Business Report: Managing and Running Carter Lane Coffee House, London

This report examines the management and operational aspects of Carter Lane Coffee House, a small coffee shop in London. It delves into crucial factors for running a small business, including financial resource planning, human resource management, and goal setting. The report further explores customer relationship management processes, such as customer portfolio analysis and value proposition development, and how these strategies can be implemented. It also investigates the potential for transnational development of small businesses, outlining the associated benefits and drawbacks. The report includes practical applications through an annual itemized monthly cash flow forecast, break-even analysis, and a discussion of financial statements. Finally, it addresses the implications of relevant legislation and regulations on small businesses, providing a comprehensive overview of key considerations for success.

Managing &
Running a Small
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Main considerations a small business or social enterprise needs to run business...........1
TASK 2............................................................................................................................................3
P2) Various processes of customer relationship management...............................................3
P3) Small business can develop transnationally and benefits and drawbacks.......................5
TASK 3............................................................................................................................................6
P4) Annual itemised monthly cash flow forecast showing fixed and variable costs.............6
P5) Break- even analysis......................................................................................................11
P6) Financial statements for an organisation........................................................................11
TASK 4..........................................................................................................................................12
P7) Legislation and regulations that have implications on small businesses......................12
D4 Regulations and legislations that impact on small business...........................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Small business can be defined as an enterprise which is privately owned and operated in
independent manner. These firms have limited in size and revenue with relatively small turnover.
As the backbone of an economy, sentiment of small businesses is an important barometer of
wider feelings between British firms. SME accounted for 99% of overall private sector
businesses in 2017 and total employment of these firms was 16.1 million. Small business have a
positive outlook for future business growth in UK economy cause of changing global landscape.
In order to ensure forthcoming success, it is essential for administration of SMEs to manage their
working activities and tasks in a systematic manner with the formation of systematic strategies
and policies for business (Smit and Watkins, 2012). The present assignment is based upon Carter
Lane Coffee House, its a small coffee shop in London which serves a wide variety of eatable
products in UK having rich and creamy taste. Present report will make a discussion on the way
SME's like this cafe develop transnationally.
TASK 1
P1) Main considerations a small business or social enterprise needs to run business
Carter Lane Coffee House is considered as a small business organisation which serves a
wide range of coffee products as well as some varieties of bakery items . From customer point of
view, this is the only cafe in London Street which specialises in making a fabulous Macchiato
and home made cakes. Although the operations are carried out on smaller scale but in terms of
service, this firm has delivered a excellent service. It has a friendly and experienced staff who
understand easily what a customer needs from them and deliver the same within a little time
(Skolud and et. al., 2016). With growing business in UK market, this cafe shop generates
numerous job opportunities to those people who are specialised in providing better services to
guest. In addition to this, it also give chance to freshers also who cook very well. In order to run
business in efficient way, its management is needed to consider on some main factors which help
in planning and allocating available resources. These factors are given below: - Planning of financial resources – For operating functions of business operations in a
smooth manner, it is recommended to employers of Carter Lane Coffee House to ensure
about funds or finance available. As for both small and large companies, finance is
considered as the primary resource without which they cannot run functions and
operations of business. Therefore, management is required to evaluate actual position of
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business in terms of finance through which sources through which funds can be generated
could be decided. Planning of human resources – While planning and managing resources, manpower in a
firm is also taken as main part without which functions cannot be operated (Schaper and
et. al., 2014). In this manner, it is essential duty of Human Resources managers of an
enterprise to hire competent employees in workplace. For this process, they need to take
appropriate methods for judging skills and abilities of staff members so that task of
business can be completed in high efficient manner. As taste of customers are changing at
rapid rate, so, this firm used to recruit such people who have capabilities to prepare
coffee and other products as per requirements of guests . In this regard, managers used to
provide essential training to workers on regular basis to increase skills and abilities of
staff.
 Identification of goals and objectives of the firm- Every business owners are needed to
set goals and objectives first before opening their outlet. They should set target in such a
way that it acquires high demand of customers easily and achievable for employees. In
this regard, managers should provide a clear information about vision and mission of
company to staff members also (Jenkins and et. al., 2013). This will aid in operating all
activities in appropriate manner as well as winning competitive advantage also. The
mission of this firm is to make sure that consumers are provided with quality food and
beverages so that they can have a soothing experience.
