London Churchill College: Small Business Management Report Analysis

This report delves into various aspects of small business management, using J.S. Supermarket Ltd as a case study. It begins with an introduction to small business management and then explores the main considerations in planning and resource allocation, highlighting the importance of human and financial resources, goals, and performance management. The report then explains customer relationship management processes, emphasizing the analysis of customer portfolios, identification of the customer base, and customer intimacy. It also examines how a small business can develop transnationally, detailing the benefits and drawbacks of such an approach. Furthermore, the report produces an annual itemized monthly cash flow forecast, discussing fixed and variable costs. It includes an analysis of financial statements like the balance sheet, profit and loss account, and cash flow statement. Break-even analysis is explained, followed by an interpretation of financial statements. Finally, the report discusses key legislation and regulations impacting small businesses, concluding with a summary of the discussed topics.

Small business
management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Main considerations at the time of planning & allocation of available resources to attain
business organisation objectives.................................................................................................3
P2 Explanation of different processes of customer relationship management...........................4
P3 Explain how a small business can develop transnationally and determine the benefits and
drawbacks....................................................................................................................................6
Benefits: ..........................................................................................................................................6
P4 Produce a annual itemised monthly cash flow forecast showing fixed and variable cost....7
Some statements such as balance sheet, profit and loss account and cask flow statement of the
J.S supermarket are discussed below: ........................................................................................7
P5 Explain how break even analysis could be applied to an organisation................................11
P6 interpretation of financial statements of organization .......................................................13
Interpretation: ...........................................................................................................................14
Interpretation: ...........................................................................................................................16
Interpretation ..............................................................................................................17
P7 Discuss key legislation and regulations that have implications on small businesses..........17
CONCLUSION .............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Small business is described as the private owned organisation, sole-proprietorship and
partnership that involves fewer employees as well as less less annual revenue. Small business
management is the process of manage all organisational activities in effective and efficient
manner. Owners of small business are responsible to manage all functions. Management is
defined as the aligned and coordinate various activities of organisation in effective manner.
There are various management skills and knowledge are required to manage whole organisation.
In this report, the chosen organisation is J.S supermarket Ltd that is incorporated in the 9 October
2014, headquarter situated in the London. in this report various factors are discussed that need to
be addressed at the time of planning and resource allocation in order to achieve organization
objectives. Customer relationship management process and various financial statements are
being mentioned that contributed important role in effective management of small scale
organisation. Apart from these various legislations that are passed by government have impact on
the small organisation are discussed in the report.
TASK 1
P1 Main considerations at the time of planning & allocation of available resources to attain
business organisation objectives
In the current competitive environment, small business have to pay their attention
towards the effective planning and properly allocation of resources that facilitates them to
achieve all defined goals and objectives within defines time period. There are some important
factors that are considered at the time of planning and resource and allocation, these are
discussed below:
Human resource: It is the very important factor that is undertaken by the organisation at
the time of planning. Human resource is the one who implemented all the activities that are
important in the attainment of organisational goals and objectives in effective and efficient
manner(Bakri,, 2017). Various employees skills and capabilities facilitates to maintain better
relation with customers and leads the organization towards the growth and success in the
particular market place. JS supermarket Ltd is a small business that conducts its business in the
UK hire most talented and skilled employees in order to enhance the performance and
productivity of overall organisation.

Financial resources: Finance is the most important resource of every organization.
Finance is required at all level of organisation to complete task in defined manner. In the small
business finance is allotted in systematic manner and there is interruption of executives in this so
divisions are taken in efficient manner (Bartolacci,Caputo, and Soverchia, 2020). JS supermarket
Ltd provides appropriate finance to all organisational level and to employees, so all marketing as
well as operational activities are done in the defined manner.
Goals, vision and targets: In order to achieve all objectives small organisations should
take proper attentions towards respective goals, objectives and visions. Organisation have to
ensure that all activities that are performed should be according to the visions and goals. This
will facilitates business to achieve their decided objectives within time period. J.S supermarket
Ltd offers quality products and services to its customers in order to satisfy their all needs and
demands. Higher authority of respective organisation considers goals and visions at the time of
allotting resources and implement them in effective manner to achieve objectives.
Performance management: This is the effective tool that is utilised by the organisation
to measure performance level of employees in the work place. Effective employees facilitates
respective organization to achieve high level profitability and productivity in defined manner.
P2 Explanation of different processes of customer relationship management
Customer relationship management is the very important aspect in the business in order
to implement various organisational activities in the market place. In small business various
innovative approaches are adopted in order to deliver all product and services to customers on
time(Bullough, Moore, and Kalafatoglu, 2017). To enhance loyal customer base, organisation
have to maintain positive relationship with their customers.

