Managing and Running a Small Business

This document discusses the management and operation of a small business, focusing on topics such as resources, customer relationship management, and transnational development. It covers the factors to consider when choosing resources, advantages and disadvantages of CRM, and the benefits and drawbacks of developing a business transnationally. The document also includes information on cash flow forecasting, break-even analysis, financial statements interpretation, and key legislation for small businesses.

Managing and Running a
small business

Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
TASK1.......................................................................................................................................3
P1 Define the term resources and business objective. Also mention the factors that a small
business consider when choosing the right resources to complete their objectives and goals.
Write at least five factors in a business which will be considered and explain the
importance of each factor.......................................................................................................3
P2 Define the term customer relationship management. Explain the main areas within the
customer resources management and provide advantage and disadvantage of each area.....5
P3 Define the transnational development. What are the benefits and Drawbacks of business
developing transnationally? Then create a SWOT analysis on the idea developing
transnationally........................................................................................................................7
TASK 2......................................................................................................................................9
P4 An annual itemised monthly cash flow forecast showing fixed and variable costs..........9
P5 Ways of Break-Even Analysis applied on an organisational situation...........................13
P6 Interpretation on key financial statements of a company for contribution in successful
management.........................................................................................................................14
P7 Key legislation & regulations that have major implications on small businesses..........15
CONCLUSION........................................................................................................................16
REFERENCES.........................................................................................................................18
Books and Journals..............................................................................................................18

INTRODUCTION
In today’s emerging world, there are many entrepreneurs open their small business,
which directly affect the growth of the economy. The small business provide employment
opportunities, due to which the conditions of economy is improved and there is increase in
the living standard of people. The small business bring innovation in market with an aim to
attract large number of people and sustain in market for longer period. It is essential for
entrepreneurs to gain an understanding about the market conditions as well as customer
requirements so that their product and service is accept in market rapidly and easily as well.
In the present report, DCS Group is taken into consideration. It is a wholesale store in UK
that offer quality grocery in market. The report covers how small business develop plans &
allocate resources in order to achieve goals and meet with the targets. In addition to this,
process of CRM is discuss along with the advantages & challenges of transnational
operations. Moreover, cash flow statement, break-even analysis, budget is develop in a proper
manner. Later, the report covers various laws and legislation that us required to follow by
small business.
MAIN BODY
TASK1
P1 Define the term resources and business objective. Also mention the factors that a small
business consider when choosing the right resources to complete their objectives and goals.
Write at least five factors in a business which will be considered and explain the importance
of each factor.
Small scale business is continuously developing Nations like UK where there are
number of policies found by government under the political changes like BREXIT and many
more. Which bring number of reforms toward the small scale industry development as well as
increasing the small scale businesses within the nation because of their contribution towards
the society as well as the economy of the country. This also brings number of resources for
small scale business. Resources can be defined as sources of supply from which a benefit is
produced and then has some utility (Miller, 2017). Business can define the resources as a
factor of production consisting of land and Labour along with capital and enterprises which
are helpful in doing the business and performing different task of organisation. Business
services for employees and all the business support supply chain of business. There are
number of sources which can be used by the organisation where it can achieve its objectives

as well as going on in a timely manner. The main five factors of a business which are directly
related to the organisation are discussed below:
Control: the first factor which has to consider by the enterprises before starting the
business and choosing the resource for development of business. This is because control is
the factors which decide the success of the organisation while performing its different
operation. If organisation chooses financial resources which are related to issue of share
capital then it will also lose the control on the organisation as shareholder will get the right to
take the decisions and control the operation of organisation because of their investment. So it
is important for the organisation that where they want to execute the control or give it to the
shareholders. This will directly impact on the distribution of resources (Millern and
Gronbeck, 2019).
Flexibility: company also identify the flexibility of the resources it is going to use in
future for smooth functioning. This is because flexibility is an important part of the
organisation structure where it can help company in increasing the trust of shareholders as
well as make changes according to the dynamic environment. Flexibility also help company
in identification of different aspects which are directly related to productivity and profitability
of the organisation.
Financial resources: before acquiring the resources for the company must identify all
the activities which are related to finance. This is because financial resources planning
important rule in organisation where the act as a backbone of the company. Financial
resources provide the working capital to the organisation where it can execute the functions
of all departments effectively. The finance help the company in performing different actions
related to purchasing of raw material allocation of resources and many more. Income tax of
DCS Group Company also need to adequate fund for its operations and business activities
where it can run them in an effective manner as well as achieve the proper goals and
objectives. For this company use Bank finance and some savings and mutual funds which
will help company in operating its business at small level (Long, 2019)
Skills and quality of human resources: it is also important for a company to identify
the skills and quality within the human resources of organisation. Decision crucial animate in
organisation where it monitor all the function of the company from recruitment to provide
salary compensation and other resources allocation to human resource organisation. This is
an important part because company have to identify the skills for working on specific projects

