Managing and Running a Small Business

This report discusses the main considerations for planning and allocating resources in a small business, the advantages and disadvantages of CRM, how a small business can develop transnationally, and how to prepare a cash flow forecast. It also examines the key legislation and regulations affecting small businesses.

Managing and Running
a Small Business
Table of Contents

INTRODUCTION...............................................................................................................................3
TASK 1................................................................................................................................................3
P1 Discuss main considerations a small business or social enterprise needs to address when
planning and allocating resources to attain business objectives. .....................................................3
M1 Use tools and techniques in a structured & analytical way to plan/ allocate resources in
business.............................................................................................................................................3
M2 Analyse importance of planning and allocating resources to achieve objectives.....................4
D1 Examine application of appropriate resources to demonstrate links between resource
allocation & achievement of business objectives. ...........................................................................4
TASK 2 ...............................................................................................................................................4
P2 Discuss CRM & determine main sectors within CRM provide advantages or disadvantages....4
P3 Explain how a small business can develop transnationally with positive & negative aspects....5
M4 Determine potential develop transnational operations using stage model of
internationalisation...........................................................................................................................6
D2 Examine CRM process at all aspects & provide suggestions for overcoming challenges of
developing transnational operations. ...............................................................................................6
TASK 3................................................................................................................................................7
P4 Prepare annual monthly cash flow forecast showing fixed and variable costs...........................7
P5 Explain how break even analysis could be applied to an organisation.......................................9
P6 Present financial statements for an entity in relation with how they contribute to successful
management of corporation............................................................................................................10
M5 Use appropriate quantitative & analytical techniques to provide an appropriately detailed
cash flow forecast and break-even analysis....................................................................................10
D3 Present accurate cash flow forecast/ BEA with a analysis of how key financial statements
contribute to successful management of business..........................................................................11
TASK 4..............................................................................................................................................11
P7 Determine legislation or regulations that have effect on small businesses or social firms......11
M6 Evaluate effects of key legislation/ regulations in an organisation..........................................12
D4 Discuss key legislation that impact upon small businesses or social organisations.................12
. CONCLUSION................................................................................................................................13
REFERENCES..................................................................................................................................14
Books & Journal:............................................................................................................................14

INTRODUCTION
In market, businesses are of many types such as small, medium and large. Managing and
running small business is not easy task and which require deep level of research as well as
knowledge. Main aim of this report is to understand how small business can be managed in
corporate sector. Fruition Consultants Ltd, a tax consultant firm in Aldgate East, headquartered in
United Kingdom. It is consultancy services firm which is managing business and expanding their
services at slower level. This report comprises of consideration of small business or social
enterprise, different process of CRM, small business development, annual monthly cash flow, and
break even analysis, financial statement of enterprise and key legislation & regulations affecting
business.
TASK 1
P1 Discuss main focal of a small business or social enterprise needs to address when planning and
allocating resources to attain business objectives.
Small businesses & social enterprise both are essential part of market which increases the
profit ration at higher level. In U.K, most of market sector is being covered by small businesses and
this bis major reason for stability of economy of country. In relation with selected firm, there are
many types of considerations which are needed to be considered when planning and are discussed
below-
Financial resource- It is important resource as these are needed for making transactions,
auditing etc. There are various types of resources in this category such as equity funding & loans,
cash, etc. In relevance with Fruition Consultants Ltd, they carry out their financial resources in a
way that these are used at appropriate period of time (Emeh, 2020).
Human resource- They are also resources which are necessary to be allocated while managing
small business. It is because these are being considered as important assets part of enterprise
because they are one who is responsible for regulating & formulation of policies (Tóth, 2020).
Identification of resources
Tangible resource- These are those type of resources which can be touched or feel. There
are various type of resource such as inventory, machinery, cash etc. In relation of chosen firm,
these resources are allocated with proper internal analysis.
Intangible resource-
These are those type of resources which cannot be touched or feel. It is crucial to allocate

