Managing and Running a Small Business

This document discusses the main considerations when allocating and planning resources in order to attain business goals, tools and techniques for resource allocation, the importance of planning and allocation of resources for attaining business objectives, CRM processes for small business entities, and the pros and cons of developing transnationally. It also includes an annual cash flow prediction showing fixed and variable costs in contrast to the income of the organization.

MANAGING AND
RUNNING A SMALL
BUSINESS

Contents
INTRODUCTION...........................................................................................................................3
Activity 1.........................................................................................................................................3
Main considerations when allocating and planning resources in order to attain business goals 3
Tools as well as techniques in an synthetic way about how to plan and allot resources........5
Importance of planning along with allocation of resources for attaining business objectives5
Various processes of CRM for a small business entities........................................................6
Discussion about how small businesses develop transnationally and its pros and cons........6
Essential factors of Customer relationship management process...........................................7
Possible to create transnational transaction............................................................................8
Activity 2.........................................................................................................................................8
An yearly itemised time unit cash flowing prediction showing fixed as well as variable costs
in direct contrast to income of organization...........................................................................8
Break-even analytic thinking in reference to organisational situations..................................9
Statement about the key financial statements involve in a successful business management11
Quantitative as well as analytical techniques.......................................................................15
Break even analysis along with cash flow statement...........................................................16
Essential legislation as well as regulations which have high implications..........................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
In the current competitive environment, small & social business entity's highly affected
on the overall growth as well as development of the economic system of the country. It has also
been said that according to business group as well as entrepreneurs it is consider as the
possibility which leads towards the accomplishment of more profit as well as money at the
competitive market. Along with this it is also very essential for the business organisations to
identify the needs requirements of customers so that they can gain success at the marketplace and
develop the living standards of people. In this report, a business organisation named as JS
Supermarket Ltd is selected. The present report is divided into part where activity 1 includes
discussions about the importance of preparation as well as allotment of resources. In addition to
this it also consist of factors which needs to be considered while doing resources allocation.
Whereas in the second part of this report, discussion about break-even analysis, cash flow
forecast, are going to be included. Along with this, discussion related to how financial statements
assistin order to gain success at the competitive marketplace. At the end, different sort of
legislation and rules are also going to be discussed which have their influence on the small
business entities.
Activity 1
JS supermarket Ltd company is one of the well known small scale retailer mainly
operates its business functions at the marketplace of UK. It is a retail sector supermarket founded
in year 2014 by Ranachandran Jalatheepan. It has been said that the organisation commonly
deals in food, grocery and beverage items which are high in quality. Currently the organisation is
facing issues related to decline in its customer base. This will negatively affect the business
operations and performance of the company at the competitive marketplace. For reducing the
negative impact they are now deciding to develop new strategies and policies to gain higher
profitability at competitive market.
Main considerations when allocating and planning resources in order toattain business goals
At the present marketplace in UK, there are ample number of opportunities given to the small
and medium enterprise to have the capability to earn more profitability at the marketplace where
competition is high. One of the major reason for this is Brexit as it provides benefits to business
organisations to setup their business from small scale within the marketplace of UK. There are
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various functions and activities conducted by the organisation on a day to day basis which
consist of recruitment, budgeting, selection, planning, allocation of resources, interpretation of
financial data & many more. For gaining growth and success at the competitive marketplace
managers of JS supermarket Ltd. in order to develop strategies and policies which is needed to
allocate resources. Some of the key elements needed for planning along with the allotment of
resource are going to be discussed as follows:
Financial resources: It define as the element mainly plays very crucial role in the
formulation of resources allocation. With the assistance of availability of required funds, an
organization can smoothly run their enterprise functions in a well defined and in an appropriate
way. In reference to JS supermarket Ltd the company which is a small level business entity as
well as does not consider any kind of capitalist which makes it challenging for them to execute
their concern purpose in a smooth way. The owner gather funds from family, friends and Bank
loan. Apart from this, organisation decides to strengthen their customers base for which huge
amount of funds are required.
