TM Develop implement a business plan 220115 (1)

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Develop and implement a business plan
D1.HCS.CL6.05
D1.HSM.CL5.06
D2.TRM.CL9.02
Trainee Manual
Develop and implement
a business plan
D1.HCS.CL6.05
D1.HSM.CL5.06
D2.TRM.CL9.02
Trainee Manual
Project Base
William Angliss Institute of TAFE
555 La Trobe Street
Melbourne 3000 Victoria
Telephone:
(03) 9606 2111
Facsimile:
(03) 9670 1330
Acknowledgements
Project Director:
Project Manager
Chief Writer:
Subject Writer:
Editor:
DTP/Production:
Wayne Crosbie
Jim Irwin
Alan Hickman
Nick Hyland
Jim Irwin
Daniel Chee, Mai Vu, Cindy Curran
The Association of Southeast Asian Nations (ASEAN) was established on 8 August 1967. The Member
States of the Association are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar,
Philippines, Singapore, Thailand and Viet Nam.
The ASEAN Secretariat is based in Jakarta, Indonesia.
General Information on ASEAN appears online at the ASEAN Website: www.asean.org.
All text is produced by William Angliss Institute of TAFE for the ASEAN Project on “Toolbox Development
for Front Office, Food and Beverage Services and Food Production Divisions”.
This publication is supported by the Australian Government’s aid program through the ASEAN-Australia
Development Cooperation Program Phase II (AADCP II).
Copyright: Association of Southeast Asian Nations (ASEAN) 2015.
All rights reserved.
Disclaimer
Every effort has been made to ensure that this publication is free from errors or omissions. However, you
should conduct your own enquiries and seek professional advice before relying on any fact, statement or
matter contained in this book. The ASEAN Secretariat and William Angliss Institute of TAFE are not
responsible for any injury, loss or damage as a result of material included or omitted from this course.
Information in this module is current at the time of publication. Time of publication is indicated in the date
stamp at the bottom of each page.
Some images appearing in this resource have been purchased from stock photography suppliers
Shutterstock and iStockphoto and other third party copyright owners and as such are non-transferable and
non-exclusive. Clip arts, font images and illustrations used are from the Microsoft Office Clip Art and
Media Library. Some images have been provided by and are the property of William Angliss Institute.
Additional images have been sourced from Flickr and SXC and are used under Creative Commons
licence: http://creativecommons.org/licenses/by/2.0/deed.en
File name: TM_Develop implement a business plan_220115
Table of contents
Introduction to trainee manual ............................................................................................... 1
Unit descriptor ....................................................................................................................... 3
Assessment matrix ................................................................................................................ 5
Glossary................................................................................................................................ 9
Element 1: Analyse the internal and external business environment .................................. 11
Element 2: Formulate business plans and strategies ......................................................... 39
Element 3: Implement the business plan ............................................................................ 87
Element 4: Monitor the business plan ............................................................................... 103
Presentation of written work .............................................................................................. 117
Recommended reading ..................................................................................................... 119
Trainee evaluation sheet ................................................................................................... 121
Trainee self-assessment checklist..................................................................................... 123
© ASEAN 2015
Trainee Manual
Develop and implement a business plan
© ASEAN 2015
Trainee Manual
Develop and implement a business plan
Introduction to trainee manual
Introduction to trainee manual
To the Trainee
Congratulations on joining this course. This Trainee Manual is one part of a ‘toolbox’ which is
a resource provided to trainees, trainers and assessors to help you become competent in
various areas of your work.
The ‘toolbox’ consists of three elements:

A Trainee Manual for you to read and study at home or in class

A Trainer Guide with Power Point slides to help your Trainer explain the content of the
training material and provide class activities to help with practice

An Assessment Manual which provides your Assessor with oral and written questions
and other assessment tasks to establish whether or not you have achieved competency.
The first thing you may notice is that this training program and the information you find in the
Trainee Manual seems different to the textbooks you have used previously. This is because
the method of instruction and examination is different. The method used is called
Competency based training (CBT) and Competency based assessment (CBA). CBT and
CBA is the training and assessment system chosen by ASEAN (Association of South-East
Asian Nations) to train people to work in the tourism and hospitality industry throughout all
the ASEAN member states.
What is the CBT and CBA system and why has it been adopted by ASEAN?
CBT is a way of training that concentrates on what a worker can do or is required to do at
work. The aim is of the training is to enable trainees to perform tasks and duties at a
standard expected by employers. CBT seeks to develop the skills, knowledge and attitudes
(or recognise the ones the trainee already possesses) to achieve the required competency
standard. ASEAN has adopted the CBT/CBA training system as it is able to produce the type
of worker that industry is looking for and this therefore increases trainees’ chances of
obtaining employment.
CBA involves collecting evidence and making a judgement of the extent to which a worker
can perform his/her duties at the required competency standard. Where a trainee can
already demonstrate a degree of competency, either due to prior training or work
experience, a process of ‘Recognition of Prior Learning’ (RPL) is available to trainees to
recognise this. Please speak to your trainer about RPL if you think this applies to you.
What is a competency standard?
Competency standards are descriptions of the skills and knowledge required to perform a
task or activity at the level of a required standard.
242 competency standards for the tourism and hospitality industries throughout the ASEAN
region have been developed to cover all the knowledge, skills and attitudes required to work
in the following occupational areas:

Housekeeping

Food Production

Food and Beverage Service

Front Office
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Introduction to trainee manual

Travel Agencies

Tour Operations.
All of these competency standards are available for you to look at. In fact you will find a
summary of each one at the beginning of each Trainee Manual under the heading ‘Unit
Descriptor’. The unit descriptor describes the content of the unit you will be studying in the
Trainee Manual and provides a table of contents which are divided up into ‘Elements’ and
‘Performance Criteria”. An element is a description of one aspect of what has to be achieved
in the workplace. The ‘Performance Criteria’ below each element details the level of
performance that needs to be demonstrated to be declared competent.
There are other components of the competency standard:

Unit Title: statement about what is to be done in the workplace

Unit Number: unique number identifying the particular competency

Nominal hours: number of classroom or practical hours usually needed to complete the
competency. We call them ‘nominal’ hours because they can vary e.g. sometimes it will
take an individual less time to complete a unit of competency because he/she has prior
knowledge or work experience in that area.
The final heading you will see before you start reading the Trainee Manual is the
‘Assessment Matrix’. Competency based assessment requires trainees to be assessed in at
least 2 – 3 different ways, one of which must be practical. This section outlines three ways
assessment can be carried out and includes work projects, written questions and oral
questions. The matrix is designed to show you which performance criteria will be assessed
and how they will be assessed. Your trainer and/or assessor may also use other assessment
methods including ‘Observation Checklist’ and ‘Third Party Statement’. An observation
checklist is a way of recording how you perform at work and a third party statement is a
statement by a supervisor or employer about the degree of competence they believe you
have achieved. This can be based on observing your workplace performance, inspecting
your work or gaining feedback from fellow workers.
Your trainer and/or assessor may use other methods to assess you such as:

Journals

Oral presentations

Role plays

Log books

Group projects

Practical demonstrations.
Remember your trainer is there to help you succeed and become competent. Please feel
free to ask him or her for more explanation of what you have just read and of what is
expected from you and best wishes for your future studies and future career in tourism and
hospitality.
2
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Unit descriptor
Unit descriptor
Develop and implement a business plan
This unit deals with the skills and knowledge required to Develop and implement a business
plan in a range of settings within the hotel and travel industries workplace context.
Unit Code:
D1.HCS.CL6.05
D1.HSM.CL5.06
D2.TRM.CL9.02
Nominal Hours:
60 hours
Element 1: Analyse the internal and external business environment
Performance Criteria
1.1 Determine information requirements and undertake research to deliver relevant
information
1.2 Consult with all internal and external stakeholders in the research process
1.3 Use research to assist in the prediction of social, political, economic and technological
trends and developments
1.4 Identify and seek assistance and advice from appropriate experts when necessary
1.5 Review and analyse the existing internal resources and capabilities
1.6 Document and analyse business opportunities and obstacles based on valid and
reliable comparative market information
1.7 Review and analyse current and emerging competitors for their potential impact
Element 2: Formulate business plans and strategies
Performance Criteria
2.1 Create or confirm enterprise mission, vision and purpose as the starting point for the
business plan in consultation with stakeholders
2.2 Establish realistic, clearly stated and measurable objectives for the business
2.3 Develop appropriate strategies and tactics to address objectives across all areas of
business operation
2.4 Identify and include opportunities for strategic business alliances
2.5 Develop all aspects of the business plan to ensure the business meets relevant legal,
social, environmental and ethical obligations
2.6 Include appropriate action plans and evaluation processes, including key performance
indicators
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Unit descriptor
2.7 Consult with appropriate staff, management and other stakeholders to encourage
support for the planning process so that all perspectives are taken into account in the
development of the plan
Element 3: Implement the business plan
Performance Criteria
3.1 Communicate the business objectives and content of plans in a timely manner to
facilitate a clear understanding of the plan and associated activities and individual
responsibilities
3.2 Use appropriate leadership techniques to encourage team commitment to the business
plan
3.3 Encourage staff to provide ongoing input into the business plan
3.4 Implement and organise actions detailed in the plan in a cost-efficient manner and in
accordance with schedule and contingencies
Element 4: Monitor the business plan
Performance Criteria
4.1 Review the business plan regularly and adjust in the light of changing circumstances
4.2 Monitor activities detailed in the plan on an ongoing basis
4.3 Identify and analyse successes and performance gaps on an ongoing basis
4.4 Implement agreed changes to plans promptly
4.5 Report performance in a transparent manner to all stakeholders
4
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Assessment matrix
Assessment matrix
Showing mapping of Performance Criteria against Work Projects, Written
Questions and Oral Questions
The Assessment Matrix indicates three of the most common assessment activities your
Assessor may use to assess your understanding of the content of this manual and your
performance - Work Projects, Written Questions and Oral Questions. It also indicates
where you can find the subject content related to these assessment activities in the
Trainee Manual (i.e. under which element or performance criteria). As explained in the
Introduction, however, the assessors are free to choose which assessment activities are
most suitable to best capture evidence of competency as they deem appropriate for
individual students.
Work
Projects
Written
Questions
Oral
Questions
Element 1: Analyse the internal and external business environment
1.1
Determine information requirements and
undertake research to deliver relevant
information
1.1
1,2
1
1.2
Consult with all internal and external
stakeholders in the research process
1.2
3
2
1.3
Use research to assist in the prediction of
social, political, economic and technological
trends and developments
1.3
4
3
1.4
Identify and seek assistance and advice from
appropriate experts when necessary
1.4
5
4
1.5
Review and analyse the existing internal
resources and capabilities
1.5
6
5
1.6
Document and analyse business opportunities
and obstacles based on valid and reliable
comparative market information
1.6
7,8
6
Review and analyse current and emerging
competitors for their potential impact
1.7
9
7
1.7
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Assessment matrix
Work
Projects
Written
Questions
Oral
Questions
Create or confirm enterprise mission, vision
and purpose as the starting point for the
business plan in consultation with
stakeholders
2.1
10,11
8
2.2
Establish realistic, clearly stated and
measurable objectives for the business
2.2
12
9
2.3
Develop appropriate strategies and tactics to
address objectives across all areas of
business operation
2.3
13,14
10
2.4
Identify and include opportunities for strategic
business alliances
2.4
15
11
2.5
Develop all aspects of the business plan to
ensure the business meets relevant legal,
social, environmental and ethical obligations
2.5
16
12
Include appropriate action plans and
evaluation processes, including key
performance indicators
2.6
17
13
Consult with appropriate staff, management
and other stakeholders to encourage support
for the planning process so that all
perspectives are taken into account in the
development of the plan
2.7
18
14
Communicate the business objectives and
content of plans in a timely manner to facilitate
a clear understanding of the plan and
associated activities and individual
responsibilities
3.1
19
15
Use appropriate leadership techniques to
encourage team commitment to the business
plan
3.2
20
16
3.3
Encourage staff to provide ongoing input into
the business plan
3.3
21
17
3.4
Implement and organise actions detailed in the
plan in a cost-efficient manner and in
accordance with schedule and contingencies
3.4
22,23,24
18
Element 2: Formulate business plans and strategies
2.1
2.6
2.7
Element 3: Implement the business plan
3.1
3.2
6
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Develop and implement a business plan
Assessment matrix
Work
Projects
Written
Questions
Oral
Questions
Element 4: Monitor the business plan
4.1
Review the business plan regularly and adjust
in the light of changing circumstances
4.1
25
19
4.2
Monitor activities detailed in the plan on an
ongoing basis
4.2
26,27
20
4.3
Identify and analyse successes and
performance gaps on an ongoing basis
4.3
28
21
4.4
Implement agreed changes to plans promptly
4.4
29
22
4.5
Report performance in a transparent manner
to all stakeholders
4.5
30
23
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Assessment matrix
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Glossary
Glossary
Term
Explanation
Alliance
Strategic partnership
Asset
Something the business owns or is owed
Benchmarking
Any standard or reference by which others can be
measured or judged
Break-even analysis
Determines at which point sales begin to cover costs
Business plan
Written document that presents detailed information
about the business, its projected plans and projections
for the future
Contribution margin
Difference between variable cost and the sales price
CSI
Customer Satisfaction Index
Current
To be used within a financial year
Distribution
How your products or services are sold to end users
E-business
Electronic based business
External environment
Focus on forces outside the business
Feasibility
A determination of the initial viability of the core business
concept
Fiscal
Financial matters
Fixed costs
Costs that remain even regardless of business activity
Inflation
Positive economic activity
Intangible
Incapable of being perceived by the sense of touch, but
still has value
Intellectual property
Property that results from original creative thought, as
patents, copyright material, and trademarks.
Internal environment
Focus on forces inside the business
KPI
Key Performance Indicator
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Glossary
Term
Explanation
Liability
Something the businesses owes to another
Mission Statement
Purpose of your business
Mitigation
The act of making a condition or consequence less
severe
OHS
Occupational health and safety
Promotion
Activity to generate awareness of an organisation's
offering
PLC
Proprietary Limited Company
Proprietor
Owner of an organisation
Recession
Negative economic activity
SOP
Standard Operating Procedure
Stakeholder
A person who has a vested interest in an organisation
Superannuation
Pension, retirement benefits
SWOT
Strengths, weaknesses, opportunities, threats
USP
Unique Selling Points
Value Proposition
Identification of how an organisation provides value to a
customer
Variable costs
Costs that vary directly with business activity
Vision
Goal or aspiration
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Analyse the internal and external business environment
Element 1:
Analyse the internal and external
business environment
1.1 Determine information requirements and
undertake research to deliver relevant
information
Introduction
A business plan is a written document that presents detailed information about the business,
its projected plans and projections for the future. The plan is based on an analysis of the
business’ current situation (if already existing), and forecasts of future trends within the
relevant industry and economy. It includes results from research into all aspects of the
business operation and is a logical and structured document, with each section of the plan
consistent with and linking to each other.
It has been proven that those business’ who have a written
business plan with strategies for its operation, have a greater
chance of success in today’s fast moving and changing
environment. Preparation of a business plan gives a sense of
ownership and involvement in the future of the business, and
ensures that the commercial directions planned have been
tested for their viability in the marketplace.
Importance of business plans for starting or existing organisations
The most important aspect of a business plan for a start-up business is that it forces you to
‘think before you jump’.
A business plan forces you to:

Seriously think about your new venture in detail

Research the necessary information

Document your findings.
For an existing business, it forces you to:

Reassess that business and its direction and activities

Plan and prepare for change and growth.
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Analyse the internal and external business environment
A business plan is normally a requirement if you are borrowing money or attempting to
attract potential investors.
A business plan is the key formal document that sets out a total picture of how a business
will operate. It helps to establish standards for measuring the success of all aspects of a
business.
Establishing a business plan is a planning process. It is also a
control process, in that it sets guidelines and targets for all
aspects of the business. It sets standards to be achieved by all
business activities, and includes measurement processes
against set targets and corrective mechanisms across the whole
organisation. For example, if dollar turnover targets are not being
met in a restaurant, the business plan will identify to what extent
costs have to be trimmed and may highlight the need for implementation of a new marketing
strategy.
By completing a business plan, you are taking a pro-active step, forcing you to think clearly
about where the business is going and how you are going to get there.
Business planning process
Broadly speaking, for a new business, the planning consists of three activities. These three
activities encompass initial research to determine whether your business has the potential to
be successful before proceeding onto more in-depth analysis.
1. Core business concept
This defines the essence of a new business idea. What are the products and/or services
your business will market? What markets will you target with your products and/or services?
2. Feasibility study
In three steps, the feasibility study determines the initial viability of the core business
concept.

Technical feasibility - Can this business idea be implemented successfully within the
restrictions of our legal, social and environmental constraints? Are the required labour
and technical resources available?

Market feasibility - Is there room in the market for the
proposed product/s/service? Can the business achieve the
required sales turnover to make it viable? Will the market
pay the price you must charge to meet your sales targets?

Commercial feasibility - Can the level of sales be achieved
over a set period to make a profit in addition to servicing
any debt and/or providing a return on investment to
investors?
3. Business plan
If the feasibility study indicates that the business concept is a viable proposition, a detailed
business plan must be prepared.
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Analyse the internal and external business environment
Research process steps
You need to undertake initial research to determine your idea is viable before progressing on
to a detailed business plan.
It is generally accepted that there are five steps in the research process:

Define the problem – what do you need to know?

Analyse the situation

Collect information and data

Interpret the information

Decide on a plan of action.
Types of research
Research may include:

Interviewing colleagues and clients

Focus groups

Data analysis

Product sampling

Documentation reviews.
Types of relevant information
Whilst each organisation will have different focuses depending on their type of operation and
individual needs, common types of relevant information may include:

Current performance data

Sales and contracts

Forecasted trends and opportunities

Available resource commitments and capacity.
Sources of research information
You may find the answers from a wide variety of sources, including but not limited to:

Trade associations

Unions

Trade journals

Daily newspapers

Internet

Government departments

Local council

Friends, colleagues, business associates

Other associated businesses in the field, e.g. suppliers.
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Activity 1
PART A:
Choose the type of business that you would like to start up. If you prefer to use an existing
business, or the one you are employed in at present, you could use that business instead. It
should be within the hospitality or tourism industry.
In the remainder of the sections of Element 1, you will conduct research and test the viability
of the business you have chosen.
PART B:
Write down the type of operation including its size, location and main product/service
options. You might like to give it a name at this time and proposed commencement date of
operation.
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1.2 Consult with all internal and external
stakeholders in the research process
Introduction
When people talk about planning they often use the term ‘stakeholders’. This simply refers to
the people, groups, organisations that may have an interest in the business or be directly
affected by the plan.
As you develop your plan you will think of its stakeholders. Every additional stakeholder is
someone else who has an interest in your business and can, therefore, be another source of
support or contribute information.
Types of stakeholders
Stakeholders may include:

Customers

Employees

Government agencies

Owners

Suppliers

Strategic alliance partners.
Importance of involving stakeholders
Communication throughout the planning, preparation and delivery of business planning is
vital to ensure that all stakeholders:

Are involved

Had the chance to contribute

Provide feedback on initial strategies and approaches

Understand how business plans and strategies will affect
them

How the business plan will interrelate or impacts other
stakeholders.
All successful planning activities are a result of effective teamwork.
This highlights the need to involve others so that business planning approaches are
thoughtfully explored.
Activity 2
Write down a list of the organisations and people that you consider would be
stakeholders in your business.
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1.3 Use research to assist in the prediction of
social, political, economic and technological
trends and developments
Introduction
When researching information to help facilitate the business planning process, it is essential
to collecting and analysing information in a wide variety of 'environmental areas' that may
impact on an organisation in the future.
Information must ensure it not only explores:

External environment - what is provided or needed by
competitors and the industry as a whole

Internal environment - what the organisation provides.
Understand external environment
Development of a successful organisation is an on-going exercise, and involves monitoring
of the internal and external environments, and the integration of findings into future business
planning and the introduction of new concepts.
Market analysis provides us with the information necessary to understand what can cause
changes in our operational environment.
A prime intent of this activity is to gain a more insightful and
detailed view of the organisation and where it sits in the overall
business and other settings.
Market analysis is a fairly generic term that describes an activity
that we are constantly conducting in order to target the right
person with the right product/service at the right time in context
with the workings of the market, our environment and our
competition.
Analysis of external environment
The external environment refers to the area outside the business over which the venue has
little or no control. It normally has the greatest effect on the need for change.
It can relate to changes in technology, changes in legislation, state of the economy, political
situations, and competition in the marketplace.
Service deficiencies caused by external factors may be harder to control, however steps
should be made to understand them and make changes whether the organisation has some
control.
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External environment impacts include:
Changes in the competitive environment
As competitors introduce new services and facilities, the nature of
our industry is we are often forced to respond and match their
offerings or introduce something else in opposition to it. The key
here is we have to know what the competitors are doing. We have
to monitor their advertising, visit their premises and talk to our
suppliers about what the opposition is doing.
We then have to take some action to exploit an opportunity or mitigate any potential negative
impacts – whichever way we go, we have to realise ‘knowledge is power’ only if we act on it.
Knowledge on its own is next to useless
As part of this analysis, it may also be prudent and instructive to undertake a similar analysis
of your competitors so that you have a better understanding of the total opposition ranged
against you, and the marketplace in general.
When analysing the competition, it is useful to gather evidence of the following:

Location and distribution area that they have established

Target markets they appear to have set

Product and service mix

Packaging or presentation

Access

Continuity

Their promotional mix – what they do in terms of advertising,
when and how

An objective assessment of the quality of their product/service – Are they providing good
quality, costs, variations, reliable service, acceptable trading hours, and value-formoney?

Their pricing structure – Do they give discounts, trade-ins, a wholesale and retail
structure?

Their level of customer service – What do they provide? Are their staff good at selling
and service?

Their market share – how much of the (local) business do they have?
Economic climate
Monitoring the media and discussion with our finance facility will help identify the state of the
economy. There is no doubt the state of the economy is extremely influential on trade and
we have to be prepared to respond to the emerging economic climate. At times we can offer
indulgent, extravagant, high-roller packages, whilst in other times we need to focus on low
cost, value-for-money deals.
There are economic cycles that need to be taken into account in your business planning.
They are periodic fluctuations that occur quite regularly, driving the general level of
economic activity upwards (inflationary) or downwards (recessionary).
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Analyse the internal and external business environment
These trends result from a large and complex range of variable economic activity and
government policies which may affect your business and over which you have little or no
control e.g.

Proposed interest rate increases may lead to lower confidence levels of consumers who
will spend less on non-essential items e.g., holidays

Lower unemployment rates may increase consumer spending from which your business
will benefit

Increased numbers of persons from a specific culture living in your area may lead to
greater/lesser demand for your type of operation.
Trends in customer preferences
Whether we lead the pack or follow the opposition (or a combination of the two), we must
respond to customer preferences.
Advent of E-business
More and more people are using the internet to access
information and make bookings. We need to tap into this
emerging but already substantial market and establish a web
site (making sure it is someone’s responsibility to keep it updated weekly) which illustrates our business and describes
our services, facilities etc.
We also need to exploit the opportunities this medium
presents for reservations and various other activities such as
retail sales (internet sales), take-away sales, and a forum for questions and feedback as well
as a platform for information dissemination.
Markets
Markets are complex and rapidly changing with new and more complex customer demands,
products and services.
Internationalisation is increasing and international competition is intensifying in many
markets.
To ensure the right quality, companies must be better at
understanding their environment and building-up the
competence and ability to change before, or at the same
time, as the outside world changes.
The luxury of lagging behind global changes has
evaporated.
International customers expect the same standards here as
they receive in any developed country overseas.
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Environmental issues
The demand for quality in the outer environment will place greater demands on how
companies conduct their business, which sources of energy they use, and how they design
their products.
More establishments will seek to portray publicly their environmentally friendly image.
This may mean they subscribe to organisations such as ECO-Buy or Green Globe.
Most organisations appreciate there are cost savings to made from
‘going green’, as well as marketing potential and the obvious effect
of reducing the impact of the business on the planet.
Most businesses today will seek to demonstrate they align with
triple bottom-line principles, taking into account not only the
financial goals of the organisation but also social and environmental
responsibilities too.
Technological development
Technological development has played a key role in the structural changes in the service
sector.
Boundaries between transportation, communication, travel-service
and hospitality industries are disappearing as airlines (and others)
begin to provide direct reservations, tours, conferences, car and
accommodation arrangements, in-flight telephone service, and
electronic retailing package delivery services in competition-andcoalition with thousands of other service units.
Many customers are looking for seamless service – a one-stop
shop for all their holiday/travel needs, and technology is providing
the means for this to be done.
Technology has also impacted on operational service delivery via computerised reservations
systems, online reservations, hand-held ordering systems in restaurants, bar code scanning
and the growing trend for customers to do their own checkout and payment after selecting
goods.
Political issues
Some political policies that would influence a tourism organisation include:

Fiscal Policies

Monetary

Wages

Exchange rates

Ease of travel

Legislative changes.
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Social issues and trends
Social significance relates to how a society deems something to be important in their lives.
In terms of tourism, more people work harder and therefore want to enjoy their relaxation
time
Social trends show society has:

A better quality of life

Greater need for tourism products

Greater community pride

Great understanding and appreciation of the world

Increased appreciation of culture

Greater understanding of other people.
Evaluate market trends
Understanding trends of the industry is vital in ensuring that what you are seeking to provide
to the market is not only fresh and relevant but is in demand.
Regardless of types of trends being researched, the basic options for gathering information
have been identified below. The keys however to this step are to:

Be proactive

Keep an open mind

Using a variety of sources

Recording what you find.
Sources of trend information
There are a number of sources that will be a great starting point to get an overview of the
industry as a whole and the trends that may impact a business and the selection of new
products or services they are thinking of introducing.

Colleagues, supervisors and managers

Representatives.

Developing your own industry network

Conferences and seminars

Product launches

Trade magazines

Industry publications

Newsletters and brochures

Advertisements

Reference books

Internet

Government bodies.
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Types of industry statistics and trends
Industry statistics are popular amongst both employees within the hospitality, tourism and
event industry and also end consumers. Statistics prove a ‘snapshot’ of important
information which can be examined and applied to improve business operations, attract new
markets or build confidence in the eyes of a consumer.
Whilst there are endless statistics that can be researched, some of these include:

Types of tourism and tourism businesses

Types and demographics of customers

Top destinations

Hotel occupancy percentages

Reasons for stays

Current industry information

Destination countries

Departure months

Length of stay

Type of organisation for the trip

Transport mode

Accommodation type

Expenditure

Popular tourist attractions

Tourism patterns

Technology.
Customer demands
The key to knowing about changing trends, from a marketing
perspective, is that this information needs to be related to customerfocussed concerns.
Your market research will have identified the areas and issues that
are important to your various target markets, so profiling the
business’s customers requires that you relate these to the products
and services you are offering.
The point being that you need to be able to identify, understand and
explain how your products meet the specific classifications of
customer demands that exist within your different market segments.
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These customer demands may vary according to:

Personal preference

Health factors

Age

Cultural group

Dietary issues

Price

Contemporary eating habits

Media influence

Cultural and ethnic influences

Seasonal and popular influences

Major events and festivals.
Activity 3
PART A:
Use a variety of resources to investigate current and future social, political, economic and
technological developments. For each category, note down the major development/s you
believe will impact on your proposed business activity. On what basis have you chosen
them?
PART B:
Identify a range of trends that will affect a tourism organisation.
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1.4 Identify and seek assistance and advice from
appropriate experts when necessary
Introduction
Before you start your business it is advisable to consult as many organisations and persons
that you believe can inform and assist you in your planning.
Whilst each organisation will have different requirements, it is wise to speak with a wide
selection of experts. Each of these will not only cover areas that you may not have in-depth
knowledge of expertise, but can also provide a different approach and alternate point of
view.
Types of assistance and advice
Assistance and advice from appropriate experts may be sought for:

Collection and collation of facts and information

Review or verification of facts

Legal or financial advice

Ensure compliance of regulations and laws

Issuing of permits and licences

Strategic planning

Specialist skill sets.
Sources of assistance and advice
These can include, but are not limited to:

Local government agencies

Tourism associations

Non-government organisations

Media personnel including journalists

Copy writer

Professional research organisations

Solicitors

Family

Existing employees

Your existing bank

Your accountant

Financial adviser

Your planning consultant

Your architect
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
Your local council

Your potential financier (if not your current bank)

Tourism agencies (local/regional/state)

Tourism operators

Shareholders/business partners

Customers

Suppliers

Neighbours and the local community.
Activity 4
Explore the internet and other resources for organisations that you believe may be of benefit
to you in starting up and running your business.
What information can be sought by these 'experts'?
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1.5 Document and analyse business opportunities
and obstacles based on valid and reliable
comparative market information
Introduction
Once management have had a thorough look at the external environment, the focus must be
internally focused.
The internal environment is the environment within the
business.
It can include the level of staff available, the policies and
procedures of the organisation, the skill and knowledge levels
of staff, the opening hours of the business, the facilities
available within the venue. In theory, a property has control
over these internal factors because it is in a position to
influence them.
Any aspects of the internal environment impacting service can be identified, changed and
improved a lot easier than impacts caused by the external environment.
Review internal resources and capabilities
If you have an existing business you will need to assess how the business is currently
positioned in the market place.

