HNHM346: Managing and Running a Small Business - The Ledbury Report

This report provides a comprehensive analysis of The Ledbury, a small hospitality business, examining key aspects of its management and operations. It begins with a discussion of resource allocation and its importance in achieving business objectives, followed by an application of relevant tools and techniques for planning and allocating resources. The report then explores customer relationship management processes and the benefits and drawbacks of transnational business development for small businesses. Furthermore, it delves into financial planning, including break-even analysis and cash flow forecasting, alongside an examination of relevant regulations. The report concludes with recommendations for overcoming challenges and a critical evaluation of the key elements discussed, offering a holistic view of The Ledbury's business strategies and challenges.

Managing and Running
Small Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
Discussion of main considerations and assessment of importance of planning and allocating
resources to accomplish business objectives for small hospitality business...............................1
Application of relevant tools and techniques in a structured and analytical way to plan and
allocate resources in The Ledbury..............................................................................................3
Critical analysis of application of appropriate resources that demonstrates links between
resource allocation and achievement of business objectives......................................................3
Explanation and critical evaluation of different processes of customer relationship
management for a small business in relation to accomplishing business objectives..................4
Explanation of how small businesses develops transnationally with an assessment of benefits
and its drawbacks........................................................................................................................5
Recommendations for overcoming challenges of developing transnational operations. ...........7
Discussion and critical evaluation of key legislations and regulations that affect small
businesses company by taking future developments and changes into account.........................8
TASK 2............................................................................................................................................8
Designing a break even analysis and cash flow forecast............................................................8
Explanation of how break even analysis that could be applied to an organisational situation.
...................................................................................................................................................10
Interpretation of key financial statements like cash flow forecast and critical evaluation how
they could contribute to successful management. ....................................................................10
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Small businesses are basically privately owned corporations, partnerships and sole
proprietorship which have fewer employees annual revenues than s regular sized business or
corporations. And according to that small business management is defined as a process of
aligning and coordinating all factors of a small business which consists managing of employees,
suppliers, business finances, roadmap and performing daily routine tasks(Steingold and
Steingold, 2019). Managing and carrying of small business represents various specific and
routine challenges for every owner. It basically deals in creating a business, determining funding
needs, managing employees overseeing marketing and managing business types and all factors
of business that ensures in keeping on growing and achieving success (Kunaka and Moos, 2019)
. This report is based on managing and running a small business of The Ledbury, which is a
small hospitality business restaurant in London an deals in providing Chef Brett Graham's
innovative cooking that are paired with fine wines in a effective and modern setting ambience.
This report firstly includes a discussion of how small business and social enterprise plans and
allocates resources that accomplish objectives, explanation and evaluation of customer
relationship management process for a small business consisting its understanding various
benefits and challenges of transnational operations. And second section is based on John and
Jenny e commerce services that includes development and analysis of cash flow forecast, budget
and break even analysis in financial statements, discussion of implication of regulations and
regulation on a small business along with its conclusion.
MAIN BODY
TASK 1
Discussion of main considerations and assessment of importance of planning and allocating
resources to accomplish business objectives for small hospitality business.
There are various key considerations and assessment that has a relevance of planning and
allocating resources that helps in accomplishing goals and objectives of business(Attaran and
Woods, 2019). In terms of The Ledbury, considerations, assessment and relevance of planning
and allocating resources that helps in accomplishing business objectives are as follows:
Considerations and assessment:
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 Financial resources: It is considered as an important aspect that is needed by manager
have planning and allocating of resources to keep their business practices running
effectively. In terms of The Ledbury, manager of restaurant makes and implements
planning and allocate resources as there are various sources that and could be used by
restaurant in order to raise funds and operate tasks in business environment.
 Vision and goals: As vision statement of every business stated to be one that indicates
and shows what is right position which company desires to accomplish in future years.
Goals is said to be an end for which companies carries business activities (Sharafizad,
2018). In terms of The Ledbury, restaurant should focus on building and carrying its
business activities in way that accomplishes its objectives and goals in an effective
manner.