Human resource: Another essential factor is human resource on which the whole
organisation growth and development is dependent. With the help of there skills and knowledge
they can produce high quality products and services which leads towards developing loyal
customer base which influence the overall performance in a direct manner. In reference to the
present context of JS supermarket Ltd, HR manager of the company need to develop various
effective strategies in order to hire best and skilled candidates. Along with this, it becomes
essential for the manager to develop strong relationship with their customers so that they can
accomplish their goals and objectives in an effective manner. It will assist the management team
of JS supermarket in order to improve their performance and accomplish their targets within
given time period.
Goals, mission, vision & targets: For grabbing a leading position at competitive
marketplace, it becomes necessary for raising the customer base and retain them for a longer
period of time by maintain them loyal towards their brand. It has been said that the main vision
of the company is to maintain their sustainability and position at the marketplace in retailing
sector. Apart from this, the main aim of JS supermarket Ltd is to create positive and strong
image of the company at the marketplace by satisfying their requirements and demands. For this,
they hire highly qualified and skilled candidates for their business activities and leads towards
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the attainment of growth and development. In addition to this, it is said that business organisation
usually targets individuals who mainly belongs to a specific age group of 20 to 45 years.
Tools as well as techniques in an synthetic way about how to plan and allot resources
In order to plan resources in a well defined and systematic manner, there are different types
of tools and techniques which needs to be used by the higher authorities are going to be
discussed as follows:
Gantt chart: It refers to a graphic representation shows whole schedule of the project
which includes starting as well as ending dates. It is a sort of graphical representation, which
shows the time taken to complete the whole project from initial phase to ending phase. With the
assistance of this tool, managers of JS supermarket Ltd gain information related to the task
conducted to accomplish the predefine targets and objectives.
Critical path analysis: Another most essential tool is critical path analysis which is used
by the management team of organisations so that they can remain in their budget while
completing the whole project in impressive way. In context to JS supermarket, adopting critical
path analysis technique aid the higher authorities of the company for attaining their task and
goals in an effective as well as appropriate manner. This as a result assist the higher authorities
of the organization to complete the project in timely manner to maintain their sustainability at the
marketplace.
Importance of planning along with allocation of resources for attaining business objectives
It has been examined that by proper allocating as well as planning the resources assist a
business entity in order to enhance their performance and effectiveness in an appropriate way
which leads towards the attainment of predefined targets in an effective manner. Apart from this,
proper and appropriate planning help a business entity in order to fulfil their targets within
stipulated time frame. In context of JS supermarket Ltd, it has been said that managers of the
company optimum utilise the resources so that they can produce high quality products and
services which increases the customer base. This directly affects the profit margin and sales of
the company in a positive manner. Therefore, as a result company will be able to gain
competitive advantage at the market which is one of the most essential objective of the business
entity.
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Various processes of CRM for a small business entities
It has been analysed that in the actual time period, it has been said that the process of
customer relationship management plays very crucial role in order to perform activities related to
customers in effective way. There are different sort of approaches adopted by business entity
while providing services to their customers at the competitive market place. It assists business
entity in order to keep affirmative human relationship with their customers as well as maintain
development at the market. In the present context of JS supermarket Ltd, the main focus is to
increase the level of customer base and for which it becomes essential to identify the preference,
taste, opinions, thoughts. In order to this, effective CRM process are going to be discussed as
follows:
Determination as well as Identification of customer needs: It refers to the starting phase
of CRM process where the management team of JS supermarket Ltd. Examine their targeted
customers with the assistance of segmentation strategy. In this reference, the business entity
categorized their customers into small sections as per their demands, taste, choice and
preferences.
Customer portfolio analysis: This phase is which where higher authorities of JS
supermarket Ltd. Assist for measuring the modular as well as activity of the customer. With the
assistance of this investigation, organisation can easily attain knowledge about the status,
purchasing power, lifestyle of the customers. It assist higher authorities in order to make
judgement related to the needs of alteration needed by the business organization for enhancing
customer base as well target customers.
Customers’ intimacy: It has been said that maintaining as well as developing positive
customer relationship assist a business organisation in order to strengthen their customers base
which leads towards the growth at the competitive marketplace. It is very essential for the
management team of JS supermarket Ltd that they must ensure the needs of customers so that
they can satisfy their demands and retain them for longer duration. In addition to this, by using
effective communication tool they can easily transfer required information to their customers in
an efficient manner.
