The Entertainer: Business Operations and Legal Compliance

The report discusses the importance of managing operations and execution activities for a small business like The Entertainer. It highlights the need to forecast future possibilities, allocate resources accordingly, understand exact operations, and manage customer relationships effectively. The report also emphasizes the significance of legal compliance with laws such as employment law, customer's law, and record keeping act. By addressing these factors, managers can ensure the success of a small business in both domestic and international markets.

Managing and Running a
Small Business

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Main considerations required for small business needs for planning and allocating
resources to achieve objectives..............................................................................................4
M1...........................................................................................................................................6
M2...........................................................................................................................................6
TASK 2............................................................................................................................................6
P2. Evaluation of processes of customer relationship management for a small business......6
M3...........................................................................................................................................8
P3. Benefits and drawbacks which small business can develop for transnationally and
determination..........................................................................................................................8
M4.........................................................................................................................................11
TASK 3..........................................................................................................................................12
P4. Monthly cash flow showing fixed and variable costs set against income......................12
P5. How break- even analysis could be applied to an organisational situation....................13
M5.........................................................................................................................................14
P6 Interpretation of key financial statements and its contribution in successful management of
business.................................................................................................................................15
TASK 4..........................................................................................................................................17
P7. Key legislation and regulations that have implications on small businesses or social
enterprises.............................................................................................................................17
M6.........................................................................................................................................18
CONCLUSION..............................................................................................................................19
.......................................................................................................................................................20

INTRODUCTION
Managing and running a small business is a wide task that helps in executing ideas and
thoughts of an entrepreneur in a business plan. Main objective of implementing these ideas is to
provide quality products and services to customers on the basis of their requirements and needs.
In this report the organization chosen is The Entertainer, which is a toy retailing company. ‘‘The
Entertainer company’’ was founded by a team of husband and wife in the year of 1981. Apart
from that it is started by them in local toy shop. In 2001 it starts to expand its business
operations. The report is going to analyse needs of a business in order to plan and allocate
resources for achieving set goals and objectives. This report also covers evaluation of procedure
for customer relationship management, development of small business transnationally and its
drawbacks as well as benefits. An annually itemized monthly cash flow is presented in the report
which shows variable and fixed cost. At last, break even analysis presented for better
clarification of situations.
TASK 1
P1 Main considerations required for small business needs for planning and allocating resources
to achieve objectives.
The businesses need various type of resources to achieve the business objectives. ‘The
Entertainers’ also plan and allocate its resources very efficiently to achieve goals. There are
various ways in which resources allocated by the enterprises (Ali and Babiker, 2017). Some of
these as follows.
 Planning resources: ‘The Entertainers’ plan its resources carefully. It has to plan about
needs of premises, equipment’s, peoples. It need to address the required skills to achieve
objectives. These activities include the management operation too. Because plan will be
about all over business operation and management is a vital task. Utilization of
management decides the success percentage of a business. At this stage the resources and
skills needed to develop exact job specification.
 Organization structure: The organization structure is also a main thing to address
because it is too important for business purpose and organizational structure. By the help
of applying an appropriate organizational culture. The main focus will be on human
resource management. The proper conduct should be made by following appropriate

procedure such as recruitment and retention, performance appraisal and management.
Apart from that team building also a main concept because without it the work target
can't be achieved.
 Outsourcing: Outsourcing play a vital role in fulfilment and allocation of resources.
Outsourcing, external advisor and networks are important factors (Bajo and et.al., 2012).
By the help and analyses of these factors various needs of business may be fulfilled. The
external advisors help in allocating the resources in best ways.
 Employment legislation: It is the key aspect of business premises. The entertainer have
to use that aspect also to succeed in life span of business. It helps in recognition and
application of equality and diversity. The employment legislation some time work as
motivator for the employees. It helps to recognise the performance of employees. It
accesses to suit the guidance notes. The candidate profile must be shared fastly.
 Project management techniques: The project will be managed through the various
techniques. Managers may use various type of chats and some other methods such as
critical path method.
Apart from these there are various challenges faced due to resource allocation so ‘The
Entertainers’ have to address some of following challenges.
There are various resources required by company for running business successfully such
as:
Financial Resources- It is most important resources required for managing and running
new business. Finance is life blood of any organisation for carrying out various activities. Money
is required for purchase of raw materials, payment, carrying out task and others. In case of
shortage of fund, it can be borrowed from banks, financial institutions.
Human Resources- They are the person such as employee, manager, workers and other
for managing and running business. In order to get success of organisation, enterprise requires
skilled, knowledge, experienced people. They are important resources of any organisation. It is
necessary for firm to hire strong team of human resources through effective methods.
Physical Resources- There are some physical resources which are required by business
such as proper work space, adequate information systems, marketing materials, working
telephone line to carry out work in effective and efficient manner so that they can get success.

