Managing Small Business Operations

This assignment focuses on the importance of effective management in small businesses, highlighting the need for optimal resource utilization, strong customer relationships, and adherence to key regulations. It also emphasizes the significance of financial management challenges, social media impact, and product innovation in small companies. The assignment draws from various sources, including journals, books, and online resources, providing a comprehensive overview of managing small business operations.

Managing and Running a
Small Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main considerations a small business or social enterprise....................................................1
TASK 2............................................................................................................................................3
P2 Evaluate different processes of customer relationship management.....................................3
P3 How a small business can develop transnationally and determine the benefits and
drawbacks....................................................................................................................................4
TASK 3............................................................................................................................................5
P4 An annual itemised monthly cash flow forecast showing fixed and variable costs...............5
P5 Break- even analysis could be applied to an organisational situation...................................7
P6 Key financial statements for an organisation in relation to how they contribute to the
successful management of the organisation................................................................................8
TASK 4............................................................................................................................................9
P7 Key legislation and regulations that have implications on small businesses or social
enterprises...................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Small businesses are refer to partnership, sole proprietorships, privately owned
corporations that having less revenue and workers. As per today's scenario, number of small
business are operate with the purpose of generating profitability. It directly contributes in
developing economic growth. In this, the size of these type of businesses are small such as
retailing services, wholesaling, grocery stores and many more. All these business are operate
their activities at small scale (Ametorwo, 2016). Along with this, the main aim advantage of
small business is to provide various job opportunities to local people through which they
improve their living standard. It positively affect the economy of country. Current report is based
on Talent Plus, is a small business organization. It is HR consulting firm that provide career
discussion with managers. This project discussed about main consideration a small or social
enterprise which needs define at the time of planning and allocating resources. Along with this,
different processes of customers relationship management is also mentioned in this report. Key
legislation and regulation are also discussed in project which is important for company to
implement within their activities.
TASK 1
P1 Main considerations a small business or social enterprise
For establishing as well as operating a small enterprise, number of factors and
considerations are available in business environment. This will affect the entire activities of the
company. Mainly, it includes macro environment and management of the company. Both are
play vital role in accomplishing business activities but these are uncontrollable. Micro factors are
also important which is directly affect all the activities of the company. Thus, it is vital for
company to evaluate as well as implement both factors before developing an effective plan. With
the help of this, they easily attain set goals and objectives in appropriate time span. Talent Plus is
a small company as they provide consultation services to customers with the purpose of
resolving their queries. The main aim of this company is to provide quality services to their
customers by understanding their needs and wants (Hassali And et. al., 2014). As a small
company, Talent Plus required some main consideration at the time of planning and allocating
resources in order to attain set goals and objectives. All these can be understood by following
points:
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Skilled human resource: It is one of the important part of the business organization
which helps in developing appropriate policies and strategies to implement all the activities. This
will helps accomplishing set goals and objectives. In this human resource department play vital
role in managing as well as arranging all the workers. Along with this, manager of company also
develop effective process with the purpose of improving workers performance (Lemahieu,
vanden Broucke and Baesens, 2018). For attaining the same, human resource department provide
training and development programs to their staff members with the purpose of enhancing their
abilities as they easily make an effective planning to develop quality products and services. This
will aid in attaining set goals and objectives in an appropriate time span.
Main vision, mission and objectives: It is also an important part through which company
set their clear objectives in order to develop a better plan. In addition of this, allocation of
various resources are highly relate with the customers requirements this will leads in improving
the chances of attaining desirable results. In this, the main mission of Talent Plus is to provide
better consultancy services to customers as per their quires. With the help of this, company make
their quality appropriate and affordable as well. Thus, company have to develop a clear vision,
mission and objectives to enhance their productivity level at market.
Proper fund: Adequate fund is one of the important factor for company at the time of
implementing the planning and allocation of resources. If company have proper funds than they
easily implement all the activities and also enhance the chance of attaining set objectives. Thus,
it is important responsibility of manager of the company to allocate proper funds to each and
every department. Lack of funds are create issues at the time implementing operational activities
and at the same time also fails in attaining set targets. In addition of this, Talent Plus is a small
company as they have less funds in which they face issues at the time of performing entire
activities. Therefore, company needs to arrange adequate fund for improving the chances of
attaining positive outcomes. For this, Talent Plus make a financial statement that cover all the
outflows, inflows, income, expenses and many more. With the help of this, company easily
reduce the expenses and increase income level (Weske, 2012). This will aid in attaining
predetermined objectives.