Location including premises - are they appropriate, is there room for growth?

Market share – how well are you performing against the competition?

Turnover

Profitability

Staff – performance, current skills possessed?

Resources – physical assets, intellectual property, finance?

Future potential?
If you intend to start up a new business ask yourself, what internal resources and capabilities
are available, desirable, attainable and affordable from the above listed categories.
Both existing and start-up businesses need to identify, investigate and assess any potential
internal resources and capabilities.
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Internal considerations

Products and or services

Skill level of staff and management

Commitment to growth

Current market share

Level of debt

Profit margins

Capacity to produce goods or services

Competition

Skills of the owners

Location of the business

Equipment.
Organisational requirements
These will differ between businesses, products and services but may include:

Access and equity principles and practices

Maintaining ethical standards

Meeting goals, objectives, plans, systems and
processes

Legislated obligations

Management and accountability channels

Manufacturer’s and operational specifications

OHS policies, procedures and programs

Quality assurance and continuous improvement processes and standards.
Capabilities and resources
The use of resources is important activities in any business, especially when introducing new
concepts.
There is a need to make sure the organisation has the resources it needs to achieve its
identified business objectives, while at the same time, ensuring that money is not wasted on
resources that are not necessary or inappropriate to the task.
Resources can encompass:

Physical resources

Human resources

Financial resources

Intellectual property.
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While the exact nature, type and quantity of resources required by an organisation will vary
depending on the products and services being introduced, common resources requirements
include

Location/premises

Occupational health and safety (OHS) resources

Plant/machinery

Raw materials – used to produce the products or service

Refurbishment requirements

Staff amenities

Stock and supplies – used to support the operation of the
new product or service

Storage space – for stockpiling items produced and for
business records

Technical equipment and software

Staffing & Training

Training materials.
Activity 5
From your research and with the assistance of stakeholders and supporters, list
the current position of your existing business or the requirements for your new
business.
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1.6 Document and analyse business opportunities
and obstacles based on valid and reliable
comparative market information
Introduction
In addition to researching published information, it would be prudent to gather information
from direct observation and personal observations. Instinct and “gut feelings” may inspire
brilliant entrepreneurs, but most of us do better with concrete evidence on which to base
decisions.
Reliable statistical information is available from the local
Bureau of Statistics or relevant government agency. Local
authorities and associations can also provide valuable
insight about the location in which you want to start up or
grow your business.
It is essential to analyse the opportunities and obstacles
offered by your proposed business. It is important that you
are confident that the business is a viable proposition and will provide you (and any other
owners) with a satisfactory income or return on investment.
As mentioned before, business exists in a continually changing environment. The operating
environment is made up of the:

General business environment (external)

Existing operation, if applicable (internal).
SWOT Analysis
Most businesses undertake a SWOT analysis to gain an understanding of what is happening
both external and internal to the business and the effect it will have on the business. This
process ultimately tries to identify:

Strengths – what the business does well

Weaknesses – what the business can improve upon

Opportunities – where the business can improve or take advantage

Threats – where the business may become disadvantaged, weakened or susceptible.
Strengths and weaknesses in the internal structure, operations and ability or capacity may
appear in terms of:

Finance – available cash flow (or lack of it), debt-equity rates,
level of assets, profitability, capital available: this reflects the
previous results the business has experienced and takes into
account the effects of previous marketing programs

Production – extent and quality of systems and technology to
enable the business to operate. Is it up-to-date or in
desperate need of an upgrade or a replacement?
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
Resources – the level, variety and availability of products, raw materials, ingredients and
other requirements to produce the goods and services offered for sale

Offerings – taking into account the product mix of the business (the products and
services available). Is this mix ‘sufficient’ or does it need growing/expansion into other
areas, products or services?

Marketing – can relate to customer database information available or existing within the
business, details about price structure (discounts and commissions), distribution
channels (such as other agencies or establishments as a source of bookings), location of
the business (including Internet exposure), promotion undertaken, as well as the extent
of service and product range

Product life cycle – a product/service nearing the end of its
product life cycle can be a negative (a weakness)
indicating a need to replace it, refine it, re-brand it or add
some new option to re-create it under a different name

Business relationships – assessing the nature and
effectiveness of the arrangements with suppliers, agents
and head office; how have they changed over time? Are
you dependent on just one supplier or carrier? Are you getting the right quality products
and the service you want? Are you being supported by those who are supposed to serve
and support you?

Relationships with customers – analysing the extent and effectiveness of the CRM and
the information it contains (in terms of currency, quality, type, quantity)

Personnel – this looks at number of staff employed (too many or not enough?), their
knowledge, skills and abilities, the level of morale, leadership and internal
communication in the business.
Opportunities and threats that may externally face the organisation can include:
Political considerations
Analysis of political considerations/factors should include:
•
The political stability of the country
•
Is a change of government imminent and if so what implications can be expected?
•
Feelings in relation to international trade/dealings
•
Political relationships between home country and those countries with whom you do
a lot of business
•
The support available from government (agencies and bodies) for industry training
and/or initiatives.
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Economic considerations
The economic environment in which the business operates – addressing matters such as:

The local economic environment as well as the economic state of other countries from
which the business draws its customers

Inflation

Interest rates

Exchange rates

Levels of employment and unemployment

Availability of local skilled/competent staff

Amount of discretionary income customers have

Community thoughts on the state and/or future of the economy.
Social considerations
Analysis of social considerations/factors should include:

Statistics and trends in relation to demographic characteristics of markets – such as: Are
customers getting older or younger?

What is the ratio of males to females? Is this changing?

What image does the industry have in the eyes of society?
Is it a positive image? Is it tarnished for some reason and if
so how/why?

Projected responses of local and other communities if the
business pursues various options - such as entering into a
relationship with a certain organisation, entering into a new
market, erecting a new building

The status of the business in the eyes of the community/public as a ‘corporate citizen’

Mobility of people and their ability to travel to and from the venue.
Technological considerations
Analysis of technological considerations/factors should include:

Does the current technology being used by the business remain effective and efficient?

Is there new technology in the marketplace which can/should
be used to: Improve business performance/save time and/or
money?

Provide better/different facilities for customers and perhaps
give the venue a USP or meet identified customer
demand/meet competition?

Does legislation require use of nominated technology?
When?

What is the cost of new/required technology and what are supply/purchase options?

Dangers or problems inherent in adopting new technology and/or integrating it into
existing systems and/or processes.
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Legal considerations
Analysis of legal considerations/factors should include the laws and regulations the business
must comply with as well as any new laws being proposed and how these will/may impact
the business.
You may consider the following:

Industry-specific laws

Contract law

Fair trading legislation

Consumer protection

Employment legislation

Environmental protection laws

Wage rates

Trends in outcomes/decisions in civil cases

Penalties for non-compliance

Application and registration requirements, complexity, costs and timelines.
Environmental considerations
Analysis of environmental considerations/factors should include:

Sustainability issues

Use of power and water

Rubbish disposal

Pollution – traffic, noise, air, water

The impact of the venue on local communities.
Opportunities
Opportunities which should be highlighted in the analysis relate to:

New markets – including niche markets – which may be pursued by the venue in terms

New (or up-dated or modified) products or services which can be introduced to the
service menu

Occasions where new/higher prices may be charged

Problems being experienced by other providers (your competitors) which result in an
opening for you

Closure of an opposition business

Fresh markets now available to you as a result of previous action
you have taken – such as how you have trained your staff, new
equipment/resources you have purchased, refurbishments you
have undertaken, new database of information you have about
potential customers/guests.
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Threats
Threats may include issues relating to:

Introduction of new and/or more severe legislation

Opening of a new competitor

Worsening economic conditions

Staff shortages

Difficulty in obtaining physical resources

An unsettled domestic situation which scares off tourists

Negative comparative monetary exchange rates with
countries who are major clients.
Activity 6
Conduct a SWOT Analysis
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
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1.7 Review and analyse current and emerging
competitors for their potential impact
Introduction
It is important to know who your competition is, including:

Who are they, and where are they located?

How significant is their share of the market in your local
area?

How well do they present to potential customers?

What are their products and/or services?
It is vital that organisations have knowledge of their competitors.
That said, when visiting and researching competitors, you may also identify other businesses
or organisations that may work with you in the future. Are there any network opportunities in
the area?
Review and analyse current and emerging competitors
Areas of review may relate to:

Volume

Price

Territory

Customer accounts

Trading terms

Market share

Customer satisfaction.
Developing a competitive advantage
The intent of conducting research is to help determine what competitive
advantages you have over your competitors so that you can exploit
them.
This research helps you to identify your USPs (Unique Selling Points) in
either product or service (or both).
A USP is something your organisation offers that no-one else does –
this makes it unique. The marketing approach says that this USP should
be highlighted in all of your advertising so that customers get to know
that they can only get this particular service, produce, facility, advice,
etc. at your store and nowhere else. The intention is that this USP will act as a motivator for
customers to buy from you.
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Current market situation
Information on the current market position is normally drawn from a database of information
that the organisation constantly updates. This includes information on the market, product,
competition, current strategies and macro-environment.
Market situation

Total market characteristics - size, growth, trends

Customer needs, perceptions and buying behaviour

Products - service characteristics

Prices

Customer service and distribution

Channels - principal channels used, stock turnovers, profit

Communication - principal methods of communication used.
Competitive situation

Industry structure - type of competition, marketing methods, new entrants, mergers,
competitive arrangements

The geographic market in which they compete

Their current marketing performance

Their competitive position (growing, contracting)

Strengths and weaknesses, and vulnerabilities of each significant competitor

Their objectives and competitive strategies

Industry profitability - financial and non-financial barriers to entry, relative performance of
individual companies, volume, source of and cost of investment, effect and return on
investment of changes in price.
Product situation

For each product/service that the organisation offers, sales,
profits, contribution margins and growth should be displayed

Product lifecycle and expected demand over the product’s life
should be considered

Growth of the product/service should be contrasted to total
market growth.
Current strategies

Current product, price, place and promotional strategies should be included

Current people, processes and physical evidence strategies should also be included.
Activity 7
Draw up a SWOT analysis of your main competitor.
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Explore the potential for joint ventures and strategic alliances
It may be that there is an opportunity for your business to form a joint venture or strategic
alliance with another organisation. The most common form in hospitality or tourism of this
would be the purchase of a franchise.
It can be an excellent way to get into a business that has a proven reputation, well-known
branding and established product, with support from extensive advertising, promotion,
training and assistance from the head office.
Consider the advantages of recognition of a brand name that applies to a franchise
operation such as McDonalds or Travelscene.
On the down-side, you will need to comply with the parent
organisation’s policies, fit-out of the premises, product (usually no
variation is allowed) and will be required to pay them entry fees,
royalties based on turnover, and a set fee for advertising and
promotion. This can be very restrictive, and the success of your
business will depend largely on how well you have researched all
the advantages, disadvantages, competitive advantages and
consumer demand in your location.
Activity 8
Look at a minimum of one franchise opportunity available in your industry.
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Work Projects
It is a requirement of this Unit you complete Work Projects as advised by your Trainer. You
must submit documentation, suitable evidence or other relevant proof of completion of the
project to your Trainer by the agreed date.
1.1 Please complete the following activities relating to this Performance Criteria:

Activity 1
1.2 Please complete the following activities relating to this Performance Criteria:

Activity 2
1.3 Please complete the following activities relating to this Performance Criteria:

Activity 3
1.4 Please complete the following activities relating to this Performance Criteria:

Activity 4
1.5 Please complete the following activities relating to this Performance Criteria:

Activity 5
1.6 Please complete the following activities relating to this Performance Criteria:

Activity 6
1.7 Please complete the following activities relating to this Performance Criteria:
36

Activity 7

Activity 8
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Summary
Analyse the internal and external business environment
Determine information requirements and undertake research to deliver relevant information

Importance of business plans for starting or existing organisations

Business planning process

Research process steps

Types of research

Types of relevant information

Sources of research information
Consult with all internal and external stakeholders in the research process

Types of stakeholders

Importance of involving stakeholders
Use research to assist in the prediction of social, political, economic and technological trends
and developments

Understand external environment

Analysis of external environment

Evaluate market trends

Sources of trend information

Types of industry statistics and trends

Customer demands
Identify and seek assistance and advice from appropriate experts when necessary

Types of assistance and advice

Sources of assistance and advice
Review and analyse the existing internal resources and capabilities

Review internal resources and capabilities

Internal considerations

Organisational requirements

Capabilities and resources
Document and analyse business opportunities and obstacles based on valid and reliable
comparative market information

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats
Review and analyse current and emerging competitors for their potential impact

Review and analyse current and emerging competitors

Developing a competitive advantage

Current market situation

Explore the potential for joint ventures and strategic alliances
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Formulate business plans and strategies
Element 2:
Formulate business plans and
strategies
2.1 Create or confirm enterprise mission, vision
and purpose as the starting point for the
business plan in consultation with stakeholders
Introduction
In the previous section, the focus was on researching and collecting information relating to
the environment in general through to internal operations, impact of competitors and any
opportunities that may exist for the business to expand.
Now that persons responsible for the development of business plans have a sound
understanding on the influences on the operation, based on this research, it is now time to
document the path forward in a business plan.
Focus of business plans
The business plan may be for:

A new or existing small business venture

A division or department of a large organisation

A new product development initiative.
Contents of a Business Plan
On the following pages are a summary of the topics normally included in a business plan.
Later these topics will be explored in more detail.
Executive Summary

Business Profile

Your Products and/or Services

The Market

The Business Potential

Mission, Goals and Objectives

Strategies

Business Structure

Finance

Conclusion.
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The Business Profile

Business Name

Business Location/s

Business Activity/Activities

Business Objectives

Business History/Entry Strategy

Ownership Structure

Legal Requirements.
The Market Report

Industry Profile

Review of Existing Operation (if appropriate)

Your Product and/Service

Competition

Environmental Information and Trends.
The Marketing Plan

Market Segmentation

Your Customers

Target Markets

Strengths, Weaknesses, Opportunities, Threats Analysis

Key Issues

Sales and Marketing Goals and Objectives

Value Proposition (Competitive Advantages)

Marketing Strategies

Pricing

Promotion

Sales and Distribution.
Operational Plan

Premises, Plant and Equipment

Floor plan

Production and purchasing

List of Suppliers

Stock levels

Purchasing Policies and Controls

Break-even Analysis.
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Finance Plan

Current Financial Position

Capital Requirements and Funding Proposal

Financial Budgets

Cash-flow Projection

Projected Statement of Financial Performance (Profit
& Loss)

Projected Statement of Financial Position (Balance
Sheet)

Financial Ratios

Financial Controls

Business Insurances.
Risks Plan

Risk Identification and Mitigation.
Structure and Management Plan

Organisational Chart and Structure

Key Personnel

Labour Requirements and Skills

Staffing Strategies

Professional Advisers

Staffing Controls.
Project Plan

Action Plan

Evaluation

Implementation
Appendices
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Executive Summary
The Executive Summary is quite possibly the most important part of your business plan.
Many potential investors or lenders will take their first look by reading only your Executive
Summary. If this section doesn’t entice the reader to want to go into the body of the plan for
additional information, then it has failed its purpose.
Once you have finished the other sections of your plan, focus on the best two or three
thoughts of each section to create a summary. The key to writing a good summary is to write
it with your reading audience in mind. If you are going to use your plan to attract investors,
your Executive Summary should address all the important issues related to your potential
investors. If the plan is going to a banker, the Summary should address the areas of concern
of the financial institution reader. Getting the reader interested enough in your project to
want to read the rest of the plan is the primary purpose for the Executive Summary.
The executive summary is the business plan in miniature. The
executive summary should stand alone, almost as a kind of
business plan within the business plan. It should be logical,
clear, interesting – and exciting. A reader should be able to read
through it in four or five minutes and understand what makes
your business tick. After reading your executive summary, a
reader should be prompted to say, “So that’s what those people
are up to.”
Crystallise your thoughts. Since the executive summary is the business plan in miniature, it
contains the plan’s highlights, its key points. To write an executive summary, focus on the
issues that are most important to your business’s success.
Set priorities. The executive summary, like the business plan, should be organised according
to the items’ order of importance. Writing it forces you to pick and choose from among the
many points you want to make in the business plan and decide on their order of importance.
Your executive summary should have the following attributes:

Captures others’ interest, attention and imagination

Makes readers want to read more

Conveys the flavour of the rest of the plan

Portrays the writer’s enthusiasm for their business

It is concise and clearly written.
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Business Profile
Business Name
Your business, if not an existing one, needs a name – simplicity is
often the best. It is a good idea to avoid using a suburb name in case
your business moves or expands into other suburbs in the future.
Make it as interesting as possible, and indicative of what products
and/or services you are offering consumers. Think about a logo that
can be used on all your stationery, promotional materials, menus and
lists. Remember you need to register the business name
Mission Statement, Vision
Whilst the Mission Statement and Vision form part of the Executive Statement, it is a good
time to think about what you will write for these now.
The Mission Statement is the purpose of your business, and it should state concisely your
beliefs in the operation of your business. For example, the Mission Statement a travel
agency could be:
“The Singapore Travel Agency will provide creative travel solutions for high end business
and leisure purposes”
The Vision is the goal, or where you want your business to be in three years’ time.
Underlying this should be your consideration of where you want to be in 6, 12 months and 2
years in order to make your Vision viable.
The Singapore Travel Agency's Vision could be:
“The Singapore Travel Agency vision is that in 3 years’ time we will have attracted at least
10% of the potential corporate travel market and be the leading provider of luxury leisure
travel services”
Next you will need to clearly define the core business activity and perhaps some subsidiary
activities. In the case of the Singapore Travel Agency their core business would be to create
compete luxury packages (incorporating accommodation, transport, meals and insurance
solutions) for both corporate and FIT leisure clients, focused on the South East Asian
market. In one year’s time they may plan to create luxury inbound packages for groups.
Activity 9
Write the Mission Statement and Vision for your existing or proposed business
and describe its activities.
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2.2 Establish realistic, clearly stated and
measurable objectives for the business
Introduction
The business profile section of the business plan should include a summary of the key
business objectives for the operation. The objectives are the goals or targets to work
towards and once defined, enable the planning of strategies to achieve them.
It is preferable to have realistic annual objectives, which are later broken down into monthly
targets. They need to be consistent, follow through and relate to each other e.g., if your
sales objective is $250,000 for the first year, then the gross profit margin should relate to that
sales value – perhaps 80% (this will vary according to your industry). It is important to
research industry averages and benchmarks and to strive to achieve equal or better than
their results.
Make sure that the objectives are clearly stated. Set
measurable objectives which are not vague generalisations
(they may not necessarily always be in numeric terms), so
results can be evaluated. They should be achievable, but
provide the motivation for the business to work efficiently and
enthusiastically towards sustainable growth and improved
results.
Types of objectives
Objectives may include:

Sales figures

Revenues

Delivery times

Service standards

Client numbers

Client handling times

Staff turnover

Profit margins.
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The following table is a very simple set of objectives for the Singapore Travel Agency.
Singapore Travel Agency
NB The owner has invested $100,000 of his own capital, and borrowed $100,000. He has
arranged to pay interest only for the first year, and then commence reducing his debt by
$20,000 per annum.
Items
Year 1
Year 2
Year 3
Sales
$250,000
$300,000
$375,000
Profit after Tax
$12,500
$25,000
$40,000
12.5%
25%
40%
$100,000
$80,000
$60,000
Percentage Return
on initial investment
Debt level
Activity 10
Develop a set of key objectives for your business over the next three years. You
may wish to include objectives other than that shown in the above table.
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2.3 Develop appropriate strategies and tactics to
address objectives across all areas of business
operation
Introduction
Now that clear objectives have been determined as the basis of the business plan, it is now
time to clarify the approach that needs to be taken to help achieve the objectives.
As can be seen in the following section, there are a number of strategic decisions that need
to be considered when identifying a clear path for your business in the future.
Business History/Entry Strategy
There are advantages and disadvantages with both starting up a new business and
purchasing an existing business. A new business is usually less expensive because you do
not have to pay for Goodwill (a value placed upon the business as a result of its good
reputation, established consumer base and physical assets).
However, a new business is riskier because there is no certainty that your product and/or
service will be in demand, and usually it will require more time and effort by the owner and
staff to attract consumers. But of course, there are great opportunities for you to create
something new and special, and perhaps position your business in a niche market.
If the business is a start-up, how will you manage the following situations?

Promoting the business and establishing customer
demand

Possible teething problems in setting up operating
systems and procedures

Sourcing reliable suppliers

Recruiting and training staff

Obtaining sufficient capital or borrowings from external
sources

Coping with the financial pressure of time lag before business is known and
products/services are in demand by consumers.
If you are purchasing an existing business, you will need to review its history and overcome
any inherited disadvantages, such as:

Obsolete or out-of-date stock

Run down equipment

Poorly trained staff

Poor business reputation.
Activity 11
Identify possible problems that could impact on your business achieving its
objectives. Suggest the strategies that you will use to overcome the problems.
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Ownership Structure
There are three main ownership structures to choose from for your small business:

Sole Trader (sole proprietor)

Partnership

Proprietary Limited Company (PLC).
Most small business commence as a sole trader or partnership.
However, it is advisable to consider the disadvantages inherent in
these forms of businesses. Although establishing a company is an
additional expense, it offers benefits, not the least being enhanced
ability to source external funds.
Activity 12
Identify the advantages and disadvantages for each type of ownership
structure.
The Market Report
Your Market Report should consist of:

An Industry Profile

Your Product or Service

Competition

Environmental Information and Trends.
Industry Profile
It is useful to write a short outline of the current status of the industry in which you will be
involved. This will focus your planning on current demand (and future demand), what types
and styles of organisations are successful, what is about to be the “next big thing”.
Factors affecting demand are:

The nature of buyers – what kinds of people are purchasing
your goods or services?

Market size – how many potential consumers are there in
the area you intend to service?

Demand patterns – is it increasing or decreasing for your
product or service?
Specific statistics for your goods or services can be found from the government agencies,
industry associations, media, business publications and internet research.
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Your Product or Service
Think about the products or services that your business will provide. What are their unique
features that will attract customers? Will you offer a wide range of complementary products,
or do you intend to specialise in a particular range? Tour Operator A decide to focus entirely
on ecotourism adventures for the under 40’s, whilst Tour Operator B offers a full range of
travel and tour options to all consumers. Both organisations have advantages and
disadvantages.
Operator A

Will be tapping into a specialised, niche market

They have a unique product

Can be at risk if demand falls or costs increase dramatically.
Operator B

Product available for greater number of consumers, therefore greater turnover possible

May require more business resources – premises, staffing, and finance – to cover the
range.
If you intend to provide more than one product, you would need to draw up a sales mix table
such as the one below.
Singapore Travel Agency - Sales mix projection (column and row headings only)
Sales Stream
Year 1
Year 2
Year 3
Airfare Bookings
Packages
Transportation
Shop items
Travel Insurance
Total Sales
Competition
It is important to identify the main competitors to your business. In your Business Plan, list all
major competitors showing details re their

Name

Address

Number of staff

Strengths and weaknesses.
This knowledge will assist you in formulating competitive strategies to lure their customers to
your business! What is your competitive advantage?
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Environmental Information and Trends
An analysis of the general business environment gives you information about current
conditions within your industry. It is equally important to identify favourable and unfavourable
changes and trends. They indicate possible opportunities and threats to your business.
Considerations include:

Is the economy currently in a boom or recession cycle and where is it heading in the
immediate future?

What is the general confidence level amongst business
persons and families?

Demographic factors in the area, and projected growth
– include population characteristics such as age,
gender, occupation, home ownership, education levels,
attitudes

Cultural trends and changes regarding life styles

Technological changes impacting on business and
family life.
In addition to researching statistical information from published quantitative sources e.g.,
statistical generation organisations, it is worthwhile gathering information from direct sources
e.g., direct observation, personal surveys.
Direct observation includes a personal examination of the environment. Personal surveys
are another valuable research tool. It is important to ask open-ended questions that allow
people to give their own opinions. Framing your questions needs to be given careful thought.
Make sure your questions aren’t skewed specifically to confirm your own opinions. From
their answers, you should gain an understanding about their needs as a consumer, their
preferences and dislikes, what they would like to have available in their local area.
Responses to carefully framed questions should assist you in making informed decisions for
marketing your business and its products.
Activity 13
Gather and document the information to enable you to prepare the Marketing
Report for your business.
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The Marketing Plan
The Marketing Plan must include information about:

Market segmentation

Your customers

Target markets

SWOT analysis

Key issues

Sales and marketing goals and objectives

Value proposition (competitive advantages)

Marketing strategies

Pricing

Promotion

Sales and distribution.
Market segmentation
Consumers have different wants and needs. These may change over a period of time
depending upon their age, finances, occupation, etc. a report for a travel organisation may
identify and describe a number of subgroups or target markets ranging from those with basic
needs to those with sophisticated requirements.
Marketing resources and products could be focused to appeal to specific target groups and
therefore achieve high yield results.
Your customers/target markets
As your product or services will be marketed to a diverse range of customers, a profile
should be constructed for each customer group identified. Each group can be classified
according to their:

Personal characteristics (geographic, demographic,
psychographic, socio-economic)

Wants and needs

Anticipated frequency of purchasing and loyalty to your
business.
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An example of two sub-groups for the Singapore Travel Agency could be:
Group 1 – “The corporate traveller"

Characteristics – aged 30-60, busy lifestyle, middle income- high income, budget
restrictions

Wants and Needs – convenience, essential services such as transport and
accommodation

Frequency/loyalty – 1 to 2 times a month.
Group 2 – “The high end leisure traveller”

Characteristics – aged 40-75, married, disposable
income, well educated, limited time restrictions middle
management, well-presented

Wants and Needs – convenience, seeking
experiences

Frequency/Loyalty – 1 to 2 times a year.
SWOT Analysis/ Key Issues
In Section 1.6 we have previously discussed the importance and contents of a SWOT
Analysis.
A marketing plan requires answers to many questions. Many of these answers will come
from your SWOT analysis. Consider the following questions:

Who will buy your products/services?

Why will they buy your products/services?

How can you attract potential customers?

How is your product or service different from or
superior to your competitors?

Are there seasonal trends?

Are your products or services price sensitive?

