Impact of External Factors on Unicorn Grocery's Operations

The assignment provides a detailed analysis of the impact of external factors on Unicorn Grocery's operations. It examines the effects of leave regulation act, 1995, anti-discrimination act, 1989, and cyber security issues on the business. The report concludes that managing and running small businesses is a critical task to earn profit or higher productivity. It highlights the importance of cash flow forecast, break-even analysis, customer relationship management, and environmental protection in maintaining effective business regulation.

Managing and Running a Small Business

Table of Contents

INTRODUCTION
Managing and running a small venture is the critical task to accomplished by the business
entities. In addition to this, controlling of small venture is also the complicated, because, it needs
the strategic planning and action making to continue business for longer period of time. In the
current scenario, management of small business has resulted in productive outcomes as well as
production of useful goods & services (Bird, 2012). This report will be carry on Unicorn
groceries, which is co-operative grocery store located in Manchester, UK. Unicorn is specialized
into the selling of fresh, dried as well as processed food & drinks and also organic food items to
local and other level of UK. In current situation, they are actually looking for opening their new
outlet in other cities of England. Apart from this, report will be carry on main considerations,
which a small business is requires to address planning and allocating of the resources. Also,
report will contain different processes of customer relationship management for small business
along with how small business can develop transnationally. Lastly, this report will forecast an
actual cash flow showing the fixed and variable costs as well as look out on break even analysis.
Overview of the company: Unicorn grocery is the largest co-operative grocery store,
which is located in Manchester, UK. It is controlled by its respective member/owner, who run
business with an flat management structure. This grocery specialized in selling fresh and new
groceries items, food products, daily based needs and other required products such as milk,
bread, rice etc. They actually believes that ethics forms real foundation of the business and they
also have their business regulation framework to regulate business operation ethically. The
current scenario is that firm is looking for opening of their new outlets in Manchester city to grab
market share and earn higher productivity. In response to this, they actually saw major scope for
large size of customer size and share to equip in order to get business strength.
TASK 1
P1 Discuss the main considerations a small business needs to address for allocation resources
Small business are those units, who are small in size & structure, but there are high, when
look out for business expansion to other regions or territory. Resource allocation is one of the
major consideration, which needs to undertaken by Unicorn before launching their outlet in city

Manchester. Suppose, if resources are limited, chances are higher that completion of task would
get delayed. To overcome this strategic planning is necessary to continue the small business
venture for longer tenure of business operations (Loscocco, 2017). For effective allocation of
resources, major preferences must be given to capacity generation with clear planning for inputs
utilization by Unicorn grocery to accomplish their business objectives. There are various
consideration, which are required to address in order to proper burning of resources are as
follow:
Capacity utilisation & management: It measures the extent to which a business is using
its production potential. It is defined as percentage of total capacity, that is being achieved in
given period of time. In context with Unicorn Grocery, it will be used to measure the production
efficiency of business enterprises. In this, average production costs tends to fall as output will
rises, so business firms can reduce unit costs and making business operations more competitive.
Unicorn grocery is necessary to remember that increasing capacity often results in higher fixed
costs. For fruitful expansion, Unicorn grocery should utilize their resources effectively along
with clear budget preparation to maintain their real values.
Identification of skilled manpower: For expansion, Unicorn grocery should considers
skilled manpower as their valuable resources to get right employee, who have accurate ability &
potential to handle any kind of critical situation along with process of expansion. First, it is clear-
cut advise to find manpower and stimulate them to find opportunities for themselves. As, we all
know that material or inputs are not sufficient, manpower is also important to do planning of
resource allocations. Unicorn grocery should prefer advance recruitment & selection process, by
which they can open their grocery outlets in Manchester city with less incurring of funds and
must ensure the higher results.
Budgetary control: It is a major technique through which, each and every value of inputs
shall be maintained to maintain its real and productive values. To keep identity of resources clear
and valuable, budgetary making is necessary to maintain its value for future production basis.
Also, Unicorn grocery should structure budget making to allocate resources accordingly into
venture regulation process (Brown, 2013). Also, control over budgetary technique is also
necessary to self being informed about any shortage of available inputs to avoid stoppage of
business expansion.