Before acquiring such resources, it is essential to analyse requirement of physical resource before
purchase.
M1
There are various tools and techniques which helps in planning and allocating resources
in organisation which are as follows:
Budgeting- With help of budgeting tools and techniques, respective organisations can
plan funds and allocate to various departments of organisation. As resources should be planned
very effectively and efficiently in business for effective outcome in order to achieve set
outcomes. It is very important for business to plan each and every activities and accordingly
allocate resources with help of budgeting tools.
Bar Charts- This tools also help respective organisation for better planning and
allocating of resources in organisation. The prepared chart reflect requirement of resources in
particular department and field for better outcomes. Therefore, it can helps to achieve goal and
objectives of business.
M2
It is very important for organisation to have proper planning and allocating resources in
order to achieve business objectives. This can be made by analysing various tools and techniques
effectively and allocating as per requirement so that better outcome can be achieved. On the
basis resource management practices an organisation can attain their target objectives and goals
in effective manner. Planning and allocation of resources define how a firm manage their assets
in respect of contingency situations so that they can attain desired objectives effectively. All
these feature determine growth strategy of firm.
TASK 2
P2. Evaluation of processes of customer relationship management for a small business.
Customer relationship management is a technique for managing company and its
customer’s relation. The all customers considered in this processes such as potential as well as
current. It will be conducted only for the improvement in customers and company’s relations.
Now in those day's various software also developed for that process. Because a good CRM leads
an amazing sales growth.

‘The Entertainers’ can use various channels in order to communicate with customer and
their care programmes, which can be developed by the following ways:
1. Digital platform : A digital platform refers to the software or hardware of a site
(Beaumont, WHITAKER and PEDERSEN, 2013). Followings are the various digital
platform which can be used by the firm for customer care and better communication.
 Social media: it is very popular mode for supporting customers in today's world. It
refers to the Social media are interactive computer-mediated technologies that
facilitate the creation and sharing of information, ideas, career interests and other
forms of expression via virtual communities and networks.
 E-mailing: Through E-mailing service firm can contact with customers and receive
and solve their problems via e mails.
 Online Chat: online chat is a mode via which the real time response is provided to
customers. So it is also a good way to set up good customers relation.
 Forums for real time response: the forums are provided to the customers via e
mail or through a site. Which have to filled by the customers and real time solution
is provided by the respective firm. The Entertainer may use that way too along with
other.
 Support team: support team is a special type of team which is established
specifically for providing support to the customers (Bridge and O'Neill, 2012). That
team work only for the customers support and loyalty. It provides immediate
solution against the problems of customers through telephonic contact.
 Specific application: In this method a specific app is designed by the firm for
customers problem recognition. The entertainer also can use that way by developing
a app may include the various process of operating variety of toys and instructions
regarding safety for children while playing.
2. Non- digital platform : It refers to that type of platform which excludes the features of
digitalization. It include face to face services. At this face the face to face discussion is
made with the customers and solutions are also provided with the physical presence. ‘The
Entertainers’ use that mode by establishing various service centres. These service centres
helps to customers by providing repairing services, replacing the defective one and etc.

