Managing and Running a Small Business

This report discusses the resources and business objectives of a small business, customer relationship management, transnational development, and cash flow forecasting. It focuses on John & Jenny E-commerce Service, an organization operating in the e-commerce sector in the UK. The report also evaluates key legislation and regulations that have implications for small businesses.

Managing and
Running a Small
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
TASK1.............................................................................................................................................3
P1 Define the term resources and business objective.................................................................3
TASK2.............................................................................................................................................5
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.............................................................................................................................6
TASK3.............................................................................................................................................8
P4 An annual itemised monthly cash flow forecast showing fixed and variable costs...............8
P5 Ways of Break-Even Analysis applied on an organisational situation................................10
P6 Interpretation on key financial statements of a company for contribution in successful
management..............................................................................................................................12
Task 4.............................................................................................................................................13
P7 Key legislation & regulations that have major implications on small businesses...............13
CONCLUSION..............................................................................................................................14
REFERENCES .............................................................................................................................15

INTRODUCTION
Global environment is changing continuously where there are various changes in working
of business operation taking place. This also impacting the operation off small scale business and
help them in establishing a growing venture. Small scale business venture can be define as the
organisation which is performing its business operation by the use of limited resource and
working in business environment for profit and growth (Elkoussa, 2019). In this current report
chosen organisation is John & Jenny E-commerce Service, it is operation in business of E-
commerce in UK. It is a small scale organisation. In this report there is discussion about
different resource which are available to organisation for performing its business operations.
There is also discussion about customer relationship management and it's usefulness. In middle,
there is evaluation related to transnational development where SWOT analysis also discuss. An
annual cash flow and other financial document with break even analysis will also be discuss in
this section. In the end of this report there is evaluation of various key legislation and regulation
which can be use by organization to achieve its business objective and maintain separate legal
existence.
MAIN BODY
TASK1
P1 Define the term resources and business objective.
There are number of key resource which are important for business firm to operate in
business environment and will lead to successfully achievement of business obstructives. This
can also seen that there are various function which has to be perform by business organisation
and are important for it. This can directly achieve by the use of business resource as it will get
easer for small scale organisation to arrange them in order to meet its targets. Below there are
some resource which are important or John & Jenny to achieve its objectives and maintain
productivity in functions so that maximum satisfaction can be derived off.
Financial resources: It is important for organisation to manage its financial resource
because they act as backbone of organization in present time. This is because financial resource
aid to different department of organisation by providing finance to each and every department for
there different operation (Corazza, 2019). So arrangement of finance is important for
organisation where it can performs function effectively and work toward the achievement of

organizationals goals. In context of John and Jenny, it is also important for organisation to
arrange finance in accordance to meed different function in organisation and relate them to
achievement of its functional goals and objectives. John & Jenny can use different tools like
bank lone and grants from other commercial institutes to finance.
Skilled human resource: Human resource are also important for organisation because
they help in performance of differed function. This is because skilled human resource will lead to
specialization in work and will improve functions in order to achieve its objectives in limited
time. This can be gain by John & Jenny with the help of effective hiring system in organisation,
this will facilitate in management of work with the help of talented staff in organisation. It can
also use proper training and development in organisation which will facilitate firm to manage
skilled worker in organization and will help it maintenance of productivity. John & Jenny can
also get benefit of reduction in waste which is occurred because of unskilled and untrained
workers in organisation ( Kremin, 2017).
Flexibility: This is directly related to function of organisation as flexibility in
organisation will help firm in identification of future opportunity and change structure of
organisation according to changes in working conditions related to dynamic business
environment. This can be seen there it is directly proportionate to goals and objectives of
organisation in current busies environment because if firm is flexible according changes than it
can positively use the changes in business environment and being innovative. John & Jenny can
also use this concept where they can manage there function and use different features for
management of there business and achievement of goals and objectives.
Control: This is also important factor which has to keep in mind while working in
organization or stating business. This is because it help organisation in identification of various
factor and arrangement of finance. Management of John & Jenny has to deicide that what are the
function which they want in organisation related to span of control. This is related to situation
where organisation want to retain its control or what to give it to other. For example, if John &
Jenny what it issue share capita for arrangement of finance then they has to loose control over
working, but if they want to remain it they can use method like commercial bank and issue of
debenture where ownership will remain in hand of firm.