Hence, all these are main consideration which is important for Talent Plus to address at
the time of planning and allocating resources. This will help in attaining positive outcomes and at
the same time also increase productivity level as well.
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Along with this, there are some key factors which consider at the tim3e of operating small
business activities are as follows:
Financial plan: It consider as a important factor for business organization to operate
entire operational activities in systematic manner. Thus, it in vital for company to keep adequate
funds so that they can easily evaluate their performance.
HRM plan: It is also consider as an important process which define current and future
needs of the human resource in business organization to attain set goals and objectives in
appropriate time frame. With the help of this, company can easily accomplished their set
objectives by implementing HRM programs.
TASK 2
P2 Evaluate different processes of customer relationship management
Customers are important asset for every business organization because they consume
company services through which firm enhance their sales at market place. Thus, company needs
to develop better relation with them by providing them quality products and services as per their
needs and wants. With the help of this company can grab customers attention and attain
competitive advantage as well (Smit and Watkins, 2012). In context of Talent Plus, it is
important to understand customers taste and preferences towards its services by communicating
with them. For establishing positive relation with consumers, firm have to understand about
customers purchasing behaviour which may leads in making their brand image more popular. In
addition of this, for establishing better interaction with their target customers, company use
various ways and methods such as social media, newspapers and so on. This can be aid in
managing better relationship with customers. By assistance of this, firm may enhance their
productivity level at market place.
Mainly, customers relationship management consider as an effective approach to manage
all the data and information of customers with the purpose of creating as well as enhancing
positive relation with consumers. Along with this, it allow to business organization to serve
quality services by considering their requirements. One of the main advantage of this CRM is
that it help to company to stay connect with their target customers which contribute in enhancing
profitability level at market place. The main focus of customers relationship management is to
maximize strong customers base with contribute in making brand image of the company is
popular. In context of Talent Plus, they communicate with potential and new customers with the
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purpose of attaining their satisfaction level. In this, the CRM process is understood by following
points which helps in attaining set objectives in an appropriate time frame:
Consumer portfolio analysis: It is first step which refer to analysing customers base.
Along with this, it also helps in determining those customers who gave more profit to business
organization. One of the main focus of this step is to determining target customers base with the
aim of attaining higher profitability (Schaper and et. al., 2014).
Customers intimacy: This step refer to the two way connection in which company needs
to be familiar with potential consumers for understanding their needs and wants. In addition of
this, it also help company to understand about target market. One of the main focus of this step is
to create as well as building customers data base by gathering relevant information. This will aid
in improving the customers awareness towards company services.
Network development: This step is refer to the determination of effective relationship
with customers with the purpose of providing them better services (Welsh And et. al., 2014).
With the help of this Talent Plus can serve quality services to end consumers in order to making
positive and healthy relationship. These type of relationship can be external partners like
investors and external partners such as workers.
Value proposition development: Under this step, manager of the company gather
information and data at the time of customers intimacy. In addition of this, manager try to
determine target customers and than create values proposition for them with the purpose of
making strong customer base. It contribute in managing better relation with them in order to
attain desirable results.
Consumer life cycle management: It is last step which refer to ideal customers journey.
Along with this, it also includes continuous relationship which develop as well as maintain with
target customers of the firm. It require proper structure and attention to entire process through
which firm can easily manage as well as develop effective relationship with customers.
P3 How a small business can develop transnationally and determine the benefits and drawbacks
Talent plus is a small recruiting company which help in identifying and cultivate talent to
the optimize an individual full potential so that they can easily perform in organization.
Company going to expand their business at global level with the aim of attaining success. For
this company can develop transnationally which can be understood by following description:
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Transnational sales: It refer to the capacity through which small business organization
sell their products and services in new areas and country with the purpose of capturing market
share from its rivals. For attaining the same, Talent plus have to adopt appropriate techniques in
order to expand their business activities in new market. In addition of this, it also provide
opportunities in which firm can build strong brand image by establishing competitive position at
market place.
Along with this, for inviting as well as attractive customers, company needs to focus on
quality products and its price as well. Both are more important which may leads in attaining
competitive advantage from its rivals (Hansen and Greve, 2015). In this context, there are some
various advantages and disadvantages which is relate with expansion of business functions in
new and another countries. All these can be understood by following points.