Management of Carter Lane Coffee House used two methods for planning and allocating
resources in an appropriate manner. These methods are:- Critical path analysis – The method is used to plan entire activities of business in a
sequential manner which must be completed on time for achieving desired outcomes in
context with future. By analysing each and every step of entire tasks, management can
ensure if operations carried out will help in bringing success of company in future. If any
kind of issues find out in terms of process then they can take necessary steps to resolve
the same.
 Gantt chart – This is another tool used by managers of small firms to allocate resources.
As this kind of chart describes time period of taken by each activity as well as
requirement of capital for completing it. Thus, it would help management in taking
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proper decisions regarding with arrangement of sufficient resources and allocate the
same.
In Small business organisations, it is necessary for management to plan available
resources and allocate them in a proper manner. It will be helpful in managing resources as well
as gaining profitability in a predetermined period of time (Jasra and et. al., 2012). In addition to
this, it will also be useful in taking appropriate decisions also through which they can support
employers in accomplishing set goals and objectives in desired manner.
An organisation has operated with different kinds of resources such as capital, manpower,
machinery equipments and other. All of such resources have equal importance in terms of
obtaining desired outcomes of business. Therefore, it is necessary for management of Carter
Lane Cafe House to concern more on way of using elements so that they can be utilised in proper
manner as well as meet requirement of business. It will help in managing available resources in
proper way.
TASK 2
P2) Various processes of customer relationship management
As relationship with customers affects business of a company more then it is necessary
for management of Carter Lane Coffee House also to concern more on the same. By developing
strategies and process help managers in interacting with consumers in a proper way (Harmon,
2015). The concept of customer relationship management assists a firm in keeping strong and
healthy relations with target customers. This would help in gaining loyalty of clients as well as
their retention for longer profitability and achievement of competitive edge in the market. In
small cafes like Cater Lane, main objective of them is to increase footfall of guest in their
premises on regular basis. This would help in generating high revenues through which business
can be developed in efficient manner. CRM technique aids a firm in judging behaviour of
targeted audience which aid help in dealing with them more easily and completing their demand
on time. Some major procedures of customer relationship management can be described in the
following manner:- Customer portfolio analysis – This is known as first stage of CRM process which helps
in make proper classification of customers into different groups on the basis of similar
characteristics i.e. age, sex, gender, buying power, status and more. This would aids a
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firm in analysing which group they wish to target so that strategies can be made
according to meet their demand (Stanciu, 2015). Customer intimacy- It is the second stage which encompasses with how to get familiar
with each customer of targeted group. Generally effectiveness of strategies built by
management of a company depend upon the way they understand need of customers as
well as deliver services to them. It includes how much customers can pay for a
commodity. In addition to this, the concept of customers intimacy relates to closeness of
customers with offerings of a firm (Hammer, 2015). Therefore, by interacting with clients
in efficient manner a company gains opportunity to know more about taste and
preference of customers. Develop the Network- This stage shows connectedness of an association with other
stakeholders who will give support to managers in delivering services to target
customers. Therefore, it is compulsory to manage relationship with customers and create
value for them on each stage of delivering or selling products. In addition to this, for
increasing brand value of business, managers of Carter Lane Coffee House are required
to develop relationship with all people associated with company so that their co-operation
is achieved in fulfilling demands of guests.
 Value proposition development- It is the last step under which management aims to
develop strategies by gathering complete information required in above steps. As through
customer intimacy, they can identify targeted audience as well as their needs. So, need to
make action plan related to value proposition so that demands of customers can be
completed on time.
Process of CRM activities includes various kinds of components which help in
maintaining healthy and positive relationship with consumers. In this regard, managers are
needed to identify demands and needs of customers as well as current trends of existing market
area. In addition to this, they should use effective measures through which loyalty of customers
can be earned for long term profitability in business (Durst and Wilhelm, 2012). It is main
responsibility of management of companies to make an appropriate plan through which
operations of business can be conducted in proper way. For developing operations management
of enterprises are required to gain opportunity available at marketplace through which
achievement of set objectives cab be completed on time.
