What Is Coaching

Assessment Book 9 – Undertake Small Business Planning

ASSESSMENT BOOK 9

Undertake Small Business

Planning

BSBSMB404A

Published by:

Life Coaching Institute (Aust)

All Case Histories in this text are presented as

examples onlyand any comparison which might be made

with persons eitherliving or dead is purely coincidental

Second edition, July 2013

Copyright ownership: Life Coaching Institute (Aust) Pty Ltd

ACN 099 379 352

This book is copyright protected under the Berne Convention.

All rights reserved. No reproduction without permission.

Life Coaching Institute (Aust)

Locked Bag 15

Fortitude Valley QLD 4006

This book is protected by copyright and may not be reproduced or copied either in part or in whole nor used for financial gain without the express approval in writing of the owner (Copyright ownership: Life Coaching Institute (Aust) Pty Ltd ACN 099 379 352) of the copyright.

Assessment Book 9 – Undertake Small Business Planning

Contents

PREAMBLE

Contents

Unit Title

Unit Purpose

Suggested Hours

Content

Prerequisites

Assessment

Time Frame

Unit Outcomes

About the Icons

Assessment Book 9 – Undertake Small Business Planning

SECTIONS

Section 1: Prepare for Business Planning...... 11

Section 2: Elements of a Business Plan...... 20

Section 3: Develop a Business Plan...... 28

Assessment Book 9 – Undertake Small Business Planning

Unit Title

BSBSMB404A: Undertake small business planning

Unit Purpose

This unit covers the research and development of an integrated business plan for achieving business goals and objectives. It is suitable for setting up a Life Coaching enterprise. This unit is related to Unit 8: Establish Legal and Risk Management Requirements for Small Business.

Suggested Hours

Although everyone will work at their own pace, we suggest you allow approximately 52 hours to complete this unit competently, including readings, teleclasses and any practical activities.

Content

• Identify your business opportunity
• Elements of a business plan
• Develop a business plan

Prerequisites

There are no prerequisites for this unit.

Assessment

This assessment book with any additional assignments should be submitted to the Life Coaching Institute upon completion. The submission options are as follows:

• Hard copy (via post)

If you are submitting your work in hard copy, please ensure you write clearly in blue or black pen (no pencil please). Failure to submit clean, legible assessment books will unfortunately result in these being returned to you, unmarked. If possible, please type any assignments that you attach to the assessment book.

Should you need more space to complete activities, please attach another page to the relevant activity and ensure any additions are clearly marked at the top of the page with:

• Your name
• Student number
• The unit code and title
• Section number and title
• The activity number your answer refers to.

Please take a copy of your Assessment Book and any other attachments (in case of loss in the mail) and return the completed Assessment Book to the following address:

Life Coaching Institute

Locked Bag 15

Fortitude Valley QLD 4006

• Email

If you have downloaded an electronic version of the Assessment Book from the LCI website, email your completed Assessment Book as an attachment to . Ensure you have completed all the activities in the Assessment Book and entered your name and student number on the first page.

Time Frame

The recommended time frame for Unit9 – Undertake Small Business Planningis 2 weeks.

Thank you for choosing to study with the Life Coaching Institute.Best Wishes!
Unit Outcomes

Upon completion of this unit, you should be able to:

Required skills:

• Communication skills to assess business performance
• Literacy skills to enable interpretation of business information
• Numeracy skills to analyse data

Required knowledge:

• Commonwealth, state/territory and local government legislative requirements relating to business operation, especially in regard to WHS and environmental issues, equal employment opportunity, industrial relations and anti-discrimination
• Methods of evaluation
• WHS responsibilities and procedures for identifying hazards relevant to the business
• Planning processes
• Preparation of a business plan
• Principles of risk management relevant to business planning
• Reasons for and benefits of, business planning
• Relevant industry codes of practice
• Setting goals and objectives
• Types of business planning - feasibility studies, strategic, operational, financial and marketing planning.