Benefits
Independence: One of the main advantage of this is that Talent Plus can easily take right
decisions towards the expanding business operations in another countries.
Efficiency: Under this, Talent plus needs to make as well as follow effective working
structure which may leads in increasing the overall performance of the company at market place
(Löfqvist, 2017). With the help of this firm enhance their efficiency level and also make their
activities activities appropriate.
Drawbacks
Minimum finance: For expanding business activities, Talent Plus required proper funds.
If they fails in managing funds than they face issues at the time of operating business functions
in new countries.
Time period: For expand business functions in new countries required more time.
Limited time may rise complexity at the time of expanding business in another areas.
Options to capture market
Joint venture: It is effective method which is used by the organisation to enter into new
market with the support of local company. This will provides the opportunity to the organisation
to use their technical know how and technologies to achieve specific objective.
Franchise: This is an other option through which organisation easily enter into market.
Here, involvement of risk with this option very low and opportunity is available regarding
earning of fixed amount of revenue as royalty.
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Internationalisation: It is consider as an effective process of increasing the involvement
of business in international markets. Mainly, it provides a roadmap for the development of
business at international market. In this context, the main advantage of this term is that it
improved skills and experience. Along with this, it also increased demand of local goods and
services. On the other side, the main disadvantages of this term is that it exploitation of
workforce and local resources. It provide advantage to Talent plus to expand their business at
global level.
TASK 3
P4 An annual itemised monthly cash flow forecast showing fixed and variable costs
For raising funds, many sources are available for small business organization through
which they easily perform various functions effectively. Proper funds are vital for each and every
business organization in which they can improve their performance level by adopting new and
innovative techniques. Along with this, it also includes working capital, debts clearance and
many more. All these are basic requirement for having proper funds. In this, sources of income
are classified in two aspects such as internal and external.
Internal source:
Sale of fixed assets: It is an effective way to raise the funds in business organization. In
this firm increase funds through sale of existing assets. It is known by divestment as it fulfil the
requirement of finance.
External source: It is also divide in short term and long term through which firm raise their
funds.
Bank loans and mortgages: It is consider as a short term in which firm increase funds by
private banks. Under this some assets of company are mortgage for the particular time span.
Leasing: It is an agreement in between lessor and lessee in which owner of asset purchase
asset from user by exchanging periodical payments called lease (Musanzikwa, 2014).
Overdraft facilities: Under this, bank allow business organization to overdrawn the
amount from their account according to the requirements.
Forecasting and budgeting
Forecasting refer to planning towards the future action which directly affect the workers
performance within the organization. It helps in formulating various budget in order to measure
actual performance of the firm (Bititci, 2016). Along with this, it evaluate the future action which
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may aid in improving the performance level of the company at market place. In this context,
there are various techniques which help business to make an effective planning and forecasting
as well:
Time series data: It is an appropriate technique which assist company to gather data and
information about the time duration for completing the new project. By assistance of this, budget
can easily prepared and at the same time also helps in setting the standard for workers by
providing them proper responsibilities.
Identification of moving average: It refer to the opportunity which helps in
understanding current trends and changes existing products. With the help of this, company may
easily satisfy customers needs and wants.