Brief summary: From above discussion, it is very necessary to evaluate these resources
to get its right usage and benefit at single point of time. Also, process of its evaluation should be
fully-fledged along with adaptation of right planning strategies to get its suitable and productive
advantages.
TASK 2
P2 Explain and evaluation of different processes of customer relationship management(CRM)
for a small business
Customer relationship management(CRM) is the combination of various practices, clear-
cut strategies and technologies that business entity uses to manage and analyse customer's ways
of interaction and data throughout the customer life-cycle, with goals of improving customer
service relationship and assistance in customer retention and driving the sales growth. Actually,
CRM systems compile customer's data across different channels or points of contact between
customer's and companies (Spence, 2016). Unicorn grocery is engaged in selling of groceries, so
they are in need to enhance CRM on a productive basis. CRM process is the fully-fledged
process to enhance customer satisfaction of the Unicorn grocery to grab maximum market share
with higher profit generation. Clear understanding of the CRM process will help Unicorn grocery
to raise their customer satisfaction on an efficient manner. This clear and complete process is as
follow:
Review corporate and marketing strategy: This is the primary step of CRM process
which involves the identification of customer segments, which are key to an organisation's
success now and into the future. Before opening of new retail, Unicorn venture are required to
identify their potential customer's to sell their products at the reasonable pricing. Also, they can
identify them on basis of demographics, geographic and on behavioural ways.
Identify criteria for categorising customer's: Unicorn grocery are classify their resources
such as advance technology, trade channels, manpower etc., to know what actual customer they
have and also what level of customer, they must acquires (Ullah, 2014). Unicorn requires to do
such practices with balanced profitability, growth, volume and its competitive position into the
market.

Guidelines for degree of differentiation: Unicorn groceries are required to consider the
revenue/cost implications of various differentiation alternatives. They must selection statutory
boundaries for degree of differentiation.
Develop framework for metrics: In this metrics, customer's impact on profitability along
with profitability needs to be considered (Anderson, 2013). Unicorn grocery should practice
effective CRM by the way of creating metrics. This will tell about customer responsiveness over
products or services availed to them.
Developing guidelines for sharing process improvements: This stage involves
improving process to engage customer's for buying products or services of Unicorn grocery. To
make this process productive, Unicorn needs to make their supply system clear and effective to
enhance the easy to provide groceries to customer and enables the feedback situation cultivate in
order to make process profit base.
Transnational operation: It is an operational approach, in which business entities
enhances global business activities through co-operation between headquarters and international
activities operations. In context with Unicorn Grocery enables to deliver consistent way of
services to all location and support high levels of collaboration, while allowing individual area
the flexibility to adapt to their local market conditions.
Benefits: This approach of operation has brought co-operation among business entities to
do work as one common entity, irrespective of global and or domestic factors. Such co-operation
have been resulted into productive accomplishment of profitability.
Challenges: Here, major challenge is the conflicts & issues belongs of similar views and
opinions. This can led to ineffective working as well as non-corporation of manpower to goals
based on operations. This leading grocery needs to have strategic planning to enhance operations
of their business.
P3 Explain how a small business can develop transnationally and benefits and drawbacks
Transnational operations is a process which is concerned with business development by
maintaining healthy relationship between the headquarters as well as international operations.
This process is useful in analysing the existing position of a business firm in the market. The
managers of taken firm i.e. unicorn grocery needs to analyse the decisions based on the product's
performance (Drucker, 2012).