of the organisation where DCS group can reduce the wastage of efforts done by the human
resources.so this must be kept in the mind of the company that there must be recruitment of
children qualified human resources for achieving the goals and objective in a proper time.
Goals visions and targets: company must describe it vision target in an appropriate
manner before identifying the potential resources for the organisations. This is because,
company have to identify the resources which are best suitable to its goals and targets by
compiling the vision within these resources. DCS group have the permission to provide the
best quality services and facilities customer to make the good experience at the shops of
company. Must be combined with the resources planning of the organisation where it identify
that proper goals must be made and adequate vision must be started to achieve the targets as
well as during the resources in a proper manner (Klein, 2020)
P2 Define the term customer relationship management. Explain the main areas within the
customer resources management and provide advantage and disadvantage of each area.
Customer relationship management can be defined as an approach which is used by
the company for interesting and matching the current potential of customers.it uses the data
analysis about the customer history and the company to improve the relationship between
company and customers specifically focusing on retention of customer for a longer period to
the company product and ultimately driving the sales growth (Huband and O'Loughlin,
2019). DCG group is using the various approaches and policies which will help company in
maintaining the customer relationships. For example, company using feedback and review of
the product and services which are consumed by the customers. This will help company in
providing the good services in order to provide customer with best faculty of the firm.
Directly impact on the relationship management of the company and will help company in
boosting the profitability and productivity within its operations and provide growth to it.
Customer portfolio analysis: it is one of the tools which are used by the company for
managing the customer services within the organisation. This tool in full include basic uses of
company in order to have better understanding of the standards and be aware of customer so
that company can provide effective services and facilities to the customer according to their
needs.to make a proper portfolio of customer care all details related to customer and thereby
habit will be stored by the company for future help as well as reminding them for their
favourite items which are said by organisation (Helferich, 2017).

Advantages: This will provide the company the accurate knowledge of customer which
company can use in identifying the purchasing power of customer as well as the lifestyle of
customer.
Disadvantage: There is less reliability of information because it is not necessary that
customer will be the same thing from the organisation regularly because of decreasing
marginal utility.
Customer intimacy: company must establisher business which provides services and
facilities at the customers to get there are many maximum benefits for this company use
number of functions and establishing a better relationship. Customer intimacy is the one of
effective tool through which company can establish a good relationship between its customer
and company this is because it helps with the feedback and reviews which DCS group can get
from its customers. This will provide better position in the market and retain the position for
a longer period of time with the help of this function (Chella, Devarajan and Rao, 2018).
Advantages: This function helps the company in getting the top market position because of
its limitation in organisation functioning where it established a good customer relationship
with maximum productivity.
Disadvantage: The major disadvantage of this function is that it arrive the issues and
problems which are faced by the customer that cannot be resolved by the company through
the feedback forms because of the complexity of the problem and nature of the problems.
Customer lifecycle management: Customer lifecycle management is that tool which
is used by the organisation for managing its customer services. Understood include the
multiple customer related matrix which are analysed for the period of time and indicate the
perforated overall scope of customer life management implementation process in
compensation on dominant and departments of the organisation where is generally bring the
sources of static or dynamic data for increasing the market performance of organisation
(Bourgois, Hart and Montero, 2019)
Advantages: its objective to increase the sales and profitability of the organisation of business
function must use the CLM function for formulating business strategy as it will ensure that
each member of the team will understand his drones in proceeding the values within the
organisation.it also helps in simplification of operations within the organisation as
organisation have so many overlapping system and data this that the customer experience is

