Managing and Running a Small Business

This study evaluates how a small business allocates resources to achieve business objectives, examines customer relationship management processes, and explores the benefits and drawbacks of developing transnationally. It also covers cash flow forecasting, break-even analysis, and key legislation affecting small businesses.

Managing and Running a
Small Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
LO 1.................................................................................................................................................1
P 1. Evaluating the main considerations a small business or social enterprise needs to address
when planning and allocating resources to achieve business objectives....................................1
LO 2.................................................................................................................................................2
P 2. Evaluating different processes of customer relationship management for a small business
or social enterprise......................................................................................................................2
P 3. Examining small business can develop transnationally and determine the benefits and
drawbacks....................................................................................................................................3
LO 3.................................................................................................................................................4
P 4. Producing annual specified monthly cash flow forecast......................................................4
P 5. Explaining break-even analysis with specific organizational situation...............................5
P 6. Interpreting key financial statements which helps in contributing to success of the
company......................................................................................................................................6
LO 4.................................................................................................................................................7
P 7. Examining key legislation that have implications on small businesses...............................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Small business is usually owned independently which is limited in size in order to gain
operational performance and productivity. This study will evaluate how a small business
allocates resources to achieve business objectives. This study also examine various processes of
customer relationship management for a small business. However, it also helps in developing
transnationally and determine the benefits and drawbacks. Moreover, this study also analyse a
cash flow forecast, budget and break-even analysis and interpreting key financial statements.
Moreover, this study also evaluates the key legislation and regulations that have associations
with small businesses. Assael Architecture Ltd. is an architectural firm which has been
established in the year 1994.
MAIN BODY
LO 1
P 1. Evaluating the main considerations a small business or social enterprise needs to address
when planning and allocating resources to achieve business objectives.
Small business is usually owned independently which is limited in size in order to gain
operational performance and productivity (Burns, 2016). Small business objective helps in
effectively maintaining the profitability by ensuring that the revenue of the business tends to stay
ahead of the cost business. It helps in controlling the cost and helps in maintaining the profit
margins for the company. Planning adequate degree of resources such as premises and
equipment which helps in effectively allocating various range of resources in order to meet the
small business objectives. It is very useful in effectively identifying the key resources and skills
in order to develop high degree of job specifications. The key consideration which in turn has to
be taken into measure by effectively articulating the goals, vision and objectives of the company.
Effectively understanding the key aspects associate with the employment legislations is one of
the most prominent measure to carry out small business or social enterprise which helps in
addressing, planning and allocating resources in order to attain business objectives (Tidd, and
Bessant, 2018). Establishing the optimum organizational structure and effective human resource
management helps Assael Architecture Ltd. to allocate resources in order to attain business goals
and objectives. Project management techniques such as Gantt charts, timeline, work breakdown
structure and critical path analysis are considered to be the key prominent measures which in
turn helps in effectively attaining the goals and objectives of the business. Developing an
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effective business plan and evaluating the key resources to carry out the business is of utmost
importance which eventually leads to high degree of operational goals and objectives. However,
use of key networks, outsourcing and key external advisers are considered to be of utmost
importance (Gruber and et.al., 2015). Team building and performance management, retention
and recruitment of the employees is very useful as it helps in addressing the needs of the small
business to attain the goals and objectives of the company.
LO 2
P 2. Evaluating different processes of customer relationship management for a small business or
social enterprise.
Customer relationship management for a small business is considered to be of utmost
importance because it helps the team and individual in effectively managing the sales effort and
customer communication (Crane and et.al., 2019). An effective customer relationship
management is considered to be of utmost importance as it helps the team in effectively
evaluating the shortening sales cycle and effective repeated sales process. Effectively assessing
the value of the customers and also retaining and acquiring customer’s needs is one of the most
prominent of the most prominent approach in building customer relationship. The company must
focus on developing customer care programmes and also affective channels for customer
communication in order to analyse the needs and problems (Storey, 2016). Effective customer
communication and resolving their issues helps in building higher degree of customer
relationship which in turn eventually leads to higher operational growth and sustainability.
