Detailed Analysis of Managing and Running a Small Business Report

This report provides a comprehensive analysis of managing and running a small business, using SoHo Coffee Company as a case study. It begins with an overview of the main considerations for small businesses when planning and allocating resources to achieve business objectives, followed by an evaluation of customer relationship management processes. The report then explores cash flow forecasting and break-even analysis, interpreting key financial statements, and examining key legislation impacting small businesses. Furthermore, the report delves into how small businesses can develop transnationally, outlining the benefits and drawbacks of various strategies. The report covers business plans, resource allocation, customer relationship management, cash-flow statements, break-even analysis, and relevant employment laws, providing a thorough examination of the challenges and opportunities faced by small businesses.

Managing and
Running a Small
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Discuss the main considerations of small business or social enterprise needs to address
when planning and allocating resources to achieve business objectives................................1
TASK 2............................................................................................................................................2
P2 Explain and evaluate different processes of customer relationship management for a small
business or social enterprise...................................................................................................2
P3 Explain how small business can develop transnationally and determine benefits and
drawbacks...............................................................................................................................3
TASK 3............................................................................................................................................4
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs
set against income...................................................................................................................4
P5 Explain how break- even analysis.....................................................................................7
P6 Interpret key financial statements for an organisation in relation to how they contribute to
the successful management of the organisation.....................................................................1
TASK 4............................................................................................................................................3
P7 Discuss key legislation and regulations that have implications on small businesses or social
enterprises...............................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
There are various policies which are taking lace in business environment. As small scale
company has to make plans with which they can make some space for themselves. It is essential
to know what can be done to improve financial position of association. Financial position of
company is one of the important concept which help to make stakeholders satisfied and this
provides assistance to raising funds (Ali and Babiker, 2017). There are various problems which
affect business and it is essential to overcome them. Manager plays vital role in managing
business operations. This is report is based on SoHo Coffee Company which is situated in
London and established in 1999. they provide various types of coffee, drinks, etc. there is
discussion about business plans and allocation of resources, Customer relationship management
process, cash-flow statement and break even analysis and lastly laws related to workers.
TASK 1
P1 Discuss the main considerations of small business or social enterprise needs to address when
planning and allocating resources to achieve business objectives
Soho coffee Company is a small coffee located at London that offer wide varieties of
eatable products and various drinking items to various target audiences and such type of small
companies does not have huge amount in order to spend large amount on various resources in
order to develop innovative and luxurious techniques at the time of offering various food items
according to the needs and taste of customers. The main objective of establishing such type of
small cafe is to offer wide variety of products services and capture the whole coffee market by
providing that taste which satisfy needs requirement of customers. Availability of resources or
raw material is not sufficient for the production of goods and services apart from it they need
proper planning in respect of accomplishment of objectives in appropriate time period. Different
points which are consider under it are stated below:-
 Goals, objectives and vision:- It is essential for organisation like SOHO coffee company
to complete objectives, task and operation of business on specified time period. Further
the whole workforce require to complete all the work in such adequate manner on the
basis of which they accomplish their objectives which are required at the time of starting
small business (Bridge and O'Neill, 2012). Training development programmes has been
organised in order to increase the skill capability of employees for better outputs.
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 Professional development:- It is essential for SOHO coffee company to organise various
programmes and events through which they guide all the employees regarding all the
innovative techniques and modern mechanisms which require to adopted at the time of
performing task and operation. Professional skills of employees allow them to
communicate with visitors in effective manner which satisfy overall needs of customers.
 Financial resources:- SOHO coffee company is small based organisation which require
huge financial resources in order to implement the upcoming projects of company.
Further whole management must present their market position in such manner so that
investor attract towards cafe and invest money for further growth of business (Burns,
2016). This will allow company to update their organisation structure and manufacture
such food products and drinks that help in satisfy the needs of customers and strengthen
the financial position in external market.
 Therefore, SOHO coffee company must consider all the above points which allow them
to optimally utilise the resources and increase efficiency and productivity of business.
TASK 2
P2 Explain and evaluate different processes of customer relationship management for a small
business or social enterprise
Customer are the leader of any business. In case of small scale business, their aim is to
earn profits which are associated with satisfaction f society. SoHo Coffee Company deals with
eatable so it is essential to consider taste of society, which helps to know what improvement or
modifications can be done to enhance profits. CRM is the technique through which manager can
know what customer expect and then renovate its plans and policies. Through this technique
there is management of SoHo can interact with customer and know their views. This is the step
which help company to grow and expand its business. There is collection of data through this
CRM.
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(Source: Customer Relationship Management (CRM), 2018)
Align systems with goals and strategy- As per concept of CRM, there is requirement to
analyse goals and targets. This must be considered by managers of SoHo to frame business
policies. It has been evaluated that this is a step which ensures that organisation works in
accordance with the goals of organisation and achieves them in a timely manner.