them for example experience, skills of employee, growth of valuable resources comes under this
category. These are important for both social & small enterprises at higher level.
Planning-
In this, planning is also essential as it without allocating proper planning it is not possible
to achieve objectives. So, with help of planning workforce activities & planning is done &
required in both social as well as small firm.
M1 Use tools and techniques in a structured & analytical way to plan/ allocate resources in business
To allocate resources in structured/ analytical way in entity, various types of tools as well as
techniques are required such as Gantt chat. It is an effective tool which is used by entity to allocate
resources in proper manner. By applying this tool, chosen firm is able to allocate resources in well-
structured way. Further technique for allocating resources is to divide team into different
departments so that it is easy to allocate resources in analytical manner.
M2 Analyse importance of planning and allocating resources to achieve objectives
It is crucial to allocate planning & allocate resources so that decision making is done in
correct way. Planning & allocating resources are required because they give clear picture the
amount of work which has been done & in what ways (Cheng, 2019).
D1 Examine application of appropriate resources to demonstrate links between resource allocation
& achievement of business objectives.
Financial resources in management- These are resources which are linked with achievement
of business objectives as because such resources assists in carrying out every activity which require
finance or capital such as training & development, recruitment etc.
Human resources outside & inside the enterprise- It is another application of human
resources in which they are mostly used for recruitment, selection, hiring of candidates (Pavlíček,
2016).
TASK 2
P2 Discuss CRM & determine main sectors within CRM provide advantages or disadvantages
In enterprise, customer relationship management which is also known as CRM is used by
entity to manage & maintain positive relationship with their past, old or new customers. It is
beneficial for development of business as it support sales management, provide customer insights
through engaging with social media.

Portfolio analysis- It is framework utilized by corporation to identify value added of
customers & market structure. With help of this, it is easy to analyse allocation of appropriate assets
so that long term success is achieved.
Advantages
 With the help of this tool it is easy to categorise both business as well as customer in
appropriate manner. It is helpful in segmenting of customer in market.
Disadvantages
 This tool doesn't shows natures of portfolio and market strategy on the basis of which
customers are to be categorised which become difficult for businesses to implement it.
CLM
It is described as a process through which it depicts the stages of customer encounter during
the process of interaction with the particular brand. CLM is important because it help in
understanding customer addresses through which their behaviour is also analysed and which is
beneficial for growth of business (Smith, 2020).
Benefits
 With the help of CLM, this help in examining the buying pattern, actual needs and R and D
opportunities.
Drawbacks-
 It is a time consuming process and which require high level of market information and
connections to implement it properly.
P3 Explain how a small business can develop transnationally with positive & negative aspects
Small businesses in a every segment play a major role in growth and development.it is
important for them to expand their business and wider level so that profitability is achieved.
Transnationally development refers to enterprise investing into foreign countries and operating their
activities at global level.
Advantages-
 Makes entity international- With help of transnationally, it is easy to make business
globally (Da Costa, 2016).
 Availability of resources- Another benefit is that through this it is easy to adapt or acquire
resources for entity in proper way.

Disadvantages-
 Risk- Due to different rules & regulations, risk related with this strategy high.
Different entry modes are-
 Exporting- It is a most appropriate form of entry mode of strategy in which goods are
being exchanged into foreign countries. In context of Aldgate East, they can opt for this
strategy which is beneficial for their expansion.
 Contractual modes- It is another form of entry strategy which can be used by company
firm allows others to use their services or products on contract basis.
SWOT Analysis-
It is framework which utilized by enterprises to examine the internal factor capabilities
affecting business. It is a time consuming process because appropriate and level information is
required to carry out this process.
M3 Discuss elements of CRM process in relation to achieving business goals.
CRM has four types of elements which are discussed below-
 Know- This component shows that customer and market both are to be measured and
understand by the business (Hatch, 2017).
 Target- This is a component in which customers are targeted through providing discounts of
and other additional benefits.
 Sell- Main focus of this component is to acquire the target customer.
 Service- In this, actual services are being provided to customers and retaining strategies are
implemented.
All these four continents help in achieving business objectives because through them
enterprise is able to examine and analyse the potential market as well as customer in most
efficient manner.
M4 Determine potential develop transnational operations using stage model of internationalisation.
Developing transactional operations using internationalisation stages is an effective strategy
which can be used by small businesses. There are various types of stages involved in this process
and are mentioned below-
Establishing domestic market- It is the first stage of internationalisation model as in this
products or services are being tested within home country.