Above mentioned are the various ways which are used by the firm to establish its good
CRM. And that relationship is very important for the business to grow it's activities and
profitability in future.
M3
The elements of customer relationship management process for achieving business
objectives are as follows:
Marketing- It is very important for respective organisation to have proper marketing
channel for their goods and services in order to achieve goal and objectives in effective and
efficient manner. This can be possible with help of CRM so that consumer get attached towards
organisation and their goods.
Customer Service- In order to create effective CRM, it is very important for organisation
to provide high quality good and customer service in order to achieve goal and objectives of
business. By providing high quality goods and services, effective outcome can be achieved in
proper manner along with increase in goodwill and brand value in market.
P3. Benefits and drawbacks which small business can develop for transnationally and
determination
A small business can be developed transnationally with the help of various factors very
easily. Trans nationalization refers the development of activities across the boundaries of nation
(Crane and Matten, 2016). But these factors are so much important for developing the business
transnationally. The management of The Entertainers can use following ways to expand its
business across the nation boundaries
There are 5 steps in the process of customers relationship management. That 5 step
process model is very popular for effective management of customer’s relationship. Process of
that model is as follows.
 Customer portfolio analysis: This is the first step of CRM in which the customer base is
analysed. It is determined that what type of customers are more profitable.
 Customer intimacy: It refers to the process of getting familiar with the target customers.
Because without a good interaction the good relationship can't be established. Every
interaction with a customer create an opportunity for business.
 Network development: It means that the strong development of relationship with the
variables which are critical in the path of success or serving the customers properly.

 Value proposition development: After targeting the customer groups and developing
the networks the values for customer will be created. If customers value increased, then it
create the value for organization.
 Customers life cycle: It means the ideal customer journey. It relates with the continues
relationship with the customers. For better management of that cycle it requires more
attention.
 Global sale increment: The sales enhanced at the global level for expanding the business
operations.
 Multinational business models: These refers to those models which helps the
organization to do the business operations in multiple countries. These models are
worked in import and export markets. The country adopts these model according to the
demand and supply situations in the respective countries and offer specific products to
specific markets. ‘The Entertainers’ focuses on delivering only the toy products.
Transnational strategies: Transnational strategies are adopted by the small business for
surety of success in the foreign market (Drucker, 2012). It may include consumable and
as well as entertaining goods. The individualized transactions are done through the
business strategies. But there is also a drawback of this variable because labour
exploitation may take place. And benefits are that the new technologies and more skilled
workers interact and advantage can be acquired. That strategy may include the process of
Exporting.
Exporting: Exporting refers to the process of spread or introduce the ideas and beliefs to
another country and it include sale of goods to foreign country market (Drucker, 2012). It follow
a specific procedure which have to follow by ‘The Entertainers’. Following steps have to follow
by ‘The Entertainers’:
1. Having an Export Order: ‘The Entertainers’ have to obtain a export order, it is the initial
phase of exporting. It can be taken in form of proforma invoice or purchase order or letter
of credit.
2. Having received an export order, ‘The Entertainers’ should examine it with reference to
the terms and conditions of the contract.

3. The Entertainer approaches the bank on the basis of laid down procedures for the pre-
shipment credit. Having received credit, it starts to manufacture / procure and pack the
goods for shipment overseas.
4. The exporter needs to apply on a form known as AR4 or AR4A to the Central Excise
Range Superintendent for obtaining excise clearance. Form A is filed when goods are to
be cleared after examination by the excise inspector. In all other cases, form AR4A is
filed.
5. Pre shipment inspection is done by the office appoint through Govt. clarification is
marked after inspection of good. After that goods send to the port of shipment.
6. After fulling all port formalities, the goods send to the importer.
Benefits
Transnational business is very effective and beneficial. There are various benefits of trans
nationalization of business and these benefits also clarify that why ‘The Entertainers’ adopt the
strategy of trans nationalization.
Business across the nation: The strategy helps to setting up business transnationally or
can say that across the boundaries of nation (Durst, Yip and Lee, 2015). It is very beneficial for
expansion in business at international level.
Introduction with advance technology: When a business will start its set up at
international level then the advantage can be taken regarding new technology. Because some of
the foreign countries have advanced technology then the domestic country of respective business
firm.
Skilled labour: More skilled labour is very beneficial for every type of business. So by
entering into new developed countries the advantages can be acquired of more skilled worker.
These will enhance the quality of work and attract more customer with higher quality products
and services (El-Rafei and et.al., 2017).
Create brand image: Transnational business creates the image worldwide. That type of
strategy introduces the product worldwide which built its reputation and distinct image.
Small business to supermarkets: It is very beneficial for small businesses because it
will help to expand these from small to supermarkets. Without the trans nationalize of business
the expansion at worldwide is not possible.