included by the delicious and inaccuracies. It also Help in bringing simplification operation
of organisation which directly and company in customer satisfaction.
Disadvantage: this cycle can always not reliable because it includes the data which are not
accurate about the customers thinking and behaviour. This also includes number of analysis
which is not directly related to the behaviour of customer because it changed according to the
trend in the market so it acts as a disadvantage of function.
P3 Define the transnational development. What are the benefits and Drawbacks of business
developing transnationally? Then create a SWOT analysis on the idea developing
transnationally.
Transactional sales is considered as a process in which business organisation sell their
products and services across the world for boosting advantages in short span of time. The
main purpose is to earn more and more profit in future period of time. And, it also helps in
achieving goal and objective of organisation in stipulated time period. In context of DCS
Group, it is necessary for business firm to assess the present situation for enhancing level of
performance at marketplace. Thus, this framework is adopted in order to make comparison
among the desired as well as real sales according to the present market condition. Therefore,
it increases the level of productivity in stipulated period of time for achieving goal as well as
objective of organisation during the period of time. Apart from this, the manager of company
focuses on maintaining effective strategies, plan and procedures in order to operate their
different activities and functions in an appropriate manner. It is also useful in assessing the
opportunities at foreign market in order to offer superior quality services to its customer at
marketplace. Therefore, it has been stated that transactional tool is appropriate for assessing
the wants of customer within specific area. It helps them in gaining more and more profit in
future period of time (Ruffin, 2016).
Transnationally strategy is considered as a process in which company focuses on
increasing level of performance in order to earn more and more profit in future period of
time. Therefore, the company adopted this tool in order to export their products as well as
services through the country for expanding their business in given period of time. It aid
assistance to company in boosting customer base in order to retain them for a longer period of
time. Thus, the primal purpose of company is to increase sales as well as profitability level by
providing superior quality products and services to its customer at affordable cost. It helps
them in achieving goal and objective of business organisation. And also it assists in boosting

its brand image as well as reputation of company in front of customer at marketplace. There
are several advantages and disadvantages of developing a business transnationally which is
going to be mentioned below:
Advantages:
 This is considered as the type of tool which is adopted by DCS Group in order to
enhance its sales as well as profitability level in targeted period of time. It increases
the goodwill and reputation of company in front of customer at marketplace.
 The other major advantage of using this framework is it helps in attracting large
number of customer by providing superior quality products and services to its
customer at affordable cost (Yaeger, 2016).
In assistance of this, transactional sales are used for taking suitable decision in order to
provide opportunities to individual person as well as resolve the issues rapidly.
 Apart from this, transactional sales are useful in offering products as well as
services into new marketplace. Thus, it provides assistance to DCS Group in
increasing sales and profitability level in future period of time.
 The main purpose of company is to provide high quality products as well as
services to its customer at affordable cost in order to increase their level of
experience within business firm.
Disadvantages:
 In addition to the advantages, there are various limitations as well. It is necessary for
business firm to make effective strategy and policies in order to expand their business
at global level. Therefore, for making effective tactics, it is vital for company to have
a large amount of money that generates issues and problems for DCS Group.
Therefore, the firm cannot afford in purchasing goods and services at marketplace can
be considered as the major limitation for business organisation.
The business firm must focuses on maintaining effective budget in order to take decision
which will be beneficial for organisation. In addition to this, it is also the responsibility of
company to make optimum utilisation of resources in order to minimize wastage. It is not
easy for company to follow all rules and regulations for operating different activities and
functions in effective manner, thus, it is determined as a disadvantages for business
organisation to operate their business at global level.

SWOT ANALYSIS
SWOT Analysis is the framework which is used for analysing internal environment of
business firm. In addition to this, it is adopted for identifying strength, opportunities,
threat as well as weaknesses which imposes direct impact on productivity and
profitability of business organisation. In context Of DCS Group, the SWOT Analysis is
adopted that is going to be mentioned below:
STRENGTH WEAKNESSES
 The main advantage of using
transnational tool is it helps in
increasing sales as well as
profitability level in future period
of time.
 Through using this tool, it is easy
for business firm to develop a
strong capital base which will be
advantageous for DCS Group
(Shover, 2018).
 It is difficult for DCS Group by
using transnational tool is
maintaining the good brand image
over internet can be considered as
the weakness for business firm.
 There is a need of talented
employees as well as large amount
of money in order to expand their
business at global level is the
major weakness for organisation.
OPPORTUNITIES THREAT
 The major benefits of this tool is it
helps in developing customer base
that assists in achieving leading
position in future period of time at
marketplace can be considered as
an opportunities for the business
organisation.
 Through using tool, it is necessary
for company to make effective
strategies and policies that requires
large amount of fund is determined
as a threat for firm.
TASK 2
P4 An annual itemised monthly cash flow forecast showing fixed and variable costs
Cash flow forecasting is a financial tool that plays a very important role in
development of effective strategies used for attainment of higher growth in various business
activities. In DCS group, related with forecasting of different set of activities that are part of