Export research & planning- It is stage in which enterprise search for information and
analyse the country where similar businesses can run in profitable way. For example Fruition
Consultants Ltd can target the countries such as Australia, Canada where consultancy services
have a high growth.
Export & expansion of international sales- In this aspect, initial sales and expansion of those
sales at international level is being carried out (Shrotriya, 2019).
Advantages of Internationalization model-
 By carrying out internationalisation model, it is benefit for small businesses to gain more
resources and examine the potential level of enterprise activities to expand globally.
Disadvantages
 It is a risky process and time consuming because high level of expertise as well as
knowledge is to understand this model in most efficient manner.
D2 Examine CRM process at all aspects & provide suggestions for overcoming challenges of
developing transnational operations.
Customer relationship process has five aspects mentioned below-
 Reach- It is the first stage of customer relationship management in which first access to
generator brand awareness with the market and reach to customers (Nagarajan, 2018).
 Acquisition- Further comes acquisition stage in which main purpose is to for a brand so that
customers gain more information about brand or product.
 Conversion- This aspect mainly focuses on converting leads into potential customers.
Energy can be done by using strategies such as matrices of consumer behaviour
understanding market trends etc.
 Retention- This stage focuses on increasing customer retaining period for longer period of
time and this can be done through services as well as after sales service in highly effective
manner.

TASK 3
P4 Prepare annual monthly cash flow forecast showing fixed and variable costs
Cash Flow- It is a statement which is used by enterprise rhythm of analysing and examining
cash floor activities within a business. This statement is useful for making aware two entrepreneurs
how and at what amount cash is available for business (Bhar, 2019).
Budgeting, planning and forecasting
Budgeting is defined as a plan which is being prepared the purpose of managing capital of
fund flow in an enterprise. Planning refers to process through which how when and why activities
related to business will be carried out to achieve organisational objectives. Forecasting is defined as
process of anticipating future happening activities on the basis of past and present data statistics.
alance Sheet
Year 2017 (value in £) 2018 (value in £)
Fixed assets 150 200
Stock 25 30
Debtors 60 45
Bank 15 25
Total 250 300
Creditors 150 200
Bank overdraft 100 100
Total 250 300
Profit and Loss Account
2017 2018
Sales 15 25
Cost of sales 20 15
Gross profit 35 40
Overheads 5 5
Net. Profit 30 35
Cash-flow statement

