Managing and Running a Small Business

This document provides insights into managing and running a small business or social enterprise. It discusses the main considerations for planning and allocating resources, different processes of customer relationship management, development of small businesses transnationally, cash flow forecasting, and break even analysis.

Unit 29 Managing and
Running a Small
Business

Table of Contents
INTRODUCTION................................................................................................................................2
TASK 1.................................................................................................................................................2
Discuss the main considerations a small business or social enterprise needs to address when
planning and allocating resources to achieve business objectives...................................................2
TASK 2.................................................................................................................................................3
Explain and evaluate different processes of customer relationship management for a small
business or social enterprise............................................................................................................3
P3 Explain how a small business can develop transnationally and determine the benefits and
drawbacks........................................................................................................................................4
TASK 4.................................................................................................................................................6
Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income for a specific organisation.......................................................................................6
Discuss how break even analysis is applied to organisation............................................................9
Examine Interpretation on key financial statements of a company for contribution in successful
management...................................................................................................................................10
TASK 4...............................................................................................................................................11
Explain briefly legislation & regulations that have impact on small businesses...........................11
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................14
Books and Journals........................................................................................................................14

INTRODUCTION
Market is wider and broader in which different types of business operates their functions as
well as operations. Managing a small business is a critical task which required deep level of
understanding and expertise (Liebregts, 2019). Mills, 2016 Fruition Consultants Ltd, a tax
consultant firm in Aldgate East, headquartered in UK. Organisation deals in providing services
related to tax,accounts, audits etc. This report comprises of allocating of resources to achieve
business objectives, different process of CRM, evaluation of transnationally business, annual
monthly cash flow, break even analysis, interpretation of financial statements and key legislation as
well as regulation on small/ social firm. This report gives a brief knowledge about managing of
business functions as well as operations (Park, 2018).
TASK 1
Discuss the main considerations a small business or social enterprise needs to address when
planning and allocating resources to achieve business objectives
In United Kingdom, market is growing and developing at larger scale. This comprises of
small, medium and large businesses. The ratio of these businesses contributes the growth of
economy as well as overall development. In 2019, growth of small & social enterprises business
increases by 4.2% with including of major proportion of local and small business (Ung, 2017).
Resource allocation is essential part to run business in proper manner. It is defined as process of
using right resources at right place. It is essential to use resources with correct market analysis so
that all are used in proper manner (Hickman and Silva, 2018). In terms of social & small business
they contribute 80 % of profit revenue to market as well as economy's development. In this
competitive era, it is crucial for entrepreneurs to allocate resources in such way that problems do
not occur during process.
In relevance with Fruition Consultants, it is a small business which run its activities in a
limited region. Moreover, for this they allocate resources in efficient so that goals and objectives
are achieved. Manager of firm make ensure that resources are used with appropriate consideration
& after analysing their usage in business. Thus, there are various types of resources which are
required and are mentioned below-
Financial resources- These are those which comprises of capital, loans, etc. which are
needed to initiate or run a business. Without the use of these it is not possible for any entity to carry
out their operations smoothly. So, selected firm allocate them with correct use where they are

