Analysis of Milk Train: Business Planning and Financial Aspects

This report provides a comprehensive analysis of Milk Train, a small ice cream parlour in London, examining its business management and financial aspects. The report begins by exploring resource allocation and planning activities, followed by an in-depth analysis of customer relationship management processes. It then delves into the financial aspects, including a cash flow forecast for the next three months and a break-even analysis to determine the sales volume needed to cover costs. The report also discusses the contribution of key financial statements and relevant business legislation. The analysis covers various aspects of business operations, including customer relationship strategies, financial forecasting, and break-even analysis to provide a well-rounded view of the business's performance and management strategies. The report highlights the importance of planning, customer relations, and financial management in ensuring the success of a small business like Milk Train.

MANAGING AND
RUNNING A SMALL
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
ACTIVITY 1...................................................................................................................................3
ACTIVITY 2.................................................................................................................................10
Cash Flow Forecast....................................................................................................................10
Break even analysis...................................................................................................................12
Contribution of key financial statements...................................................................................13
Key Legislation..........................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Managing and running a small business is a very comprehensive task and involves
consideration of various financial and non- financial aspects that need to be considered in order
to complete different aspects that are related to the management of a small business (Ajekwe and
Ibiamke, 2019). Milk Train is a small ice- cream parlour that is located in London and serves
naturally flavoured and organically made ice- creams and other delicacies. The report will first
identify the resource allocation and planning activities which would then be followed by the
explanation and application of the customer relationship management process of the selected
business. Further, the financial aspect would be analysed by preparation of a cash flow forecast
for the company and then analysing the breakeven sales for Milk train. Lastly, this would then
include an analysis of the financial statements and the key legislative aspects of the business.
MAIN BODY
ACTIVITY 1
Planning and
allocating resources:
Milk train, London is one of the new ice cream bar company operating its
business into London highly gives importance to planning of business
management and resources allocation for constructive work and functional gaol
achievement. Milk train being small medium sized company functions with
fixed resources and strong planning to innovatively serve customers within
market segments where there are high preferences for large business objectives.
The ingredients which are used under ice cream and various products which are
an innovative service model of company to bring high end services for
customers and vivid market opportunity for larger market optimisation and
functional efficiency (Véron and et.al,2018).The capacity of milk train to bring
forward various innovative products and services for wide market share
customers who are vividly spread enables in proper allocation of resources and
constructional planning of various structures. Planning and allocating of
resources are highly correlated with each other based on their working patterns
and business ranking for gaining strong position among customers market share
and higher market value which enables to cater higher market position and large
goodwill factor. Milk train will look forward to best pricing strategies for
higher innovative marketing functions , attracting pricing among customers and
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various schemes to cater large crowd attention for long term business
optimisation. The resources will be planned among company services where
milk train functionally brings forward higher functional segments to attract
higher market composition onto which further development can be attained by
business perspective. Millk train company services will be programmed to keep
employee working skills higly advanced and serve them with best preferences
among products. The company aims to keep market targeted for longer term
and functionally operative towards bringing best services and functional growth
with high innovation funnel of creativity (Mascarenhas and Ruiz, 2019).
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Customer
relationship
management
process:
In entrepreneurship customer relationship and management procedures
are highly important for perfect optimisation of resources allocated into
business, which will leverage various high goodwill parameters. Customer
relationship management by Milk Train will be finalised on the way employees
are trained, with cost effective technology usage and innovative marketing
segments. Milk Train ice cream parlour company will strongly build customer
relationship with company services where there will be high factor of
innovative marketing used among products. The company plans to built various
models and business strategies for effectively serving the business objectives
which are targeted for bringing innovation among their services. Customers are
the high strength onto which large focus and development of goodwill by Milk
Train company is programmed for gaining huge profitability factors and
technology usage will be very high so as to reach large customer market share
segments onto various levels.
The relationship will be focused towards gaining optimum resources and
functionally strengthening customers relationship with company so as to get
high functional strength into company business models. The resources will be
used with high potential development towards various targets and functional
strength among consumers market share for gaining strong goodwill, keenly
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develop the synergy of positivity services among customers (Ceptureanu and
Ceptureanu, 2019). Milk train plans to build strong customer management
relations by actively working towards various resources allocation and skilled
employees who are working as strength for brand and will be able to provide
high quality integration.