What price will you sell your products or services for?
From the SWOT analysis of your customer base, you should now be able to identify the key
issues for your business’ marketing plan resulting from your in-depth understanding of your
current and potential customers.
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Sales and Marketing Goals and Objectives
Business Objectives were discussed in the above Business Profile (refer to Section 2.2).
Sales and Marketing goals and objectives form part of the underlying basis for the overall
business objectives.
These may be based on:

Client development

Geographic expansion

Organisational growth

Service growth

Debt reduction

Income development.
The sales goal and objective table for the Singapore Travel Agency could be:
Goal
Develop the business to be the most
profitable of its type in the local area
Objectives
To increase the number of customers by
25% in Year 2, and a further 10% in Year 3
(compared with Year 1 results)
To reduce the costs of operating the
business by 10% in Year 2, and by a
further 10% in Year 3, (compared with Year
1 results)
Sales and marketing objectives should be expressed in measurable terms (sales units, or $
values), and have built into them an allowance for inflation. When setting sales objectives
remember to make them reasonable, attainable, and ensure that they will provide profitability
for your business.
You need to strive for growth in the marketplace, whilst ensuring that you are recovering
your costs. It is pointless to capture the majority of sales in your area by selling your product
and services below cost price. Some businesses do this to attract customers for a short
period of time but it is not a sustainable business practice.
Also remember that you need to be mindful of the operating capacity of your business. If you
are unable to meet the demand that you have created there will need to be an urgent
increase your operating capacity.
This may require more capital and other resources than you are able to access, and you
may not be able to step up volume speedily enough. Your business does not need to have
unhappy or disappointed customers – a poor reputation is easy to earn, difficult to overcome.
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Value Proposition
What will value add to your product or service that your competitor’s product does not have?
In the case of a tourism operation it could be:

Unique features

Location

Unique or superior products and services

Creative packages

Exclusivity to attractions

Well versed and experienced staff

One stop shop for all travel services.
The list is endless. It is important to differentiate your product or service from your
competitors so as to give you that competitive advantage from your competitors.
Marketing Strategies
Marketing strategies are designed to satisfy the wants and
needs of the target customers. If they are satisfied with
your product or services, they will become repeat
customers and will tell others about your business. Word
of mouth advertising is free, and personal
recommendations by existing customers should
guarantee you additional sales. You need to be customerfocused in designing marketing strategies. Put yourself in
the place of the customer. What strategies assure your
positive response? What turns you off?
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The following table shows possible strategies that the Singapore Travel Agency could
implement in order to achieve their Sales goal.
Goal
Objectives
Strategies
Develop the business to
be the most profitable of
its type in the local area
To increase the number
of customers by 25% in
Year 2, and a further
10% in Year 3
(compared with Year 1
results)
Develop a professional
brochure to drop off to local
business’ by 31 March, and
have it delivered by 15 April
Make sales appointments to new and
potential corporate clients
Advertise in media outlets focused on
high end leisure and corporate target
markets
To reduce the costs of
operating the business
by 10% in Year 2, and by
a further 10% in Year 3,
(compared with Year 1
results)
Identify all costs of the business in
the past 3 months (Jan 1 – March
31) by 7 April
Work with employees and suppliers
to achieve potential cost savings
ideas by 30 April
Implement and monitor the
performance of cost savings
implemented as above each month
end commencing 31 May
In addition to increasing sales to existing customers, this business could consider:

Modification of product or service

Increase area serviced

Diversification.
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Pricing
What price do you need to sell your products or services to cover all
start-up costs, fixed and operating costs and make a reasonable
profit? The price must be high enough to satisfy this requirement, but
remain competitive to attract customers.
It must also “fit” with the image of your business as perceived by the
customer. For example, if you are going to focus on luxury travel the
packages developed and prices charged must not be in competition
with the budget travel market. This also relates to whether your
product fulfils a “niche” demand.
When setting your price also decide whether you will offer credit terms. In hospitality and
tourism operations some business’ offer accounts to regular customers e.g., hotel
accommodation/food and beverage bills for corporate customers. If accepting credit card
payments by other customers, you need to build in the operation costs of these cards –
business is charged a percentage of the amount charged by the banks or American
Express/Diners Club.
In your Business Plan you will need to outline:

The price structure for your product or service

The basis on which your prices have been calculated

How your prices compare to your competitors.
Promotion
Thought must now be given to how you can best promote your business to the desired target
market segments
Promotion of your business can be achieved by:

Advertising – print, TV, etc.

Direct mail marketing

Website marketing

Events

Sponsorship

Unpaid advertising – media coverage, word of mouth recommendations

Customer service

Personal contact.
Consider what forms of marketing that are you going to use to attract and maintain your
target customers.
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Sales and Distribution
How will your customers purchase your products or services?
Will you have a dedicated office? If so, where will it be located – is it convenient and
accessible? What times will you be open for business?
Will you offer:

Dedicated intranet sites

Website bookings

Phone bookings

Email bookings

Personal sales visits.
Will other business operations be involved in the sales and distribution of your product, e.g.,
agents, distributors or franchisees?
Plan methods of sales and distributions and their contribution to your revenue
Activity 14
Gather and document the necessary information to enable you to prepare the
Marketing Plan for your business.
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The Operational Plan
An Operational Plan consists of information regarding:

Premises, Plant and Equipment

Floor Plan

Production

Purchasing / Suppliers

Stock Levels

Purchasing Policies and Controls

Break-even Analysis.
Premises, Plant & Equipment
In the Business Profile you have nominated the location of your business. At this time it
would be useful to give reasons for your choice of location. It could be that you have located
where there is a good flow of passing traffic who you hope will be attracted to your business.
Perhaps proximity to suppliers, or an available workforce were determining factors.
You will need to outline any arrangements that you need to
make re rental of premises, or lease, or purchase. Do you
require local government approval for the use of the
premises for your type of business? Will you need to pay
for a fit-out of the premises, or will you need only to
redecorate and can handle it yourself with the help of family
and friends?
What plant and equipment are you going to need? - will it be new or second-hand, and will
you purchase or lease it? Have you given thought to an efficient workflow when installing
fittings and plant and equipment?
Floor plan
It is a great idea to draw a floor plan of the premises and, to scale, show the position of all
work areas, equipment, etc.
Pace it out and make sure it flows and is comfortable. Would you enjoy working in this
layout, will your customers find it attractive and does it comply with all regulations?
Production
If your business will be manufacturing products, you will need to include information on:

Production Capacity

Output Levels

Production Methods

Production Quality Controls.
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Purchasing/Suppliers
A vital part of any business’ operations is the sourcing and purchasing of goods, products
and services which it requires in order to operate.
This is especially true in the tourism industry where primarily you are selling other
organisation's products and services. Establishing a reliable, cost-effective supply chain is
essential to a small business. Your skills in identifying the most suitable products, then
achieving the best possible prices and supply terms will be very beneficial to your business.
Stock Levels
Again, in the tourism industry, many of your operations, is
based around selling other products and services.
Therefore stock levels may not be a major consideration.
That said, if you offer your own travel related products and
services, careful consideration must be given to ensuring
you have adequate stock.
The purchasing plan is dependent on information from the marketing plan and takes into
account production schedules and requirements. Remember the marketing plan was based
on the sales targets, so you can see the flow on effect from having relevant sales targets.
Think about what supplies your business will require. You will need to shop around, and
perhaps find more than one supplier to avoid being let down if your preferred supplier cannot
satisfy your requirements from time to time. However, if you use one supplier for a certain
type of product will you receive quantity discounts?
Consider:

How frequently will you purchase supplies?

How will you set and maintain stock levels? Will you use the “Just-in-Time” practice?

If you carry too much stock do you risk it becoming unusable, or obsolete?
Purchasing Policies and Controls
It is good practice to document the Purchasing Policies for your business. Consider:

What will be the terms of payment for each supplier?

What purchasing procedures will you use? Will you have written purchase orders, or
order by phone or emails? Will you match these and delivery dockets against invoices?

What controls will you have in place to prevent or detect theft, fraud?

How will you pay your suppliers? Cash or bank transfer. Is
there any discount for prompt payment?

What currencies will be used for payment?

What commissions apply?

How much of your funds do you want to tie up in stock?

Analyse the gross profit margin – in dollar and percentage
terms, compare sales against purchases. This important
information is in the annual reports, but should be
checked at least monthly.
For each purchase item, draw up a table of suppliers, including their names, address, what
they supply and their terms. You may like to present this as a spread sheet.
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Breakeven Analysis
A break-even analysis determines at which point sales begin to
cover costs. After that, sales revenue becomes profit. There are
several methods that can be used in this analysis.
You may have studied the unit Manage Financial Operations in
which the processes involved in break-even analysis are dealt
with in-depth.
To refresh your memory, the first steps were:
Identify:

Fixed costs – those costs that remain even when there is no business activity e.g., rent,
insurances, manager’s salary

Variable costs – those costs that vary directly with business activity, e.g., purchases,
electricity

Contribution margin – the difference between variable cost and the sales price.
Example 1:
Our tourist attraction has total Fixed costs of $18,000. The Selling price per ticket is $45 and
the Variable costs are $15 per unit. Calculate Break-even point.
Ticket selling price $45
Less variable cost 15
Contribution margin 30
To work out the breakeven point, we divide the fixed costs by the contribution margin,
because their amounts contribute to paying out fixed costs.
Breakeven point = fixed costs contribution margin
Breakeven = $18,000
30
= 600 tickets or $27,000 sales revenue (600 x $45)
In other words, in order for the organisation to cover its costs, it needs to sell 600 tickets.
Example 2: Our business also wants to make a profit of $12,000.
Fixed cost Profit
$18,000 + $12,000 = $30,000
30
30
= 1,000 tickets or $45,000 sales revenue (1000 x $45) to realise a profit of $12,000
NB this is more than $27,000 + $12,000 (39,000) because of the apportionment of fixed
costs and variable costs per unit.
Activity 15
Prepare an Operational Plan for your proposed business, incorporating all the
above information.
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Finance Plan
This is a significant section of your Business Plan.
You will need to write about:

Current Financial Position

Capital Requirements and any Funding Proposal

Financial Budgets

Cash-Flow Projections

Projected Statements of Financial Performance (Profit & Loss)

Projected Statements of Financial Position (Balance Sheet)

Financial Ratios

Financial Controls

Business Insurances.
The financial objective of the business is to achieve sustainable profits for the owners, to
maximise those profits and ensure compliance with legal regulations.
If the business is a sole trader, it is important that he/she receives adequate remuneration
for the time and effort that is the norm in a small business. If others have invested time and
money in the business, they should be rewarded at better than bank interest rates for that
contribution, otherwise why would they have risked their money?
Current Financial Position
Before purchasing any business or starting a new one, it is essential to establish exactly how
much personal financing you are able to commit to the business. It is highly desirable to
contribute as much of your own capital as possible as this gives you control over the
business.
If you will need to borrow funds, make a list of all your personal assets and personal
liabilities. The difference between the two is your net personal worth, and forms the basis for
an application for loans.
Also make a list of your current monthly personal expenses – this will show how much you
need from the business to contribute to your lifestyle.
Capital Requirements and Funding Proposal
How much capital needs to be invested in the business? This is a complex question, and
needs careful consideration.
If the business is a start-up, you will need to carefully list all the costs that will be required.
This part of the plan would benefit from discussions with mentors, business advisors and
other business owners in a similar field. Even family and friends could make valuable
suggestions. Do not underestimate how much it will cost to cover start-up, and to carry on
the first few months of operation.
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For most businesses there are significant Establishment costs. Choose those relevant to you
from the following list. You may find that there are items you will need, some you won’t and
you may find others specific to your business.
Typical Establishment Costs
Business structure
Display materials
Registration
Stands
Professional fees
Brochures
Purchase price of business (existing)
Training
Franchise fee Office equipment
Self
Desks
Staff
Chairs
Safe
Shop fittings
Computers - hardware and software
Counters
Telephone system
Racks, shelving
Internet systems
Storage
Decorations
Vehicles, Plant and equipment
Purchase price/deposit
Security system
Delivery
Trademark/design/patents
Repairs
Registrations
Installation/commissioning
Patent attorney fees
Building costs
Reference materials
Shop front
Land
Electrical wiring and fittings
Floor coverings
Toilets, plumbing and drainage
Painting
Other decoration
Signs
Total capital costs
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Initial costs
In addition there will be costs you will need to cover to operate the business in the first
months. If possible, have enough finance behind you to cover the first three months of
operation.
Initial costs may include, but are not limited to:

Lease

Legal Costs

Government taxes, such as stamp duty

Rent in advance

Bond

Electricity, gas and phones:

Connections

Security deposits

Opening stock

Insurance Premiums:

Property damage

Public liability

Vehicles

Theft

Personal disability

Professional indemnity

Printing and artwork

Wages

Credit card establishment fees

Promotions

Loan establishment cost

Stationery and office supplies

Computer hardware and software:


Installation

Training
Statutory charges:

Licences

Permits

Registrations

Subscriptions for publications

Association membership fees.
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Once you have calculated your total establishment and initial costs, you may find that your
personal finances are insufficient, and that you need to borrow loan funds. If possible, do not
borrow more than 60% of the total start-up costs. Capital or interest repayments are a huge
drain upon a new venture, and can put enormous pressure upon the owners.
Often, interest rate movements are difficult to forecast, and when borrowing try to ensure
that you will be able to manage even if the rates move several points upwards. Shop around
for the best deal from reliable lenders.
Divide your requirements into long term (to use for capital projects such as expensive plant
and equipment) and short term (initial costs). Perhaps the short term costs could be financed
with a bank overdraft, leaving longer term loans to be used for capital items.
Budgets
An important element of your business plan is short-term
annual budgets. Quantified targets allow you to measure
performance, and take corrective action to ensure you
achieve your goals and capitalise on any opportunities.
Budgets predict or indicate a future level of business
activity in terms of monetary value and quantities of units
produced, purchased and sold.
Budgets are estimates based on past history in the case of an existing business. For a new
business, they are predictions based on your research and analysis during compilation of
your business plan.
Involving stakeholders in budget process
All decision-makers in the organisation should be involved in the preparation of budgets.
This collective approach helps:

Ensure that everyone’s efforts are heading towards the same goal

Bring together a variety of people’s opinions from the collective expertise and experience
within the organisation

Maximise the motivation and commitment of those involved

Facilitate a greater understanding of the issues involved

Provide a forum to discuss and work through budgeting issues.
Persons responsible for setting budgets
Who should be involved? Depending on the size of the organisation, those responsible for
setting the budget would be:

Owner/operator

Chief executive officer

General managers

Department managers

Accountants.
All should have some knowledge of the organisation and
the skills required for setting budgets. External accountants
and consultants are available to assist in this process.
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Types of budgets
There are many types of budgets, covering all activities of the organisation. The size and
complexity of the organisation determines the mix of these budgets.