Balance sheet of Talent Plus organization:
Balance sheet at the year ended
Year 2017 (value in £) 2018 (value in £)
Fixed assets 170 310
Stock 30 50
Debtors 100 75
Bank 40 60
Total 340 495
Creditors 150 200
Bank overdraft 110 90
Total 260 290
Working capital 80 205
Profit and Loss Account at the year ended
2017 2018
Sales 100 150
Cost of good sold 20 45
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Gross profit 120 195
Overheads 60 80
Net profit 60 115
Cash Flow statement
Particulars January February March April May June
Cash inflows
Investment 8000
Credit sales 1200 1800 2100 2300 2000 3000
Total inflows 9200 1800 2100 2300 2000 3000
Cash
outflows
Fixed:
Equipment’s
1500 1500 1500 1500 1500 1500
Variable :
Direct
material
300 200 150 100 200 350
Total
outflows
1800 1700 1650 1600 1700 1850
Net cash flow 7400 100 450 700 300 1150
Opening
balance
0 7400 7500 7950 8650 8950
Closing
balance
7400 7500 7950 8650 8950 10100
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Particulars July August September October November December Total
Cash inflows
Investment 8000
Credit sales 3500 3800 4000 4600 5200 6000 39500
Total inflows 3500 3800 4000 4600 5200 6000 47500
Cash
outflows
Fixed:
Equipment’s
1500 1500 1500 1500 1500 1500 18000
Variable :
Direct
material
300 400 450 600 700 750 4500
Total
outflows
1800 1900 1950 2100 2200 2250 22500
Net cash flow 1700 1900 2050 2500 3000 3750 25000
Opening
balance
10100 11800 13700 15750 18250 21250
Closing
balance
8950 10100 11800 13700 15750 18250
P5 Break- even analysis could be applied to an organisational situation
Break even analysis is one of the effective and important techniques through which
company can evaluate the facts in order to determine that what things are need to sell, monthly or
annually in order to cover total cost of the business. Along with this, it is used by the production
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management to determine variable and fixed as well (Kew and Stredwick, 2017). In this, both are
compared with sales to analysis the level of total sales volume. In addition of this, it is graphical
representation of all the costs at different activities. One of the main advantage of using this is to
identify the margin of safety points. It also define opportunities towards the policies which helps
in improving the sales volume in order to earn revenue. Furthermore, break-even point is an
effective situation which define profit and loss in order to make their sales volume appropriate.
For attaining success, it is important for Talent Plus to make an effective plan for
determining the sales and cost (Jones, Borgman and Ulusoy, 2015). In this, break-even analysis
play vital role in analysing information towards the sales. With the help of this company can
reduce wastage and increase the chances of attaining profitability. For example, fixed cost of the
company is 20000 and variable cost is 10 per unit and the selling price is 15per unit. In this
context the BEP is:
BEP = Fixed cost/ margin per unit = 20000/ (15-10)= 4000.
That implies company have to sold more than 4000 unit to attain any profit. If they fell short of
the target they have to incurred losses, anything more than 4000 units will be the profit of the
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company. Company is hitting there breakeven at 4000 unit where there is no profit and no loss to
the company. Talent plus need to monitored there sales and should focus on selling at least 4000
units at the given prices. Strategies should be formed in a way so that break-even (4000 units)
can be hit. Initially there is a possibility of loss as there expenditure will be more but the focus
should be on to reach the break-even as soon as possible. Only after achieving break-even
company will start earning revenue/profit.
P6 Key financial statements for an organisation in relation to how they contribute to the
successful management of the organisation
Financial statements are the important for business organization as it includes cash flow
statement, profit and loss account and balance sheet. All these are important which provide
different information towards the company and its activities as well. This will lead in
determining the actual performance of the firm and at the same time also define the ways to
enhance their market share. In context of Talent plus, they also make effective budget and
statement which includes expenditures, assets, liabilities, income and many more. With the help
of this company can enhance their performance level and make their brand image successful. In
this context, there are some interpretation of key financial statements which directly contribute in
making a successful management are as follows:
Gross profit ratio: It define relationship between gross profit and net sales revenue.
Along with this, it is more effective tool which helps in evaluating the operational performance.
One of the main advantage of this tool is to measure the efficiency level of company and its
materials and well which helps in producing and selling products for increasing profitability
level. This can be concluded as:
Gross profit ratio= Total sales – Cost of goods sold / Total sales
Net profit ratio: It is also an effective tool in which net profit and gross profit are equal.
Along with this, it helps in evaluating the profitability level of the company which are not taken
non operating revenues and expenses (Crush and Chikanda, 2015). One of the main advantage of
using this tool is to determine the overall profitability of the company. This can be concluded as:
Net profit ratio = Net profit after tax/ Net sales * 100.
Quick ratio: It is an effective way to measure the financial statement through which
company may easily identify their short term financial liabilities (How to Interpret a Financial
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Statement, 2016). It is also known by acid- test ratio. One of the main aim of this ratio is to
measure the liquidity of the Talent Plus. As it is calculated as:
(Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.
Current ratio: It is refer to liquidity ratio which help business organization to determine
the ability to paying both long term and short term obligations. It is consider the total current
assets and total liabilities as well. One of the main advantage of this ratio is to measure the
liquidity position of the business organization. It can be calculated as:
Current Ratio = Current Assets / Current Liabilities.