Consolidate customer data- After analysing goals and targets, managers has to collect
data of consumers. This functions is performed in order to make difference in consumers, so
product and services can be produced accordingly. As the company will provide product and
services as per the needs of customers they will be able to satisfy them on higher extent.
Segment customers- After creating consumer, they are segmented on the basis of
demand, income level, age group, etc. This helps to deliver appropriate variety of Coffee. It will
also help the business to set their target audience.
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Illustration 1: Customer Relationship Management (CRM)

Personalise customer interactions- After segmentation, managers or sales personnel has
to maintain personal interaction with customers. This gives satisfaction to consumer as they are
important part for SoHo. It will also help the manager to get customer feedback that will
help them to provide product with better quality.
Re- evaluate and recalibrate CRM strategy- After personal interaction, managers are
able to know mindset of consumers, then they re- evaluate CRM strategies and apply it to
maintain and improve sales. Which will help them to satisfy customer and also to retain them in
effective manner in the business.
With using above mentioned process it is easy to understand change in consumer
behaviour because of change in market trend. As per change in plans and policies . This is the
best process because there is proper step for conducting customer relationship balanced. With
this process, it is easy to collect information in synchronise manner through which SoHO Coffee
company can make their consumer satisfied. When follow this process to manage relationship
with consumers in better way because this process is cycle so managers of SoHO Coffee
company can perform it to get positive outcome.
There are various methods through which data can be collected such as Email, SMS,
Telephonic interview, etc. There will increment in profits of company also (Chauma, 2017).
There are policies which has to be delivered to workers so they can act accordingly. To expand
business, there must be some new products has to be launched by SoHo Coffee company. CRM
helps to craete good relations with customer and they can prefer SoHo brand over others.
Assessment of customer value- There are various customer which has difference in their
demands. It is essential to come with new and innovative products, this can be done with help of
feedback. Taking feedback is not enough, it is essential to work over it. This provides chance to
make good relations with customer and they also feel familiar with brand. This assessment helps
to know brand value in society and hence there is motivation to frame policies which are more
effective for association.
Event and Road shows- Road shows are helpful to tell public about brand and new
products. This creates brand value in society (Winarno and Wijijayanti, 2018). But this method
of costly and it covers less number of people. There are chances that people do not respond to
such shows. There is some motto of these shows and this helps to create awareness about brand
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among public. To present road shows this is activity which is interesting for workers too, so this
act as mood refreshing act.
Social Network-There is important role of social media in performing business activities.
This is the way which is most common these days and this helps to be in touch with numerous
people at time. In case of SoHo Coffee they can create their own web page through which they
can advertise products to customers (Cojoacă, 2017). There are sites on which they can make fan
pages and post new pictures and discounts. This method is best for youngsters.
Digital marketing- This is the method through which company can market its product
and services to different parts of country. This approach is cheap as it helps to create awareness
about brand at distant places too. These days role of digital marketing is increasing so there are
various mediums through marketing can be done. Burt while doing this confidentiality has some
questions.
P3 Explain how small business can develop transnationally and determine benefits and
drawbacks
Transactional operation define as primary process in which SoHo needs to perform in
order to successfully execute its business. This is also consider import and export businesses in
which they identifies what other countries buyer want according to that they export there
product. With this SoHo can expand its business in an effective manner. Opening new
branches , agents and franchising this all are help SoHo to expand its business.
Opening branches for expanding business after analysis of the market opening new
branch of SoHo that help in attracting new customer and create awareness in the mind of
customer.
Licensing, it is form of business agreement which involves two companies under which
one gives permission such as using patent or copyrights to another in exchange for payments.
Under this the licensee receives the rights or resource to get manufactured in the foreign location.
The main advantage associated with it that enable expansion into foreign markets and the
disadvantage is that agreement generally prohibit the originating firms from exploring the assets
in particular foreign markets. As the methods involves little or no direct investment it will be
beneficial for SoHo to take advantage of this method to expand transnationally.
Franchising, this is the term which allow to the business owner to use brand and method
of doing business distribute its product and services to other country. In this first SoHo should
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do the research of the market before selling its services and product. Advantage of franchising is
to that other individual who is capable to conduct research in better and effective manner.
Disadvantage of franchising is that in this sharing of profits is done. Under this method if the
franchisee behave in an dishonest way then business will face loses.
Strategic alliance, is the process through which there is correlation among individuals to
achieve aggrieved aims and objectives but remaining in dependent. Advantage of strategic
alliance is that SoHO Coffee company does not loose their identity in market and aims and
objectives can be achieved with joint efforts. While disadvantage of this strategy is aims and
objectives of company gets revealed in front of external party. This can serve as good method to
Soho to move transnationally as here collaboration made with other firms to facilitates business
growth.
