Managing and running a small business

Managing and running a
small business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main consideration a small business or social enterprise needs to address......................1
TASK 2 ...........................................................................................................................................3
P2 Different processes of CRM for small business or social enterprise................................3
TASK 3............................................................................................................................................5
P3 How Small business can develop transnationally and determination of benefits and
drawbacks...............................................................................................................................5
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs set against
income for specific organisation............................................................................................6
P5 How break- even analysis could be applied to an organisational situation.......................8
P6 Key financial statements for an enterprise in accordance with their contribution to
successful business management............................................................................................9
TASK 4..........................................................................................................................................14
P7 Key legislation and regulations that have implications on small business or social
enterprise..............................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

Index of Tables
Table 1: Cash flow statement...........................................................................................................7
Table 2: Break even analysis...........................................................................................................9
Table 3: Profitability ratio analysis................................................................................................12
Table 4: Liquidity ratio analysis....................................................................................................13

INTRODUCTION
Managing and running a small business is an activity that implies to effective and
efficient operation of a business. This analysis will tend to examine the role of small business in
context of management. Different areas of small business will be covered starting up with the
key definitions of small business (Hatten, 2015). Management concept will be defined in order to
highlight its importance on this study. Present report is based on analysis of Softwire Ltd, a small
business enterprise in IT sector. Company usually provides its software development services to
some large scale business enterprises in UK. In accordance with this, main considerations
thatsmall business or social enterprise needs to address when planning and resource allocation is
discussed. Further, different procedures for Customer Relationship Management (CRM) for
Softwire are also evaluated along with forecast of cash flow showing fixed and variable costs. At
last, key legislation and regulation are also discussed that provide implication on small business
enterprise.
TASK 1
P1 Main consideration a small business or social enterprise needs to address.
Prior to establishment of business, it is essential for every business enterprise to make
effective planning and allocation of resources as it helps in understanding the requirements and
enables the organisation to achieve the business objectives. In present context, there are also
some important aspects have been identified which Softwire Ltd needs to address at the time of
planning and resource allocation. These essential considerations are mentioned as follows: Planning resources: It is the most important aspect which implies that every small
business enterprise needs to determine the resources which are required to accomplish a
specific project and achievement of business objectives (Bridge and O'Neill, 2012).
Planning of activities in organisation involves the utilisation and management,
identification of resources and skills required to create appropriate job specification. In
this context, Softwire also needs to identify the resources such as finance, material and
skilled employees for completion of specific business project. They also need to ensure
that resource must be effectively utilised and managed in order to achieve business
objectives.
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 Organisation structure: It is considered as a system which determines how the activities
will be directed in order to achieve the aims and objectives of organisation. In Softwire, it
is essential for employers and manager to develop an appropriate and suitable
organisation structure at the time of planning to accomplish business project (Burns,
2016). Effective delegation of responsibilities and authorities will help them in providing
proper direction to business activities and understanding to employees to complete those
activities effectively. In addition to this, organisation also needs to identify the effective
ways to manage their human resources and fulfil the present requirements. For this, they
need to apply proper recruitment and selection procedure for hiring qualified employees
at workplace which provide them support in accomplishment of business objectives. Performance management: It is also important consideration which implies that
management of Softwire needs to manage the performance of its employees when
planning for new business project. It helps in them in analysing capabilities of their
employees and requirement of skills to complete the project. Training needs to be
provided to employees to enhance their skills and knowledge related software
development. This aids the management in development of teams at work that will work
together effectively. Employment legislation: Key aspects of employment legislations are also need to be
analysed and addressed by organisation at the time of hiring and managing human
resource. For example: All rights and welfare facilities need to be provided to employees
by Softwire.
 Business plan: At the time of planning and resource allocation, it is essential for
employers of Softwire to articulate their business vision, goals and objectives because it
provides them direction to accomplish business activities (Weske, 2012). Further, they
also need to determine the key components of their business plan and needs to apply
effective project management techniques involving Gantt charts and critical path analysis
in order to complete the project on specific time duration and achievement of business
objective effectively.
There are various resources have been used by organization in order t achieve objectives such as:
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