Moreover digital platforms are also one of the most Prominent measure because it helps in
developing effective customer relationship which includes email marketing, online chats,
forums, mobile devices which helps in providing real-time solutions and responses to the
customers. Online ratings and testimonials are also one of the most prominent feature which are
very useful for developing customer relationship management for the Assael Architecture Ltd.
small business and social enterprises. Use of effective social media platforms such as Instagram,
Facebook, Twitter, et cetera considered to be the key prominent platforms which helps in
building high degree of relationship with the customers which eventually leads to higher
profitability and sustainability of the small business. Customer relationship management is used
within a small business in order to manage clients, contracts and also create high degree of sales
lead. It is very important and helps in tailoring the market needs and also eventually leads to
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higher sustainable growth and efficiency of Assael Architecture Ltd. Developing a network
development program and value proposition development in turn is considered to be as one of
the most effective measure because it helps in developing relationship with the customers.
Customer portfolio analysis helps in evaluating the needs and want of the customers (Hillary,
2017). This way it is considered to be very prominent in delivering the quality products to the
customers. Moreover, customer life cycle management and value proposition development are
also one of the most effective measures because it helps in improving better relationship with the
customers.
P 3. Examining small business can develop transnationally and determine the benefits and
drawbacks.
A transnational sale tends to carry out in more than one country. A transnational business
strategy is one of the most prominent international business structure which has more business to
carry out their operations with cooperation and interdependence between various locations of
business nationally and internationally (Stokes and et.al., 2016). A transnational business
strategy is very useful because it is considered to be a less costly affair which has it privatising
global standardisation and improve the efficiency and productivity of the small business.
Moreover, a translational business has a centralising to effectively use various set of resources
which helps in cutting down the cost of the Assael Architecture Ltd. business.
Transitional sales is considered to be one of the most prominent method associated with
the sales when sales representative tends to seek out various degree of prospect and it also helps
in developing relationship with the customers. Transactional business model is considered to be
an online business method where users tend to engage in various set of transitions which helps in
generating revenue by charging commission fees from the users in order to carry out successful
transaction.
One of the biggest advantage associated with the transnational strategy is that it helps
small businesses and expanding their operations of the business because it helps the organisation
in adapting to specific strategies for higher market share and profitability (Goworek and et.al.,
2018). Translational strategy is also an effective measure for the company because it helps in
saving the expenses of the small businesses and employing cheap labour and raw material within
the Assael Architecture Ltd. Company. It is also very useful in implementing good things and
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culture of various international countries into the business which helps in providing higher
degree of quality services to the customers.
One of the biggest disadvantage of transnational strategy for the small business is that company
do not have complete understanding of the international market which can be influencing for the
business. High degree of legal, operational, political risk is one of the most influencing factor
which in turn largely affects the operations of the business (Kirton, and Greene, 2015). This in
turn also results in loss for the Assael Architecture Ltd. Company. High degree of loss of control
while carrying out transnational sales within a small business is also one of the key disadvantage
associated with this strategy.
LO 3
P 4. Producing annual specified monthly cash flow forecast.
Cash flow statement is considered to be a financial statement which has been providing a critical
set of data associated with the cash inflows and cash outflows of the company. Cash flow
statement helps in evaluating the ongoing operations which has been carried out internally and
externally of the small business (Walker, Gowland, and Points, 2018). Cash flow statement is a
very useful because it helps in evaluating the operational activities, investing activities and also
financial activities of the business. At the end it helps in determining the net cash flows of the
specific period in order to examine if the company is in profit or loss. Cash flow statement is one
of the most prominent method which helps in evaluating from where the money has been
generated and where the money has been invested. Cash flow statement is one of the most
prominent measure which helps the company in managing their cash position. Casual statement
is very useful in examining if the company has optimum amount of cash to carry out their day to
day activities and operational activities associated with the business operations.