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Business plan may include:

• Business opportunities, which may be influenced by:
• Amount and types of finance available
• Expected financial viability
• Skills of operator
• Details of ownership/management
• Finance, expenditure statement, balance sheet and cash flow forecast, projections for the initial years of operation, assumptions underlying the business plan, expected level of inflation and taxation, expected trend of interest rate, capital expenditure and its timing, stock turnover, debtors collection period, creditor payment period, return on investment
• Level of risk involved, risk assessment and management
• Market focus of the business
• Marketing requirements
• Need to raise finance and requirements of lenders
• Organisation/operational arrangements
• Proposed size and scale of the business
• Recognition of any seasonal or cyclical (time-based) elements which are crucial to the success of the business
• Resources required and available
• Sources of funding
• Specialist services and sources of advice that may be required
• Staffing
• Stages in the business development

Business goals and objectives may include:

• Customer needs/marketing projections
• Family or community benefits
• Financial projections
• Goals, objectives, plans, systems and processes
• Lifestyle issues
• Market focus of the business
• Proposed size and scale of the business
• Short-, medium- or long-term goals
• Social responsibility

Work health and safety must include:

• Identification of specific hazard issues such as occupational violence, security, manual handling, equipment and hazardous substances
• Management of the organisation and operation of WHS as part of the business plan
• Procedures for managing hazards in the workplace (identify, assess and control)
• Provisions for ensuring safety of members of the public and contractors visiting the premises/worksite

Financial plan may include:

• Analysis of sales by product/service, identifying where they were sold and to whom
• Cash flow estimates for each forward period
• Current financial state of the enterprise (or owner/operator)
• Estimates of profit and loss projections for each forward period
• Financial performance to date (if applicable)
• Likely return on investment
• Monthly, quarterly or annual returns
• Non-recurrent assets calculations
• Profit, turnover, capital and equity targets
• Projected profit targets, pricing strategies, margins
• Projections of likely financial results (budgeting)
• Projections, which may vary depending on the importance of such information and the stage in the life of the business
• Resources required to implement the proposed marketing and production strategies (staff, materials, plant and equipment)
• Review of financial inputs required (sources and forms of finance)
• Risks and measures to manage or minimise risks
• Working, fixed, debt and equity capital

Marketing strategies may include:

• Achieving lower costs of production and distribution than competitors
• Creating a very different product line or service so that the business becomes a class leader in the industry
• Distribution
• Pricing, presentation and display of products/services
• Product design and packaging
• Product range and mix
• Promotion and advertising
• Pursuing cost leadership and/or product differentiation within a specialist market segment

Products/operations plan may include:

• Customer requirements, market expectations, budgetary constraints
• Industrial relations climate and quality assurance considerations
• Means of supply and distribution
• Operational targets and action plan, which may include short-, medium- or long-term goals
• Options for production, delivery, technical and customer service and support

Staffing requirements may include:

• Full-time, part-time staff, permanent, temporary or casual staff
• Owner/operator
• Sub-contractors or external advisers/consultants

Specialist services may include:

• Accountants
• Business advisors and consultants
• Business brokers
• Contractors
• Government agencies
• Industry/trade associations
• Lawyers and providers of legal advice
• Mentors
• Online gateways

Relevant people may include:

• Clients
• Family members
• Franchise agency
• Owner/operator, partners, financial backers
• Regulatory bodies
• Suppliers
• Trade or industry associations

Risk management strategies may include:

• Breach of contract, product liability
• Knowledge management
• Measures to manage risk including professional indemnity, securing appropriate insurance to cover loss of earnings through sickness/accidents, drought, flood, fire, theft
• Security systems to provide physical security of premises, plant, equipment, goods and services
• Security of intellectual property

Risk management strategies must include:

• WHS requirements

Contingency plan may include:

• Disturbances to cash flow, supply and/or distribution
• Sickness or personal considerations

About the Icons

The following icons are small graphics used throughout the Assessment Book to describe certain activities that you will need to undertake.