These are some resource which can be use by organisation to achieve its goals and
objectives so that it can manage its function in a particular direction by minimising negative
impacts on organisation and facilitate smooth functional in organisation.
TASK2
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: CMR can be explained as that approach which is
used by organisation to mange its customer by establishing and maintaining and establishing
relationship between customer and organisation. This will help business firm in meeting the
requirements of customer and helping them to full fill there needs by consumption of product
and services offered by organisation. This also benefit to organisation in maintaining customer
for longer period of time with firm. In context of John & Jenny E- commerce, organisation can
also use this function where it can establish relation with customer by use of different methods
and gain advantage in successful business environment (Shukla, 2019).
Customer portfolio analysis: It can be define as that tool which is useful for
organisation to manage customer relations and use this for longer period of time. Under this
system as systematic record can be establish where organisation can record the habits of its
regular customer to identity there behaviour related to products which they purchase frequently
to the organisation. In context to John & Jenny s this function will help organization
identification about the information related to their regular customer where it can manage
success in organisation and will enhance the functional productivity through regular inspection.
Advantages: Using this function will help organisation in identification of buying habits
related to customer where organization can easily target customer and manage productivity in
there work (Dubey, 2020).
Disadvantage: By regular consumption of same product the marginal utility drive from
the product can damage the demand and lead to change in behaviour which is not cover in this
function.
Customer intimacy: This system of CMR is based on feedback and review system
where manger in organisation try to establish relation with its customer and firm to with help
feedback and quires and help them to achieve maximum satisfaction. This is effective system
which can be use by John & Jenny s. This is because it help organisation in management of

various functional as well as solve problem of customer by improving service offered by
organisation in target market. It help in gain good position market and achieving objectives in
timely manner (Ervural, 2018).
Advantages: Help in solving the issue of customer which ill increase brand image of organisation
in its target market.
Disadvantage: major problem with this system is that some time customer are not satisfied by
solution made to its feedback which can impact negatively on relations with customer.
It can be evaluated from the above mentioned report that organisation is working in E-
commerce sector so it need to establish a proper system related to CRM. So it can use customer
portfolio system to establish proper CRM system because it help organisation in identification of
behaviour.
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.
Transnationally development: Transnationally can be define as method used by
organisation to go beyond the boundary of nation to performance its function related to sale of
goods and services offered by it. This is important for organisation to use this concept for
increasing market share as well as establishing global brand image of organisation. This will also
increase opportunity to firm where it can perform its factions in effective manner (Abdel-Basset,
2018). There are various advantages and disadvantages of this particular function . Some of these
are discuses below:
Advantages:
 This will help John & Jenny in identification of various growth opportunities where firm
can increase its profitability by performing its operations at global level.
 This will also help organisation in identification of various functions related to
achievement of its objectives which can help in future by maximization of productive
measures by using new and global technology
 This will also help organisation in identification of new and global techniques related to
its services where it can improve quality of its product and service and help individuals in
identification on Morden technology

 One more advantage of this function to organisation is that it will help in hiring global
employee who has more talent than other individuals and can help in performing with
better productivity.
Disadvantage:
 It will increase burden on organization manager because they have to perform more and
work more because of challenges related to internationalization of products (Vlados,
2019).
 This will also impact on financial capacity and ownership in organisation as it is a small
scale organisation which has to perform its business with limited resource and there is
non availability of finance to. This can impact negatively on organisation because
increasing business to global level require huge capital investment.
 Market expiation is not possible for organisation in changing environment and and this
strategy can cost highly if organisation use it in this challenging environment.
SWOT analysis
It is that framework which is used by organisation to identify examine internal factors
which impact on organisation. It include identification of strengths, weakness, opportunities and
treats in front of organisation. This will help in management of various function and lead
organisation in profitable direction. In context of John & Jenny, SWOT analysis is mentioned
below:
Strengths Weaknesses
 The major strength of these tools is that
they provide various opportunity to
organisation where it can increase
profitability for future period.
 One more strength of this function is
that it help in attracting investor in
organisation because regular changes in
firm will lead to development of its
various function (Madsen, 2016).
 The major weakness of this function to
organization is that it require large
amount of capital which is impossible
to invested by organisation on various
function.
 For using this function it is also
important for organisation to higher
talent employee who can perform at
global level. This is act as weaknesses
for organisation because it is imposable
for organisation to higher talented

