L/508/0566 - Managing & Running a Small Business: Report

This report provides an overview of managing and running a small business, focusing on key aspects such as cash flow forecasting, break-even analysis, and the importance of financial statements. It discusses various sources of funding for small businesses, including own savings, equity finance, loans, and leasing options. The report also examines how break-even analysis can be applied in an organizational context, highlighting the uses of budgets, performance monitoring, and variance analysis. Furthermore, it addresses the regulations and legislation impacting small and social enterprises, including record keeping, tax and employment laws, health and safety regulations, and data security measures. The report emphasizes the need for small businesses to focus on initiatives that can sustain and expand their operations, providing valuable insights for entrepreneurs and business managers. Desklib offers a platform to explore more resources and solved assignments related to business management.

Managing and Running a
Small Business

Contents
INTRODUCTION...........................................................................................................................................3
Activity 1 (Covered in Brochure)..................................................................................................................3
Activity 2......................................................................................................................................................3
P4 Annual itemized monthly cash flow forecast showing variable and fixed cost...................................3
P5 How break even analysis can be apply to organisation context..........................................................7
P6 Key financial statement for organisation that contributes to the successful management...................9
TASK 4........................................................................................................................................................10
P7 Regulations and legislation that have impacted on small and social enterprises...............................10
CONCLUSION.............................................................................................................................................11
REFERENCES..............................................................................................................................................12

INTRODUCTION
In today's global environment, numerous entrepreneurs are opening up their small
business that has a significant effect on the growing economy. Small business offers employment
options, as a result from which market situation are strengthened and people's living standards
are rising. The small business introduces technological creativity with the goal of attracting large
numbers of people and keeping them in the company for a longer period of time (Alewijnse and
et.al, 2017). Business owners need to develop a better understanding of market dynamics and
also consumer needs in order to efficiently and simply embrace their products and service in the
marketplace too though. To better understand of this report select Aldgate East which is
consulting firm that provide advice to local community with the main focus on small business
and social enterprise. They contain how to start a new business, find out various ways of funding
and reduce risk. This report categorized in two activities. In first activity discuss about the social
and small business entity is developing plan in order to allocation of resources and maintains
customer relationship. In second activity understanding cash flow, forecasted and budgeted
financial statement and understand various rules and regulations that require to operate a small
business.
Activity 1 (Covered in Brochure)
Activity 2
P4 Annual itemized monthly cash flow forecast showing variable and fixed cost
The actual amount that is moved in liquidity type into or out of a company is
profitability. The other concept of cash flow describes that a company needs cash and its related
products to help operate a business. It gives the business with flexibility so that all operations
and tasks can be carried out efficiently. In needed to conduct a company that pays the
obligations, it is important to rely on sources of financing which are as described:
Sources of fund: It is important to manage the funds to operate a company and conduct all
company activities that help to improve all performance and improve the value of the product.
Brightstar British Limited operates its small business by organizing the information from
external sources including such:

Own saving: When financial problems that have wanted to run their company then they can
have their own savings that will enable them stand alone. When conducting and distributing
goods and services, this will better satisfy the essential needs and expectations of companies
(Das, 2016).
Equity finance: This refers to fund collection provided by the public share of the capital and
workers who help manage the finances. Brightstar British Limited advises and supports its
customers in managing equity investment funds that will help handle the operations and maintain
the continuity.
Loan from family and friends: This is yet another source of financing that indicates an
individual who will be running a business both small and big have the choice to turn out loans
from family and friends that offer a low interest rate gain. This will help improve
competitiveness, as there is no obligation to pay in set period and rate of interest. Brightstar
British Limited can support its family and friend to support create a business and enhance the
business operations.
Bank loan: Much of the corporate company receives loans from banks at a set rate of interest
and duration. When receiving a loan, protection and security professional and non-customers
need to be given as they will pay the cost of the loan at a specified period of time. Brightstar
British Limited will extend its small business content by having loans that really can help to keep
a company running (Gherhes and et.al, 2016).
Leasing and hire buying – This means giving bank and other citizens the rent and employs
properties that really can help operate a company. Brightstar British Limited's manager has the
choice of leasing and recruiting properties to support operate a company on an ongoing basis.
Balance Sheet, P&L and cash flow statement of the Brightstar British Limited:

Profit and Loss Account at the year ended

Cash flow Statement
Cash budget for the year

P5 How break even analysis can be apply to organisation context
Break even analysis: It can be viewed as a cost - volume - profit benefit and financial
method that uses market issues to explain revenue and expense importance and equability at a
fixed point. This demonstrates that a business earnings and expenditures are on an equitable level
and are literally going a corporation. This also notes what costs consumers are able to purchase
goods and services at. In other terms, break even evaluation is the active concept, defining how
organisation-related goods and services are efficient and fair. For Brightstar British Limited, this
can be a difficulty to run a company through using break even analysis that specifies how a
company can be function successfully (Hull, 2018).