Sales budgets itemise the estimated income from all areas of the organisation. In a large
organisation a sales budget would be prepared for each department

Variable cost of sales budgets estimate the cost of the materials and services incurred
directly in producing the products and/or services sold. In a large organisation a costs
budget would be prepared for each department

Ongoing fixed expenses budgets project the cost of items not directly related to
producing the products and or services sold. These are costs incurred irrespective of
how much is produced, such as vehicles, insurance and administration

Capital expenditure budgets set out the estimated
costs of purchasing, replacing and repairing key
capital items such as equipment, vehicles

Cash budgets show monthly cash receipts and cash
payments. This budget discloses when you have
surplus inflows, and highlights deficits so that you
can make arrangements to draw down or make
arrangements for additional funds

Budgeted Profit and Loss Statements forecast the estimated gross and net profit or
losses. It brings together all the operating budgets for the period. It is a pivotal tool used
to take action if operations are not going as planned.
For your Business Plan you will be required to include:

A cash budget projection for one year (monthly)

A Projected Statement of Financial Performance (Profit and Loss) for three years

A Projected Statement of Financial Position (Balance Sheet) for three years.
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Cash Budget Projection
Cash Budget Projections are best managed on an Excel spread sheet or software suited to
the tourism industry. The following sample may assist you.
Note: In some months there may not be payments for some expenses.
Examples of a Cash Budget
MONTH
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts
TOTAL RECEIPTS
$
$
$
$
$
$
$
$
$
$
$
$
Expenses
Start Up Costs
Registration of Business
Name
Operating Costs
Heating, Lighting and
Power
Telephone and Internet
Maintenance
Laundry
Licences
Permits
Rent
Security, Fire and Safety
Stationary, Postage and
Office Supplies
Human Resources
Wages
Superannuation
Work Cover
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MONTH
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Finance
Accounting
Loan Interest
Loan Repayment
Bank Fees
Marketing Costs
Advertising Costs
Graphic Design Costs
Web Page
Implementation
Insurances
Public Liability
Building and Contents
Equipment
Repairs and
Maintenance
Rent Payments
Assets
Taxes
GST Payable
Payroll Tax
Other Taxes
TOTAL EXPENSES
$
$
$
Surplus/(Deficit)
Bank Balance at
Beginning
Bank Balance at End
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$
$
$
$
$
$
$
$
$
Formulate business plans and strategies
Projected Statement of Financial Performance (Profit and Loss)
The following example is very comprehensive; you may not need to include all the accounts
shown. Remember you will need to include three year’s projections.
Example - Statement of Financial Performance
Name of Firm
Statement of Financial Performance
for the Period Ending...............
$
Sales
Less Sales returns and allowances
Net sales
Less Cost of goods sold
Opening stock (Inventories)
Purchases
Less Purchases returns
Net purchases
Freight inwards
Customs duty
Wharfage costs
Insurance on stocks
Cost of goods available for sale
Less Closing stock
Cost of goods sold
Gross profit
$
$
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
Add miscellaneous operating revenue
Rent revenue
Commission revenue
Interest revenue
Other operating revenue
Discount received
Total miscellaneous operating revenue
xx
xx
xx
xx
xx
xx
TOTAL REVENUE
xx
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$
LESS OPERATING EXPENSES
Selling & distribution expenses
Freight outwards
Advertising
Depreciation of motor vehicles
Salesperson’s salaries, wages, commissions
Motor vehicle expenses
Other selling & distribution expenses
$
$
xx
xx
xx
xx
xx
xx
xx
Administration expenses
Office stationery
Office salaries & wages
Rates & taxes
Telephone, power, light, etc.
Depreciation of office equipment
Other administrative expenses
xx
xx
xx
xx
xx
xx
xx
Financial expenses
Discounts allowed
Bad debts
Interest expense
Doubtful debts
Other financial expenses
xx
xx
xx
xx
xx
xx
Miscellaneous expenses
Donations
Legal costs
Other miscellaneous expenses
xx
xx
xx
xx
TOTAL OPERATING EXPENSES
xx
Operating profit before abnormal items
xx
Abnormal items
- Additional bad debts
+/- other abnormal items
Operating profit
Extraordinary items
+ Profit on sale of major segment of business
- Loss on sale of major segment of business
xx
xx
xx
xx
xx
xx
NET PROFIT
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Projected Statement of Financial Position (Balance Sheet)
The following example is very comprehensive; you may not need to include all the accounts
shown. Remember you will need to include three year’s projections. There are several styles
which are acceptable – you may choose this format, or alternatively one which shows the
same information but arranged in a different sequence.
Example -Statement of Financial Position
Name of Firm
Statement of Financial Position
as at .....................................
OWNER'S EQUITY
Capital
Plus Additional capital
$
$
xx
xx
$
xx
Plus Net profit or Less Net loss
xx
xx
xx
xx
Less Drawings
Total equity
Represented by:
ASSETS
Current assets
Bank
Debtors
Less allowance for doubtful debts
xx
xx
xx
xx
xx
xx
xx
xx
xx
Stock/Inventories (closing)
Petty cash advance
Cash on hand
Prepaid expenses
Accrued revenues
Total Current Assets
xx
NON-CURRENT ASSETS
Non-current assets
Motor vehicles
Less Accumulated depreciation motor vehicles
xx
xx
Equipment
Less Accumulated depreciation equipment
xx
xx
Furniture and fittings
Less Accumulated depreciation furniture & fittings
xx
xx
xx
xx
xx
xx
Premises
Total Non-Current Assets
INVESTMENTS
Shares
Bonds
xx
xx
xx
xx
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$
INTANGIBLES
Copyrights
Patents
Trademarks
Franchises
Goodwill
$
xx
xx
xx
xx
xx
xx
xx
TOTAL ASSETS
LESS LIABILITIES
Current
Bank overdraft
Creditors
Short term loans
Accrued expenses
Prepaid revenues
Provision for annual leave
$
xx
xx
xx
xx
xx
xx
xx
Non-current
Mortgage
Provisions for long service leave
Long term loans
xx
xx
xx
xx
TOTAL LIABILITIES
xx
NET ASSETS
xx
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Financial Ratios
Once you have prepared the projected final statements, it is possible to calculate, analyse
and compare information with the results that you forecast.
To refresh your memory, ratios are listed below.
Types of Financial Ratios
Liquidity (short term stability) Ratios
Current Ratio
Current assets divided by current liabilities
(expressed as a ratio)
Quick Asset Ratio
Current Assets minus (stock and prepaid
expenses) divided current liabilities
(expressed as a ratio)
Working Capital
Current assets minus current liabilities ($
amount)
Activity Ratios
Asset Turnover
Total sales divided by total assets (result
in times per annum)
Stock Turnover
Cost of goods sold divided by average
stock (result in days)
Debtors Turnover
Average debtors divided by average daily
credit sales (result in days)
Profitability Ratios – usually calculated as percentages
Gross Profit Ratio
(Gross profit x 100) divided by Net Sales
Net Profit Ratio
(Net profit x 100) divided by Net Sales
Return on Investment
((Net operating profit + tax + interest) x
100) divided by average total assets
Long Term Solvency Ratios
Debt to Equity Ratio
(Total Liabilities x 100) divided by total
assets
Proprietorship Ratio
(Owner’s Equity x 100) divided by total
assets
You will need to calculate these ratios for Years 2 and 3 from your Statements.
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Financial Controls
A business is required to have a financial record keeping system. Most small business chose
an off-the-shelf computerised book-keeping system e.g., MYOB, to enter daily transactions
and produce end of month and end of year reports. In addition, they make have some
manual (pen and paper) systems e.g., the daily takings sheet.
Once you have decided on your financial record system, you need to consider what controls
you are going to put in place to monitor and evaluate your performance and overall results.
Types of controls

Profit controls. Regular detailed profit reports (Statement of Financial Performance) with
variances from budget will highlight any early shortfalls or excellent results

Financial ratio analysis is another tool to pinpoint strengths and
weaknesses, especially when compared against benchmarks such
as industry averages

Cash flow controls. The projected cash flows should be closely
monitored – at least weekly in a small business. Problems can be
identified such as slow debtor collection, stock control issues,
possible shortages due to theft

Financial position controls. Regular reviews of your Statement of
Financial Position (Balance Sheet) will monitor the type and
amount of external debt financing your business.
Relevant financial ratio analysis should be undertaken from this data too.
Business Insurances
You will need to arrange appropriate insurances before you commence operations. Consider
including some of the following where relevant to your business:

Building – fire and contents, third party property

Burglary

Public risk/liability

Product liability

Motor vehicle insurances – comprehensive, third party

Medical insurance

Monies in transit, or held at home overnight

Plate glass

Marine

Income disability/income protection

Professional indemnity.
Activity 16
Prepare a Finance Plan for your proposed business, incorporating all the above
information.
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Risk Plan
Risk Identification and Mitigation
All businesses should have a risk plan in place which identifies, evaluates and manages all
the potential hazards and exposures to loss that a risk may cause.
A really good way of getting started with your Risk Plan is to revisit your SWOT analysis and
make a list of the Weaknesses and Threats. Perhaps after discussion with your stakeholders
you can include some other risks that you hadn’t thought of earlier (add these to your
SWOT).
Consider issues such as:

Economic Downturn

Technological Breakdown/Advancement

Human Resource

Local business

Occupational Health and Safety

Supplier Issues

Managing chemicals within the workplace.

Financial Errors

Administrative Errors.
The next steps are to:

Identify and document the risks associated with the business

Analyse the risks associated with the business

Categorise the risks associated with the business

Establish reporting procedures for your business

Identify training and education opportunities for you and your staff.

Monitor activities to identify potential risks

Minimise and remove risks in accordance with agreed strategies.
The following templates may assist you in developing your Risk Plan. Refer to other
resources and previous studies to complete your own schedules
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Risk Treatment Schedule Template
Date of Risk Review …/…/….
Compiled by ………………… Date …/…/….
Reviewed by ………..……….. Date …/…/….
Function/Activity _____________
The risk in
priority
order from
risk
register
Possible
risk
treatment
options
Preferred
options
Risk
rating
after
treatment
Result of
cost
benefit
analysis
Accept /
Reject
Person
responsible for Timetable for
implementation implementation
of option
Activity 17
Develop a Risk Plan outlining strategies you will use to minimise risk in your
business.
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How will
this risk
and the
treatment
options be
monitored
Formulate business plans and strategies
Structure and Management Plan
In this section of your Business Plan you will need to discuss the:

Organisational Chart and Structure of the
business

Key Personnel

Labour Requirements and Skills

Staffing Strategies

Professional Advisers

Staffing Controls.
One of the most important “ingredients” in a successful business is the management and
staff. In a start-up business you have the advantage of a clean slate without carry over staff
from the existing business who may find change difficult or who may have workplace
practices that do not conform to your new operation.
Organisational Chart and Structure of the business/Key Personnel
A good starting point is to analyse the tasks required to complete the activities of the
business. From this you can identify the number of staff required, key personnel, job roles,
and whether one employee can undertake one or more of the required roles. In small
business, it is quite a normal occurrence to find one person “wearing several hats”.
A diagram is a useful tool to depict the roles and hierarchy of within the organisation. Key
personnel can be identified on the chart. When new employees commence later, a copy of
the Organisational Chart of the business is a valuable induction tool. Many large
organisations clearly display the Chart (often accompanied by photographs) in their foyer or
other public place within the business.
For each management position you will need to write a summary of their background, skills
and experience, specifying any skill gaps or weaknesses and how you plan to overcome
these deficiencies.
Labour Requirements and Skills
It is necessary to prepare a Job Description for each job, listing the duties of the position,
who the person reports to, and the remuneration to be offered. Are the jobs full or part-time?
Could they undertaken by contractors rather than employees?
You will need to research the regulations and awards which apply to your staff. Consider the
following:

How to attract quality, skilled, experienced people, recognising that these people will
expect a higher payment?

Is it preferable to employ younger, inexperienced staff and
train them to suit your business?

What people skills and customer service skills are we
looking for in our employees?

Why would staff want to work in your business?

What can we offer them?

How will we offer career paths and further development?
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Staffing Strategies
It is important that the business recruit the best persons to fulfil the positions within the
business. A successful business will have staff that are productive, co-operative, take
responsibility for their own efforts and work as a team.
Your Business Plan should reflect decisions that you have made in respect to:

Recruitment – will you rely on media advertising, referrals, educational institutions, and
friends of current employees or your family?

Probation periods – a trial work period may last from one day to six months

Remuneration – will you pay hourly, weekly? Are you offering casual or ongoing
employment? Are your rates competitive so that you select the right employees? Make
sure you allow for legal required entitlements

Incentive schemes – would you consider a sales bonus, or some other form of incentive?

Work environment – both physical and social
environments need to be considered. Physical must
comply with regulations for OH&S and other
government legislation. A friendly, co-operative
workplace where teamwork is practiced can lead to
greater productivity and loyalty

Training and development – what induction and regular
ongoing training activities will your business provide?