required for example- infrastructure, documents etc. With help these, continuity of business remain
present in market.
Assets- Then comes the assets in which it involves land, machinery, etc. These are types of
resources which is privately owned by enterprise. They are physically available like transportation,
furniture and many more. They help in initiation of activities & planning with use of assets. In
context of chosen entity, they use them for accomplishing their goals with use of such assets.
Human resource- They are also to be considered as most important resource of firm
because they are one who manages & coordinates all the activities of business. Also, they are
responsible for increasing productivity of firm. Thus, given entity have efficient human resource
who assist making decisions.
TASK 2
Explain and evaluate different processes of customer relationship management for a small business
or social enterprise.
Customer relationship management is defined as process of maintaining & managing &
data driven strategies which is used by organisations to analyse customers interactions with aim of
generating profit. This strategy help entities to use stay connected or with their end users. In
relation with Fruition Consultants Ltd. They use CRM with aim of understanding users demands or
requirements. With help of this, it is easier to implement effective decision making. There various
process which are explained below-
Portfolio Analysis- It is approach of management which is adopted by enterprise to examine
and categorise their product or services by comparing their effectiveness in market & with
competitors. Fruition Consultants Ltd. Use this process which help them to understand their
products or services performance level (Torry, 2017).
Benefits- With help of this process, company is able to develop strategies for business &
which also assist them in reducing of errors . It gives a clear picture of products that are essentials.
It encourages management to do evaluation of their services or product.
Drawbacks- Portfolio analysis do not provide exact credentials about market changing
environment which is crucial for implementing strategies. Also, it is difficult to change analysis
because it be a time consuming.
CLM- It is elaborated a customer life cycle management which refers to continuous process
of examining of customer metrics on the basis on basis of which decisions or strategies are
implemented. In context with given entity, they use this so that there products are used by potential
buyers. Moreover, with use of CLM customers preferences, attitude, behaviour are being analysed.
Advantages

Develop business opportunities- CLM helps business to analyse & understand needs,
pattern of behaviour, market opportunities to firm. Through this, it is easier for company to access
more new opportunities.
Limitations-
Time consuming- This CLM is a time consuming process because it is systematic
procedure & each stage required deep level of understanding.
Thus, after analysing above matter it is seen that CRM is integral part of organisation
which is needed to be carried out properly. By using different types of process it is easier to adopts
CLM & portfolio analysis. Moreover, CRM is an effective tool which helps in increasing of more
customers for business (Fogel, 2019).
P3 Explain how a small business can develop transnationally and determine the benefits and
drawbacks.
Small business are major reason for development of overall economy of country.
Transnationally business is defined as process of developing enterprise into international level. It is
most developed strategy which is adopted by most the companies with aim to expand their business
activities at larger scale. In this type of strategy, import as well as export is being done globally at
different locations. It is not easy to use this strategy because risk associated with this one is high. It
mostly used by large businesses because they are financially capable.
Advantages-
Increase recognition of brand- With use of this strategy, it increases brand recognition
across the globe. It is beneficial entity because customers are aware about brand at larger scale. This
strategy assist Fruition Consultants Ltd. To increase their presence of company internationally.
Increases market share- It also enhances market share of enterprise & which is beneficial
because it help in accessing more opportunities in wider market. It makes them aware about to
target which potential buyers.
Disadvantages-
Uncertainty- Transnationally doing business is uncertain because rules & regulations of
country is different from one to anther which makes it difficult for business to run their activities
because they are changeable & uncertain.
SWOT Analysis
It is framework which is used by entities to determine their strength, weakness, opportunity
& threat to determine impact of internal factors on work environment. In reference with chosen
enterprise, they use this framework so that appropriate tactics are adopted by them. This tool

required deep level of market research for gaining information related to busi9nesses.
Strength
 Transnationally business enhances
market value & brand recognition
worldwide.
 This strategy is useful in access more
opportunities at different locations which
is beneficial for Fruition Consultants
Ltd.
Weakness
 To implement strategy properly, there is
huge requirement of money at wider
level because of which it become
difficult for businesses to use it in
effective way.
 Another weakness is that small business
requires entry strategies to access global
business (Sayles, 2017).
Opportunity
 Company will be able to access ample
number of resources for their operations.
 Then, given organisation can access to
wide range of customers for businesses.
Threats
 Due to availability of existing small
businesses & social enterprise, suppliers
dominate new entries.
So, from given paragraph it states that transnationally business strategy can be adopted by
Fruition Consultants Ltd. It will be easier for them top access more clients for their business and
services. Moreover, to understand this SWOT framework has been discussed briefly which depicts
that it is beneficial in longer term. Also, evaluation is being given which assist in using of strategy.
Thus, manager need to be active while adopting tactics for management so that issue do not arise in
near future (Jackson and Goessling, 2018).
TASK 4
Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set against
income for a specific organisation.
In business, it is essential to focus on their accounting& management so that transactions,
income & expenses are record on daily basis. Through this, it will be easier to manage all costs
which are related to business. Accounting is necessary to be carried out so that performance of
company is known in most efficient way. In reference with selected corporation, they make assures
that accounting procedures are adopted with appropriate considerations.

