Managing and Running a Small Business

This report discusses the management of small enterprises, focusing on the DCS group, a distributor of beauty and household products in the UK. It covers important points to consider while planning and allocating resources, methods to maintain good relationships with consumers, creating a transnational business, cash flow forecasting, break-even analysis, and the contribution of financial statements to successful management.

MANAGING AND
RUNNING A SMALL
BUSINESS

Table of Contents
INTRODUCTION:..........................................................................................................................4
TASK 1............................................................................................................................................4
P1Discuss the important points that should be consider by small enterprises while planning
and allocating resources to achieve organizational objectives:..............................................4
TASK 2............................................................................................................................................5
P2) Discuss various methods of undertake by small business to maintain good relationship
with consumers:......................................................................................................................5
P3 Describe how a small business can create transnationally and find out benefits and
disadvantage...........................................................................................................................6
TASK 3............................................................................................................................................7
P4 Make an initial itemised monthly cash flow forecast showing fixed and variable costs set
against income........................................................................................................................7
P5 States how break even analysis could be applied to an organisational situation..............8
P6 Analyse main financial statements for a company with respect to how they contributes to
successful management of company....................................................................................10
TASK 4..........................................................................................................................................12
P7 Analysis key regulations and legislation that have impact on small organisation and social
enterprise..............................................................................................................................12
CONCLUSION - ..........................................................................................................................13
REFERENCE.................................................................................................................................14

INTRODUCTION:
Small business and social enterprise are a crucial part of economy. It gives significant
contribution in the development of a country through employment, reducing poverty and
enhancing standard of living of citizens. The report is about management of small enterprises in
an efficient manner. The report consider DCS group that is a distributor of beauty, household
products at UK(Grogan, Mercer and Engwicht, 2020). It has started the business in the year of
1994. It deals in grocery and own wholesale store within market of UK. The following report
consist how small business can plan and allocated the resources in an efficient manner to achieve
goals. Apart from this it consist various marketing techniques carry out by company to enhance
its market share. Hence, the overall report give a prospective about effective management of
small business.
TASK 1
P1Discuss the important points that should be consider by small enterprises while planning and
allocating resources to achieve organizational objectives:
Small and medium enterprises plays a significant role in the development of a country
such as UK. They create a source of employment for ample of people and develop
entrepreneurial skills such as risk taking, marketing & promoting a product and many more.
Resources are crucial to accomplish business activities and to provide necessary products ans
services to buyers. Finance, human resources, raw material, equipments and many other
resources are essential to have in order to run a business in an efficient manner( Lashkari and et.
al., 2018). Managers of DCS group maintain appropriate control on several resources such as
funds, employees, raw material so that they can meet with the demand arise at market place.
They maintain proper coordination between different departments like finance, marketing, HR in
order to make plans and strategies to fulfil the requirement of resources within organization.
Management team of company consider the following points to plan and allocated resources in
an efficient manner.
Equipments planning: Equipments and tools are essential to undertake manufacturing
process. It is crucial to make plans to make efficient utilization of available tools and machines.
proper maintenance as well as repair facilities on timely basis. In Dcs, group, they acquire tools
ans machineries to carry out processing activities and minimize defects during production.