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In the procedure of customer relationship management, managers are needed to concern
on some major steps as stated below:-
 Correlate- This step includes a sequence of communication and transaction process
through which better customer relationship can be implemented.
 Combine- It entails managers to implement a healthy and effective conversation with
customers through strong communication skills.
 Cognize- It refers to collect information related to different kinds of products or services
as current market scenario.
 Connect- It assists management to interact with channels of media, clients, suppliers and
investors.
P3) Small business can develop transnationally and benefits and drawbacks
Transactional sales – It is a kind of strategy used by such organisations who wants to sell
products or services in quick manner without focusing on making long term relationship with
customers (Durst and Runar Edvardsson, 2012). It is directly linked with process of delivering
services to customers as per requirement of customers. In this regard, management of Carter
Lane Coffee House requires to conduct proper market research in order to evaluate latest trend of
marketplace and demand of customers. Information availed will be helpful developing strategies
and tactics through which minds of customers can be attracted. It would help in earning high
profitability for a business enterprise. As products of this cafe like Macchiato, Italian style of
coffee as well as way of delivering i.e. not too hot not cold with effective services on reasonable
price shows effective quality. As in London Street many new cafes are opening at rapid having
creative ideas create threats on business of this firm. Therefore, to maintain reputation of
business and expand it in other locations, management of this cafe requires to make proper action
plan.
Transactional sales is a kind of strategy used to accomplish short term goals of a
company in quick manner. As Carter Lane Coffee House currently wants to increase sales
performance with at least 2% within two months. So, this strategy helps in planning and
allocating resources through which such kind of objective can be accomplished within set period
of time. In this process, it is necessary for this cafe to provide coffee and other bakery items
enrich with high quality to customers on affordable price rates (Drucker, 2012). Some major
benefits and limitations of translational sales are explaining as below:-
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Benefits - Brand Loyalty: This term reflects how business connects customers and assist them to
buy commodities directly from stores in repeated manner rather than from suppliers. The
main purpose of using transactional sales strategy of a company is to enhance sales
performance. So, delivering services as per demand of customers so that there is
repetition of purchases. It aids small firms in enhancing brand image of business at a
particular marketplace. Product Development: Through transactional sales, a firm like Carter Lane Cafe can
modify its products or services. It will help in offering high innovative services to
customers as well.
Drawbacks
 Lengthy- Developing new strategies and providing innovation in products or services
consume much time as well as resources therefore may not encouraged by a company.
 Financial risks- Implementation of new techniques in workplace and adoption of new
technologies covers several risks and uncertainties (Weske, 2012). It will majorly impact
on working capabilities of employees and on performance of business also. As
introducing new techniques as well as create modification in existing one requires much
amount. Thus, this procedure seems to be unhealthy in terms of finance for small
business which have less capital resource.
TASK 3
P4) Annual itemised monthly cash flow forecast showing fixed and variable costs
In order to raise finance from different source, small firms are required to generate
unique and innovative ideas. They should make proper action and budget plan which includes
entire activities as well as capital required to run the same (Cojoacă, 2017). This would help
management in analysing requirement of funds. Some sources available for small companies
are:- Bank loan- There are number of public and private banks available which provides loan
and credit facilities to all kind of businesses on easy terms and conditions. Hire purchase- It is considered as the best source used by managers of small firms to
drive capital in business. In this process, they can acquire finance on giving some assets
of company on rent.
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Forecasting and budgeting Time series data- This technique help a firm in setting up schedule of entire activities of
plan so that such kind of project can be executed on time within an estimated budget.
 Dealing with seasonality developing budget- In this phase, management of company are
required to make some essential changes in existing budget plan. This would help in
dealing with current and future trends of market place in appropriate manner.
Balance Sheet, P&L and cash flow statement of Carter Lane Coffee House:
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
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Sales 20 30
Cost of sales 10 15
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 28000 30250 31550 29650 28750
Budgeted cash receipts 13400 37550 64690 92370 118170
Total cash available 41400 67800 96240 122020 146920
Cash distributed
Direct material 1500 1050 1650 1500 1550
Direct labour 1300 660 850 850 680
Overhead 500 650 630 700 670
Selling and distribution 550 750 740 800 760
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Total cost use 3850 3110 3870 3850 3660
Cash surplus/ deficit 37550 64690 92370 118170 143260
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