Report on Managing and Running a Small Business: Oak Cash and Carry

This report provides a comprehensive analysis of managing and running a small business, using Oak Cash and Carry as a case study. It covers essential considerations for small businesses, including future goals, financial resource management, and human resources. The report delves into customer relationship management processes, exploring customer segmentation, intimacy, network development, and value proposition. It also examines the potential for transnational business development, outlining its benefits and drawbacks, along with different modes like franchising and strategic alliances. Furthermore, the report includes practical financial elements such as cash flow forecasts, break-even analysis, and financial statements, alongside a discussion of relevant legislation and regulations impacting small businesses. The analysis incorporates tools and techniques like Gantt charts and resource allocation strategies, offering a well-rounded perspective on the challenges and opportunities within the small business landscape.

MANAGING AND RUNNING
A SMALL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main considerations a small business or social enterprise needs..........................................1
M1 Tools and techniques in a structured and analytical way.....................................................2
M2 Importance of planning and allocating resources.................................................................2
D1 Critically analyse the application of appropriate resources to demonstrate.........................3
TASK 2............................................................................................................................................3
P2 Various processes of customer relationship management.....................................................3
P3 Small business can develop transnationally and benefits and drawbacks.............................4
M3 Elements of the customer relationship management process..............................................5
M4 Potential to develop transnational operations.......................................................................5
D2 Process of customer relationship management.....................................................................6
TASK 3............................................................................................................................................6
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs...................6
P5 Break- even analysis..............................................................................................................9
P6 Financial statements for an organisation..............................................................................10
M5 Quantitative and analytical techniques...............................................................................11
D3 Break even analysis and cash flow statement.....................................................................11
TASK 4..........................................................................................................................................12
P7 Legislation and regulations that have implications on small businesses.............................12
M6 Implications of key legislation and regulations in an organisation....................................12
D4 Regulations and legislations that impact on small business................................................12
CONCLUSION..............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
Many small businesses are running in the economy of UK and having significant
contribution in development of nation. For them, it is required to create impactful strategies that
aid to achieve target goals and objectives properly. These kind of activities can be beneficial for
them because they have limited resources that required to be utilized effectively. Small business
are privately owned organisations that have limited number of employees and less annual
turnover. These organisation's running effectively in an economy by providing their quality
services to target customers (Wynarczyk, Piperopoulos and McAdam, 2013). Small business
firms provide their huge contribution regarding economy development by providing employment
services and proper cash flow. This report is based on Oak Cash and Carry which is a small
grocery wholesaler firm. This organisation was incorporated in the year of 2000. This report
includes consideration of small business need, appropriate process of customer relationship
management, development of transnationally and its advantages as well as disadvantages. At last
it include data representation of monthly cash flow, break even analysis, different financial
statements and also impact of Legislation and regulations on small business organisation.
TASK 1
P1 Main considerations a small business or social enterprise needs
In a economy, each and every organisation establish with a specific goal and objective
that they wants to achieve properly. For this, they manage business activities properly to create
positive working environment for their workers. Oak Cash and Carry is small firm which is
provide their quality services to target customers on the bases of their requirement and need. This
firm implement their business process in simple way as pay and pick. For them it is required to
create impactful strategy to getting higher competitive advantages from target market (Williams,
2012). There are some other factors are determine below that requires to consider before
planning and allocating resources as -
Future goals and objectives – For a enterprise, it is required to identify future objectives
and goals clearly. Through this, they can easily determine appropriate direction to their
employees. Oak Cash and Carry is a small grocery wholesaler, so for them it is required to
identify their target market and audience who help them to getting desired growth and income.
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Main objective of organisation is to determine customer's need and demand to provide them
quality services and products. This is help to build long term relation with audience.
Financial resources management – This is one of the most important factor that
requires to identify properly. In this process, financial manager and management of organisation
analyse their requirement need for appropriate fund. After this, they requires to identify financial
sources that helps to provide sufficient funds (Smit and Watkins, 2012). This is a most important
aspect of a firm. Oak Cash and Carry is a small business organisation, so for them it is require to
manage financial stability properly. These kind of activities helps to provide several
opportunities to an organisation easily.
Human resources – This is a functional approach of an organisation that helps in
workforce planning and operational management procedure. In this procedure human resources
manager aid to create effectiveness in firm by their working approaches. Main objective of this
management process is to maximise productivity and profitability of firm in proper manner. For
Oak Cash and Carry, it is required to manage their business activities effectively that helps to
improve cost of production and employees performance. These functional approaches helps to
achieve future objectives and goals of firm.
M1 Tools and techniques in a structured and analytical way
For a business organisation, it is required to analyse several tools and techniques that
helps to achieve target objectives and goals easily. For a small scale organisation it is required to
analyse effectiveness of their resources to utilize them properly. In this procedure, employees of
organisation provide their own contribution by providing quality services to their target
customers. There are different tools of Oak Cash and Carry are determine below as -
Gantt chart – This is a graphical representation of firm that determine project schedule
of an organisation. It determine exact duration of an task that requires to accomplish them
(Schaper and et. al., 2014).
