow statement, P&L and balance sheet of Hawthorn international is given as follows:


2017 (value in £)

2018 (value in £)

Fixed assets


















Bank overdraft






Working capital



Profit and Loss Account at the year ended







Cost of sales



Gross profit






Net. profit



Cash flow Statement







Beginning cash balance






Budgeted cash receipts






Total cash available






Cash distributed


Direct material






Direct labour












Selling and distribution






Total cost use






Cash surplus/ deficit






From given cash statement it can be stated that in beginning of January opening cash balance of Hawthorn international is 25000 and in February it is 32250 and it is 31750 and 29750 in moth of March and April respectively.

P5 Application of break even analysis

Break even point is the point that indicate the profit in which entity bear no loss and no profit. This take place when all profits generate by firm cover all the expenses done by enterprise. When manager ascertain break even point then it help in identify the total number of units sold (Hotho and Champion, 2011). This is determine by manager because this provide guidance in take various decisions and increase effectiveness of financial performance of enterprise. Different efforts are done by firm to increase the sale of product so company can generate more profits and can sustain in market for long run. Manager collect and analyse financial information collected through sources in order to forecast the demand of sale. This provide support to manager during formulation of budgets. Various efforts are done by enterprise to cross break even point as this help in generate profits and this ensure long term survival of company in market. This help in allocate all resources in a way so it can be utilise at an optimum level. Another benefit of this is that it help in reduce wastage and bring efficiency in commercial activities (Nga and Shamuganathan, 2010. There is a formula which is use by firm to determine break even point. If fixed cost of company is 30000 with variable cost 10 rupees per unit and 15 is the selling price then in this situation BEP will be calculated by apply the following formula:

BEP: Fixed cost/construction margin per unit or product= 30000/(15-10)= 150000

P6 Financial statements and its contribution in successful management of organisation

In order to enhance business and increase profitability a firm is required to prepare various kinds of financial documents in an appropriate manner. In further process, interpretation of statements is also aid in formulating proper budget plans which help in utilising available resources in a effective and efficient way. Some key financial statements are given below which are needed to be done by every type of companies included Hawthorn International:-

Balance sheet: It is an important financial statement which contain a complete information about liabilities and assets as well as shows actual position of a firm in terms of finance (Williams, 2012). This would help investors and money investors in making decisions related to investment.

Cash flow statement: This kind of financial statement highlights cash inflow and outflow of a company in a certain period of time. In this manner payment of machineries, equipments, expenses and inventories etc. are termed as cash inflows. While other payments in business are considered as outflows (Roomi and Parrott, 2008). In addition to this, cash flow statement also shows how alterations in balance sheet affect cash equivalents. Therefore, by preparing this type of key statement help a firm in determining whether company is able to manage essential expenses as well as cover payroll.

Profit and loss account: This type of accounting tool is considered as most important financial document which also termed as income statement. It includes complete description about revenues, costs and other expenses in a financial period of a company. Through this kind of statement, employers can gets knowledge that in which area business have gone down due to unnecessary expenses. Thus, it helps in managing cash and obtaining profitability in business.

Current Ratio:

Formula of current ratio = current assets / current liabilities (working capital = current assets-current liabilities)

Current ratio = 8,002,491 / 2,061,944 = 3.88:1

Ideal current ratio is 2:1, but Hawthorn international is currently having current ratio of 3.88:1 which indicates under trading and over capitalization.

Gross profit ratio:

Formula of gross profit ratio = gross profit / net sales * 100

Gross profit ratio = 3,967,447 / 12,147,616 * 100 = 32.66%

Gross profit ratio indicates ability to make profit after paying off all its debts, and in this case Hawthorn international has observed to be having a fair ability to make profits.

Return on total assets:

Formula of Return on total assets = operating profit / total assets * 100

Return on total assets = 1,751,063 / 8,976,103 * 100 = 19.508

Higher return on total assets ratio of Hawthorn international shows better management and better income earning capacity.

M5 Application of quantitative and qualitative techniques

Different techniques are there that can be use by firm to ascertain the break even point. It is very essential for manager of Hawthorn international to analyse all available tools before choose a final one (Blackburn, Hart and Wainwright, 2013). Main reason why it is essential for firm to determine break even point is that it help in determine the financial performance of an organisation. Break even point highlight the point where firm gain no profit and suffer no loss. All activities and decisions taken by enterprise are focus to attain break even point as entity do not suffer any kind of loss.

D3 Cash flow and break even analysis

Various financial statements are develop by enterprise such as P&L account, cash flow statement, balance sheet and many more. This help in identify the financial performance of enterprise and also guide manager to take better decision. P&L account is the one that indicate the total profits and expenses of entity and on the other hand balance sheet reveal total asset and liabilities of company. Another financial statements known as cash flow statement reveal inflow and outflow of cash in company in specific time period.


P7 Key regulations and legislations that have implication on small enterprises

To control functions of business and monitor their activities, regulatory bodies of a nation have made various laws. It will also help in keeping environment of business safe and secure so that employees can work in a proper manner (Teece, 2012). In context with Hawthorn International, due to impose of rules and legislations, operational activities and decision-making procedure affects a lot. Some laws in this manner are explaining below:-

  • Health and safety act: This act has enacted in 1974 according to which it is necessary for companies to ensure health and safety of workers and people who are associated with business (Malhotra and Temponi, 2010). As Hawthorn international deals in manufacturing sector, so it is necessary for management to provide essential training to employees so that they can keep themselves save from hazardous situation. It will help in reducinglabour turnover and enhance job satisfaction in them.
  • Data protection act: It was established firstly in 1988 and further reformed in 2003 according to which associations are amendable to keep personnel data of employees in a safe and confidential manner as well as do not disclose the same to third party. Thus, in this manner employers of Hawthorn international provides high security to workers.

M6 Implication of regulations and legislations

Every business organisation remain responsible to follow various rules and regulations given by government while carry out commercial activities. It is very important for manager to consider all rules while formulate policies related with business (Teece, 2012) . With this, Hawthorn international can provide healthy and safe working environment to its employees and this enhance their creativity.

D4 Key legislations and regulations that affect small business

So many regulations and legislations are there which affect the decisions and operations of small business enterprise. It is very essential for manager to consider the regulations given by government and the changes made in it for take decisions accordingly (Hill, 2008). In this way, Hawthorn international can take carry out its business activities in effective manner.


From the above given project report, it can be summarised that small business enterprises are the one that play a big role in economic growth of a country. To sustain in market for long run and to generate more number of profits, it is very essential for manager to create and maintain good relationship with customers. Different legislation and regulations are there that require to be follow by manager during development of various policies as this support entity to operate in an effective manner. Planning is one of the major aspect that should be done by manager so company can attain its set business objectives and can generate more number of profits.


  • Bridge, S. and O'Neill, K., 2012. Understanding enterprise: Entrepreneurship and small business. Palgrave Macmillan.
  • Schaper, M. T.,and et. al., 2014. Entrepreneurship and small business.
  • Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
  • Stokes, D., Wilson, N. and Wilson, N., 2010. Small business management and entrepreneurship. Cengage Learning EMEA.
  • Drucker, P., 2012. Management. Routledge.
  • Nickels, W. G., McHugh, J. M. and McHugh, S. M., 2008. Understanding business 8 th Ed. McGraw-Hill Irwin: New York, NY.
  • by Sara Carter, E. and Jones-Evans, D., 2009. Enterprise and small business: Principles, practice and policy. Strategic Direction, 25(5).
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