 Employees and their skills: Workers are mostly considered to one of valuable assets of
every company as there are various job roles and duties that are to performed by skilled
and trained employees to satisfy and fulfil demand and requirements of customers. In
terms of The Ledbury, manager of restaurant focus on ensuring that training programmes
for employees and cooks of restaurants are to be timely carried in order to enhance
performance of restaurant business.
Importance of planning and resource allocating:
Planning is considered to be an important function for running and carrying every
business in an effective way. As without having effective and efficient planning business will
not able to achieve its planned objectives. In terms of The Ledbury, planning and allocating of
resources helps manager of company to have:
 To have maximization in resource utilisation.
 It helps project managers to appraise their schedules and in estimation of resource
availability in real time.
 It helps in resource forecasting that leads to have enhanced staffing (Liguori and Pittz,
2020).
 It helps managers to have more productive and efficient project teams and work groups.
 It helps in having precise resource capacity planning and efficient allocation of resources.
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Application of relevant tools and techniques in a structured and analytical way to plan and
allocate resources in The Ledbury.
There are various techniques and tools which are required for utilising resources. It helps
in deciding and developing future decisions and actions (Depken, and Zeman, 2018) . There are
various benefit of structured plan which is required to allocate resources and helps in
determining resources which are needed to accomplish planned business goals of company and
helps that helps in increasing and ease of allocating process. In terms of The Ledbury, some of
techniques and tools that are required to carry a structured plan to helps in allocating resources
are as follows: Gantt chart: Use of this tool and technique helps in determining and identifying various
paths that are available to complete project and business activities. It helps in identifying
various business related activities. In terms of The Ledbury, manager of restaurant keeps
its focus on ascertaining largest and longest path which is available in accomplishing
planned goals.
 Critical path analysis: This tool and technique considered and proved to be an effective
and efficient method that helps building structured plan and it stays in type of offer data
and bar chart which reveals time of every project activity(MADUEKE, Okoro and
BABARIND, 2020) . This technique helps in determining longest route to complete an
activity. In terms of The Ledbury, manager of restaurant could focus on gathering data
and information about resources that are needed to carry business practice and achieve
planned goals of restaurant. As by having effective and efficient communication channel
that could be applied and used by businesses which helps in bringing cooperation among
various business operations.
Critical analysis of application of appropriate resources that demonstrates links between
resource allocation and achievement of business objectives.
There are wide number of resources and according to that there are various resources that
are use by businesses to have a good effectiveness and to attain it business goals and objectives.
As when any business company has all resources that are needed to implement and execute
commercial operations and after that it brings efficiency in business tasks and enhance its
effectiveness. On other hand there is a lack of resources which creates challenges and barriers
that delays in satisfying requirements of customers. So it is essential for managers to design and
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formulate a structure plan which haves information related to resources requirements to
accomplish and complete business activities(Battisti and Deakins, 2018).
Explanation and critical evaluation of different processes of customer relationship
management for a small business in relation to accomplishing business objectives.