Uses of budgets, performance monitoring and control: A document that contains all
information of accounting period revenue and expenditures and helps to efficiently manage a
company is known as a budget. It is a legal statement that is designed and for order to calculate
sums by managers who have awareness of theory and financial details. Performance monitoring
and review are organizational tasks that involve organizational success by constructing a

schedule, executing effectively and regulating economic activities. This also benefits by
sustaining good efficiency and retaining customers to increase the corporate earnings (Ismail and
Johnson, 2019).
Variance analysis: This is also recognized as distance analysis indicating the difference between
real activity and accepted practices. The amount of all organizational variance provides an image
of their company's success that determines whether or not that the need to carry about some
change. Brightstar British Limited uses variability research to assess the differences between the
actual and expected number which promises to push about changes and efficiently grow the
business.
P6 Key financial statement for organisation that contributes to the successful management
Each organisation includes supervising Financial Statement that is often called Final
Statement, which allows seeing the company's financial performance. This is essential for small
business and other companies to produce final document ending of each accounting cycle which
can assist the financial condition and efficiently manage a company. Brightstar British Limited
runs small companies and prepares financial statements which are as below:
Balance sheet: The key organizational document is the balance sheet compiled by the
accounting on a monthly or quarterly basis. This maintains a profile of assets, liabilities, current
profits and losses, other things for the aim of explaining their company's precise financial status.
This helps to improve the efficiency of the company by collecting precise details (Kaehr Serra
and Thiel, 2019).
Cash flow statement: A statement that indicates a company's financial condition is achievable
via cash flow statement that allows operates sales and enhances productivity. This takes into
account working, spending and trading transactions which really is necessary to operate a
company and improve productivity. Mangers should organize it because all the relevant data
Profit and loss account: Brightstar British Limited reports on business revenues and expenses,
but instead tracks with each day in trial balance. A report of profit is compiled by managers with
the aid of trial balance which allows operating a company by assessing business assets and
liabilities and efficiently running a business.

Analytical and quantitative techniques: It is important to use break even analyses and
quantitative methods for a business organization that really can help preserve profitability and
increase the intensity of the company. Brightstar British Limited effectively operates a company
with the use of strategy and working resource emphasis (King, 2017).
Working capital elements are as depictions:
 Bills Receivable: This is a written statement provided for obtaining a bill and payment
appropriately by yet another individual. This will help turn the cash in much less period.
 Cash Inventory: Companies use this aspect of capital expenditures to turn the raw
resources into money in order to efficiently run a company.
 Inventory: Stocks and manufactured goods are corporate resources which are operational
uses to operate a company and boost efficiency.
TASK 4
P7 Regulations and legislation that have impacted on small and social enterprises
Social enterprise: This requires a corporate plan and culture that uses companies to offer
various types of goods and services. This helps optimize social being enhancement and keep
good results. Focusing on society's problems and delivering the goods and services needed is
essential for organization. In Brightstar British Limited, management needs to concentrate on
welfare programs that install smart run a successful business (Mangla and et.al, 2019).
Legislation: This implies essential laws and regulations imposed on the company by the
state in order to operate a business and increase corporate income. Brightstar British Limited
focuses on numerous legal responsibilities to achieve the aim and objectives of the company.
The various regulations are as described by:
Record keeping: The aim of this law is to maintain count of all statistical information
which can help operate a company and improve business efficiency. Such as Brightstar British
Limited's supervisor keep track of all staff and business-important knowledge that enables to
attract more customers. They also offer wages, benefits, bonuses to workers which idea
implementation them.

Tax and Employment (1976): This law applies to tax and jobs whereby administrators
are forced to pay taxes on capital gains received. Through charity this affects social care and
currently offers employment opportunities (Siahaan and Aryza, 2018).
Health and safety: There are other laws that say that a company should obey the
principles of health & welfare by providing people with protection and great health. This draws
workers and makes people feel good. It also helps maintain the institution's clients by providing
equity and benefits.
Data Security (1998):- As workers work in a company, they want to be protected with
all their knowledge and documents. Executives at Brightstar British Limited observe this rule,
and keep all appropriate to describe private (Staniewski, 2016).
CONCLUSION
From the above discussion it can be inferred that there is a need for smaller companies to
concentrate on different initiatives that can help to sustain and successfully expand the company.
It is individually owned company which is established by somewhat individuals to provide goods
and services. Manage projects financial reports to realize the financial situation. Study break
even is a technique used to recognize shareholder value.

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