Foreign investment is the process to invest in other country for the purpose of expanding
business. This is the way through which helps to invest in some other currency and enjoys good
image in industry. Advantage of this strategy is to maintain good brand image in industry. While
disadvantage of this is there are possibilities of loss due to fluctuating future. This method can
increase the capital requirement to the business as they will need capital to invest in the foreign
market.
Merger is the policies in which identity of one organisation merges with other identity.
This is the way through which information about best resources can be implemented to
workplace. Vanadate of this strategy is financial position of SoHO Coffee company can be
improved. While disadvantage is legal identity gets lost. This methods will help the company to
acquire the skill and knowledge of the other company with whom they are merging and thus will
be able to operate in market in better way.
From the above discussion, it is clear that strategic alliance is best for SoHO Coffee
company as they can expand business by maintaining their own identity in industry. This helps to
achieve organisational goals in best manner.
Local contact- In order to make good sales, it is important to make good relations with
people residing in same geographical background. This helps managers of SoHo to know taste
and demand of consumer and accordingly product can be launched in market.
Location- Location place vital role in developing business through transaction sales. For
instance, if SoHo has outlet near by some college or school, then there is crowd of students.
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While at the same time, if they have outlet near corporate offices, then professional will visit
outlet and they prefer quick services.
Local skill staff- There is requirement of staff in order to serve good quality product. As
per this transnational sales, managers must select skilled personnel, so they can analyse
consumer demand properly and take actions to serve them the best. This helps to improve
consumer base of SoHo.
Local market knowledge- In order to make good sales, it is important that managers of
SoHo has knowledge about local market. This helps managers to procure resources from market
which are cheap and easily available. This helps to satisfy consumer demand.
Small business SoHo company has to keep eyes on market trends and then apply it
(Drucker, 2012). There is difference in perception of personnel, so it essential to analyse with
changes can be done to grow organisation. Benefits and drawbacks are as under-
Benefits-
Independence- Increment of sales through transnationally is independent with other
development activities of business. This is beneficial for changing policies and it is essential to
convey it to management of organisation. There is independence in taking actions and then this
gives rights to take some authority too.
Efficiency- Transnationally activities are independent and this is helps to achieve
efficiency (Williams, 2012). There are factors which has to be considered so it is helpful in
changing plans and policies of organisation. Employees must be aware of actions which has to
taken into consideration which aims at getting efficiency.
Drawbacks
Financial instability- Finance is the blood of company, so there is requirement of polices
which help to raise funds through authentic sources (Durst and Runar Edvardsson, 2012). There
is financial risk associated with this sales. It is not essential that company must ear profits in
initial days of transactions. As there is change demand of consumer, so it is not essential that
trend must be long term, so SoHo may feel competent in achieving targets.
Time consuming process- Transactional sales is the best approach to increase sales and
profits, but at the same time this method is time consuming as there is analysis of various
approaches. This is disadvantages for SoHo. Under this approaches managers has to make
process strategies which has to be part of business growth.
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TASK 3
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income
There are different modes through which an enterprise can increase their monetary and
financial value because of accomplish all activities of the company. With accurate amount of the
money support the organisation to do their all activities and functions in proper manner. There
are different source of finance which is apply by the SoHo are explained as below:
Bank Loan: It is identify as an essential and main source of the finance which is follow
by the company in order to arrange sufficient amount of the money. This source is also beneficial
for the company maintain their better position in marketplace (Durst and Wilhelm, 2012). Apart
from this, different kind of documentation also completed by the bank manager and even they
yield security measure by rendering loan.
Government subsidies and grants: There are different legal authority which renders accurate
amount of the finance or capital such as subsidies and grants. All these are essential for the
company to do their entire functions and activities in appropriate manner. Further, it assist in the
maximisation of sales and profit. In this government start some programme at the provincial and
federal level.
Equity Finance: It is identify as a process of increasing fund of organisation with assist
of selling assets and share in the company. It is not same from debt financing because it is
mainly related to capital lend by a firm. In this new organisation can come with their Initial
public offering. In this all share are listed under the BSE (Bombay Stock Exchange) and NSE
(National Stock exchange).
Balance Sheet, P&L and cash flow statement of SoHo Coffee Company:
Year 2017 (value in £) 2018 (value in £)
Fixed assets 120 220
Inventory 30 45
Debtors 80 50
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Bank 30 40
Total 260 355
Creditors 110 170
Bank overdraft 80 60
Total 190 230
Working capital 70 125
Profit and Loss Account at the year ended
2017 2018
Sales 40 50
Cost of sales 20 25
Gross profit 20 25
Overheads 8 9
Net profit 28 34
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