Better and strong customer relation help organisation to attain its objectives and take various
competitive advantages. J.S supermarket evaluates various needs, demands and preferences to
satisfy them with providing better quality services. Factors of customer relationship management
are mentioned below:
Analyse customer portfolio: It is very effective tool of that is utilised by the organisation
in order to analyse all customers needs, demands and preferences. So there are any changes are
happened in their expectations, that can be examined by them formerly. Proper in depth research
is done on the customer's to identify their demands. J.S supermarket develops strategies
according to customer's expectation that will facilitates the organisation to create better
positioning in the external market.
Identification of customer base: In this step, J.S supermarket organisation make proper
analysis on their target audiences or customers. The respective organisation conduct market
research through questioner and interview of customers(Chawinga, and Chipeta, 2017). It
classified customers in various segments according to their differentiated demands, taste and
choices. This facilitates organisation to satisfy each segment according their requirements.
Customer intimacy: Customer's demand is essential factor that is required to loyal
customer base and retain customers with organisation for long run. Small organisations have to
ensure customer satisfaction and maintain better relation with them to create leading position in
the respective market. On various communication tool as adopted by the organisational managers
to ensure better communication with their customers in order to align them with organisation for
the long period of time.
P3 Explain how a small business can develop transnationally and determine the benefits and
drawbacks
Transnational business is defined as the business that is conduct its trade out of national
boundaries. It provides various opportunities to the small scale enterprise to promote their
business at international level with having support of government. National government support
small business to grow and develop. Transactional activities facilitates organisation to gain high
profits, enhance market share and survive in the competitive environment.

Developing transmission channel to promote communication with customers: Small
business also use various communication channels such as digital marketing, social media
platforms such as Facebook, Instagram, You Tube and many more. These application facilitates
organisation to maintain connection with their customers in effective manner(Deller, Conroy,
and Markeson, 2018). Now small organisation use various online chat option so they can give
quick response to their customers quarries and problems. All these factors able organisation to
built effective relation with their customers.
JS supermarket Ltd can make utilization of approach in order to attain opportunities to
develop transnationally. It is analysed that transnational approach assist in identifying customer
requirement of various culture and areas in a proper manner. The benefits and limitations of such
approach is describe below:
Benefits:
 Change in customer level: Transactional development facilitates small scale
organisation, it helps them to collaborate with employees and finance.
 Improvement in productivity level: If small business raise their operational level
globally then, it facilitates them to enhance their performance and productivity according
to its requirement. This takes positive impact on the organisational profit.
 Employment generation: Employment improvement is the essential factor that provides
benefits in every nation and global organisation.
Disadvantages
 High operational cost: To perform various operations at internationally, organisations
are required high level fund that is quite difficult for the small businesses to collect. If
these organisation take loans from the financial institutions then, they have to paid higher
interest amount on continuous bases. These interest rates impact the organisation
revenue and profitability.
 Labour exploitation: Most of the country's have their own cost of employees that affect
the planning of business, if organisation follow them then this lead the organisation
towards the labour exploitation and affect on the every functions of organisation.