With the help of transnational, the current market state of a business can be handled
properly. Also the productivity level of the firm can be managed through this process. In unicorn
grocery, transnational sales process is used for managing the co- ordination and opportunities
available in the international market (Font, 2012). It helps managers of unicorn grocery for
targetting the potential customers whom the product and services are provided. The advantages
and disadvantages are discussed below:
Advantages of transnational approach: Transnational approach is helpful for Unicorn
grocery as it assist them to bring any changes in their production process. This approach is in
process through its benefits to get higher base of oversees customer. Main focus of it to attract
large number of overseas customers so to increase the profitability. Apart from this, transnational
operations in company helps them to deliver right opportunities to their managers. At last, it also
helps them to promote or increase brand awareness of unicorn grocery in a global level.
Disadvantages of transnational approach: It provides growth and success to unicorn
grocery but for achieving this sustainability it requires proper strategies and policies which helps
them in expanding the business operation, it also requires appropriate funds and resources for
carrying out a process. As Unicorn Grocery is a small firm and they can face the challenges of
shortage of funds so that it is not possible for the managers of Unicorn grocery to afford the
process of expansion.
The approach of expansion also requires a proper standard of goals and objectives so that
organisation have to consider such policies of a specific nation which can negatively influences
on the business operations of the firm. It also consumes a huge time so the availability of funds
can also damage their estimation of expansion.
TASK 3
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
Cash flow forecast is the estimate of the timing and amounts of cash inflows & outflows
over a specific period. A cash flow forecast shows if a firm needs to borrow, how much, when
and how it will repay the loan (Thomas, 2014). It is important, because, if a business runs outs of
the cash and still not able to obtain new finance, it will become insolvent. Hence, cash flow is the
blood of all businesses-particularly starts and small businesses. It basically involves total cost
and total revenue, which is the major factor of this forecasting tool and techniques. The benefits

of this tool is that, it will help to forecast the requirement of cash inflow and outflow of the
business requirements. In context with Unicorn grocery, cash forecast will help this leading
grocery firm to know the requirements of funds and its allocation into the business operations
(Sampaio, 2017). Hence, cash flow forecast is required to do with complete and clear planning to
ascertain the requirement of cash by Unicorn to open their new grocery outlet in the city of
Manchester. This will be done by complete structure and formulas:
Fixed expenses are those expenses, which remains at the every level of business
outcomes. It is completely different from variable expenses, which actually changes with change
in level of outputs. Hence, both are proportional to each other. The sum of both ascertains the
total costs. Hence, this forecasting is important to find out cost fluctuation, when they will open
their new outlets in Manchester city.

P5 Explain how break-even analysis could be applied to an organisational situation
Break-even analysis: Break even analysis is the suitable tool, which is basically adopted
by business entities in order to analysis their annual sales requirements monthly, quarterly and
annually basis. Break even point actually depends of variable and fixed cost per unit of sales. It
has been adopted by every business entity in order to ascertain their business profitability level.
Break-even points has facilitated the decision making of an Unicorn grocery on the basis of sales
made and along with expenses incurred on making of such sales (Legg and et. Al, 2015). It is the
point, where unicorn can identified its financial capabilities as well as recording of expenses. It
will also helps this leading grocery to identifying their expense and sales. Break even analysis
will help Unicorn grocery to take separate decision making on the matter of sales generated and
overview of cost incurred on making of such sales.
Break even analysis is analytical tools, which have capacity to module the actual sales of
the business firms as per its actual requirements. As, Unicorn grocery is looking for its outlet
expansion in the city of Manchester, so they should go for ascertaining the Break even analysis
to know where they actually stands in their business operations. With the help of break even
analysis, they will find out profit earning capacity along with potential to generate annual sales.
Unicorn grocery can ascertain their break even point on quarterly basis, through they would

known that are they capable to open new outlets into the market or not. In context with Unicorn
grocery, advantages and disadvantages of the Unicorn grocery are as follows:
Advantages:
 Measurement of the profits & losses making at the different stages of production and
sales.
 Prediction of an impacts of changes into sales prices.
 Analyse big relationship between cost related to fixed and variable costs.
 Prediction of an impact to the cost as well as efficiency alteration on the profitability.
Disadvantages:
 Assumption on the selling prices which are constant at every levels of output.
 Assumes production and sales are the same.
 Break even charts may be time consuming to prepare.
 It can only apply to a single product or single mix of products.
For example: If annual sales of Unicorn grocery are 20000 pounds and P/V ratio is 50
percent, then break-even point (in sales) is 400000 pounds. During this formula, P/V ratio has
been ascertained by doing sales – variable cost, which has arrived at contribution, then
contribution – fixed cost has been resulted into P/V ratio. As, this method is consisting of sales,
variable cost and fixed cost to ascertain the BEP. This tool will help Unicorn grocery to ascertain
their relevancy of sales, variable as well as fixed costs. Also, BEP would assist Unicorn grocery
to enhance sales growth with measures to reduce incurring of the expenses to balance financial
of the firm.
P6 Interpret key financial statements for an organisation
INCOME STATEMENT
2018-19 2019-20
Revenue 59893 62102
Cost of revenue 41424 43045
Gross profit 18469 19057
Operating expenses
Sales, General and administrative 11340 11855
Other operating expenses 3049 3040
Total operating expenses 14389 14895
Operating income 4080 4162