Cash flow- It is a statement which is prepared by entities to examine flow of cash during
time interval. With help of this one, it is possible to determine mobility of cash which leads to
analysing of financial position & progress of corporation. In context with given firm, they prepare
cash flow which assist them in determination of their cash position. It is mandatory for them, also
because they provide tax consultant services for which cash flow is necessary. In cash flow, it is
essential to focus on fixed as well as variable costs (Haseki, Scott and Gailliard, 2020).
Budgeting, planning and forecasting
Budgeting- It refers to process of preparing financial plan, with aim to manage money
flow (Liebregts, 2019). It is required so that resources are used properly. Without budgeting, it is not
possible to make decisions regarding the project or management. Manager is responsible for
preparing of budget which assist them in handling of everything re4lated to accounts. Planning
refers to developing of idea or activities which are required to achieve objectives. It is necessary to
implement planning so that everything is being done in systematic procedure. Whereas Forecasting
is defined as tactics of implementing future predictions which are made on basis of past or present
credentials. These stated elements are helpful in effective implementing of decision making. In
reference with undertaken corporation, they use all these elements which assist them to reduce
errors. These are to be properly prepared so that problem do arise in near future.
Below is the cash flow and table showing Balance sheet, CFS and P& L Account of Fruition
Consultants Ltd-
Year 2018 (value in £) 2019 (value in £)
Fixed assets 120 220
Stock 30 45
Debtors 80 65
Bank 30 35
Total 230 340
Creditors 130 150
Bank overdraft 80 50

Total 670 905
Working capital 30 80
Profit and Loss Account at the year ended
2018 2019
Sales 40 60
Cost of sales 20 17
Gross profit 20 43
Overheads 8 9
Net. Profit 12 34
Cash flow Statement
Cash budget
for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 28000 30250 31550 29650 28750
Budgeted cash receipts 13400 37550 64690 92370 118170
Total cash available 41400 67800 96240 122020 146920
Cash distributed

Direct material 1500 1050 1650 1500 1550
Direct labour 1300 660 850 850 680
Overhead 500 650 630 700 670
Selling and distribution 550 750 740 800 760
Total cost use 3850 3110 3870 3850 3660
Cash surplus/ deficit 37550 64690 92370 118170 143260
From the explained matter, it is seen that cash flow statement, balance sheet & P & L
account are crucial to be implemented so that it leads to implementation of numerical data in most
appropriate way. It is time consuming process but is needed to be adopted by entities. Furthermore,
accounting/ auditing team make ensure that all transactions are recorded with appropriate analysis.
Collected numerical data are revised so that any no omitted transactions are present. During
process, skills & practical knowledge is being carried out (MacKey and Destefanos, 2018).
Discuss how break even analysis is applied to organisation
Break Even Analysis- It is management accounting technique which is used by enterprise
to determine the level of cost with aim of access marginal safety which are based on fixed and
variable cost (Page, 2017). BEA is an effective tool by which sales level are determined. It is used
at wider level in corporate sector. It is critical task which requires high of expertise so that result is
obtained in proper manner.
It is calculated as-
Break even quantity= TFC/ (P -AVC)
TFC= Total fixed cost
AVC= Average variable cost
P- Price
In relevance with Fruition Consultants, they use use this technique or approach when there
is requirement of accessing knowledge related to sales profit/loss.
Advantages