Cash Flow Statement
PARTICULARS 31ST March, 2020
Operating activities
Net income 60000
Gain on the sale of the assets (40000)
Decrease in inventory 20000
Net cash flow from operating activity 40000
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Investing activity
Sale of the equipment 1,00,000
Net cash used for investing activity 100000
Financing activity
Proceeds from long term borrowings 35000
Net cash provided by the financing activities 35000
Increase in cash and cash equivalents 175000
Beginning of the year 43000
End of the year 218000
P 5. Explaining break-even analysis with specific organizational situation.
Breakeven analysis is one of the most important financial tool which helps in determining at
what stage the products of the company a profitable. Breakeven analysis is considered to be
useful because it helps in examining the relationship between the fixed cost, variable cost and
revenue of the company (Vance and Paik, 2015). Moreover a company which tends to have low
fixed cost eventually have low breakeven point of sale. Contribution for unit is calculated as
difference between sale price per unit and variable cost per unit. The breakeven point is
calculated by dividing fixed cost of the period two contribution per unit. Breakeven analysis is
considered to be prominent because it helps in determining at which unit of the product
maximum profit can be generated by the company (Break-Even Analysis – Definition, Formula
& Examples, 2020). It also has demanding the change in profits because of change in price of the
products are altered. Breakeven analysis is useful in setting the best price for the product in order
to fetch higher degree of profit for the specific product within the Assael Architecture Ltd. small
business. Breakeven analysis is also useful in making smart degree of precision and attain
specific revenue targets.
Total fixed cost= $1000
Selling price per unit = $100
Variable cost per unit= $40
Contribution per unit= $ 60
Break- even point= Fixed cost / contribution per unit
Break- even point = $1000/ $60
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Break- even point = 16.66
P 6. Interpreting key financial statements which helps in contributing to success of the company.
Breakeven analysis is one of the most important financial tool which helps in determining at
what stage the products of the company a profitable. Breakeven analysis is considered to be
prominent because it helps in determining at which unit of the product maximum profit can be
generated by the Assael Architecture Ltd. Company. Cash flow statement is a very useful
because it helps in evaluating the operational activities, investing activities and also financial
activities of the business.
Cash flow statement is one of the most prominent method which helps in evaluating from where
the money has been generated and where the money has been invested.
Variance analysis is it effective quantitative approach the chairs and evaluating the difference
between actual and the budgeted behaviour. It helps in evaluating the cause of the deviation
weather in the planned budget (Khan, Flanagan and Lu, 2015). It also helps in controlling the
cost for carrying out operations of the small business. Moreover, variance analysis is an effective
qualitative tool which helps in achieving the business targets And is also very useful in ensuring
that resources of the organisation has been efficiently utilised. Variance analysis is an effective
tool which helps in assigning the responsibilities of the company to various employs of the
different departments of small business.
Budgeting is also one of the most effective financial tool which helps in examining the income
and expenditure of the particular period. It is very useful in balancing the income and expenses
for the said period and it also helps the management of the company to examine if the company
has enough amount of cash to carry out their business operations. Budgeting is also very useful
in controlling and monitoring the business performance which eventually leads to higher
sustainable growth and efficiency of the business.
The key financial statements which in turn are required for successful management of the
organisation are income statement, balance sheet, cash flow statements and statement of retained
earnings.
Income statement is considered to be one of the most prominent financial statement because it
helps in clearly stating whether the company is in a good position to carry out business or not. It
helps in examining the total revenue and expenses of the organisation for the particular period
(Bititci, 2016). Small business owners tend to use income statement because it helps them in
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finding out what are the key prominent areas of the business which are under budget and over
budget. It also helps them in a valuating which are the most profitable units of their business and
order to improve the business performance and productivity in Assael Architecture Ltd.
Balance sheet is one of the most prominent financial statement for the small business enterprise
because it helps in shareholders examining the financial position of the company. It also helps in
displaying the income in revenues for the specific period (Walker, Gowland, and Points, 2018).