Interest Expense 346 315
Other income (expense) -1190 -403
Income before income taxes 2544 3444
Provision for income taxes 939 1004
Net income from continuing operations 1605 2440
Net income from discontinuing ops 1084
Other
Net income 2689 2440
Net income available to common shareholders 2689 2440
Earnings per share
Basic 1.19 1.08
Diluted 1.19 1.08
Weighted average shares outstanding
Basic 2252 2258
Diluted 2257 2262
EBITDA 3972 4811
TASK 4
P7 Discuss key legislation and regulations that have implications on small business
Small business is considered as emerging businesses, as they have huge scope for higher
business growth for longer tenure. But, these business regulations are highly effected by some
regulations or legislation such as minimum wages, leave enrolment, discrimination along with
“Ban on the Box”. In context with Unicorn grocery, these regulations have played necessary role
in control any kind of shortcomings from business operation. These regulative laws have put
down implications on productivity and profitability of Unicorn groceries. The explanation of
various regulative laws along with its implication are as follows:
Minimum wage act, 1998: This act was created by government of United Kingdom on 1st
May, 1997 and it was passed by parliament on 21 January, 1998. This act has put its emphasizes
on payment of wages, salaries or remuneration to an employee's on work done by them. Also, act
was applicable on every types of business whether large, medium or small. This act has given
right to every employee's or worker to demand their adequate wages from business units in case
if there is anything outstanding or arrears. In response, minimum wage has forced small business
to pay back remaining amount of labour in given time to prevent them from any strict and legal
actions. This has effected Unicorn financial position, as they have paid high increase in salaries

and wages to their employee's within one quarter, which has impacted their financial position
and market strength.
Leave regulation act, 1995: This act was passed by government of United Kingdom in
the year 1995 to provide law for enabling the business firms to provide the adequate leaves to
their employee's as proposed in given laws. Also, this act has enabled business entities to make
various changes in leave of providing 22 leaves in four quarter from 15 leaves. This has impacts
on business operations of Unicorn Grocery, because their employees are taking 4 leaves in 2
months, which is their absence from work. In response, this act has effected business production
and profit generation of the Unicorn grocery on large manner. Absence of labour has created big
burden on Unicorn grocery to maintain their business activities to continue for longer period of
time.
Anti-discrimination act, 1989: This act has been initiated by government of UK to
protect employee's from being harassed by others. In work context, people are harassed through
differs in age, gender, income, society status, colour, religion as well as power. Because of this,
unicorn has faced several legal issues into the business operation, in which one employee abused
another employee. It has effected brand image of Unicorn grocery and its functional operations.
Continuous changes or amendments are necessary to be made to maintain effective business
regulation in Unicorn business growth. Because of increasing rates of harassments, interest and
dedication of their employees have lost and high employee turnover have been resulted in.
Cyber security issues are increasing onto the proactive basis, which can be considered as
threats for business firm to perform its work or task into the defined time or sources of different
task. Cyber issues such as hacking of the account, insufficient support to the IT system are some
of the cyber issues, which can put impact such as implication to the business operation and also
long term longetivety of a business operation at to the longer side. Environment protection issues
such as change into weather as well as climate will impact Unicorn grocery in closure of
business operation and also which would impact in profitability and sustainability of the firm.

CONCLUSION
From the above report, it has been concluded that managing and running small business
is one most critical task to do by business person to earn profit or higher productivity. Cash flow
forecast is the techniques, which has resulted into doing strategic planning of cash generation
along with cash inflow and cash outflow. Along with this, break even analysis has shown about
no profit no loss conditions for business firms. Business entities are required to understand and
analyse the various implications of laws on an operations of business firms. Also, customer
relationship management has been resulted into increasing the engagement of an employee with
higher level of products satisfaction along with increasing scope of customer services.

REFERENCES
Books & journals
Online
Break-Even Analysis, 2018. [online]. Available through:
<https://toughnickel.com/business/Breakeven-analysis>