financial department of an organisation. In the present report there is discussion of the
application of cash flow forecasting for DCS group that can use this as a method for overall
controlling of their expenses and investing them for attainment of optimum results and better
outcomes.
Equity Finance: It is a financial tool that is used for the purpose of raising funds increasing
the overall share of market along with percentage growth in sales. In DCS group, there are
some small factors to sell their shares because of the low market value they possess. On the
part of company there is requirement to have some appropriate requirement of funds which
can be considered by various Financial Institutions for generating such funds to increase their
effectiveness.
Bank loan: It is related with taking loan from banks, basically a kind of Financial Institutions
that are dealing into major functions of lending money to organisations to where is activities
and in return the keep it as a Collateral security. In Case of DCS group, the organisation has
to take loans on a fixed rate of interest from such banks for generation of accounts. Bank loan
is a very effective medium of generating funds for the purpose of fulfilment of some specific
objectives.
Budgeting, planning and forecasting:
The Overall performance of the organisation is relying on basic three pillars so that
they can have appropriate funds can be used for making plans related to budget. In case of
DCS group, there is requirement to make effective planning for achievement of set objectives
within specified period of time. This process is very effective in assisting the procedure of
forecasting of all the activities for increased growth of all the operations of business.
Forecasting is one of the most important aspects of different financial projections and
assisting in various important decisions that have to be considered for future functioning. In
the DCS group, there are certain techniques and tools that can be applied by an organisation
in the process of planning, budgeting and forecasting of all the activities as discussed below.
Measure moving average: It is a technique that can be used by organisations for the
purpose of gathering and collecting of all the information and data. Such information can be
applied for the purpose of its use in the changing scenario of external environment that is
competency dynamics and is changing very fast. It can also be applied to develop an
understanding of the present position of the company in the external market.
.

Time series data or information: It is also a tool that can help in preparation of
production schedule in organisations. It is very necessary for an organisation to prepare
schedules so that all the activities can be completed in the allotted period of time. In the DCS
group the overall management can use the information and the provided budget so that
overall planned objectives can be completed in the specified time period.
Above tools can be applied in DCS group, for the purpose of carrying on all the
different activities that are part of the finance department and assisting in optimisation of
available resources with the organisation. So that for achievement of higher profitability and
enhancement of revenue by maximisation of the overall available financial resources across
different activities and functional departments.
Balance Sheet, cash flow statement, profit and loss account of DCS Group Company:
Year 2017 (value in £) 2018 (value in £)
Fixed assets 120 220
Stock 30 45
Debtors 80 65
Bank 30 35
Total 230 340
Creditors 130 150
Bank overdraft 80 50
Total 670 905
Working capital 30 80

Profit and Loss Account at the year ended
2017 2018
Sales 40 60
Cost of sales 20 17
Gross profit 20 43
Overheads 8 9
Net. Profit 12 34
Cash flow Statement
Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 28000 30250 31550 29650 28750
Budgeted cash receipts 13400 37550 64690 92370 118170
Total cash available 41400 67800 96240 122020 146920
Cash distributed
Direct material 1500 1050 1650 1500 1550
Direct labour 1300 660 850 850 680
Overhead 500 650 630 700 670
Selling and distribution 550 750 740 800 760

Total cost use 3850 3110 3870 3850 3660
Cash surplus/ deficit 37550 64690 92370 118170 143260
P5 Ways of Break-Even Analysis applied on an organisational situation
Break-even analysis refers to a financial tool which helps an organisation in
determining the stage at which company will have profits. This can be said to be financial
calculation for determination of products and services which a company needs to produce and
sell in order to sell its products. There is no loss or no game at the break even. It is when total
cost or equal to total revenues.
In order to evaluate relationship between cost, expenses as well as profit business uses
a number of tools one of them is breakeven analysis. This helps versus different levels of
output for an organisation (Klein, 2020). It also helps in analysing video stages when the
company will see its total revenues and total cost of production equal. There is another name
for break-even analysis which is your football analysis store it can also be used to conditions
which are linear cost and revenue& Non-liner cost and revenue relationship.
There are a number of advantages as well as uses for a business organisation of breakeven
point. Some of them are mentioned below:
 It helps in measuring profit as well as losses at different level of production and sales
which an organisation will have to face.
 It helps in organisation to understand in advance the effect of changes in its sale price will
have on its profit. Through the help of breakeven analysis company can easily change
their sales price in order to earn profits.
 Breakeven analysis also has an organisation to effectively understand a relationship
between fixed as well as variable cost of an organisation.
 Breakeven analysis also helps in knowing in advance the effects of cost as well as
efficiency changes in an organisation on the profitability of company.
When talking about DCS group company can use this method and also apply this through
graphical method, Algebraic method, contribution analysis as well as profit volume ration.
The company here have adopted algebraic method which will help it in taking the appropriate