M2 Importance of planning and allocating resources
In Oak Cash and Carry, it is required to make appropriate planning and strategy to
allocating resources properly. In small scale firm, number of resources are limited that requires
to utilize properly to getting desired outcomes. For this, they requires to enhance employee's skill
and working approaches to create effectiveness in firm. Through this they can easily manager
cost of production and provide appropriate as well as quality services to target customer's. These
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are the most important functional approaches of firm that helps to create positive image in target
market. Though these planning process, Oak Cash and Carry can achieve their future objectives
and goals.
D1 Critically analyse the application of appropriate resources to demonstrate
As per the words of Weske, (2012) for a business organisation, it is require to use
appropriate methods and techniques to manage their resources. These kind of activities helps to
maximise employees productivity and their working approaches. Main objective of this process
is to analyse customer's demand, requirement and providing quality services to them. Through
this they can easily provide higher satisfaction to their target audience. Resources allocation is
business approach which directly or indirectly connected with future objectives. This process
basically helps to accomplish any task and project of firm that provide effectiveness in
achievement of future goals and objectives.
TASK 2
P2 Various processes of customer relationship management
Customer relationship management is an organisational procedure that helps to attain
desired success and goals easily. For this firm require to analyse customer's demand and
requirement to provide them quality services and products. Oak Cash and Carry is a small
business organisation and for them it is require to build strong connection with target audience to
getting long term benefits easily. Process of Customers relation management are determine
below as -
Determine customers base – In this process, Oak Cash and Carry requires to use
customers segmentation process that helps to analyse their choice and demand. This procedure
helps to maximise firm's sales and income in appropriate way. For this process, organisation
requires to identify most profitable segment to make impactful strategy for this (Jenkins and et.
al., 2013).
Customer intimacy - For a small scale organisation, it is required to build positive
relation with target customers to getting long term benefits easily. In this, employees of Oak
Cash and Carry requires to build positive communication with target audience to understand
their issues and provide appropriate solution to them. Through this they can easily create
customers intimacy in their business.
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Network development – In a business organisation, it is required to build positive
network in target market. Through this they can interact with new customer's to provide their
organisation services to them. Strong business network always helps to maximise firm's sales
and revenue.
Value proposition development – In this procedure, employees of a firm identify their
target market and audience to provide them quality services easily. Main objective of this
process is to get connected with customers to create positive image in target market and
maximise sales. Value proposition development increase organisational goodwill and its market
values in front of their consumers (Jasra and et. al., 2012).
Customer life cycle management – In this process, Oak Cash and Carry can easily
analyse potential of their customers towards the organisation. Life cycle management helps to
build customers and brand loyalty to getting long term benefits easily. This is a helpful method
for Oak Cash and Carry and customers too.
P3 Small business can develop transnationally and benefits and drawbacks
This is a business procedure in which an organisation start to sale their product and
services in another country. Main objective of this process is to expand business structure in
several countries. For a small scale firm, it can be a positive move that helps to provide different
opportunities from target market. Oak Cash and Carry requires to develop transnationally in
their business to getting higher benefits and growth. Through this they can easily build customer
intimacy to getting long term benefits easily. This operational procedure is based on quality
services of a firm that help to reaching beyond the domestic edges. There are advantages or
disadvantages of this process are given below -
Benefits -
 Independence – Before expanding business organisation in new country, management
requires to create impactful strategy that provide an independence move to them
(Harmon, 2015). Through this firm can easily manage their own activities without having
any interfere of furthers bodies. It can be a positive element for Oak Cash and Carry.
 Enhance standard of living – For an business organisation, it is require to provide
effective and quality services to different locations. Through this, they can easily
maximise customer's purchasing power that enhance their standard of living in direct or
indirect way.
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 Effectiveness - Oak Cash and Carry requires to adopt transnational process to build
effectiveness in their firm easily. This is aid to enhance employee's skills and working
capacity to provide their effective services to others customers. These business
approaches create effectiveness in an organisation.
Drawbacks -
 Financial risk- Before developing transnational process, Oak Cash and Carry requires to
manage financial sources and funds properly because these activities can be risky. This is
a most important factor that can reduce ability of firm to create further operational
approaches easily.
 Time period – Transnational operational activities takes a lots of time to establish an
organisation in new market. In this duration firm should have to survive with their
competitive rivalries (Hammer, 2015).
Mode of transnational business:
Franchising: This is a most specific approach through which an organisation can enter in new
market. On the basis of this, Oak cash and carry can be transnational their business in quick way
to set up their own business new country. Franchising determine an contractual agreement in
which Oak cash and carry can enter into an agreement with franchisor to sell their goods and
services in particular market.
 Advantages: By implementing this strategy Oak cash and carry can easily reduce risk of
failure in new country. As it also help in enchaining market share of particular
organisation.
 Disadvantages: Franchising requires a adequate cost for setting up business in new
country. Thus, for this firm requires to have a proper amount of fund for business
expansion.