Discussion about how small businesses develop transnationally and its pros and cons
Transnational operations define as one of the essential tactic which is incorporated by the
business entity in order to perform their operations at their head offices. One of the biggest
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welfare of adopting this technique is that it assist in examining the present-day market situation
as well as profitability of the company in an appropriate way. In context of JS supermarket Ltd,
it is the approach adopted by the management team in order to attain the opportunity available at
the international market area. Apart from this, it will help in targeting right customers at the right
time and offer them high quality products and services effectively. This is the approach which
includes various advantages and disadvantages which are going to be discussed as follows in
detail:
Benefits:
 With the assist of transnational approaching, it is examined that management team of JS
supermarket easily make modifications which as a result they can attract large number of
people towards them across the boundaries. Apart from this, they adopt innovative
approaches so that they can promote their products and services at international level in
an effective way.
 Another advantage of this approach is those business organisations merchandise their
products across the whole wide worlds which as a result assist them in enhancing their
sales at the competitive marketplace.
Disadvantages:
 It has been identified that in order to expand business function globally it requires lot of
funds, efforts, need strategies and plans which as a result need huge investment.
Essential factors of Customer relationship management process
CRM is linked with different procedures of a business entity needed to accomplish the
goals and objective of the company at the competitive marketplace. Strong relationships with
customers help in retaining them for a longer period of time. It has also been identified that there
are various process of CRM which are adopted by the management team of the company in order
to examine their taste, requirements, preferences and opinions. It assists business entity in order
to provide high quality products and service to their customers who as a result satisfy their needs
and wants effectively. This as a result assists in retaining the potential customers for a longer
period of time. Main elements related to effective customer relationship management are going
to be discussed as follows:
 Business reporting
 Work flow automation
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 Marketing direction
 After sales services
Possible to create transnational transaction
It is said that transnational operations plays very essential and crucial role in the growth
and development of organizational functions as well as to enhance the performance of business
entity by targeting accurate customers in appropriate way. Apart from this, it also helps in raising
the market share of business entity by doing business expansion at international market place. In
relation to JS supermarket Ltd. Director of institution mainly emphasize on increasing their
market share by expanding their business functions at the competitive marketplace.
Activity 2
An yearly itemised time unit cash flowing prediction showing fixed as well as variable costs in
direct contrast to income of organization
Cash flows forecast is commonly used to develop an effective plan that has major
influence over the business so that higher income can be generated by them effectively. This
kind of forecast directly supports business manager in controlling their expenses so that they can
be controlled in timely manner. There is the huge requirement of several sources in order to
forecast cash flow effectively. The main among them are specified as below:
Equity Finance: In this, funds are raised by selling shares at marketplace form. This
method is not effective for small companies as their market value is low. JS Supermarket raises
funds by taking funds from friends, family members and relatives..
Bank Loan: It is mainly adopted by JS Supermarket for generating funds. Bank usually
provides loan to small entities at nominal interest rate.
Planning, budgeting & forecasting: JS supermarket makes use of these three pillars for
determining tendency in the near future. It also supports entities in formulating midterm budgets
and making decision associated with long term schemes. Wit reference to JS Supermarket, the
respective company could make use of Measure moving average and Time series data and
information methods for planning, budgeting and forecasting.
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Variable cost: It is commonly seen as the cost of the product during its development
stage that might fluctuate or change as per the quantity. Variable cost can be easily identified by
simply deducting fixed cost from the total cost.