employee for small scale.
Opportunities Threats
 There are various opportunists in front
of this tool to get improvisation in
implementation so that organisation can
use it for global growth of business an
achieving its targets.
 Increasing competition is major threat
in from of organisation while opting
this strategies because there are
different function which can impact on
resource of organization.
TASK3
P4 An annual itemised monthly cash flow forecast showing fixed and variable costs

Every business and organisation requires cash flow for analysing and examining the financial
position of entity. It is important for organisation to have a knowledgeable and skilled finance &
audit team so that it is easier to prepare a cash flow statement. It is defined as net amount of cash
which flows outside as well as inside the business (Lewellen, 2016). IT is classified into three
forms which are operating, investing & financing. Operating cash flows are those which
comprises of cash generated by entity main business activities. Investing are those which
involves all purchases of assets or investments within the corporation. Financing are those cash
flows which comprises of all proceeds gained from issuing debt as well as profitability. A CFS
measures and determine how properly organisation manages capital and debt. It also
complements the balance sheet & income statement. There are different methods of calculating
cash flow which are direct method & indirect method. It depends upon company to select most
suitable one. Also, there are different types of metrics used in CF such as net present value, IRR,
liquidity, cash flow per share, cash conversion ration, funding gap etc (Weber, 2018).
Mostly shareholders and business operators are concerned about the cash flow statement
as it gives all detailed detailed information of finance.
Cash flow forecasting
Particulars
First month (All
data in £)
Second month (All
data in £)
Cash receipts:
Investment by partners 10000
Sales revenue 5000 5000
Total cash receipts (A) 15000 5000
Cash payments
Office rent 1000 1000
Office furniture 500 0
Marketing 500 500
Legal and accounting costs 200 200
Project materials 0 500
Sub-contracted labor 2000 2000

Salary 1000 1000
Sundry cost 500 500
Total cash payments (B) 5700 5700
Net cash flow (A-B) 9300 -700
Interpretation- From the above stated table, it has been seen that in the first month net
cash flow is 9300 as because more profit was earned and less cash was given whereas in second
month cash flow as recorded -700 as because more cash was used and given. This, CFS is an
integral part of accounting part of financing.
P5 Ways of Break-Even Analysis applied on an organisational situation
Break-even analysis: It can be define as tool which is used by organisation for
identification of different stages which help in calculation of profit. It can also be define as the
framework to identify current situation of bushiness. This includes various this also help
identification of stages related to is no loss or no game at the break even. It is when total cost or
equal to total revenues (Robinson, 2016).
There are a number of advantages as well as uses for a business organisation of break even point.
Some of them are mentioned below:
 It aid in measurement of profit and losses at antithetic level of industry 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 break even analysis company can easily change their
sales price in order to earn profits (Kampani, 2020).
 Break even analysis also has an organization to effectively understand a relationship between
fixed as well as variable cost of an organization.
 Break even analysis also helps in knowing in advance the effects of cost as well as efficiency
changes in an organization on the profitability of company.
Calculation of BEP
Particulars First month (All Second month (All

data in £) data in £)
Fixed cost:
Office rent 1000 1000
Furniture 500 0
Salaries 1000 1000
Total fixed cost 2500 2000
Variable cost:
Marketing cost 500 500
Legal and accounting cost 200 200
Material cost 0 500
Labour 2000 2000
Sundry cost 500 500
Total variable cost 3200 3700
Sales 5000 5000
Break even point (In units)
Fixed cost /
contributio
n
Break even point (In units) 1.39 1.54
Break-even point (In revenues)
Fixed cost /
PV ratio
Break-even point (In revenues) 6944.4 7692.3
Working Note*
Contribution
Sales-
variable
cost
Contribution 1800 1300