Mangers allocated equipments as per the requirement of production activities. They make
appropriate strategies to reduce down the breakdowns arises at work place.
Human resources planning: Human resources are the key person for an organization as
they are responsible to undertake different business functions. Planning is essential to recruit and
select skill and qualified employees to accomplish goals. In DCS group, HR manager make
suitable plan to hire, train as well as retain human resources for a longer period of time. Along
with this, they also ensure to motivate work force through several benefits such as incentives,
bonus, reward,recognition and many more. They allocate task to employees as per their
capabilities and skills (Leochico, 2017). It help them to use efficiency of human resources for the
success as well as growth of company.
Financial resources: Fund are necessary to perform various business task. Manger need
to be careful while allocating funds to different activities such as marketing, HR and so on.
Finance can be get from various sources like equity, debt, bank loan etc. Finance team make
anticipations for future funds requirement and then procure it from various sources. Management
team of DCS group make sure that they have necessary fund to accomplish various task.
Furthermore, they allocate funds in an efficient manner so that they attain the organizational
goals in predefined period of time. They carry out financial techniques such as BEP analysis,
overall cost analysis maximize profits and minimize cost.(Marum, Sugarcrm, 2016)
It has been analysed that DCS group is executing proper planning related to finance,
human resources and other. Apart from the above sated points company undertake outsourcing
practices to get efficient advise from experience professionals. They make sure to allocate
resources to different business functions in order to accomplish organisational goals.
TASK 2
P2 Discuss various methods of undertake by small business to maintain good relationship with
consumers:
Marketing is an essential function of every business whether large or small(Marum,
Sugarcrm, 2016). It consist promoting and advertising the products and services being offer by a
business entity. So that, they can retain and attract potential buyers. Marketing managers of DCS
group adopt following processes to manage good relation with consumers:

Communication Channels: It is essential to maintain proper communication with
existing and potential buyers through various channels such as advertisements, hoardings,
marketing campaigns and many more. In DCS group, marketing mangers make sure that they
convey appropriate message to target segment(Mathew, 2017). For this, they adopt different
practices to promote and advertise their product such as digital media, newspaper advertisement
and so on.
Loyalty Marketing: It refers to build loyalty for brand among existing buyers. So that,
they give preference to particular product over other brand. It is an important technique to retain
existing buyers. Marketing managers of DCS group are able to create trust and loyalty among
customers through its efficient post sales services and other methods. It make them enable to get
competitive advantage at market place as consumers give preference to their products.
Customize marketing: As per the current trend, companies are adopting customized
practices of marketing. It refers to adopt strategies according to need and requirements of
potential buyers. DCS group make sure that they apply personalized services to their consumers.
It will help them to engage and retain customers for a longer period of time.
Digital platforms: in the present digital era, organizations are using techniques such as
social media marketing,e-mail and content marketing to enhance their presence at market place.
Marketing managers of DCS group execute various digital techniques to communicate with
target audience and to sustain at competitive market place.(Yasmin, 2017)
From the above discussion, it has been monitor that company is efficient methods of
customer relationship management such as customized marketing, online platforms and so on. It
will help them to get the attention of new buyers and retain existing ones. it makes them enable
to attain organizational objectives in predefined period of time.
P3Describe how a small business can create transnationally and find out benefits and
disadvantage.
Transnational business refers to trade of business across international boundaries. In
which they make strategies to run their business in effective across globally and which is
considered as transnational business strategies. It is important for small scale business in order to
achieve growth and success. In which there are various approaches for creating supranationality.
Some of these are opt by DCS group which are discussed below:

Export and import – Through this technique small business can develop transnationally
as they can export and import their product as well as other resources for production and
manufacturing in order to maintain trans-nationality of two places. In context of DCS group, it is
very essential for them to use this tool for the accomplishment of organisational goal or
objective(Waldman and Bowen, 2016). This will aids company to maintain their existence at
different nation along with other boundaries of nation.
Advantage – Primary advantage of this strategy is, it is less costly compare to multi
national domestic strategy. In this small firm have opportunity of market penetration. In which
company can perform their task in bigger level and can reach their predetermined goal.
Disadvantage- In this organisation need to face to much competition from their rivalries.
As well as it is very tedious for firm to centralize global offices.
The transnational model show a cooperation between local authority and centralised
decision making. In this firm try to equilibrium between pressure for global integration and local
representative. In this liabilities and assets of corporation is spread according to the benefits of
specific activity.
TASK 3
P4 Make an initial itemised monthly cash flow forecast showing fixed and variable costs set
against income.
Cash flow – it refers to an statement that is used by a business entity in order to
determine flow of cash for a specific period of time so that will be able to to manage all function
by providing adequate amount for each activity. It is very essential tool for any firm in order to
manage cash inwards and outwards of firm. In this all transaction data are recorded afterwards
analysis of data is done in a effective manner.
Budgeting, planning and forecasting- It is very crucial for any firm as performance of all
entity is relies on all these factors. As well as these function aids company to perform all task in
effective manner by setting proper plan of budget and forecast(Silver, Pyke and Thomas, 2016).
This is because the environment of business is dynamic in nature in which these all three
elements helps company to run their business flexible. In context of DCS group, they use
planning, budgeting and forecasting in order to allocate resources in appropriate manner and for