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Stage model of
internationalisation
Stage model of internationalisation has 5 stages onto which transitional
operations can be undertaken for higher business development and high
optimum funds building which will further add to wide portfolio of products by
Milk Train. At stage 1 the international expansion will be strategically
developed, which will be fuelled with high innovation and creative thinking on
another stage, by accessing the parameters onto which company can gain
results into customers preferences and further steps will be built based onto the
results at this stage. Milk train company has to factories various market
optimisation working units for factorising the scenarios of working among large
customer marketing segments. On the results analysed with the various
preferences and metrics of figuring out what are the most targeted customer
segments for higher productive outputs. The stage model is one of the most
important factor of growth onto which higher targets by company marketing
segments are built, higher working infrastructure can be developed within Milk
bar for gaining large customers goodwill and gain huge synergy through which
higher market share can be functionally targeted (Bardon and Josserand, 2018).
 Benefits: The benefits of this stage model of internationalisation can be
understood as it enables to get accurate optimum functional positioning
with various stages which are programmed under visionary goals of
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Milk Bar. The company will be highly successful to spread and expand
its business into international market positioning with vivid factors of
innovation at every stage of functioning, timely utilisation of all
resources and building of various targets so that higher relative changes
can be built within company. There will be high focus given to each
stage of optimum functioning among resources with technology
utilisation , strong marketing segments and there are various other
targets onto which the model will help effectively in gaining huge
profits.
 Challenges: The challenges under this model is that it do not hold the
space for bringing in more changes within the pace of time as the
dynamic changing business world makes it important for companies to
regulates their business with wide changes and innovatively keeps on
changing. The challenges of this model is that it lacks any scope for
productive development as all stages are continuously planned which
do not gives scope for any changes. The changes will impact company
business models onto which higher business objectives may not be
achieved for higher functional strength. Milk train may be unable to gain
optimum targets effectively under this stage model as the company will
not be able to deliver services and products effectively to customers
market segments if the required changes are not implemented within
stages properly (Alofan, Chen and Tan, 2020).
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ACTIVITY 2
Cash Flow Forecast
A cash flow forecast statement is basically the incorporation of two major items i.e. cash
inflow and cash outflow where the difference is tried to be ascertained for a business (Yoo and
Pae, 2017). A cash flow forecast is usually prepared for the upcoming months and ultimately
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helps in predicting the quantum of sales that is expected to arise in the future and the cash
availability as well. The incomes of the business are categorized under the cash inflow part and
all the cash outgoings are segregated as the cash outflows. The net cash flow is then ascertained
by subtracting the outflow from the inflows and if the resultant balance is positive it is treated as
positive cash balance and if it negative then it is treated as negative cash balance or cash deficit.
Another major concept in the preparation of the cash flow forecast is opening and closing
balance i.e. closing balance for one year on one month is treated a the opening balance for the
next month always (Pan, 2019). For the Milk Train, although the venture has been operating
successfully for quite a number of years now, but the cash flow forecast for the next three
months can be prepared in a following manner:
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The cash forecast that is presented above is prepared for the Milk Train Company and it
can be adequately said that the company is predicted to be in a comparatively profitable
situation. It can also be observed very clearly that the closing balance of the cash at every month
acts as the opening balance of cash for every consequent month (Pitkänen, 2016). This is almost
similar for every month thus it is expected that for the next quarter sales of Milk Train are not
expected to rise very much and they tend to remain more or less equivalent. In the cash flow
forecast that has been prepared the cash income for the small ice cream parlours is at a lower
point in the first month at only £ 2800 but in the second month they are expected to rise at £
6000 and further to £ 7500 in third month. However, the net cash flow at the end of first and the
second month are predicted to be almost similar because in the first month the difference is
ascertained to be in negative due to the increased expenses and then later on in the second month
the negative balance is bridged up thus remaining at a similar level rather than going further
down and in the last month the cash is expected to rise for the Milk Train Ice- Cream parlour.
Therefore, it is expected that the cash income will rise but gradually and that too at a slower rate.
The reasons behind the slower prediction of the cash forecasting is due to the weaker economy
and this is directly reflected to the high amount of taxes that are to be paid additionally i.e. as
estimated amount of £ 2000 every month which is too much. However despite this, it can be
adequately said that the company can even grow more in the future if they are able to attract
larger customer share (Oh, 2019). The critical aspects of preparing the cash flow can be seen in
the decision making where the management of Milk Train are already able to ascertain that since
their sales will be lower, they should develop better marketing strategies for capturing higher
market share thus it can be ascertained in this manner that the preparation of cash flow is
extremely important in every organisation.
Break even analysis
The break even analysis is another technique that helps in ascertaining that particular
quantity of units that should be sold or even a particular amount of sales that should be achieved
in order to reach a situation where there is no profit and no loss (Mahajan and Deobagkar, 2020).
Any company should always try to achieve sales at a point that is higher than this as profits can
be earned only when the actual sales are above the breakeven point sales.
The breakeven point (in Units) = (Fixed cost) / (Selling price per unit – variable cost per unit)
Breakeven point (in amount) = (Fixed Cost) / (Contribution Margin)
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