Activities
Jan
uar
y
Febr
uary
Ma
rch
Ap
ril
M
ay
Ju
ne
Ju
ly
Au
gus
t
Septe
mber
Oct
obe
r
Nove
mber
Dece
mber
Tot
al
Receipts:
Total
amount of
loan
200
0 2000 18
00
15
50
17
50
18
50
20
00
145
0 500 200
0 1400 2200 205
00
Available
cash
100
0 800 10
00
10
50
12
00
70
0
89
0 760 950 600 550 1000 105
00
Total
receipts
300
0 2800 28
00
26
00
29
50
25
50
28
90
221
0 1450 260
0 1950 3200 310
00
Payments
Fixed
cost:
Interest
expenses 60 60 60 60 60 60 60 60 60 60 60 60 720
Rent 500 500 50
0
50
0
50
0
50
0
50
0 500 500 500 500 500 600
0
Salary 300 300 30
0
30
0
30
0
30
0
30
0 300 300 300 300 300 360
0
Variable
cost:
Direct
material 600 500 54
0
54
0
40
0
45
0
41
0 350 360 380 444 260 523
4
Direct
labor 60 80 75 55 50 40 65 95 45 78 85 96 824
Selling
expenses 110 90 80 78 65 55 50 60 90 75 85 87 925
Total
payments
163
0 1530 15
55
15
33
13
75
14
05
13
85
136
5 1355 139
3 1474 1303 173
03
Net cash
flow
137
0 1270
12
45
10
67
15
75
11
45
15
05 845 95
120
7 476 1897
136
97
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P5 Explain how break even analysis could be applied to an organisation.
Break Even Analysis- It is a type of a tool which is used by entity to examine cost
structure of a company. This analysis is mostly used with the aim of understanding and
analysing the relation between fixed variable and revenue cost. It also shows that it is a stage
in which enterprise neither has profit or loss and has equilibrium line (Pavlíček, 2016).
 Manages size of units to be sold- Help of breakeven analysis enterprise for
entrepreneur to determine Price and analyse how much units are being needed for
coming up be actual cost.
 Budgeting & setting targets- With the help of breakeven analysis as enterprises
are aware about out profit and sales wish you it is easy for them to prepare a budget
and set a target according to which of the objectives can be achieved.
It is calculated as-
Break even quantity= TFC/ (P -AVC)
TFC= Total fixed cost
AVC= Average variable cost
Advantages-
 Measure profit- Main benefit of this BEA is that it help in determining profit ratio
which is useful for forecasting of business.
 Forecasting- Further, BEA is also commonly used for forecasting of business situations
which also leads to effective decision making.
 (Cheng, 2019).
Disadvantage-
 Assumptions- BEA is basically based upon assumptions which make it difficult for
entity to use at wider level.
 Time consuming- Due to determining of forecasting via data & statistics, it is time
consuming process.
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P6 Present financial statements for an entity in relation with how they contribute to successful
management of corporation
Financial statement of an organisation are essential to be repaired because they help in
achieving goals as well as objectives and contribute to successful management of business.
Financial statements which are used by Fruition Consultants Ltd & are mentioned below-
Balance Sheet
It is a type of a statement in which all assets & liabilities are being placed at their right
place. With help of balance sheet, investors are able to analyse and examine whether to invest in
a particular business or not. In relation with selected enterprise, accounting team and department
prepare balance sheet on monthly and yearly basis.
Cash Flow
Cash flow is another type of financial statement in which include as well as also of cash
is measured and prepared by enterprises. This statement is being prepared true examining of
fixed variable and revenue cost (Emeh, 2020).
Contribution of financial statements-
In business, furniture statements are most important to be used as they help in carrying
out transactions and other financial activities in most effective manner. The contribute to aspect
of managing operation in a successful way as through use of them Fruition Consultants Ltd is
able to implement appropriate decision making process which is beneficial for growth and
development. The above-mentioned financial statements are the main national for survival of
business in the market as they help in managing transactions financial resources and other
business activities in most efficient manner.
Profit and loss account
These are financial statement which reflects the expenses revenue of a specific time
period. The p and l account Statement, are being carried out by comparing with accounting
periods like research and development spending operating cost functional cost etc. In reference
with chosen firm, they also prepare profit and loss account statement through which they are able
to make decision and set targets accordingly.
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M5 Use appropriate quantitative & analytical techniques to provide an appropriately detailed
cash flow forecast and break-even analysis
There are various types of quantitative & analytical techniques which are used for cash
flow & Break even analysis & are mentioned as follows-
Direct estimates- It is also an effective technique for cash flow which is used by enterprise
and corporate sector has in this there is a direct estimate of an element value based on expert
opinions and other resources on the basis of which decisions are made.
Ratio forecast- It is another technique which is being used in which elements of variable
and ratios are compared with each other. This is because corporate sector has a production
was a belief that same strategy will be applied of forecasting will be done in same way with
some minor changes (Tóth, 2020).
Break even analysis technique
Graphical method- The graphical method reflects the linear break even analysis and is
being used when prices of product are same and total revenue is being due to the output because
of increased in production.
D3 Present accurate cash flow forecast/ BEA with a analysis of how key financial statements
contribute to successful management of business.
Financial statements are essential for business such as cash flow, profit and loss account,
balance sheet because they are the main reason for carrying out all the business and operations
in most effective manner because they are adjusting forecasting repairing and evolution of all
resources. Without use of these financial statements it is not possible for children enterprise to
successfully run their management of this in the market. It is responsibility of the manager to
make ensure that all these statements are being prepared with proper considerations without
facing an issue or problem (Emeh, 2020).
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TASK 4
P7 Determine legislation or regulations that have effect on small businesses or social firms.
Legislations refer to laws which are governed by the government. Every entity has to
follow all rules and regulations of government operate in a proper manner. In relation with
selected firm, danger that every business activity is being carried out buy property following
government rules as well as regulations so that goals are achieved in proper manner. There are
various types of legislations and regulations which are followed by enterprise and are mentioned
below-
Consumer law-
According to this law it was introduced for the purpose of safeguarding consumer’s right
in market. Under this law can complete or use their right if any injustice or unpractised are being
done to them by marketers.
Impact on social & small business-
This law has a great impact on social enterprise as well as small businesses because
consumers are part of society and small businesses a dependable consumer through which
they generate profit (Tóth, 2020).
Employment law
It is another law under which it shows the interrelation between organisation and
employee which is to be maintained. In relation with chosen entity, they ensure that possible
relationship is between both the parties so that common desired goals are achieved.
Health and Safety at Work Act (HASWA) 1974
HASWA , according to this act it is piece of legislation in which it reflects the covering
of occupational health & safety. It depicts the duties of employers towards employees & people.
Main aim of this act is to adequate welfare provisions for staff at work & provide safe work
environment.
Equality act (2010)-
According to this act it aims at protecting people from getting discriminated at workplace
or within a society. Under this laws any injustice done to individual is being examined by
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associations or bodies.
National Minimum Wage Act 1998
Thus act states the minimum amount of pay a worker is bound to get to per hour. In this,
wage or amount of pay is based on worker's age.
Impact on social & small business-
Employment laws also impacts upon social enterprise as well as business because and
these are the sources which small businesses are able to complete their work on time. Whereas
a social enterprise focuses on employing behaviour under which decision making is done
(Cheng, 2019).
M6 Analyse effects of key legislation/ regulations in an organisation
Consumer law-
According to this law it was introduced for the purpose of safeguarding consumer’s right
in market. Under this law can complete or use their right if any injustice or unpractised are being
done to them by marketers.
Employment law
It is another law under which it shows the interrelation between organisation and
employee which is to be maintained. In relation with chosen entity, they ensure that possible
relationship is between both the parties so that common desired goals are achieved.
D4 Discuss key legislation that impact upon small businesses or social organisations
Impact on social & small business-
This law has a great impact on social enterprise as well as small businesses because
consumers are part of society and small businesses a dependable consumer through which they
generate profit (Tóth, 2020).
Impact on social & small business-
Employment laws also impacts upon social enterprise as well as business because and
these are the sources which small businesses are able to complete their work on time. Whereas
a social enterprise focuses on employing behaviour under which decision making is done
(Cheng, 2019).
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.CONCLUSION
After examining of above report, it has been concluded that small business and running
them is not an easy task & time as well as investment. This report gives a brief knowledge about
how small businesses can be managed. Social enterprises and small businesses are major
contribution to the economy growth and development. So it has been evaluated that it is essential
for an entrepreneur to carry out this two factors in most appropriate way.
15