working flexible with changes of business environment. Cash flow statement of DCS group is
mentioned below:
P5 States how break even analysis could be applied to an organisational situation.
Break even analysis: It is a technique that is opt by an organisation in order to analyse
and determine profit ration and margins. It always looks on step of fixed cost related with profit
earned by each additional unit produced and sold(Kuhn, and Maleki, 2017). A firm which has
low low fixed cost will posses low break even point of sale. In which Break even point means no
loss and no gain. In relation to DCS group they opt algebraic method to determine break even
point for decision making process. Calculation process of this methods is obstinate below:
Break even quantity= TFC / (P -AVC)
where,
TFC= Total fixed cost
AVC= Average variable cost
P- Price

It has been analysed that 200 items will be sold and cost of each product will be around
35 pounds. Calculation of BEP for the event is as follows:
BEP (in units) = Fixed cost / contribution per unit
= 2860 / 21.5
= 133.023 or 133 product
At least 133 products, need to be sold for meeting Break even point.
BEP (In amount) = Fixed cost / PV ratio
= 2860 / 61.43%
= 4655.71 or 4656 pounds
For fulfilling condition of no profit and no loss point, firm should generate revenues of
around 4656 pounds.
The no profit and no loss point require that the
Working notes:
Contribution per unit = Sales – Variable cost / total units to be sold
= 7000 – 2700 / 200
= 4300 / 200
= 21.5
PV ratio = Contribution / sales * 100
= 21.5 / 35 * 100
= 61.43%
All the figures discussed above are based upon assumption.
Merits of break even analysis-
 Measuring profit and loss at each level of production and sales.
 It analysis the relationship between total fixed cost and average variable cost.
 It anticipate impact of cost and efficiency of profitability changes.
 Company can enhance their productivity and profitability by using BEP tool.
From above advantages it can be analysed that BEP is an essential tool for any firm in
order to determine financial position of company. In context of DCS group they use this tool for
increasing the profitability of their business by enhancing volume of production, selling price
and by decreasing fixed cost and variable cost of product(Neubauer and Lank, 2016).

P6 Analyse main financial statements for a company with respect to how they contributes to
successful management of company.
Financial statement is a sequence of three major reports that includes cash flow
statement, income statements and balance sheet. In which interpretation of this is an endeavour
to identified the importance and meaning of financial statements data so that a forecast can made
successful with the prospects of future earning, ability to pay interest, debt maturities, both
current as well as assets, liabilities and profitability of sound divided policy( Bain, and
Band,2016)In context of DCS group it aids company to determine the current performance so
that they can made decision on the basis of performance. In context of DCS group, interpretation
of all three statements are discussed below:
Balance sheet-
It is a statement of assets, liabilities, equity, shares along with capital of business within
company for a particular period of time. It is used to identified financial position of company.
The below mentioned balance sheet is of DCS group
Particulars 01/04/17 31/03/18
Current assets
Cash and cash equivalents 20770 46860
Net receivables 14480 13780
Inventory 78100 75850
Other current assets 1090 16770
Total current assets 114440 153260
Long-term investments 4360 5150
Property plant and
equipment 439390 483780
Goodwill 7740 7840
Intangible assets 52180 63060
Other assets 119560 97090
Total assets 737670 810180