It has been critically analysed and evaluated that customer relationship management
refers to a strategy for maintaining and building a good relationship with customers. It is defined
as a process of interacting with customers and managing business's relationship. This approach
helps in enhancing company's profitability and revenues (Putra and Cho, 2019). There are
different types of resources that could be used by business companies in order to interact with
customers through social media sites, telephones and emails. In terms of The Ledbury, restaurant
is applying customer relationship management in their operations to have a understanding about
customer's behaviours, tastes and preferences related to food and ambience. There is a benefit of
using customer relationship management as it enhances information management that relates to
have complete information about customer that leads to positive experience in companies. This
is explained as follows: Customer portfolio analysis: It refers to first stage that consists of evaluation of
customer's base to understand to understand which type of customers that are more
profitable. It basically provides target base of business. In terms of The Ledbury,
manager of restaurant analyse and develop and customer portfolio that helps them in
analysing taste and preferences of customers. Customer intimacy: This refers to second stage of business that consists process of
knowing target customer base. Companies has to keep maintain their relationship with
customers in order to knows well about its customers that consists all buying habits of
customers (Kgoroeadira Burke and van Stel, 2019). This steps consists establishment of
customer's data base and store gathered information. In terms of The Ledbury, manager
of restaurant focus on building customer's satisfaction and according to that it is essential
to understand behaviour of customers to know their taste and preferences in food and
ambience of restaurant. Development of network: It is next stage that consists determination and building of
customer relationship through individuals, company and network. As these relationship
involves internal as well as external partners which are suppliers, employees and
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investors. In terms of The Ledbury, restaurant uses to develop and build their network
with customer in order to make them regular customers. Development of value proposition: it basically refers to information technology which is
assembled while working on customer intimacy (Tidd and Bessant, 2020) . As when
target customers are identified there is a creation of value proposition for customers and
value creation for business.
 Management of customer life cycle: It is considered as last stage of customer
relationship management where it is defined as a journey of customer. As for managing
of cycle needs to have a proper structure and attention to process. It is also related to have
a continuing relationship with customers. In terms of The Ledbury, restaurant could build
health customer relation by knowing their taste and preferences and their journey towards
their restaurant.
There are various components that affect customer relationship management and which is
needed to be consider by every company prior making any decision. In terms of The Ledbury,
some of components of customer relationship management which are to be considered by
restaurant in order to fulfil its business goals are as follows: Changes in taste and preferences of customers: This component basically states that
whenever there is a change that takes place on requirements and wants of customers and
it also creates an impact on customer relationship management. In terms of The Ledbury,
restaurant focus on determining changes in customer's taste and preferences and
according to that develop and design their strategies in order to fulfil needs of customers
as well as accomplishment of business objectives.
 Modification in services and products: As whenever any company introduces and
launches a change in their offerings and delivery then it as a result it affects customer
relationship as either it is in positive and negative way. In terms of The Ledbury,
restaurant constantly focus on having and building modification in their operations in
order to maintain its survival in corporate markets.
Explanation of how small businesses develops transnationally with an assessment of
benefits and its drawbacks.
Small businesses that are transnationally develops is defined as a sale strategy which
consists having focus on accomplishing quick sale that create and develops a long run customer
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relationship. This types of strategy is basically used for businesses that offers generic products
and services with an aim of enhancing profitability by making high amount of sales. This
strategy indicates and highlights sales of company's products that take place across national
boundaries. It is important for companies to create and generate implement strategy according to
conditions that exists in markets(Pakroo, 2018). It results to have high amount of profits and at
same time it develops brand image in new markets. In this there are several efforts that are taken
by business companies for having expansion of business operations at international level. In
terms of The Ledbury, some of benefits and drawbacks that are related to business are as
follows:
Benefits: Efficiency: There is a standard process of working that is followed by small business
companies that helps in enhancing their effectiveness and efficiency of business process
and that provides various benefits which helps in earning profits and enhancing brand
value for company,. In terms of The Ledbury, restaurant uses this process to have
improvement in their operations and activities that helps restaurant to perform better.
 Independence: There should be a right of having independence in providing initiatives
and opinions. As these factors helps in building improvements and enhancing company's
efficiency (Trevino and Nelson, 2021). In terms of The Ledbury, manager of restaurant
has authority to take and make various decisions that are related to expansion of business
activities and tasks. As it helps and provides a benefit to enhance profit and increase
brand value of restaurant.
Drawbacks: Lengthy: For having and experiencing business operations in an efficient and systematic
way and to generate and build more profits then it is important for business companies to
adapt creative and innovative ideas. In terms of The Ledbury, restaurant should keeps it
focus on using innovative ideas to overcome a barrier and to avoid having lengthy
process.
