Managing and Running a Small Business

MANAGING AND
RUNNING A SMALL
BUSINESS

TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................2
LO 3............................................................................................................................................................3
P4 Annual itemized monthly cash flow forecast showing fixed and variable cost set against income for
Oldham consultancy limited....................................................................................................................3
Main sources of finance for startups:-......................................................................................................3
P5 Application of break-even analysis on organisational situation..........................................................5
P6 Key financial statements for Oldham consultancy limited in relation to its contribution for
successful management of the business...................................................................................................6
LO 4............................................................................................................................................................7
P7 Discuss different laws and regulations that affect to small business and explain advantage and
disadvantage of each law.........................................................................................................................7
CONCLUSION...........................................................................................................................................9
REFERENCES..........................................................................................................................................10
INTRODUCTION
Managing and running a small business requires confidence of the managers. It also
requires an effective business plan that can guide the firm to manage the business more
effectively (Steingold and Steingold, 2019). Present study is based on a small consulting firm in
Oldham that was established in the year 2005. Report will include different factors that help the

business to allocate its required resources so that they can achieve the desired business goals.
Report will evaluate different processes that customer relationship management implements for
its business and the ways in which CRM process work. Report will identify the way a small
business develop transnationally and the respective advantage and limitations to develop the
business transnationally. Report will produce a cash flow forecast and what are the benefits of
forecasting techniques. Report will also highlight the way in which break even analysis could be
implemented to the small business. It will interpret all the respective financial statements that
contribute for the successful management of the business. Finally, report will discuss some key
legislations that business is required to implements for organisational growth.
LO 3
P4 Annual itemized monthly cash flow forecast showing fixed and variable cost set against
income for Oldham consultancy limited
Main sources of finance for startups:-
For starting a new business, firm is required to have different sources from which it can
extract funds and can invest for the business. These sources are as following:-
 Personal investment:- The personal investment includes own saving and other assets that
a person can use to start a business.
 Friends and family:- Another source is borrow money from relatives who are ready to
invest in your new business.
 Angel investors:- There are many wealthy investors who are ready to invest in your
business directly and not only funds these leaders are having experience in technology
and management, so they also gives best advice to the startups (Yoo and Pae, 2017).
 Venture Capital:- There are venture capitalist in market who are ready to invest for the
startups in exchange for the equity and also expects high return on their investments.
 Business loan:- There are different financial institutes and banks who are the common
source of funding for startups and small businesses.
Cash flow forecast:-

Cash flow forecasting helps the business to have control and save time for other
activities. With the less time consumption, small business becomes more powerful. This
forecasting helps in visualizing different scenarios that can be utilized take big decision for the
organisation. Better informed decision is in hand with the use of cash flow forecasting and
business grows in right direction with the help of it.
Cash flow from operations
Net earnings 2000000
Additions to cash
Depreciations
Decrease in account receivable
Increase in account payable
Increase in taxes payable
10,000
15000
15000
2000
Subtractions from cash
Increase in inventory 30000
Net cash from operations 2012000
Cash flow from investing
Equipment 500000
Cash flow from financing
Notes payable 10000
1522000
Forecasting and budgeting:-
There are different forecasting and budgeting techniques that business uses to forecast the
overall income and expenses of the business of Oldham consultancy limited.
Budgeting forecasting techniques are as following:-
 Creating a Master Budget:- It is the easiest way to forecast any small business as this
static financial document is useful to identify what will be the actual performance of the
business over year. Here, financial data is been gathered from each team and with the use