Royal Furniture: Business Idea, Financial Analysis and Planning

This report examines the business launch of Royal Furniture, a company selling customized furniture online. The report begins with an introduction to the challenges of starting a new business and then provides a brochure outlining capacity management, resource allocation, customer relationship management, and the potential for transitional business development. Activity 1 is the brochure that discusses the role of capacity management in managing different operation and functional area of the new business idea. The report explores tools and techniques for resource management and the importance of customer relationship management. It also presents a transitional operation and development model to analyze challenges and benefits. Activity 2 includes an executive summary, detailing financial management, cash flow forecasting, break-even analysis, and an evaluation of key financial statements and relevant legislations affecting small businesses. The report emphasizes the importance of sound financial management and its application in real-world business scenarios, providing valuable insights for entrepreneurs and business students.

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Table of Contents

INTRODUCTION......................................................................................................................3
Activity 1....................................................................................................................................3
Brochure.................................................................................................................................3
Activity: 2.................................................................................................................................11
Executive Summary.................................................................................................................11
Understanding financial management..................................................................................11
Cash flow forecasting for Royal Furniture...........................................................................12
Breakeven analysis...............................................................................................................13
Critical evaluation of key financial statements....................................................................15
Critical evaluation of key legislations and regulations affecting small business.................15
REFERENCES.........................................................................................................................16

INTRODUCTION
Introducing new business idea is all about starting in a new business venture. The new
start up are very challenging to handle as they ensure different strategic needs and
requirements as a business holder. This report is based on the case study of Royal Furniture
in regards to launch of its business idea (Mathieu, May and Reif, 2017). Th organisation will
engage in selling customised furniture products over internet. This report will discuss
different aspects of the launch of the new business idea. Henceforth, report will project the
brochure that will discuss about the role of capacity management in managing different
operation and functional area of the new business idea. Link between resource management
and achieving business objectives will also discuss under this project. Different tools related
to the resource management will also discuss under this project. Involvement of the customer
relationship management will also discuss under the brochure. Potential to develp business
transitionally will also elaborate under this project. Transitional operation and development
model will elaborate to analysis both challenges and benefits of adopting the model.
Furthermore, report will emphasis over the cash flow forecast and break even analysis in
respect to the new business idea. Furthermore, different legislative implication over the new
business idea will also discuss under this project.
Activity 1
Brochure
Capacity Management
Capacity
management is a process
that involves analysing
and evaluating the
capacity of business
Resource allocation and achieving
business objectives
Resource allocation is a
process that involve on the basis of
the different planning has been done
in respect to the resources attached
Customer relationship
management

enterprise to achieve the
overall business
objectives of company.
Capacity
management involve
managing the resources
of company in such way
that it allow and drive
the business entity to
achieve the overall
business objectives.
Resources are
always limited in
number and especially
with the business entity this is about
to allocate all different resources in
different functional responsibilities
entertained by company. Allocation
of resource is very significant in
respect to the small business start up
as it is obvious that the resources are
limited in number that require the
business entity to utilise the financial
resources in the best way possible.
The limited resources clearly
demonstrate that company cannot
meet all its functional responsibilities
so when it comes to allocation of
resources company should emphasis
over the fact that it can keep a right
balance between the financial
requirements availability of the
financial resources in the business.
Only such resources are allocated
under this process that can
sufficiently meet up all the needs and
Customer relationship
management is a process
of managing the
relationship with the
customers in market. This
is a process that involves
managing and
establishing the long term
relationship with the
potential customer
associated with respective
target market. Customer
relationship is the focus
area of company where
the business entity tries to
establish the long bond of
the organisation and its
existing customer base in
against to deliver the
overall business
objectives.

for the small business set
up resources are further
more selected. In such a
situation capacity
management function
play a huge role. This
involves utilising
resources associated with
the business entity in
such manner that they
cope up with the overall
requirements associated
with the business entity.
The function of
capacity management is
to evaluate the overall
capacity of the resources
company hold and also
to analysis the level of
utility company can get
engaged with in against
to use such resources
part of business entity
(Skora, 2017). The
practice of capacity
management is about to
demands of the business entity
(Watson, 2020). Also the
productivity and efficiency of the
operation and functions of the
organisation clearly demonstrate that
the organisation should utilise its
resources in such way that all areas
of operation and functions could
have been meet by the business
entity. Royal Furniture is in the
initial stage of its business life cycle.
This indicates that company own a
limitation in the availability of its
financial resources. In such a
situation these become essential that
the company allocate only such
resources that is require at that point
in time. While allocating resources
of the business entity management
also analysis the present need and
future requirement of the business
entity. This is also essential that
company do not consume all its
resources in the present time frame
only. This is also essential that the
company should keep its resources
for future possible situation so that
overall needs and demand of the
business entity could have been
meeting by the organisation.
In against to achieving the
overall business need this process f
allocation of resources of the
business entity in all different
Every business entity
require long bunch of
customers that can
precisely buy and use
only the product and
services organisation is
getting engaged selling in
(Vego Scocco, 2018). The
process of the customer
relationship management
is about to establish the
long term sustainable
relationship with the
customers of origination
and the business entity.
The process is very
essential where the Royal
Furniture Company will
try to develop and
establish the long term
and strong relationship
that can empower the
organisation to meet up
all its business objectives.