 Financial risks: It refers to major and important risk that is faced by business companies
while having expansion and up gradation of company operations in new areas. Hence
small business companies don not have sufficient and available resources to operate on
high level. In terms of The Ledbury, restaurant is having a drawback of having financial
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risks in markets as there are various financial risks that are present in markets which
hampers operation of restaurants.
Recommendations for overcoming challenges of developing transnational operations.
As when a business companies perform their commercial operations by
internationalisation model then it provides various benefits to companies. It is important that this
model should be utilise in an effective and efficient way and for having this it is important that
manager should has information about some aspects that are used by The Ledbury are as follows: Relationship commitment decision: This factor determines and indicates that quality of
products must be offered to all customers in given time as this helps in retaining them for
a long run period. In terms of The Ledbury, restaurant could build relationship by
providing quality products to customers in order to provide them better customer
experience. Knowledge opportunity: By having a proper research must be carried out so that
managers could collect information about opportunity that exists in markets and
companies that are able to get a competitive position in markets(Hickman and Silva,
2018). In terms of The Ledbury, restaurant could uses various knowledge opportunity by
understanding various behaviours of customers to improve well.
 Network positioning: By having marketing and promotional tools that are utilize by
companies in order to communicate with customers and maintaining a good and healthy
relationship with them. In terms of The Ledbury, restaurant, uses various network
positioning in their operation in order to provide customers a better experience and
support.
There are some stages that are involved in evaluation of process of customer relationship
management and it is important that every stage should be managed by manager of company so
that company could retain them for a long time period. In terms of The Ledbury, various factors
that helps in evaluation of transnational business as well as customer relationship management
are as follows: Correlate: In this stage manager of company could conduct and carry a program and
invite employees working in different departments of companies for creating and
maintaining good relations with target audience.
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 Cognize: In this stage manager of company could collect and analyse various
information that are related with different functions that are performed by business
companies.
Discussion and critical evaluation of key legislations and regulations that affect small
businesses company by taking future developments and changes into account.
From discussion it has been evaluated that as to control different functions of business an
determining their tasks there are various regulatory bodies of nation that has made various laws.
As it will provide benefit in keeping environment of business safe and protective so that
employees and workers could be able to work in a systematic way. In terms of The Ledbury,
restaurant could use rules and legislations, decision making and operational activities process
that affects a lot. Some of laws are explained are as follows:
 Health and safety act: This act has been imposed and has enacted in 1974 that is
important for companies to ensure health and safety of employees and individuals who
are related with business (Ritz, Wolf and McQuitty, 2019) . In terms of The Ledbury, as
being a small hospitality business company, it is important for management of restaurant
to provide important and required training to its employees in order to provide quality
food products to customers so that could provide themselves from any dissatisfaction and
harmful situation. This act will help in decreasing employee turnover and enhance job
satisfaction towards them.
TASK 2
Designing a break even analysis and cash flow forecast.
Cash flow statement: It could be defined as a statement in which information related to
cash inflows and cash out flows are explained. It is basically prepared for a particular time
period(Polonsky and Waller, 2018). As it helps stakeholders to determine that company is
financially strong or not. While John and Jenny are willing to expand their e commerce business
in various places and than it is essential for managers to forecast possible future expenses that
may take place in future. Cash flow statement is as follows:
Forecasted cash flow statement
Cash Jan Feb Marc April May June July Augu Septe Oct. Nov. Dec Total
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distributed h st mber
Total
revenues 8000 6500 5500 5000 8500 9000 9200 8750 8250 8000 8520 8925
9414
5
Direct
material 1500 1250 1250 1300 1450 1580 1650 1458 1589 1685 1985 1785
1848
2
Direct labor 1250 750 500 500 1350 1400 1435 1445 1474 1458 1568 1589
1471
9
Overhead 1000 500 500 700 2700 2850 2950 2987 2250 1850 1650 1250
2118
7
Selling and
distribution 750 750 750 800 850 950 850 650 720 715 785 795 9365
Total
variable
expenses 4500 3250 3000 3300 6350 6780 6885 6540 6033 5708 5988 5419
6375
3
Fixed
expenses 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000
2400
0
Total cost
use 6500 5250 5000 5300 8350 8780 8885 8540 8033 7708 7988 7419
8775
3
Surplus/
Deficit 1500 1250 500 -300 150 220 315 210 217 292 532 1506 6392
From above cash flow forecasted it has been analysed that company may receive a
surplus in coming periods.