Current liabilities
Accounts payable 87290 96750
Short/current debt 12530 51760
Other current liabilities 22260 22430
Total current liabilities 122080 170940
Long-term debt 162290 166340
Other liabilities 109940 106240
Minority interest -250 -590
Total liabilities 394060 442930
Stockholders' equity
Common stock 40620 40620
Retained earnings 656040 661760
Treasury stock -442630 -428390
Capital surplus 41640 41640
Other stockholder equity -442630 -428390
Total stockholder equity 295670 315630
Net tangible assets 811810 929500
From above table it has been analysed that total assets of company is 73760 in year 2017
whereas in year 2018 it is 810180 which shows that assets of company are increase within year
as well as liability of company also increase. Which contributes company towards success. Cash
that DCS have in 2017 is less compare to 2018. Which is in favour of company. Through this it
can be seen that can is growing upwardly.
Income statement

In this company records their inflows and outflows of firm in order to determine flow of
cash in context of DCM it is discussed below:
Particulars 2017 2018
Revenue
Total revenue 1069820 1062200
Cost of revenue 674560 662930
Gross profit 395260 399270
Operating expenses
Selling general and
administrative 332470 334860
Others 4950 6320
Net profit 57840 58090
From above income statement it has been analysed that net profit in year 2018 is more
compare to year 2017 which is 58090. which means company is successfully achieved its goal
and objective in a very effective manner. This aids company to contributes towards success and
development.
TASK 4
P7 Analysis key regulations and legislation that have impact on small organisation and social
enterprise.
Rule, regulations and legislation is essential for small business and social enterprise.
Organisation followed by regulation and legislation so it helps to achieve goal of the company. It
also help to increase the profitability and productivity of company. DCS group is one of the
company which is followed properly regulation and legislation due to help in managing business.
It is crucial aspect because examine the transaction of business which is recorded in both online
and offline way so easily check them. It is conduct discipline in business and also set code of

conduct for social enterprise. There are various kind of legislation and regulations which is
followed by DCS group so mention below:
Healthy and safe Act-: It is act which is save the interest of employee in order to provide
safe and secured working environment. It includes various rules and regulations made which is
provide a protection of the employees. In relevance of company. It is essential to follow this Act
because it must be provide protection their employees due to deliver high quality goods and
product. It includes also develop brand image and goodwill in market. Organisation provides
various kind of provision of employees like health insurance, accidental claim and life insurance
policy which is employee face any kind of difficulty so it can help all these
provisions( Brustbauer, 2016).
Consumer law-: It is said to be consumer protection law under this small business set
code of conduct for consumer which is essential to followed by company due to protection
interest of consumer. There various organisations unethical practices are doing so it is directly
affect the consumer interest. DCS group which is followed proper rules which is come under this
act and supply quality product to the consumer. It is followed strict code of conduct which is not
done any kind of misbehaved activity. It always provide goods and service according to need of
customer.
Data security-: This act is knows as authentic information of consumer are protected
under this law. It is provide protection information of customer which is not leak under any
circumstances. In context of DCS group, followed strictly that rules privacy of customer must be
protected. Thus, it is use advancement technology to easily protect a data and also provide
protection against cyber security(Rees and French, 2016).
Employment Act-: This act is developed by each and every small business and social
enterprise. Under this law provide protection and saving interest of consumer. It includes various
rules and guideline which is followed by company. DCS group, it provides freedom to expressed
their views and given a respectful designation. It is related to employer must be good behave
towards the employee and provide a good working environment. Organisation followed
guideline properly and achieve satisfaction level of employee as well as firm also.
Therefore, above the concepts all are related to law and it conduct various act in order to
smooth running business operations. There all act is beneficial for the small business and social

firm because it helps to achieve objective of the organisation. It also help to provide competitive
edge in the market.
CONCLUSION -
From above report it has been concluded that managing small business in not an essay
job as various factor affects function of business. For this company need to be flexible in nature
in order to accept changes of business environment. Moreover DCS firm opt transnational tool to
operating their business globally for enhancing productivity and profitability of firm. Which
contributes corporate towards growth and development. As well as company uses financial tool
like income statement, balance sheet for maintaining record of their cash flow which helps them
to determine financial position of firm. Furthermore DCS group use BEP to determine whether
company is in profit or loss. In addition, with the help of norms and legislation, company can
improve workplace environment by maintaining positive and healthy workforce environment.

REFERENCE
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