conduct resource
planning and on the basis
of the overall planning
associated with the
business resources this
involve allocation of
such resources in
different functional role
and responsibilities part
of business entity.
Resource planning is an
important and crucial
phenomenal where
business entity plan its
financial requirement
and try to create a
balance in between the
financial wealth of
company and the
practices where it can
incorporate utility of
such financial resources.
Planning is an important
operational and functional area.
The aim of the organisation is
to keep the right balance between the
resources available and the
requirements of the resources in
respect to the business entity
(Giovannoni, 2020). Both the aspects
are analysed and based on that
company try to achieve the best level
of performance in the market. This
can ensure that all this allow the
organisation to reach at the best level
of business objectives against
channelizing business operations of
company.
This is an
important aspect of the
overall growth and
development of the
business entity where it
tries to sustain a long term
goal of having a strong
relationship with the
target customers of the
business entity.
Management at the Royal
Furniture Company can
install the customer
relationship management
application where the
professional company
hire will approach the
customers in against
making of sales of
company for the
respective financial year
(Mateus and et.al., 2017).
The use of the application
will make it more

part of the entire
capacity management
function and this require
professional level of
ethics and values to plan
the whole operation and
functions of company.
Along with the
resource planning
allocation of resources
over different functional
responsibilities is also a
key part of the capacity
management task.
Resource allocation is
about to allocate or
segregate overall
resources associated with
the business entity over
all different functional
responsibilities that
Tools and techniques of resource
allocation
There are various tools and
techniques related to the resource
management that the Royal Furniture
Company can incorporate in against
to utilise its financial and other
resources at the organization level.
These tools allow the company to
manage all its resource related
requirements in against to deliver the
overall business objectives. There are
multiple tools like Teamdeck, Float,
Forecast, 10000 Ft, Mavenlink,
Harvest and Ganttic are some of the
tools that company can use in against
to manage all different resources
company own (Poór and Basl, 2019).
All these tools segregate the
resources in the professional way so
that best level of utility against the
resources available could have been
achieved by the business entity.
convenient for the
business entity to cherish
the greater bond between
the business entity and the
target customer base of
the organisation. This can
precisely defined that the
organisation can approach
the customers in market
in a proper manner over
the customer relationship
management application.
Stage model of
internationalisation
This model is all
about the process business
entity can follow in order
to make the business
international. This is
about to expand the
business operations at the
international level. This
emphasis of this model is
about to transform the
business at an
international level so that
best level of growth
opportunities could have
been attracted towards the
business entity.

business entity try to
meet in against to deliver
the business practices.
Resource allocation in
precise manner is all
about allocating the
resources in the way
planning of the
respective resources has
been done. Resource
allocation is also a
crucial part of the
resource planning. With
support of the capacity
management technique
company try to utilise
the financial and other
resources in best way
possible so that overall
business objectives could
have been meet by the
business entity (Morrow
and Burdillat, 2020).
Tools and techniques are the one that
motivate and guide business entity to
manage all the financial
requirements in the best way
possible. This is essential to keep the
balance between the available
resources and the utilisation of such
resources in the best fashion.
The allocation of the overall
resources associated with the Royal
Furniture Company could have been
incorporated with support of
different techniques. These
techniques are divide all the project
in different task, assign the
resources, determine the resources
attributes, resource levelling, re
allocate as necessary and track the
resource utilisation. All these are the
different techniques that company
can undertake in against to deliver
the best level of utilisation of the
overall resources associated with the
business entity (Bansal and Rai,
Royal Furniture Company
has just started its
business operations which
require the business entity
to give emphasis over
providing quality
products and services that
can favour the business
entity to achieve the best
level of growth
opportunities in the
market (Fürst, 2021).
Stage model is all about
focusing over the
individual stage that can
cater and deliver the best
level of growth oriented
opportunities in favour of
the business entity.