decision for various difficult circumstances as well as situations. In order to calculate the
breakeven quantity the method mentioned below is used by company:
Break even quantity= TFC/ (P -AVC)
TFC= Total fixed cost
P= Price
AVC= Average variable cost
There can be an example taken to understand the calculation which is given above. If there
are fixed cost which amounts to 40,000, selling price of 18 per unit and the average variable
cost of nine per unit. The break-even point
Break even quantity= TFC/ (P -AVC)
= 40000/ (18-9)
= 4444.45
This means that if the company sells 4445 units of its product the company will
neither be in losses nor in profit. More than this products are sold by company there will be
profits for companies. If the company is not able to sell up to breakeven quantity the
company will face losses.
P6 Interpretation on key financial statements of a company for contribution in successful
management
In today’s world, small business plays very crucial role and contribute a major part in the
growth of the economy. It is essential for an organisation to focus on financial performance
on continuous basis so that positive results can be gained in an effective manner. The
companies nowadays make both online as well as offline transactions and there is possibility
that all transactions is not recorded. Thus, it is important for mangers to look on financial
reports and maintain the data in an effective manner.
In addition to this, small business such as DCS Group, it have effective finance
department that help in recording each and every transaction that further assist in influencing
investors to invest in the company that leads to growth of an organisation. By the assistance
of financial statement, it is easy to gain an understanding about the cost occur and revenue

earned by the company in an effective manner. The financial statements is described below,
which is adopted by the DCS Group:
Cash Flow statement: This statement help a company to record all the cash outflow
and cash inflow. Herein, all the transaction whether it is internal and external associated with
cash is recorded in an effective manner. It is determine that investment that take place
through cash associated with fixed time period is recorded and is known as cash flow
statement. By the assistance of cash flow statement, DCS Group can easily cover its overall
payroll areas & other factors also.
Profit and loss statement: Every organisation is associated with some profits as well as
loss and by the assistance of P&L statement, it is easy to gain an understanding about the
current position of an organisation. In context to DCS Group, maintain profit and loss
statement allows managers to manage all the activities and focus on increasing revenue as
well. In addition to this, it help company to look over the statement and put their efforts in
order to achieve objectives within stipulated time frame.
Balance Sheet: It is known as financial statement that includes maintain records of
assets and liabilities of an organisation. In addition to this, it is important for an organization
to maintain balance between assets and liabilities in order to enhance profit as well as
revenue level. (Wynarczyk, Piperopoulos and McAdam, 2013).
P7 Key legislation & regulations that have major implications on small businesses
There are various legislation that is require to be followed by an organisation in order to
properly and smoothly carried out activities as well as operations. There are various
challenges faced by companies associated with the rules and regulations made by the
government. There are various laws, which are formulated by regulatory bodies of UK is
given below:
Consumer Law: This law was proposed with an aim to protect an individual from unfair
practices that is occurred at the time of transaction from a people and the organisation. This
law include various laws such as Goods & Service ACT, it state that quality goods is provide
to the customers so that their requirements can be fulfilled in an effective manner. Moreover,
this law protect customers of being by companies prevailing at marketplace.
Employment Law: One of the major asset is employees that reaches a company towards
success and growth as well. The employee perform task and put their efforts towards the

attainment of objectives within time frame. It is important to protect the employees and
follow all the rules related with employment law in an effective manner (Yaeger, 2016). By
the assistance of this, DCS Group can make employees feel valued and important part of the
organisation, which directly leads to increase in efficiency of an organisation. In addition to
this, it also develop positive mind set of employees towards the company objectives and
goals as well.
Data Protection: It is important for an organisation to protect the data of all the
customers and employees secured in an effective manner. In addition to this, it is essential for
an organisational to did not share the data of any customer and employees without being
informing as it is unethical and decline the image of company.
Health and safety act: It is important for an organisation to provide safety to employees
that leads to increase in productivity of an organisation. The health of an employee require to
be good then only they can work with full zeal in an effective manner. It is essential for
companies to follow all the rules associated with health and safety act in order to provide
safety to all the staff members.
CONCLUSION
From the above discussion, it is analysed that small business contributes a major part in
the growth of the economy. It is important for a small entity to consider all the laws formed
by the government in order to smoothly carried out activities in an effective and proper
manner. In addition to this, it is analysed that proper planning is required in order to run a
business and sustain in market for longer tie period. Moreover, it is essential to maintain a
good relationship with customers that has a positive influence on the brand image as well as
performance of an organisation. Furthermore, it is essential for companies to identify market
trends and customer requirements in order to gain success and sustain in market for longer
period.

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