Break even analysis: It can be referred as point where company is not in situation of
profits and losses. As in stage all expenses of company is recovered with sales of products and
services. Break even analysis can be calculated as:
BEP = Fixed cost/ selling price per unit – variable cost per unit
Calculation of BEP=
Fixed cost= 12000
Selling price per unit= 10
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Variable cost per unit= 4
BEP= 12000/10-4
BEP= 12000/6
= 3000.
Applications of BEP:
 BEP analysis acts as guide for company's managers to set appropriate prices for products
which are manufactured by company.
 It is used to analyse and determine actual point where company could accomplish higher
profits.
 Managers of company may get idea of units that requires to be manufactured to recover
all costs that are related to production.
From above it has been analysed and determined when revenues and total costs meets
than it result in having break even point. Fixed costs always stays same for production and
variable costs always fluctuates according to production units.
Explanation of how break even analysis that could be applied to an organisational
situation.
From above analysis it has been evaluated that by using break even analysis it helps in
sub dividing various tasks and roles and other tasks will be carried after completion of one tasks
so it will be helpful for company to carry all activities in business effectively. A by carrying and
dividing activities in various parts it helps in reducing risk factor of company.
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Interpretation of key financial statements like cash flow forecast and critical evaluation how they
could contribute to successful management.
Financial statement: It refers to statement which are formulated by accountants and
managers of company and it has analysed by external and internal stakeholders in order to
analyse that company is achieving profits or losses(Wei, Thurasamy and Popa, 2018) . There
are following statements that are formulated by accountants of John and Jenny e commerce
services: Income statements: It is basically formulated to record all income and expenses of
company so that actual profitability could be determined. In terms of John and Jenny ,
income statements are formulated to analyse all incomes and expenses of company
which takes place in a particular time period. Balance sheet: It is prepared to determine over all performance of company. It shows
liquidity, assets, liabilities, equities and other components which are required by
stakeholder such as investors to determine that company is able to provide them good
returns on their invested amount or not(Hill, 2018) .
 Cash flow statement: As all kinds of cash related transactions which are related to cash
inflows and outflows are recorded in cash flow statement. It basically helps in
determining actual liquidity of company for a particular period of time.
Income statement:
Particulars Amount
Sales £15,000
Cost of Goods Sold £11,500
GROSS PROFIT £3,500
Expenses
- Salary £250
- Rent £500
OPERATING PROFIT £2,750
Depreciation £1,200
PROFIT BEFORE TAX £1,550
Taxes - 20% £310
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NET PROFIT £1,240
RETAINED
EARNINGS £1,000
DIVIDENDS £240
Balance sheet:
ASSETS Amount
Cash/Banks £3,500
Inventory £1,500
Acc Receivable £3,600
Fixed Assets
- Gross £12,800
- Acc Depreciation £2,000
- Net Value £10,800
TOTAL ASSETS £19,400
LIABILITIES
Bank Loans £8,500
Accounts Payable £1,660
TOTAL LIABILITIES £10,160
EQUITY
Capital £8,000
Retained Earnings £1,240
TOTAL EQUITIES £9,240
TOTAL EQUITY +
LIABILITIES £19,400
Cash flow statement:
Particular Amount
INITIAL BALANCE £6,800
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CASH IN
From Operations £1,500
From Investment £1,100
CASH OUT
From Operations £3,500
From Investment £2,400
FINAL BALANCE £3,500
From above statement it has been analysed that company is earning profits. From balance
sheet of company it has been analysed that company is having internal liabilities that consists of
equities and total liabilities and according to above analysis it has been determined that company
is in good situation as it is building profits regularly.