P4 Produce a annual itemised monthly cash flow forecast showing fixed and variable cost
Cash flow forecast also termed as the cash forecasting. It is related to the estimating the
cast inflows and outflows that of the business in a specific time period. Generally cash flow
shows the projected cash that contains income as well as expenses(Dobrosavljević, and Urošević,
2019). It is important tool for the organisation to take appropriate decisions for business
activities such as funding, investment and expenditures. Cash forecasting is carried out by the
organisation for the range of time such as short term cash forecast medium as well as long tern
cash forecasts. This forecasting assist small business to control their expenses in effective
manner. Some sources of cash flow forecasting are discussed below:
Equity finance: It is the effective and suitable source of funding that is adopted by the
small business. By using this source, business raise its funds through selling shares in the open
market. Companies which are not not performing well or do not have strong financial condition
not able to sale their shares in the market.
Bank loan: Small enterprises can raise their funds through taking loan from the bank. In
the bank loan a fix rate of interest is given by the organisation along with the principal amount.
Planning, budgeting and forecasting: J.S supermarket Ltd use these three aspects in its
activities in order to develop budget and take effective decisions for the organisational functions.
Some statements such as balance sheet, profit and loss account and cask flow statement of
the J.S supermarket are discussed below:
Balance sheet: Balance sheet is a fundamental financial statement of organisation that
contains both financial and accounting activities (TZapkau, Schwens,and Kabst, 2017). It shows
the assets and liabilities of the organisation(Durguner, 2017). Balance sheet is the statement that
reflect the financial positioning of the organisation within specific time period.

Profit and loss account: Profit and loss account is the financial statement that contains
all revenues, cost, expenses that are occur in specific tie period. It is also known as the income
statement. It describes all factors related to the profit and loss of organisation of a specific month
or year.
Fixed cost: Fixed cost is defined as the cost that does not change by the increasing as
well as decreasing amount of the goods services production(Weaven, Baker, and Dant, 2017)..
These expenses are fixed that have to be paid by the every organisation.
variable cost: Variable cost is the expense that is changed according to changes in
proportion of production or output.
Cash flow statement: Cash flow statement is the financial statement that contains all
data related to the cash inflows and cash outflow. Cash flow statement contains three activities
such as operational activity that shows the amount that is utilised in the operations of the
respective organisation, investing activities that is related to the investment goals and losses and
the last one is the financial activities that describes the cash used in the financingz.

P5 Explain how break even analysis could be applied to an organisation
Break-even analysis is the concept that is determined by the safety margin of an
organisation between the profits and cost respectively. At the break even point is described as the
situation where sales and cost of organisation is on the same level. The respective tool control
the fixed as well as variable cost of the organisation. In context of J.S supermarket Ltd, break
even analyse is used in the developing effective business plans, build cast related strategies,
manage cost and generate profits(Hussain, Salia, and Karim, 2018). If the organisation know
about their break even point then it can take effective decisions for controlling cost. Proper
analysation of BEP facilitates the organisation to innovate new products within specific
determines expenditure. J.S supermarket organisation utilize break even analysis in its

organisation that helps in enhance profits and facilitates it to decide cost of various products
appropriately. Break even point is discussed below:
TFC = total fixed cost
P = Price
AVC = variable cost per unit
QB= TFC/ (P- AVC)
Advantages:
 Break even analysis facilitates the organisation to determine customer's
demand(Josephson, Schrank, and Marshall, 2017). When break even point is
overestimated, this is the indications that organisation is in the loss situation and they
have to innovate their products and services in order to maximise demand.

 It help the organisation to determine market targets efficiently(Octavia, and Ali, 2017).
J.S supermarket organisation set its targets by break even analysis in order to provide
better services and enhance profit as well as performance level.
 It provides various financial data and information that help in effective decision making.
Disadvantages:
 Break even analysis is very time consuming process for that organisation that are dealing
in multiple range of products.
 Break even analysis is based on the marketing conditions that is keep changing. So, it is
not provide appropriate and definite outcomes.
 It is based on the assumptions that can not be same in the future.
P6 interpretation of financial statements of organization
Financial statements are the statements that are related to the organisation financial
activities and determine whole financial strengths and financial position organization at the end
of year(Masiello. and Izzo, 2019). Financial statements are prepared at the end of the financial
year by every organisation. There are some documents are prepared by the managers of
organisation that are financial statement, cash flow statement and income statement. All these
statements reflect the income, profits, overhead, cash inflows and outflows as well as
organisation's financial position.
Balance sheet: Balance sheet is defined as the financial statement that includes all assets,
liabilities of respective organisation in a particular time period. It provides all financial
information and financial position of organisation to all relative parties.

Interpretation:
It has been observed that balance sheet provide all financial information about the
organization as well as increase the profitability. In the above balance sheet all assets and
respective liabilities are mentioned(Messeghem, 2018). Profit of organisation are 16.16% and