Path of success: The expansion of business is very important for the success in market. If
a businessmen expand the business worldwide then internationalization is path for that.
Drawbacks
Drawbacks are the points which will not
Financial risk: The diversification brings the risk of finance. Because it is very
expensive activity. Sometime it costs very huge but return is almost zero so the businesses have
to bear a higher loss.
Foreign contracts: When the business enter into foreign markets then it has to follow the
foreign employment contracts and regulation. Which will very difficult to understand for a new
business and brings a legal risk.
Foreign culture: At the time of diversification of business it has to face the foreign
culture. It is a big challenge for the small business, because at the earlier stage respective
business have not proper resources to face a very new culture.
M4
The transnational operations using the stage model of internationalisation, assessing both
benefits and challenges are:
Benefits
Skilled labour: More skilled labour is very beneficial for every type of business. So by
entering into new developed countries the advantages can be acquired of more skilled worker.
These will enhance the quality of work and attract more customer with higher quality products
and services (El-Rafei and et.al., 2017).
Create brand image: Transnational business creates the image worldwide. That type of
strategy introduces the product worldwide which built its reputation and distinct image.
Drawbacks
Foreign culture: At the time of diversification of business it has to face the foreign
culture. It is a big challenge for the small business, because at the earlier stage respective
business have not proper resources to face a very new culture.

TASK 3
P4. Monthly cash flow showing fixed and variable costs set against income
Cash flow statement: It can be defined as a statement in which information regarding
cash inflows and outflows are mentioned (Goffee and Scase, 2015). It is mainly made for a
defined time period. It helps interested parties to analyse that organisation is financially strong or
not. While The Entertainer is willing to expand its business worldwide than it is very important
for the managers to forecast possible future expenses that may take place in future . A forecasted
cash flow for The Entertainer is as follows:
Forecasted Cash flow Statement
Cash distributed Jan Feb March April May June
Total revenues 10000 12000 9000 11000 12500 13000
Direct material 1500 1250 1250 1300 1450 1580
Direct labor 1250 750 500 500 1350 1400
Overhead 1000 500 500 700 2700 2850
Selling and distribution 750 750 750 800 850 950
Total variable expenses 4500 3250 3000 3300 6350 6780
Fixed expenses 3000 3000 3000 3000 3000 3000
Total cost use 7500 6250 6000 6300 9350 9780
Surplus/ Deficit 2500 5750 3000 4700 3150 3220
July August September Oct. Nov. Dec Total
11500 10500 10000 9500 9000 15500 133500
1650 1458 1589 1685 1985 1785 18482
1435 1445 1474 1458 1568 1589 14719
2950 2987 2250 1850 1650 1250 21187
850 650 720 715 785 795 9365
6885 6540 6033 5708 5988 5419 63753
3000 3000 3000 3000 3000 3000 36000
9885 9540 9033 8708 8988 8419 99753
1615 960 967 792 12 7081 33747

From the above forecasted cash flow it has been analysed that organisation may receive a
surplus of 33747 in upcoming period, total variable expenses are 63753 and total fixed cost is
36000. Total estimated revenues of the company are 133500.
P5. How break- even analysis could be applied to an organisational situation.
Break Even analysis: It refers to the point where the organisation is not in profits and
loss both situation (MacDonald and Coffield, 2015). At this stage all the expenses of the
company get recovered with the sales of the products and remains zero revenue. Quantitative
technique for calculation break even point is as follows:
BEP = Fixed cost/ selling price per unit – variable cost per unit
Calculation of BEP=
Fixed cost= 120000
Selling price per unit= 100
Variable cost per unit= 40
BEP= 120000/100-40
BEP= 120000/60
= 2000.
The organisation needs to sell 2000 units to recover all its expenses.
As The Entertainer is currently operating business in UK successfully. The organisation
is a small business firm so it is very essential for the company to examine the point where it can
recover all its expenses with the help of sales. With the help of BEP analysis company can easily
recover its total expenses that are incurred during the production process as it can guide to
manufacture appropriate units (Macht and Weatherston, 2014).
Application of BEP:
1. It is used to determine the actual point where the company can achieve higher profits.
2. BEP analysis guide the managers to set appropriate prices for the products that are
manufactured by the company.
3. Managers may get the idea of such units that needs to be manufactured to recover all the
costs that are related to production process.