Determine profit & sales- With this approach, corporation is able to calculate profit as well
as sales ratio of their business activities. By determining these, it increase confidence that their
accounting data is correct which can be used further.
Appropriate use of money- Break Even Analysis helps entity to use they money in
efficient way as they are aware about their profit & sales ratio whether they are in marginal safety
or not.
Help in forecasting- This technique helps in making forecasting on basis of obtained &
prepared data with both fixed & variable costs. With this, it is possible for them to eliminate errors,
conflicts in both present and future period of time.
Disadvantages
Numerical data- Main limitation of this technique is that it is based on numerical data
which is not easy for every individual to understand as one needs to have a proper knowledge of
accounting.
After analysing of above matter, it is seen that BEA is critical technique which is required to
be adopted so that marginal safety of enterprise is known in appropriate way. Then, with correct
use of it helps in providing reliable information which is beneficial for company functions &
operations.
Application of breakeven analysis with business situation
The chosen firm named Fruition Consultants Ltd has an operation in consulting tax of other firms;
hence, its basic income is in the form of fees for consulting and providing solutions to their clients.
For attaining breakeven point; company requires to divide its total fixed cost with contribution
margin. The breakeven analysis will provide information related to minimum sales in units and
volumes to cover its fixed cost or desired profit.
Examine Interpretation on key financial statements of a company for contribution in successful
management
Financial statement is necessary to executed for increasing understanding level and
expertise. Therefore, it is important to prepare financial statement for considering financial position
of organisation. The organisation focuses on increasing or boosting its business at advanced level.
There are various financial statement used by organisation which is going to be mentioned below:
Balance Sheet- The financial statement signifies recording as well as maintaining accounts
of organisation in an appropriate manner. It is important to maintain this statement for make
investment within organisation. Therefore, the company focuses on maintaining all records in
proper way. By using this, details related to all accounts are being examined. Two sections are
displayed in format assets & liabilities under which accounts are separately divided.

Contribution: This financial statement contributes in the form of providing information related to
solvency of the business and also showing the proportion of business equity with total debts taken
by the company. This information makes management successful through taking timely decisions
and judge future risk involved with the misbalance of Assets and Liabilities.
Cash Flow- It is considered as an financial statement that helps in considering inflow as
well as outflow of cash that assists in determining cash which is useful for organisation during the
particular phase of time period. Therefore, it is important to assess both variable as well as fixed
cost. There are various kinds of activities maintained in cash flow such as investing, operation and
financial activities in an appropriate manner. Therefore all necessary records of inflow as well as
outflow of cash is maintain in this account that helps company in cross check, if there is any kinds
of errors occurs during the transactions of organisation (Hopkins, 2017)
Contribution: This statement contributes in the form of providing liquidity information of the
business which supports management in utilizing these liquid cash into projects which will give
better return on investment in future.
Profit and loss account- This account is prepared for increasing profit and eliminating cost
on both yearly as well as quarterly basis. There are various expenses which is occur during the year
such as operating cost as well as R and D expenditures. In addition to this, the profit earned by
organisation is compare with loss in order to maintain account of whole year. Through these,
companies are able to analyse their profit & loss scale during a period.
After assessing above mentioned paragraph, it has been analysed that these financial
statements are adopted by organisation for considering their position at marketplace. It helps in
considering outcomes that are required to assess cash portfolio of organisation. All of these are
prepared with depth analysis with help of which accounts are recorded.
Contribution: This statement contributes in the form of providing indication to the business about
whether the returns of firm has been increased or decreased compare to previous year. It also shows
how efficiently business has performed in current financial year as compare to previous year.
TASK 4
Explain briefly legislation & regulations that have impact on small businesses
Legislations as well as regulation signifies that on going procedure of controlling or
monitoring law. These laws and legislations are obeyed by organisation in order to perform different
activities and functions in legal manner. It also assists in protecting or preventing the right of citizen
of society from illegal actions. In addition to this, the organisation also focuses on hiring legal
teams in order to follow laws in relation to organisation. Therefore, it is follow by organisation for