Balance sheet at the year ended
Year 2017 (value in £) 2018 (value in £)
Fixed assets 170 310
Stock 30 50
Debtors 100 75
Bank 40 60
Total 340 495
Creditors 150 200
Bank overdraft 110 90
Total 260 290
Working capital 80 205
Profit and Loss Account at the year ended
2017 2018
Sales 100 150
Cost of good sold 20 45
Gross profit 120 195
Overheads 60 80
Net profit 60 115
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Cash Flow statement
Particulars January February March April May June Total
Cash inflows
Investment 8000 8000
Credit sales 1200 1800 2100 2300 2000 3000 12400
Total inflows 9200 1800 2100 2300 2000 3000 20400
Cash
outflows
Fixed:
Equipment’s
1500 1500 1500 1500 1500 1500 9000
Variable :
Direct
material
300 200 150 100 200 350 1300
Total
outflows
1800 1700 1650 1600 1700 1850 10300
Net cash flow 7400 100 450 700 300 1150 10100
Opening
balance
0 7400 7500 7950 8650 8950
Closing
balance
7400 7500 7950 8650 8950 10100
Profitability
ratios Formula 2017 2018
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Gross profit
ratio gross profit/net sales*100 120 130
Net profit ratio net profit/net sales*100 60 76.67
Liquidity
ratio Formula 2017 2018
Current ratio Current asset/current liability 1.13 0.93
Acid test ratio
Current asset-inventory/ current
liabilities 0.93 0.65
Hence, all these are important which helps business organization to evaluate financial
statements. This will contribute in enhancing the chances of attaining success at market place
and at the same time also define the way to increase profitability level.
TASK 4
P7 Key legislation and regulations that have implications on small businesses or social
enterprises
It is important for every business organization to implement key legislation and
regulations at the time of operating all the functions. All these are develop as well as set by
government authorities that include both positive and negative impact on small business
enterprise. In this some rules are helps them in making their performance appropriate and at the
same time also effectively control all the operations. In context of Talent Plus, as a small
business they needs to implement all the rules and regulation at the time of executing their
business functions. All the key legislations and regulations are understood by following points:
Health and safety Act 1974: It is one of the effective act which helps in protecting
workers at workplace by providing them safe and healthy work environment. Thus, it is
important duty of manager of Talent plus to provide welfare, safety and healthy services to
workers are customers as well (Ward, 2016). if workers are feel secure and safe at workplace that
they easily perform their task in efficient manner. This will aid in motivating employees in which
they can accomplish desirable results. Along with this, it also contribute in attaining set
organizational goals and objectives in appropriate manner.
Tax and employment Act: This act is also beneficial for Talent plus in which they have
to pay tax amount. With the help of this, it provide support business organization to effectively
perform their duties and activities as well. Mainly it includes remuneration, wages, salary,
bonuses, allowances, commission and other benefits. For attaining success at market place,
Talent Plus needs to pay tax amount for improving their brand image at market place.
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Data protection Act: It is also play an important role in protecting workers and staff
members data and information (Karadag, 2015). Along with this, they does not transmit the
workers information to another one without their permission. In context of Talent Plus,
implement this act within their activities with the purpose of managing workers information.
With the help of this, company may reduce the staff turnover and at the same time also build
trust with customer and employees as well.
Small business enterprise and employment act: This act an effective act which is
designed to make the UK more attractive by reducing the barriers that many small business face
in their drive to innovate, grow and compete. Mainly, it is related with access to finance,
company transparency and insolvency measure.
Trading Laws: It is one of the important act which are designed to prevent unfair trade
practices and at the same time also protect the consumers. For example, organization engaged in
selling products to general public and a law firm providing the legal services to the public.
Hence, all these are important key regulations through which Talent Plus easily enhance
the chances of attaining better success at market place. Thus, it is important for them to
implement at the time of operating their business functions.
CONCLUSION
From the above mentioned report, it can be concluded that it is important to manage a
small business enterprise with the purpose of attaining success. Talent plus is small HR
consulting firm which operate their activities at small scale. In this the main focus of this
company is to use necessary resources at optimum level at the time of executing business
activities. With the help of this, company can easily attain desirable goals and objectives. Along
with, customers relationship management processes are also play vital role in providing
competitive advantage to business organization. This will contribute in making brand image
more popular at market place. Key legislation and regulations are also helps in developing
positive image of small business organization.
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REFERENCES
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Online
How to Interpret a Financial Statement. 2016. [Online]. Available
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1200760>.
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