Illustration 1: Break even analysis
From the above image it can be examined that when revenues and total costs are same
than it would result in break even point. Fixed costs always remain same for the production and
variable costs always fluctuate according to production units.
M5
For an organisation, it is required to analyse their financial condition in respect of
identifying their future needs for the effective attainment of target objectives and goals. In
context of The Entertainer, it is needful for them to examine financial condition of the firm in
order to managing their future objectives.
Qualitative approach:
These are theoretical framework of information analysis that assist in determining
appropriate information through different resources. Major of these approaches are to define
meaning of a particular term through which individual can build an understanding easily. These
approaches are far from data and statistical information as its base determine information in
theoretical manner. In qualitative manner, cash flow statement can be defined as a statement in
which information regarding cash inflows and outflows in an organisation. In respect of
breakeven analysis, it refers to the point where the organisation is not in profits and loss both
situation.
Quantitative technique:
It is define as planning, directing, organising and controlling and require mathematical
techniques and diversifies knowledge. In context of The Entertainer, the company can gather
information in numerical form which will help them in decision making process.

Analytical technique:
It refers to the method or technique of analyses of information gathered which helps in
determining the cash flow in organisation. In respect of The Entertainer, the company need to to
do analyses of its financial statements which will help them to improve their profitability.
In respect of The Entertainer, firm can analyse effectiveness of cash management
practices. On the basis of above cash flow forecast of firm it has been identified that firm receive
a surplus of 33747 over the expenses of expenses are 63753. it assist them in attaining growth
sustainability at desired level. Whereas the break even analysis which is a tool used to determine
whether total cost is equal to total revenue of a firm. It also helps in observing relationship
between variable cost and fixed cost. Through break even analysis a firm can identity whether
sales are covering cost incurred like rent, taxes, raw materials and so on. As per this analysis,
firm needs to sell 2000 units to recover all its expenses. As through this they can manage
business financial resources in effective manner.
P6 Interpretation of key financial statements and its contribution in successful management of
business.
Financial statements: These are the statements that are formulated by the accountants
and managers of a company (Nowotarski and Paslawski, 2015). And examined by internal and
external interested parties in order to determine that organisation is attaining profits or facing
losses. Main objective behind preparation of financial statement is to analyse actual position of
company. Following statements are formulated by the accountants of The Entertainer:
Income statement: It is mainly formulated to record all the income and expenses of an
organisation so that actual profitability can be analysed. In ‘The Entertainers’ income statements
is formulated to determine all the incomes and expenses of the company that have taken place in
a specific time period.
Income statement
Particulars Amount(£)
Sales 150000
Cost of Goods Sold 115000
GROSS PROFIT 35000
Expenses
- Salary 2500

- Rent 5000
OPERATING PROFIT 27500
Depreciation 1200
PROFIT BEFORE TAX 26300
Taxes - 20% 5260
NET PROFIT 21040
RETAINED EARNINGS 1000
DIVIDENDS 20040
Balance sheet: It is formulated to analyse total performance of the organization. It
depicts liquidity, assets, liabilities, equities and other elements that are required by stakeholders
to make allocating decision (O’Connor and Kelly, 2017). It helps the external interested parties
like investors to determine that company is able to provide them valuable returns on their
amount invested or not.
Balance sheet
ASSETS Amount(£)
Cash/Banks 35000
Inventory 15000
Acc Receivable 36000
Fixed Assets
- Gross 12800
- Acc Depreciation 2000
- Net Value 10800
TOTAL ASSETS 96800
LIABILITIES
Bank Loans 85000
Accounts Payable 16600
TOTAL LIABILITIES 101600
EQUITY
Capital 80000
Retained Earnings 12400