Break-even analytic thinking in reference to organisational situations
Break even analysis is supportive in determining relationship between several elements
such as costs, expenses, profits, at different stages of end product. With the utilization of break-
even investigation individual can easily determine that at which level their revenue is equal to
the production cost. Break even analysis is also named as profit share analysis. This can be easily
identified with the usage of the numerical formulas. With reference to J S supermarket Ltd. the
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respective manager of this company makes use of the algebraic method for determining break
even analysis. The calculation of this is specified as below:
TFC = Total fixed cost
P = Price
AVC = Variable cost per unit of outcome
Qb= TFC/ (P-AVC)
It has been analysed that where the cost which is variable are 40,000 as well as 9 per unit
is variable cost and 18 is selling cost. The break-even point is calculated as:
=40000/(18-9)= 4444.45
From this, it has been identified that there is the break-even point which means total cost
is equal to total revenue. This also seen as the no profit no loss situation. Graph of this is
specified as below:
Sales 34*30 1020
Variable Cost 34*15 510
Contribution 34*15 510
Fixed Cost 34*15 510
Profit/loss - NIL
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Statement about the key financial statements involve in a successful business management
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Interpretation
It has clearly been concluded with the help of above stated balance sheet which says that
the business organisation conduct all their concern purpose in appropriate way which leads
towards the growth in profit margin of the company at the competitive marketplace. It has been
identified that the profit is approximately 16.06% whereas the overall operating margin is about
17.89% as per the above stated figures. Apart from this, return on the assets is around 2.88%
which says that company is in a strong position which gives better result to them at the
competitive marketplace. It is examined that the higher authorities are more concern about their
profit margin and wants to do business expansion at international market place in order to
capture huge market share.
.
Income Statement
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Interpretations: It has been identified with the help of above mentioned cash flow table that the
total amount generated by the management team is about 961500 which help them to execute all
their task in an impressive and appropriate way.
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Interpretation:
With the assistance of above stated table it has been concluded that the overall operating
cost is around 961500 but on the other hand investing cost goes in negative which is around
(646300). This simply shows that the buying of fixed asset is minimum or less then as compared
to sale of fixed asset.
Quantitative as well as analytical techniques
It has been identified by examining various aspects related to a business organisation
which says that each and every business organization adopt quantitative along with analytical
methods so that they can grab information and data related to break even analysis. It has also
been said that it becomes essential for the management team to consider each and every activity
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which assist in accomplishing organizational objectives in a well defined manner. In reference to
the JS supermarket Ltd, it is said that top management team along with financial department
adopt such sort of approaches which assist them to improve their financial performance as well
as for attaining their predefined targets.
Break even analysis along with cash flow statement
It has clearly been examined that cash flow along with break-even analysis both plays very
crucial role in order to manage the financial position of the company in an appropriate way. This
will help in performing all the business functions in more effective and efficient manner and
leads towards the enhancement of more profit margin. If talking about Break-even analysis, itis
said that this is the condition where a company arise at no profit no loss situation. This situation
help in examining the current market situation of the business entity. On the other hand in
context of Cash-flows statements, this is the financial structure which includes both inflow as
well as outflow of the cash statement.
Essential legislation aswell as regulations which have high implications
It has been analysed that small business entities carry through their business concern
operations effectively which leads towards the development and growth of the society along with
the economy of country in a positive manner. In relation to JS supermarket, it is said that
business organisation facing some issues related to legislation which as a result reduces the
overall efficiency and performance of the company in a negative manner. Some of the most
essential laws and legislation are going to be discussed as follows:
Employment Law Act 1996: This is a law formulated by the government in order to
protect the rights of employees at workplace which includes discrimination and many more. In
reference to the JS supermarket Ltd it is said that managers of the company ensure that each and
every staff members working within the organization treat equally and provide equal opportunity
to reduce issues and conflicts from the workplace.
Consumer Law, 2015: It is a sort of law which consist of different rules and regulations
which have the main motive to protect the rights of consumer from any kind of biased activity.
By adopting all the rules and regulations in an effective manner company will be able to grab
and retain their customers for a longer period of time. Adopt all these policies and strategies help
the management team of JS Supermarket for maintaining positive relationship with their
customers.
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CONCLUSION
With the assistance of above stated report, it has been concluded that small and medium
scale enterprises plays very important role in the growth and development of the economic
system of a country. Apart from this, it is also very essential for the business organisations to
consider various factors like human resource, finance, mission, vision and objectives of the
company in order to allocate resources effectively. In addition to this, there must be adoption of
each and every law so that they can easily perform their functions and smooth running of the
business operations.
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