1

Assessment Book 9 – Undertake Small Business Planning

Section 1

YOUR BUSINESS OPPORTUNITY

ACTIVITY 1

1.1 Which of the following statements is FALSE in regards to the business planning process?

a)Business planning can be thought of as a cycle of thinking, doing and checking

b)Documentation is an important part of the planning cycle

c)Evaluation informs future planning

d)Business planning is a linear process that only needs to be undertaken once

e)None of the above

Your answer: Select answerABCDE

1.2 In your own words, provide a short explanation of what is involved in each stage of the planning process:

Preparation:

Developing the plan:

Finalisation and documentation:

Implementation:

Monitoring:

Evaluation:

ACTIVITY 2

2.1The Life Coaching Institute (Australia) named ten (10) elements of a successful small business. Choose five (5) and briefly describe each one.

2.2Reading 9.1 identifies common reasons that small businesses fail. Consider three (3) of these reasons and discuss what you could do to prevent them from influencing your Life Coaching enterprise.

2.3Identify thetype of Life Coaching you would like to provide (as this will be your focus throughout the workbook). For example, a general Life Coaching service or a specialty area of coaching. Describe your reasons for wanting to start this type of service.

2.4There are a number of features of a small business. Review the following list which contains some of these features and select the ones that you think you/your Life Coaching business would have.

Adapted from Savage, W., Reynolds, W., & Williams, A. (2000). Your Own Business: A Practical Guide to Success.Nelson, VIC: Thomson Learning.

Of the features you have identified, which three (3) do you consider essential to the success of your Life Coaching enterprise? Please justify your answers.

2.5Of the skills outlined on page 17 of the Study Guide, name three (3) skills you would like to develop to feel more confident about starting and running your own Life Coaching enterprise. Discuss.

2.6The following is a list of personal characteristics that may be common in people who are successful small business operators. Indicate with a tick which qualities are typical of you.

Please note: possessing these characteristics is not a guarantee of a successful small business. The purpose ofthis checklist is to assist you in developing a greater sense of your strengths and areas for development.

2.7Think about the values that are important to you (eg. leadership, achievement, success). What values do you think you may transfer to your Life Coaching business? Explain your reasons for this.

2.8What values that areimportant to you may challenge you when running your Life Coaching business (eg. security, concern for others)? How will they challenge you?

ACTIVITY 3

3.1Think about opening your own Life Coaching enterprise. Name three (3) overall goals for the enterprise.

3.2Develop one of your goals into a SMART goal. An example has been provided.

Example

By December 2010 I will have paid back $10 000.00 of the business loan I received from the bank.

Specific:The objective focuses on the repayment of the loan only

Measurable:The specified amount of money

Achievable:Based on projected profits, this is deemed achievable

Realistic:Although this is a challenge, it is possible

Time framed:To be achieved by December 2010

* Please note: The dates used here are only an example and may not relate to today’s date.

a)Your SMART goal

b)How does yourSMART goal relate to the SMART criteria?

1

Assessment Book 9 – Undertake Small Business Planning

Section 2

ELEMENTS OF A BUSINESS PLAN

ACTIVITY 1

1.1What is the purpose of a feasibility study?

a)To calculate an exact percentage representing the likelihood that the business will succeed

b)To examine the success of other businesses

c)To expand upon the business idea

d)To develop an in-depth marketing and financial plan

e)To give an initial indication of the likely success of implementing the business idea

Your answer: Select answerABCDE

1.2A feasibility study would usually occur…..

a)After having a business idea and prior to developing the business plan

b)After developing the business plan

c)Before having a business idea

d)After taking out a loan for the business

e)None of the above

Your answer: Select answerABCDE

1.3Match the sections of the business plan with their descriptions by selecting the corresponding letters in the boxes below.

ACTIVITY 2