Module 3 – Assessment Task 8 – Activity 8.1 – Business Plan and Budget
Key requirements/specific instructions:
1. In order to ensure that your business is able to hit the ground running, you decide to complete a comprehensive business plan and budget to guide the establishment and growth of your business. As a minimum, your business plan and budget must address:
Consultation processes for the establishment and growth of the business, including the range of persons and organisations to be consulted
Key performance indicators and other measurements to be used to monitor business growth, progress, and the achievement of organisational objectives
Contingency plans to be implemented in the event that the business does not achieve its goals, including lack of start-up capital and insufficient income
2. Resourcing requirements for establishment and growth for the first 12 months of operation, including:
Premises and facilities
Equipment
Human resources
External contractors and services
3. A detailed budget which clearly specifies the required capital for start-up based on the determined resource requirements, as well as the ongoing income required based on the estimated resources requirements for the first 12 months of operation
4. A balance sheet displaying the assets and liabilities relevant to the business upon start-up
5. Performance management and review processes for monitoring the progress and success of the organisation
6. Record keeping requirements for all operational and financial documentation, including:
Sales and expenses
GST and PAYG payments
Superannuation contributions
Public Liability, Professional Indemnity and WorkCover Insurance
Any relevant permits and licenses
7. Once the business plan and budget have been completed, prepare a cover letter to accompany the documents when providing them to relevant stakeholders. These persons could include accountants, solicitors, or managers which you intend to hire. The purpose of the cover letter is to seek approval and support for the implementation of the business plan.
Module 3 – Assessment Task 8 – Activity 8.2 – Financial Evaluation
Your business has now been operating for 12 months. Unfortunately, your business is not progressing according to your business plan and budget. Actual income is 15% below the initial estimates, while staffing costs have blown out by 25%. There have also been significant cost blowouts on construction projects due to the ordering of excess materials which are then disposed of without being used on additional projects.
Key requirements/specific instructions:
1. In order to address the financial issues which have plagued your business, you decide to conduct a full evaluation of the organisation’s financial strategy. As a minimum, this evaluation must include:
A strategy for monitoring expenditure to ensure that costs are managed effectively
Contingency plans to be implemented as a means of controlling business expenses
An updated balance sheet showing updated assets and liabilities, using an electronic spreadsheet
Modifications required to the business plan to ensure that the business is profitable and remains viable
Modifications required to Performance Indicators
Training strategy for underperformers
2. Once the financial evaluation is complete, prepare a cover letter to your accountant explaining the evaluation and the results, providing a summary of the actions to be taken to improve the organisation’s financial position and the associated changes to the business plan.