It is very useful tool to provide a clear snapshot of firm’s financial position for the specified
period. Retained earnings statement is very useful for shareholders to indicate how much equity
the shareholder collectively own within the Assael Architecture Ltd. organisation.
LO 4
P 7. Examining key legislation that have implications on small businesses.
Employment law: This is one of the effective legislations because it helps workers and
employees where they have been protected against the discrimination. There are various
characteristics such as disability, age, pregnancy, religion, caste, etc. which in turn eventually
helps in protecting the employers and employees of the organization from such discrimination
(Tidd, and Bessant, 2018). Employment law helps in giving equal and fair treatment to the
employees which in turn results in higher performance and productivity of the Assael
Architecture Ltd. small business.
Environmental and waste regulation: United Kingdom waste policy, environment and
legislations and waste regulations Ensures that the small businesses work in an environmentally
friendly and ecological manner which do not have the environmental conditions of the economy.
It helps company to focus on recycling and waste management activities in order to work in a
prominent manner. Environmental law is very useful because it helps in setting a fundamental
structure where the authority focuses on waste management and it also helps in reducing the
emission of carbon dioxide into the environment. This environmental law is very useful because
it helps in preventing hazards to humans, living creatures, property and plants.
General data protection regulation: General data protection regulation is very useful because it
helps in protecting the useful information of the various stakeholders within the organisation
(Stokes and et.al., 2016). The GDPR act is very prominent because it helps in Ensuring that the
information is transparently, lawfully and fairly used by the company. Data protection act is
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useful in controlling how the personal information of the individual has been used by the
business and government officials.
Health and safety law: Health and safety laws of the United Kingdom tends to state that the
reasonable set of practice must be carried out within the Assael Architecture Ltd. organisation in
order to ensure that people are working within the safe environment (Khan, Flanagan and Lu,
2015). One of the key objective of the health and safety law is to protect employees within the
organisation from any sort of hazardous activities. It is very useful in protecting the wellbeing of
the employers and employees within the small business. Ineffective health and safety standards
leads to loss of employees and increased cost and profitability for the company.
Hence, organization complying with Employment law, Environmental and waste regulation,
General data protection regulation and Health and safety law in turn helps in improving the
performance and profitability of the company by working in legal manner.
CONCLUSION
From the conducted study it has been summarized that, planning resources in advance such
as premises and equipment which helps in effectively allocating various range of resources in
order to meet the small business objectives. Project management techniques such as Gantt charts,
work breakdown structure, timeline, and critical path analysis are considered to be the key
prominent measures which in turn helps in effectively attaining the goals and objectives of the
small business. Customer relationship management is used within a small business in order to
manage clients, contracts and also create high degree of sales lead. A transnational business
strategy is very useful because it is considered to be a less costly affair to carry out business
internationally. The key financial statements which in turn are required for successful
management of the organisation are income statement, balance sheet, cash flow statements and
statement of retained earnings which tends to contribute towards success of the business. It has
been summarized that, Employment law, Environmental and waste regulation, General data
protection regulation and Health and safety law are key legislation that have implications on
small businesses
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REFERENCES
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the age of globalization. Oxford University Press, USA.
Goworek, H and et.al., 2018. Managing sustainability in the fashion business: Challenges in
product development for clothing longevity in the UK. Journal of Business Research.
Gruber, M and et.al., 2015. Managing by design.
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collaborative technologies.
Kirton, G. and Greene, A.M., 2015. The dynamics of managing diversity: A critical approach.
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Stokes, P and et.al., 2016. Managing talent across advanced and emerging economies: HR issues
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Storey, D.J., 2016. Understanding the small business sector. Routledge.
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
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Vance, C.M. and Paik, Y., 2015. Managing a global workforce. Routledge.
Walker, M.J., Gowland, M.H. and Points, J., 2018. Managing food allergens in the UK retail
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Online
Break-Even Analysis – Definition, Formula & Examples. 2020. [ONLINE]. Available through<
https://cleartax.in/s/break-even-analysis >
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