Strategic alliance: Strategic alliance is an agreement between two or more parties to pursue
asset of agreed upon set objectives. It is allow two organisation,individuals and other ventures to
perform work towards reaching with common goals. Oak cash and carry are adopt strategic
alliance which help in managing and maintaining business operations.
 Advantages: Competitive advantage with the access to partners resources such as
marketing methods, technologies and people.
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 Disadvantages : Create challenge for an organisation while communicating with
employees as well as customers.
Licensing: for licensing a businesses it involve two companies. In which owner company gives
special rights or permission to other company. Licensing includes giving permission by using
patents or copyrights in exchanges for payments. Advantages of licensing is that it helps in
reaching new market and customer by expanding businesses on international levels.
 Advantages: There are some disadvantages also a company can face is that it is risky.
 Disadvantages: This process requires a proper time for business expansion in different
country as well as a proper alliance with well known organisation.
M3 Elements of the customer relationship management process
Customers relation management is an organisational process, in which a business entity
build their positive relation with target audience. For this, a firm needs to analyse customer's
behaviour, their need, demand and desire for specific product. After analysing these elements an
organisation requires to serve them quality services and products that provide higher satisfaction
to them. This overall procedure helps to build strong customer relation. Some other elements of
customers relationship management are -
 Marketing management
 After sales servicing
 Business reporting
 Work flow automation
Through this firm can easily made positive and strong relation with target customers by
providing appropriate services to them.
M4 Potential to develop transnational operations
Translational operations are the effective business procedure that helps to develop
multinational treading by reaching on the far side of the domestic location. Through this an
organisation can easily build their relations with new customers. These type of business activities
are beneficial for Oak Cash and Carry to expand their organisational structure. For this, a
business firm requires to analyse its consequences and future impacts. After this they need to
make impactful strategy to face several challenges properly. All theses operational activities
helps to provide several opportunities to increase organisation's structure and size properly.
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D2 Process of customer relationship management
Customers relationship management can be a beneficial process of an organisation that
helps to maximise product's sales and further treading process. For this Oak Cash and Carry
requires to implement appropriate process in their business activities to build positive relation
with audience as -
 Determine customers base
 Customer intimacy
 Network development
 Value proposition development
 Customer life cycle management
Main objective behind this process is to build strong and positive relation with target
consumers by providing them higher satisfaction through their products and services. This is
provides several opportunity regarding satisfaction of service user's desires (Durst and Wilhelm,
2012).
TASK 3
P4 Annual itemised monthly cash flow forecast showing fixed and variable costs
For a business organisation it is required to manage their financial sources effectively to
maximise organisation's funds. These activities helps to enhance firm's performance in target
market. For Oak Cash and Carry, it is important to manage their investments and reserves
properly to manage functional and operational approaches effectively. This process include
working capital management to effectively utilize raw material and resource for finished goods
activities. These terms include several factors as -
Internal -
 Sale of fixed assets: This is an organisational procedure in which firm raising their funds
by the sale of their assets on its market values. Through this firm can easily get
appropriate amount through theses resources.
External -
 Bank loans: These are the financial institutions who provides appropriate funds and
money to their customers on the bass of their requirement. This loan amount requires to
paid on appropriate time by borrower.
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 Overdraft facilities: These type of services are provided by banks to different
organisations. In this, firm can overdrawn appropriate amount from them on the bases of
their requirement for a particular time period.
Balance Sheet, P&L and cash flow statement of Oak Cash and Carry organisations:
Year 2017 (value in £) 2018 (value in £)
Fixed assets 130 210
Stock 20 35
Debtors 70 55
Bank 20 30
Total 240 330
Creditors 120 180
Bank overdraft 90 70
Total 210 300
Working capital 30 80
Profit and Loss Account at the year ended
2017 2018
Sales 20 30
Cost of sales 10 15
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Gross profit 30 45
Overheads 6 7
Net. profit 24 38
Cash flow Statement
Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 25000 32250 31750 29750 26750
Budgeted cash receipts 12400 1600 1100 1000 15000
Total cash available 37400 34850 32850 29850 28250
Cash distributed
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Overhead 900 600 600 600 600
Selling and distribution 650 700 700 700 700
Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 2515
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Functional classification of costs
Particular
Direct or
indirect Amount
Production cost:
Direct material Direct 800
Direct labour 250
Direct expenses 250
Total direct costs 1300
Research Indirect cost 3000
Designing plan Indirect cost 400
Factory overhead Indirect costs 450
Administrative costs 250
Marketing and distribution 200
After sales services 300
Total Costs 5900
P5 Break- even analysis
This is a one most important technique of organisation in which they require to increase
their sales level to cover overall cost of a product. This is also introduce margin of safety of an
organisation (Durst and Runar Edvardsson, 2012). For Oak Cash and Carry, it is require to
implement this process in their business activity to getting one specific point , on which firm can
found on profit no loss situation. These activities provide several opportunities to an organisation
to make desired modification in their functional approaches.
Formula of BEP= Fixed cost / Construction margin per unit or product
Particular Amount
Sale prices per product 8000
Less: Raw material 1200
Contribution 6800
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