PV ratio
Contributio
n / Sales *
100
PV ratio 36 % 26.00%
P6 Interpretation on key financial statements of a company for contribution in successful
management
In order to conduct successful management, key financial statements are required to be
interpreted in rightful manner. If it is talked about small business organisations like John &
Jenny, which is dealing within e-commerce industry, it is essential to interpret key financial
statements. With the help of this, company could effectively take right decisions in relation with
funding. Basically, John & Jenny is operating as a online retailer, where financial transactions
takes place both online and offline segments. Therefore, it can be said that it is vital for finance
mangers to look among different aspects like financial reports so that smooth transactions can be
made (Sharma, 2020).
Away with this, John & Jenny already has an effective finance department that conducts
monitory transactions with the help of both online and offline channels and record them in
financial books. Considering financial statements, it becomes really very easy for John & Jenny
to analyse revenue, profit margins and expenses that took place in a financial year. On the other
hand, some of the crucial financial statements and their interpretations are presented underneath:
Cash Flow statement: In present context, this type of financial statement helps an
organisation in focusing on both cash inflow along with the outflow. On the other hand, it can be
said that transactions that are taking place in John & Jenny (both external and internal) are
linking to cash are specifically being recorded within cash flow statements. Basically,
investments that are made by John & Jenny, expenses along with the profit that has been earned
by firm is recorded within cash flow can be considered as cash flow statement.
Profit and loss statement: In present context, profit and losses in books are recorded by a
company of a financial year can be defined as P&L Statement. In present context, John & Jenny
specifically records different losses and profits that took place in a financial year. Basically, this

type of 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 (Williams, 2020).
Balance Sheet: Another type of financial statement, which specifically helps John & Jenny
in recording different liabilities along with the assets. In other words, it can be said that John &
Jenny could easily record various current and other types of liabilities that takes place in John &
Jenny and also the different profits as well.
Task 4
P7 Key legislation & regulations that have major implications on small businesses
In present time, it has been analysed that parliament of a country specifically formulated
different types of rules and regulations that aid them in implying different operations of a
company like John & Jenny. Away with this, it has been analysed that government of United
Kingdom has formulated different key legislations and regulations that are required to be
followed by John & Jenny and some of these are presented underneath:
Consumer Law: This type of law is specifically being proposed by government of
United Kingdom in order reduce the different problems faced by the consumers like any sort of
fraudulent activities and so on. It is needed for John & Jenny to take into consideration of
different range of acts that are already covered under Consumer Law like Goods and Service
Act. On the other hand, it has also been analysed that this law specifically protects consumers
from getting conned by companies working in United Kingdom.
Employment Law: In every single organisation, employees specifically plays an
important role and this is why government has developed different rules and regulations that
helps employees to secure them any sort of discrimination, bias situation and so on. It is
necessary for John & Jenny as well, to follow all the legislations like Equality Act, 2010 and so
on, in order to protect employees from any sort of discrimination and offer them equal
opportunities. If it is talked about John & Jenny, then it is much needed to develop different
policies which follows specifically all the laws linking to employment. On the other hand, it can
be said that, John & Jenny may become able to develop positive environment for staff members,
which may effectively impact on their performance level (Harris, 2019).

Health and Safety Laws: It has been analysed that, Health and Safety at Work etc. Act,
1974 and so on are required to be followed by a business organisation like John & Jenny as it
may directly lead firm to enhance safety measures. It is required by John & Jenny to follow all
the rules associated with health and safety act in order to provide safety to all the staff members.
CONCLUSION
With the help of above mentioned report, it is being concluded that small business
organisation plays an important role in putting positive impact on economic conditions at
international level. On the other hand, it has also been summarised that rules and regulations
formulated by parliament of a country helps a small business organisation in performing
different range of operational activities in much effective and in efficient manner as well. Away
with this, proper planning if done by a small business organisation, then it can may help firm in
sustaining within the market for a longer period of time. Including this, maintaining relationship
with customers through satisfying them may lead a company to enhance profit margins and
brand image at marketplace.

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