REFERENCES
Books & Journal:
Akhtar, 2018. SMEs' use of financial statements for decision making: Evidence from
Pakistan. Journal of Applied Business Research (JABR),34(2), pp.381-392.
Bhar, 2019. Design & implementation of a personal Cash flow program using Microsoft
Excel®. Global Journal of Business, Economics and Management: Current Issues,9(1),
pp.29-40.
Cheng, 2019. How to enhance SMEs customer involvement using social media: The role of
Social CRM. International Small Business Journal,37(1), pp.22-42.
Da Costa, 2016. Thinking ‘post-racial’ideology transnationally: The contemporary politics of
race and indigeneity in the Americas.
Emeh, 2020. Prospects and Challenges of Managing Small Scale Manufacturing Businesses in
Enugu East Senatorial Zone, Enugu State Nigeria.
Hatch, 2017. The cost effectiveness of vancomycin for preventing infections after shoulder
arthroplasty: a break-even analysis. Journal of shoulder and elbow surgery, 26(3),
pp.472-477.
Jaber, 2020. How do Legislations, Regulations, Policies and Cases Influence the Security in E-
Commerce?. Systematic Reviews in Pharmacy,11(1), pp.673-679.
Nagarajan, 2018. Use of Break-even analysis in financial appraisal of projects. Indian Journal of
Public Health Research & Development,9(11), pp.2098-2105.
Pavlíček, 2016, December. Social media and social CRM. In International Conference on
Research and Practical Issues of Enterprise Information Systems(pp. 77-87). Springer,
Cham.
Shrotriya, 2019. Break Even Analysis–The Concept and It’s Utility.
Smith, 2020. Developing Practice Transnationally. Critical Publishing.
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Tóth, 2020. Becoming a more attractive supplier by managing references–The case of small and
medium-sized enterprises in a digitally enhanced business environment. Industrial
Marketing Management,84, pp.312-327.
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