TOTAL EQUITIES 92400
TOTAL EQUITY + LIABILITIES 194000
Cash flow statement
Particular Amount
INITIAL BALANCE 68000
CASH IN
From Operational activities 15000
From Investment activities 11000
CASH OUT
From Operations activities 35000
From Investment activities 24000
FIANAL BALANCE 35000
From the above statements it has been analysed that Gross profits of The entertainer are
35000, total sales is 150000 and cost of sales is 115000. Net profits of the company according to
the income statements is 2104 which means the organisation is earning profits continuously.
From the balance sheet of the organisation it has been concluded that organisation is having
35000 cash and total assets of the company are 96800. Organisation is having internal liabilities
that include equities are 92400 and total liabilities of the company are 101600. From the cash
flow of the company it has been observed that total cash that organisation is having is 35000.
According to above analysis it has been identified that organisation is in good situation because
it is generating profits with passing of time.
Ratio analysis: Following ratios are calculated for analysing the position of organization:
Name of ratio Formula Calculation Results
Liquidity ratio
Current ratio Current assets/current 86000/16600 = 5.18

liabilities
Quick ratio Quick assets/current liabilities 71000/16600= 4.28
Profitability ratio
Net profit ratio Net profit/sales*100 21040/150000*100 14.02%
Gross profit ratio Gross profit/sales*100 35000/150000*100 23.34%
From the above calculation it has been analysed that The entertainer is having good
profitability and liquidity because the above mentioned ratios shows a good performance and
position of the company. From the above ratio analysis it has been observed that organisation
have the 5.18 liquidity ratio which is higher than ideal liquidity ratio so they are capable in
adverse situations if face by because they are enough capable to pay their debts. Their net profit
ratio is 14.02% and gross profit ratio is 23.34% which is an good profit for an organisation to
grab potential market share.
TASK 4
P7. Key legislation and regulations that have implications on small businesses or social
enterprises.
For all the business entities it is very important to follow key legislations and regulations
that are imposed by the government of the country. All the legislations that should be followed
by The Entertainer are as follows:
Health and safety act 1974: According to this act organisation needs to look out that
their manufacturing activities do not harms employees (Parkin, Fielder and Ashby, 2016). The
Entertainer is also required to follow this act because it is very important to follow it to operate
business successfully.
Data protection act: This act guides organisations to protect their confidential
information so that it cannot be misused by others. The Entertainer executives are required to
keep their data safe so that employees who may leave organisation in future.
Record keeping act: In this act companies are directed to keep proper record of
organisation's activities so that it can be presented to the legal authorities to assure that
organisation is not part of any illegal activity (Radwan, Jones and Minoli, 2012). The Entertainer
requires to follow this act so that its stakeholders may get exact information of the company.

Employment Law, 1996: The employees working are entitled to work under contract
which form employment relationship. The employee working under this agreement should get all
benefits, rights and others. This agreement should be in written format including name of
employer, employee, job title, date of joining, notice period.
Customer's Law, 2015: This act was formulated to provide rights to consumer on basis
of good and service which they have purchased. They should be provided with good quality of
goods, fit for purpose and as per description given by them. If seller has sold defective item to
consumer then they should be replaced, refund by seller.
All the above described acts and regulations are required to be followed by The
Entertainer as it may help to execute business smoothly with less interference of legal
authorities. There are various legislations that are imposed by legal authorities of the countries
where different type of companies operate business. All the small and large organisations
including The Entertainer should follow all the rules to execute operational activities
successfully. Main impact of these legislations is that it helps to keep the data safe and have
detailed report of all the activities (Schaper and et.al., 2014). Key regulations including data
protections, record keeping, health and safety act affect small business entities such as The
Entertainer positively as well as negatively. Positive impact of the legislation is that it helps to
keep detailed information and records and negative impact of them is that for all the small
entities it is not possible to follow the rules as they operate business on a small scale.
M6
 Implication of record keeping act:
The Entertainer must follow this rule because this law states that if the company maintain
its record of years so that they can have data of each of their employee which may be required in
future.
 Implication of health and safety act:
In respect of The Entertainer, the company must provide health insurance to their
employees so that they find the workplace safe and duties that are carried out.
CONCLUSION
At the end of the report it has been concluded that for running a small business it is very
necessary to manage its operations and execution activities. If its manager doesn’t forecast the

future possibility and allocate resources according to these situation then it would not be
succeed. And apart from that if manager will not able to understand its exact operation then it
would result the decrease in profitability and liquidity position of organization. Customer
relationship management and resource allocation also too important as well as other activities for
a small business. So before launching a small business in domestic as well as in international
market above factor must be addressed by the managers.