protect or prevent rights within society. It is necessary fro small organisation to assess these
legislations for running small organisation in smooth manner. There are various kinds of regulations
that is going to be mentioned below:
Consumer law- This is considered as a law which was launched for protecting rights of
consumer during the particular phase of time period. Through using this law, it is easy to assess the
mistreatment of seller to its consumer. If any seller misguide its customer than it is the right of user
to file a case against them. The consumer law which is usually maintained for providing protection
to its user that helps in increasing or enhancing experience level of customer at marketplace. It is
the right of user to be file a case against misguiding by its seller that is mentioned in this act.
Employment law- This is considered a law that helps in maintaining relationship among
both employee and employer. In this law, there is a minimum requirement in relation to average
salary as well as their work is mentioned. In this law, the minimum salary or wages of employees
is mentioned in proper manner which must be followed by company during the particular phase of
time period (Ailawadi and Farris, 2017).
Data protection: It provides the information in relation to customer that helps in security or
protection of data. The organisation adopts latest technology for securing credential for clients in
order to maintain trust among them. It is the responsibility of organisation to provide safety as well
as security to its user for increasing their experience level during the particular phase of time period.
Therefore, the business organisation adopts latest technology and online administration system that
helps in offering credential to clients for building trust among both parties (Salehi, 2020).
Thus, laws as well as legislation assists organisations to operate their business in legal
manner. In addition to this, it is necessary for organisation to follow laws as well as legislations in
order to run their business in lawful way. It assists in increasing brand image and reputation of
company at marketplace.
CONCLUSION
On the basis of above mentioned analysis, it has been assessed that it is necessary for
organisation to conduct necessary research for managing or handling small organisation. The
current assignment provide the knowledge regarding small company and also provide contribution
to economy. In addition to this, there are a discussion regarding legislations, financial statements as
well as assigning resources in an appropriate manner. Apart from this, there is a explanation
regarding transnational business as well as regarding CRM report. Therefore, social and small
organisation are handled as they improved economy of country at broad level. In addition to this,

there are various legislation which must be followed by organisation in order to operate their
business in smooth way.

REFERENCES
Books and Journals
Park, K., 2018. The Korean American dream: Immigrants and small business in New York city.
Cornell University Press.
Hickman, C.R. and Silva, M.A., 2018. Creating excellence: Managing corporate culture, strategy,
and change in the new age. Routledge.
Torry, M., 2017. Managing God's business: Religious and faith-based organizations and their
management. Routledge.
Fogel, D.S., 2019. Managing in emerging market economies: Cases from the Czech and Slovak
Republics. Routledge.
Jackson, K.L. and Goessling, S., 2018. Architecting Cloud Computing Solutions: Build cloud
strategies that align technology and economics while effectively managing risk. Packt
Publishing Ltd.
Haseki, M., Scott, C.R. and Gailliard, B.M., 2020. Communicatively Managing Multiple,
Intersecting Identities Among Immigrant Women Entrepreneurs. International Journal of
Business Communication, p.2329488420907139.
MacKey, A. and Destefanos, B., 2018. Sustainable Virtual, Probabilistic Technologies for Managing
the Partition Table. Probabilistic Technologies for Managing the Partition Table (January
18, 2018).
Hopkins, B.R., 2017. Starting and managing a nonprofit organization: A legal guide. John Wiley &
Sons.
Ailawadi, K.L. and Farris, P.W., 2017. Managing multi-and omni-channel distribution: metrics and
research directions. Journal of retailing, 93(1), pp.120-135.
Sayles, L.R., 2017. Managing large systems: organizations for the future. Routledge.
Page, 2017. Case study: Wellness, tourism and small business development in a UK coastal resort:
Public engagement in practice.Tourism Management,60, pp.466-477.
Sung, 2017. Challenges and support for scaling up upcycling businesses in the UK: Insights from
small-business entrepreneurs. IOS Press.
Salehi, 2020. The impact of changes in cash flow statement items on audit fees: evidence from
Iran.Journal of Financial Reporting and Accounting.

Liebregts, 2019. Employment protection legislation and entrepreneurial activity.International Small
Business Journal,37(6), pp.581-603.
Mills, 2016. The state of small business lending: Innovation and technology and the implications for
regulation. Harvard Business School Entrepreneurial Management Working Paper, (17-
042), pp.17-042.