Ratio analysis:
Name of ratio Formula Calculation
Liquidity ratio
Current ratio Current assets/current
liabilities
8600/1660=5.18
Quick ratio Quick assets/current
liabilities
7100/1660=4.27
Profitability
ratio
Net profit ratio Net profit/sales*100 1240/15000*100=8.27%
Gross profit ratio Gross profit/sales*100 3500/15000*100=23.33%
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From above calculation it has been analysed that John and Jenny e commerce services is
having good profitability and liquidity as above ratios depicts a good performance and position
of company.
Analytical and quantitative techniques plays a important and vital role in evaluation of
cash flow statement and break even analysis. All kinds of techniques are mainly used to improve
company's performance. It also provides benefit to stakeholders to analyse actual status and
position of company in market. As cash flow provides information of cash inflows and outflows
and break even analysis that helps to determine actual units that could be manufactured by
company to recover expenses.
Financial statements such as cash flow statement, income statement and balance sheets
are prepared to analyse overall performance of John and Jenny e commerce services. As it guides
all stakeholders to design and make strategic decisions about making investment of having
credits to company(Pearlson, Saunders and Galletta, 2019). Managers could also evaluate
financial statements results in successful business management as a guides managers to
specifically formulate their strategies.
CONCLUSION
From above report it has been concluded that small businesses are privately owned
corporations. And managing and running small business carries by having small business
management which is a process of aligning and coordinating all factors of small business. This
report carries a brief explanation of various discussion and resources that are required to
perform and carry small business. There is a brief explanation of managing, data and information
which is required to carry small business company effectively and smoothly. There is
explanation of various financial statement that are cash flow statement, break even analysis that
are required to carry and determine finances and funding for small business.
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REFERENCES
Books and Journals
Attaran, M. and Woods, J., 2019. Cloud computing technology: improving small business
performance using the Internet. Journal of Small Business & Entrepreneurship .31(6).
pp.495-519.
Battisti, M. and Deakins, D., 2018. Microfoundations of small business tax behaviour: A
capability perspective. British Journal of Management .29(3). pp.497-513.
Depken, D. and Zeman, C., 2018. Small business challenges and the triple bottom line, TBL:
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Hickman, C.R. and Silva, M.A., 2018. Creating excellence: Managing corporate culture,
strategy, and change in the new age. Routledge.
Hill, I., 2018. How did you get up and running? Taking a Bourdieuan perspective towards a
framework for negotiating strategic fit. Entrepreneurship & Regional
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Kgoroeadira, R., Burke, A. and van Stel, A., 2019. Small business online loan crowdfunding:
who gets funded and what determines the rate of interest?. Small Business
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Kunaka, C. and Moos, M., 2019. Evaluating mentoring outcomes from the perspective of
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era of COVID-19. Journal of the International Council for Small Business .1(2).
pp.106-110.
MADUEKE, D., Okoro, C.B. and BABARINDE, S.A., 2020. Managing Challenges Associated
with the Small Business Failure in Emerging Markets: The Nigerian Illustration. TEST
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Pakroo, P., 2018. The small business start-up kit: A step-by-step legal guide. Nolo.
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systems: A strategic approach. John Wiley & Sons.
Polonsky, M.J. and Waller, D.S., 2018. Designing and managing a research project: A business
student's guide. Sage publications.
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perspective: A qualitative study. International Journal of Hospitality Management, 78,
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Ritz, W., Wolf, M. and McQuitty, S., 2019. Digital marketing adoption and success for small
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Sharafizad, J., 2018. Informal learning of women small business owners. Education+ Training.
Steingold, F.S. and Steingold, D., 2019. Legal guide for starting & running a small business.
Nolo.
Tidd, J. and Bessant, J.R., 2020. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Trevino, L.K. and Nelson, K.A., 2021. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Wei, L.H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
global business services industry. Management Decision.
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