The aim of the
capacity management
task is to overcome the
limitation of the
resources and to achieve
the objectives of
company in best way
possible. Capacity
management is among
the crucial techniques
that is used by the small
business entities and
venture to channelize the
business operations in
the most prominent way
possible.
2020). Royal Furniture is a
customised furniture brand that
requires huge resources in different
functional area. These techniques
and the tools mentioned above will
be a beneficial way or approach for
the business entity to achieve the
best level of work efficiency by the
company in such manner that
organisation can fulfil all its needs
and requirements along with
achieving the overall business
objectives. Resource allocation is
scientific and fundamental processes
that involve assessing the needs and
requirements of the resources
towards a specific functional and
operational area. These techniques
mentioned above will be a profitable
manner to allocate overall resources
of the business entity in the best way
possible.
This model is a
supportive aspect and
favour the organisation to
guide in a particular
strategic direction that can
empower the Royal
Furniture Company in
such way that
organisation can reach at
the best level of growth
opportunities in the
respective target market.
This model is all about
keep taking steps to
advance the services of
the organisation so that
best level of customer
satisfaction could have
been achieved by the
business entity.

Activity: 2
Executive Summary
Sound financial management system must be in place in case of every business whether it is
small or big. There are many techniques offered by financial management which can be
applied in real world situations of the business to identify threats and risks to the business at
an earliest possible way. In the report, various such financial management techniques has
been evaluated in the context of Royal Furniture, a new start up business in order to forecast
it cash flows from the first year of operations on a monthly basis and also the determination
of breakeven point has been to provide an idea to the management on how much minimum
sales they must require to made in order to cover their costs.
Understanding financial management
All business whether it is small or big must have a sound financial management in its place in
order to ensure sustainability and long term success of the business. Sound financial
management of a company allows for tracking and prudently managing financial resources of
a company along with ensuring sufficient and efficient cash flow management, so that
liquidity of a business can be ensured in a better way (Blue and O’Faircheallaigh, 2018). It
ensures generation of correct and accurate generation of information which helps in avoiding
poor decision making activities and early identification of minor or major business issues
which can create serious problems and risky situations for the company. Here in this report,
how a consultancy firm should carry out the financial management task of a small or start up
business in order to ensure that there would be appropriate financial system in the business
through accurate information provision and efficient operations, so that end results could be
improved to a great extent. Financial management services aims to ensure in making
informed business decisions through the analysis of major and important financial indicators
(Arianti, 2018). It is the responsibility of the financial management team to provide
management information on a quickly basis, so that both delay in decision making and
decisions based on outdated information can be avoided.
In this report, a small business which is going to start up its operations in the coming
year will be advised on financial management and it’s forecasting of cash flows and
breakeven analysis will be done to ensure this business can have better and sound financial

management system in their business operations (Jiang, Xu and Liang, 2017). The chosen
company is Royal Furniture, who is going to start up its operations soon will be advised on
funding business activity and ways to minimize business risks that can have an impact on the
business success.
Cash flow forecasting for Royal Furniture
Here there is a forecasted cash flows on a monthly basis for the upcoming year related to the
Royal furniture are as follows:
Particular January February March April May June July Augus
t
Septem
ber
Octob
er
Novem
ber
Decem
ber
Opening
cash
$100,000 $142,400 $136,700 $132,100 $142,2
50
$147,65
0
$157,8
50
$161,0
50
$172,45
0
$181,8
50
$189,25
0
$196,55
0
Cash sales $10,000 $12,000 $15,000 $20,000 $18,00
0
$21,000 $19,00
0
$20,00
0
$21,000 $22,00
0
$23,000 $24,000
AR
Collections
0 $5,000 $8,000 $10,000 $11,00
0
$15,000 $12,00
0
$14,00
0
$12,000 $13,00
0
$14,000 $16,000
Bank
financing
$20,000 0 0 0 0 0 $0 0 0 0 0 0
shareholder
investment
$30,000 $0 0 0 0 0 $0 0 0 0 0 0
Total of
cash
inflows
$160,000 $159,400 $159,700 $162,100 $171,2
50
$183,65
0
$188,8
50
$195,0
50
$205,45
0
$216,8
50
$226,25
0
$236,55
0
Uses of
cash
Payroll
(Fixed cost)
$5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Rent
(Fixed cost)
$500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Utilities
(Variable
cost)
$700 $700 $700 $1,000 $700 $800 $700 $600 $700 $500 $700 $700
Interests
and Taxes
(Variable
cost)
$300 $400 $300 $250 $300 $400 $500 $400 $300 $500 $400 $500
Inventory
purchases
(Variable
cost)
$10,000 $15,000 $20,000 $12,000 $16,00
0
$18,000 $20,00
0
$15,00
0
$16,000 $20,00
0
$22,000 $19,000
loan
repayments
(Fixed)
$500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Other
(Fixed)
$600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Total cash $17,600 $22,700 $27,600 $19,850 $23,60 $25,800 $27,80 $22,60 $23,600 $27,60 $29,700 $26,800