Your leadership style – will it be autocratic or democratic?
Professional Advisers
Your Business Plan should also name any external advisers (and how they will assist you)
that you will consult with initially then day-by-day.
These can include:

Accountant

Lawyer

Bank

Insurance agent or broker

Industry organisations.
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Staffing Controls
It is advisable to regularly measure and review labour costs in dollar terms and as a
percentage of sales revenue.
Labour costs may include on-costs such as:

Superannuation / retirement pension

Holiday leave loading

Medical insurance premiums

Long service leave

Training costs

Other incentives and benefits.
There are normally increases in wage rates with inflation that will increase the dollars paid to
employees each year, but sales revenue should increase similarly. To show a more accurate
picture than just using dollar amounts, calculate the percentage of labour costs to sales
revenue. This reflects a truer indication. The formula is:
Total Labour costs x 100
Sales revenue
If the percentage is increasing, you may need to evaluate the performance and productivity
of each of your employees.
Formal, documented Performance reviews are common practice in government and large
organisations. Traditionally, small business has used verbal on-the-spot reviews, particularly
when praising or rebuking an employee. Gradually small businesses are moving towards
more formal practices.
How will your business handle employee theft or any other dishonest practice? In small
business it can be very traumatic for all staff when this occurs e.g., money is missing from
the cash register. It will be useful to include methods you will use to identify and correct any
similar situation as tactless and unproven accusations can lead to legal repercussions.
Activity 18
Prepare the Structure and Management Plan for your proposed business,
incorporating all the above information.
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2.4 Identify and include opportunities for strategic
business alliances
Introduction
Strategic planning relates to long term planning. An alliance is a
group, association or partnership. In Element 1.7 Franchise
operations were discussed. Consider if there are any other forms of
alliances that may support or promote your business operation.
Identifying possible strategic alliances
Your industry association can provide substantial information, and through trade shows and
networking you will meet other similar or allied businesses that lead to new and expanded
operations.
Activity 19
For your Business Plan, can you identify any possible strategic business
alliances?
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2.5 Develop all aspects of the business plan to
ensure the business meets relevant legal,
social, environmental and ethical obligations
Introduction
There is a famous adage in law that ‘Ignorance is No Excuse’. You do not have to
understand every piece of legislation or legal principle but you must understand how the law
impacts on your business.
In addition there may be a number of registration and licensing processes that must be
initiated to ensure legal compliance simply to operate.
There are certain legal, social, environmental and ethical requirements to be complied with
by all businesses.
Earlier in the SWOT analysis, a number of legal issues for consideration were outlined.
Requirements and Obligations
Some legal requirements and obligations that must be considered when setting up a
business include, but not limited to:

Registration of Business Name

Business Licenses for certain activities such as:

Required permits

Approvals for signage

Approval for shop fit-outs and structural alterations

Certification required by staff

Taxation Registration

Industrial Awards

Medical Insurance – organise insurance cover and pay premiums to protect staff
employed by you in case of accident and/or injury

Intellectual Property Registration – to cover any unique trademark or design consult

Other insurances – consult an insurance agent or broker

Pollution/environmental controls – comply with relevant government provisions
Activity 20
In the Business Profile you will need to list any relevant legal requirements
including where you will obtain information for your business.
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2.6 Include appropriate action plans and evaluation
processes, including key performance
indicators
Introduction
One of the key requirements of any business plan is to outline how the goals, objectives and
strategies will be accomplished.
This step is essential in any business plan as it details:

What actions need to be done

To what standard must it be done (see Key
Performance Indicators explained later in this section)

What policies or procedures must be adhered to

Who is responsible for action

What tasks are associated with actions

Timelines for actions

Support mechanisms.
In addition to having actions clearly identified for completion, evaluation mechanisms must
also be identified to ensure that actions are monitored and controlled on a regular and
systematic basis.
Areas requiring action plans
Areas of business operation in the business plan should have action plans include:

Business establishment

Operations

Marketing

Technology

Human resources/labour requirements

Management and organisational structure

Financial plan and projections

Quality management.
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Action Plans
It is useful to outline a timetable for completion deadlines of key strategies.
Examples of a an Action Plan - Business establishment
Action
Due for completion
Secure bank funding
1 January
Develop company brand and logos
10 January
Move into premises
16 February
Purchase fixed assets
18 February
Finalise production processes and recipes
22 February
Document policies and procedures
28 February
Commence trading
1 March
Monitoring and evaluation mechanisms
Monitoring is an ongoing, regular process of review. Monitoring should occur frequently
throughout the life of the business, both on an as-needed basis (when issues arise) and on
fortnightly, monthly, quarterly or twice yearly basis.
It is important to remember that monitoring is a valuable
tool in measuring the progress of your business which
may fluctuate regularly. For example, if you find that your
income is down for a month you should not take this as a
sign to panic and change/throw out your business plan.
Rather you should take note of it, determine possible
causes, and take prompt, corrective action.
Evaluation is a longer term process which is all about
looking back to see how well you’ve met the goals you set for your business, and if not why
not. Evaluation of your business plan should occur on an annual basis before you set your
budget for the next financial year.
Evaluation is when you review the outcome and effectiveness of all sections of your
business plan to identify successes and problems and if necessary to put yourself back on
the road to growth.
Evaluation processes may include:

Key performance indicators

Gap analysis

Customer feedback

Compliance reports

Employee feedback.
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If you have developed clear measurable goals, objectives and performance criteria, the
evaluation process need not be an overly difficult or time-consuming exercise.
Monitoring and Evaluation of the Business Plan
Section
Frequency
Monitoring
Evaluation
Business Plan
Ongoing
Annually
Strategies
Ongoing monitoring change
in light of changed external
conditions
Review annually
Objectives
Quarterly (every 3 months)
Review annually in
conjunction with strategies
Action Plans
Monthly/weekly by
supervisor, daily by
responsible person
Evaluation determined by
duration of action always
on completion
Financial Plan
Depends on targets but at
least monthly to check on
cash flow
Annual review to assess
performance and
accuracy of projections
Key Performance Indicators (KPI’s)
Identifying a small number of key performance measures (KPI’s) that can be regularly
monitored is an important first step. They provide an early warning system showing progress
or lack of it. Being able to graphically represent them is also helpful since the results can be
displayed for colleagues and staff to see at a glance.
KPIs need to be directly linked to your goals and objectives. You will have to determine the
ones most suitable to your business.
Types of KPIs
Suitable KPIs may be:

Total number of customers

Total number of customers per department or market segment

Average dollar spent

Total revenue per capita

Sales per product group

Average sales per day’s trading

Average total revenue per client

Marketing expense per customer

Marketing expense and sales revenue per customer from a specific campaign

Total revenue / full time employee

Gross profit margin.
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To be effective, KPIs should flow directly from your business systems and be comparable to
those used by others in your industry. Information on what is being measured by others in
your industry should be available from your Industry Association. You may need to
reciprocate, by supplying your own figures into the association. Often industry statistics are
collected by an independent third party and used to produce averages and a range of
performance, while protecting the identity of individual respondents.
The information gained from these comparisons can identify any problems, shortfalls or
other anomalies within your business.
Appropriate control procedures and systems need to be in
place in your business so that you can rely on the results.
Simple computer programs can speedily analyse and
generate business indicators automatically.
Involving staff in the review process assists in their
perceived ownership of the business’ performance and
financial results. It can also be a forum for generating
solutions for dealing with areas where the KPIs indicate
under performance.
Activity 21
In preparation for your Business Plan, complete an appropriate

Action Plan

Monitoring and Evaluation Table

List of KPIs.
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2.7 Consult with appropriate staff, management
and other stakeholders to encourage support
for the planning process so that all
perspectives are taken into account in the
development of the plan
Introduction
Many people have an interest in your business and its success. These include colleagues,
employees, suppliers, your customers and the community in which you operate.
As a small business operator, you are part of a team and need the effort and co-operation of
other people to achieve your goals. Colleagues and employees are the people you most rely
on, apart from family, to support your business and work for its success. Involving them at an
early stage and giving them an opportunity to contribute to the planning process will help
them “own” the plan and work towards its success.
Importance of involving stakeholders
Working through the action plans with those responsible for their implementation, can
provide an early warning of complications and resistance, and may suggest a better
approach than you could have achieved from acting on your own.
Helping colleagues and employees to understand the goals and objectives of your business
enables them to work independently towards their achievement. It also empowers them to
take actions in your absence in a manner sympathetic to the business goals. In this way,
small issues can be resolved before they develop into major issues for your business.
Although an action has been written down to be achieved in
a particular time frame, keep in mind that the operating
environment is not static. You may need to change
suppliers, competitors could introduce new promotions and
products, economic circumstances and personal situations
could change. All or any of these changes can occur at any
time after you have developed your operating plans.
Support for employees, in removing barriers to achievement, or providing guidance and
advice, is important to the achievement of the business plan. This is a key role for the
manager or owner of a business, or a project leader. Whilst there appears to be a role
reversal of you serving those you employ, it is much more efficient to delegate and empower
employees than do the whole job yourself.
Additional resources in terms of people, supplies or cash can be required as a project or
business develops. Remember that you began with the knowledge available at the time of
establishing your plan. It is probable that you had to make some assumptions and decisions
about the level of resources required. As you get further along the track, the actual level of
resources required becomes apparent.
Activity 22
Review the Action Plan you drafted in Activity 21. Add to it any other
information that will clarify your plan e.g., staff consulted and their
responsibilities.
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Work Projects
It is a requirement of this Unit you complete Work Projects as advised by your Trainer. You
must submit documentation, suitable evidence or other relevant proof of completion of the
project to your Trainer by the agreed date.
2.1 Please complete the following activities relating to this Performance Criteria:

Activity 9
2.2. Please complete the following activities relating to this Performance Criteria:

Activity 10
2.3. Please complete the following activities relating to this Performance Criteria:

Activities 11-18
2.4. Please complete the following activities relating to this Performance Criteria:

Activity 19
2.5 Please complete the following activities relating to this Performance Criteria:

Activity 20
2.6 Please complete the following activities relating to this Performance Criteria:

Activity 21
2.7 Please complete the following activities relating to this Performance Criteria:

Activity 22
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Summary
Formulate business plans and strategies
Create or confirm enterprise mission, vision and purpose as the starting point for the business
plan in consultation with stakeholders

End users of business plans

Contents of a Business Plan

Executive Summary

Business Profile
Establish realistic, clearly stated and measurable objectives for the business

Types of objectives
Develop appropriate strategies and tactics to address objectives across all areas of business
operation

Business History/Entry Strategy

Ownership Structure

The Marketing Plan

The Operational Plan

Finance Plan

Risk Plan

Structure and Management Plan
Identify and include opportunities for strategic business alliances

Identifying possible strategic alliances
Develop all aspects of the business plan to ensure the business meets relevant legal, social,
environmental and ethical obligations

Requirements and Obligations
Include appropriate action plans and evaluation processes, including key performance
indicators

Areas requiring action plans

Action Plans

Monitoring and evaluation mechanisms

Key Performance Indicators (KPI’s)
Consult with appropriate staff, management and other stakeholders to encourage support for
the planning process so that all perspectives are taken into account in the development of the
plan

Importance of involving stakeholders
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Element 3:
Implement the business plan
3.1 Communicate the business objectives and
content of plans in a timely manner to facilitate
a clear understanding of the plan and
associated activities and individual
responsibilities
Introduction
In the previous section you identified who you will need to involve in the construction of your
Business Plan. You now need to make decisions about how the objectives and content of
plans will be disseminated amongst stakeholders.
Refer to relevant information throughout Elements 1 and 2.
Once business plans, including objectives have been
finalised, it is now time to present the final version to
relevant stakeholders.
Depending on the type of the business plan, the nature of
stakeholders will vary.
Stakeholder considerations
Regardless of the stakeholder, the presentation stage is critical as it is often the first time the
stakeholder may be.
No doubt they will want to:

Get a clear understanding of the business plan

Ensure that all key concerns have been considered

Understand the benefits of the business plan

Understand how the business plan will benefit them

Understand how the business plan will impact on them

Understand their role in implementing the business plan

Any potential problems identified

Have their concerns addressed

Be excited and reassured about the business plan.
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Types of stakeholders
Relevant stakeholders may include:

Clients

Business partners

Colleagues

Staff

Superiors

Suppliers / vendors

Team leaders

Team members

Venue operator / leaser.
Communicate business plan information
As mentioned above, there are many stakeholders who will need to understand the details of
the business plan that is being introduced. This is essential to ensure that key aspects of
business plans are not only communicated with others but also understood by them.
These aspects can therefore include:

Key vision of the plan

Reasoning or purpose behind the business plan

Background information - including research
methodology and facts gathered

Business objectives - which may include sales figures,
revenues, delivery times and service standards

How the plan will be implemented

Roles and responsibilities of key stakeholders

Timelines

Support mechanisms.
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Communicating business plans to stakeholders
The communication of new business plans may occur in various ways.
The key to communicating these changes is the communication must be planned.
This is especially true when explaining business plans to staff as they will be stakeholder
who will be impacted the most.
Your approach should follow these guidelines:

Hold a formal staff meeting to inform stakeholders of the
business plan – if they have been actively involved in
the development process then the concept should not
come as anything new to them

Remember it is important not only to explain the
purpose of the business plan but also explain why it will
be beneficial

Give them a hard copy of the new business plan, either in its entirety of the parts specific
to the stakeholder– give them everything that is applicable to their area such as:

Copies of plans

Copies of standards

Copies of policies

Copies of procedures

Explain the changes – tell them how the ‘new’ business plan differs existing operations.
Be specific

Tell them about the dates for introducing the new business plan implementation

Reassure them they are not required to implement the changes ‘tomorrow’

Inform of the training being provided to support implementation of the new business plan
requirements – let them know when and where the training is happening, what it will
involve, who will be leading it

Encourage questions about the business plan – answer them fully and honestly

Make yourself available outside this meeting to talk to if they have concerns regarding
the business plan

Include new policies, procedures etc. in operational manuals, induction programs and inhouse training.
Activity 23
Briefly describe how you will communicate the objectives and contents in a timely manner to
stakeholders so as to provide their clear understanding, promote their support for the
business’ activities and encourage them to in their individual responsibilities and
performance.
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3.2 Use appropriate leadership techniques to
encourage team commitment to the business
plan
Introduction
The role of leadership is vital in ensuring that new business plans and the implementation
actions associated with them are not only understood by staff, but they are motivated and
committed to its success.
Loyalty and dedication of team members involves doing anything that has to be done to
ensure the team’s success.
Members must be committed to the team’s goals and expend energy in achieving them.
This section will look at the different leadership styles and techniques that can be used to get
staff committed to the successful implementation of business plans.
Appropriate leadership
Appropriate leaders set realistic and clear goals.
They demonstrate change is possible and increase the self-confidence of team members by
helping them realise their potential more fully.
The best team leaders tend to be coaches or facilitators as
opposed to autocratic and controlling people. This will be
discussed in more detail below.
They help to guide and support the team by empowering
its members, but do not seek control of the tem or its
members.
This can be hard for some traditional managers who
cannot see the benefits of shared leadership and cannot give up control.
Managers who cannot accept the new shape of organisations may have to be replaced or
transferred.
Leadership styles
Following are three leadership styles that may be implemented.
Autocratic and democratic leaders
An autocratic leader is one who centralises authority and
relies only on legitimate reward and coercive power.
Employees perform well as long as the leader is present.
Also, levels of satisfaction tend to be low when people feel
they are being closely monitored. Feelings of hostility
subsequently arrive.
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A democratic leader delegates their authority to others, encourages participation and relies
on expert and referent power to influence others.
In this situation, employees are given their own decision making responsibility and perform
well when the leader is absent.
The relationship centres on trust, and the group tends to have positive feelings rather than
hostility.
It is wise to be autocratic in situations where there is time pressure, where employees are
slow to make decisions, and where there is a great difference between the leader and the
subordinate.
It is wise to be democratic where employees are willing and able to learn decision making
skills.
Research suggest the extent to which the leader is autocratic (boss-centred) or democratic
(subordinate-centred) depends on organisational circumstances.
Charismatic leadership theory
Charismatic leadership theory says that followers make attributions of heroic or extraordinary
leadership ability when they observe certain behaviour.
There is an impressive correlation between charismatic leadership and follower satisfaction.
People working for charismatic leaders are motivated to exert extra work effort and they
express greater satisfaction with their work.
Charismatic leadership may be most appropriate when the followers’ task has an ideological
component such as in politics, religion or a business where they are introducing a radically
new product.
The need for such a leader may subside once the crisis period or need for dramatic change
is over.
This is because the charismatic leader’s overwhelming self-confidence becomes problematic
when they cannot listen to others: they become aggressive when challenged and have an
unjustifiable belief in their rightness on issues.
The key characteristics of charismatic leaders are:

Self-confidence – charismatic leaders have complete confidence in their judgement and
ability

Vision – they have an idealised goal that proposes a future better than the status quo the
greater the disparity between these two, the more likely the follower will attribute
extraordinary vision to the leader

Ability to articulate that vision – they are able to
clarify and state the vision in terms that are
understandable to others: this demonstrates an
understanding of the followers’ needs and hence
acts as a motivating force

Strong convictions about the vision – charismatic
leaders are perceived as being strongly
committed, willing to take on high personal risk,
incur high costs and engage in self-sacrifice to
achieve their vision
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
Behaviour that is out of the ordinary – they engage in behaviour that is perceived as
being novel, unconventional and counter to norms; when successful, these behaviours
evoke surprise and admiration in followers

Appearance as a change agent – charismatic leaders are perceived as initiating change
rather than as caretakers of the status quo

Environment sensitivity – they are able to make realistic assessments of the
environmental constraints and resources needed to bring about change.
Transactional versus transformational leadership
Transactional leaders are leaders who guide or motivate their followers in the direction of
already set goals by making them clear and explaining task requirements.
Transformational leaders are leaders who inspire people beyond
their own goals through individual consideration and charisma. They
are capable of having a profound and extraordinary effect on their
followers.
Most of the models discussed previously have addressed
transactional leaders. Transformational leadership is built on top of
transactional leadership.
A transformational leader is far more than a charismatic leader.
A charismatic leader would have vision, and want followers to adopt
their world view, whereas a transformational leader would instil in
followers the ability to not only question views, but to question the views of the leader.
In summary, evidence indicates that transformational, as compared to transactional
leadership, is more strongly correlated with lower staff turnover rates, higher productivity and
higher employee satisfaction.
Clear goals
High performance teams have both a clear understanding of the business purpose, such as
vision, mission, goals
The importance of such goals means individuals prioritise
team goals above their own.
In a strong team, members are committed to the team’s
goals, know what they expect to accomplish and work
together to achieve those goals.
Clear goals create an environment where there is
stronger commitment, better cooperation and
collaboration and a greater willingness to ‘get the job done’.
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Mutual trust
Members must have mutual trust, acceptance and recognition of one another.
Members must believe in the integrity and character of other team members.
Trust takes a long time to build and is easily destroyed, so managers must be careful to
nurture and maintain relationships between team members.
This also highlights the care managers must take when selecting people to form a team.
Organisations that work in a climate of openness, honesty and collaboration generally
encourage a culture of trust.
Managers can build trust with teams or groups via:

Regular and effective communication

Being supportive

Being respectful

Being predictable.
Demonstrating competence in their own managerial duties, as well as helping out team
members with practical hands-on assistance when need dictates.
Good communication
Teams must be able to communicate clearly and concisely with one another both verbally
and non-verbally.
Communication should occur outside traditional working times via briefings, de-briefings and
staff meetings, and also during the heat and pressure of
busy service sessions.
Appropriate responses to communication are also critical –
team members must acknowledge communication sent to
them and provide an appropriate response. The response
may be simple verbal acknowledgement, body language or
action.
Communication in teams is essential to share ideas, ask
for help, communicate workplace information during
service and provide feedback.
Feedback from members and managers is essential in helping to correct misunderstandings
and optimise potential.
Feedback must be open but also needs to be constructive and sensitive.
Team members should be able to share ideas and feelings. That is, team members should
be able to share how they felt when something went wrong, when they felt let down by
another team member’s actions or inactions etc.
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Internal and external support
Internally the team must be structured so that:

Members are properly trained or experienced – so that a competent team is formed

An understandable measurement system that employees
can be evaluated against is implemented – to allow
team members and management an objective way to
measure their performance

Incentives are offered – to encourage commitment and
effort, and to reward endeavour and success

A supportive climate is fostered – to cater for the human
requirements all team members have in the workplace.
Activity 24
Decide what type of leadership methods you will adopt to encourage a team spirit
by your employees. Write down the benefits/disadvantages of the style you have
chosen.
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3.3 Encourage staff to provide ongoing input into
the business plan
Introduction
Encouraging teams and individuals to provide ongoing input into the business plan is
another aspect of the manager’s role in developing team commitment and cooperation.
Leaders should encourage team members to develop and contribute innovative ideas and
inputs into how the business plan can be implemented.
This signals management’s recognition of staff as valuable
members of the organisation in the overall work process,
rather than just as operational staff.
It also underlines the importance of communication in the
workplace. There is little point in team members having
great ideas or suggestions for improving the business plan
or operations relating to it if they are not shared, or if they
believe their input will not be appreciated or considered.
Methods to encourage staff input
Examples of ways in which leaders can provide ongoing input into the business plan or the
business plan can be implemented include:

Asking for ideas – encouraging staff to make suggestions about better ways of doing
things

Having an ‘open door’ policy regarding suggestions

Sharing ideas – encouraging others to alert team members to the potential of new
practices

Being prepared to test new ideas – this demonstrates management is prepared to try
new ideas as opposed to insisting the old ones are adhered to

Seeking information and ideas from non-traditional
places – such as other departments or other
venues (including the competition)

Thanking people for their contributions

Taking the time and effort to explain to someone
who contributed an idea why their idea was not
implemented – as opposed to appearing to simply
ignore the suggestion

Ensuring the person responsible for suggesting an effective new approach receives the
credit for doing so – rather than their manager taking the credit.
Activity 25
Briefly list the procedures you will use to encourage staff to continue to contribute
to the Business Plan.
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3.4 Implement and organise actions detailed in the
plan in a cost-efficient manner and in
accordance with schedule and contingencies
Introduction
Now that business plans have been communicated with stakeholders responsible for its
delivery, it is now time to implement any actions.
Planning for the implementation of business plan actions is essential to ensure all aspects
relating to the proposed actions have been considered, planned and have clear plans for
implementation.
This section will explore some of the activities associated with the implementation of actions.
Whilst business plans themselves are actual plans, additional planning needs to take place
to ensure the implementation of activities are conducted in a thorough manner.
Implementation considerations

Compliance requirements

Occupational health and safety (OHS)

Legal liability exposure

Integration with other aspects of the business

Timing issues

Resources

Changes to policies and procedures

Documentation & record keeping

Service delivery

Impact on organisational culture.
Implementation planning inclusions

Details of intended actions to be taken

Allocation of responsibilities for action to nominated
persons

Determination of accountability for actions taken

Timelines for completion of nominated actions

Details of the budget and resources allocated

Description of the processes for monitoring
progress including Key Performance Indicators
(KPIs)

Details and timelines for reviewing progress.
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Defining and assigning roles
It is important that everyone knows what is expected of them. In these times of uncertainty
everyone must be aware of the roles each person plays.
Depending on the role of each staff member within the implementation process, they must
be made aware of what is expected of them. This includes a detailed understanding of their
roles and responsibilities including:

Structure of the project time

Level of responsibility and authority

Start dates of change

Expected completion date

Pre-change activities including attending meetings,
reading job descriptions etc.

Activities to be performed

Resources required to implement the plan

Work breakdown

Involvement of other staff

Training to be taken

Support mechanisms

Expected standard of performance

Milestones for completion

Budgets to work within

Methods of communication

Making observations

Providing feedback.
By having clear roles and responsibilities, it helps to eliminate confusion of what each person
is to do.
Identify predictable consequences of change
As implementation actions takes place, things often go exactly to plan for a variety of
reasons, both caused by factors within and external to the department or organisation.
Change quite often evolves from its original plan as variations and alteration take place.
Quite often as change is actually implemented, further change or correction is required.
Change always brings with it a certain level of unpredictability.
Managers must understand this and be realistic in how operations will be disturbed and what
productivity levels can be achieved.
Whilst managers will not be able to predict all consequences of change, some predictable
consequences of change exist.
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Disruptions to routine
Without a doubt, disruptions to routine will take place. These may be caused by changes
associated with the transition from old systems to new systems including changes to:

Facilities, fixtures or fittings

Equipment or supplies

Organisational policies and procedures

Management and personnel

Training

Job roles and responsibilities

Work tasks

SOP’s.
These disruptions may be caused internally by management or externally through suppliers,
weather, transportation, availability, laws or regulations to name a few.
Quite often when physical change to a work environment takes place, certain areas need to
be closed and reconstructed with manual activities causing physical and emotional
disruption and strain.
Problems with timelines
Naturally as disruptions take place, timelines are often not met. There is often a change
reaction, with different activities interacting and relying on others. Flexibility in the approach
to specific activities may need to be considered.
Where timelines may not be met, communication is a key requirement to let affected parties
know at the earliest possible time, to enable them to make contingencies accordingly.
Issues with reporting structure
One natural reaction to change is a change to job roles and organisational structures. Not
only are staff unaware of their new roles, but may be unaware as to who their managers are,
or who they report to in times of uncertainty or where clarification and support is required.
It is vital clear lines of accountability; reporting and communication are identified and
explained to staff.
Extra support required by employees
As mentioned, during these trying times, managers must be empathic to the conditions and
stresses staff are confronted with. They must show tolerance and have realistic expectation
on how staff will behave and the level of productivity that will take place.
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Provide support and resources to support implementation actions
As mentioned, any time change takes place, whilst in the long term it will benefit the
organisation and staff involved, it will cause disruptions and make activities harder for staff in
the short term. This is evident not only as the actual change takes place, but as staff try to
understand and become familiar with the new way of doing things.
It is especially important that during this stressful time, that management play an active role
in leading and supporting the team as a whole and individuals who may need assistance.
There are many ways a manager can provide assistance and support, however at the end of
the day, the aim is to enable staff to be able to learn and implement new changes into the
workplace.
During this period, you must manage the twin functions of ‘group task’ and ‘group
maintenance’.
Task functions
‘Task’ functions of leadership involve leading the group
successfully understanding and performing new activities
associated with change. Factors included here are:

Setting plans to help staff achieve the set change goals

Passing on facts and skills

Offering ideas and information

Seeking opinions

Giving directions

Getting the individuals within a group to function as a cohesive unit

Coordinating activities

Clarifying goals as they progress through the change process.
Maintenance functions
‘Maintenance’ functions centre on ensuring that staff continue to work harmoniously and that
there are good working relationships among the team. This includes your being involved in:

Provision of positive feedback to staff – to help keep them
interested, engaged and motivated

Giving encouragement – either verbally or non-verbally

Raising enthusiasm amongst the team – to make them
aware that they can achieve what is required, and to
provide motivation during the tough times when they
might be tired, frustrated or disinterested

Maintaining a safe, secure and supportive physical and emotional environment –
physical safety is, of course, important, but so, too, is the need to provide emotional
support when staff find the going tough or when they feel dispirited

Acknowledging contributions and efforts made by staff – the important thing is to provide
acknowledgement for effort and not just for success

Using humour as a motivator and means of reducing
tension – this can assist in maintaining momentum and
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getting staff to have another go at something they may have previously not succeeded in

Sensitive and non-judgemental communication – it is very important that whatever is said
to staff cannot be misconstrued in any way. Your role is to support, encourage, nurture –
not to criticise or put people down

Frequent, accurate and encouraging feedback – which means finding something to
provide a positive comment about even when staff are unable to achieve the set
objective

Allowing staff to make mistakes and create an environment where it’s okay to do so.
Activity 26
Briefly describe how you will put into practice the actions listed in the Business
Plan.
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Work Projects
It is a requirement of this Unit you complete Work Projects as advised by your Trainer. You
must submit documentation, suitable evidence or other relevant proof of completion of the
project to your Trainer by the agreed date.
3.1 Please complete the following activities relating to this Performance Criteria:

Activity 23
3.2. Please complete the following activities relating to this Performance Criteria:

Activity 24
3.3. Please complete the following activities relating to this Performance Criteria:

Activity 25
3.4. Please complete the following activities relating to this Performance Criteria:

Activity 26
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Summary
Implement the business plan
Communicate the business objectives and content of plans in a timely manner to facilitate a
clear understanding of the plan and associated activities and individual responsibilities

Stakeholder proposal considerations

Types of stakeholders

Communicate business plan information

Communicating business plans to stakeholders
Use appropriate leadership techniques to encourage team commitment to the business plan

Appropriate leadership

Leadership styles

Clear goals

Mutual trust

Good communication

Internal and external support
Encourage staff to provide ongoing input into the business plan

Methods to encourage staff input
Implement and organise actions detailed in the plan in a cost-efficient manner and in
accordance with schedule and contingencies

Implementation considerations

Implementation planning inclusions

Defining and assigning roles

Identify predictable consequences of change

Provide support and resources to support implementation actions
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Element 4:
Monitor the business plan
4.1 Review the business plan regularly and adjust
in the light of changing circumstances
Introduction
This concept was introduced in Element 2.6.
It is important that business plans are reviewed on a regular basis.
In the natural evolution of business activities, changes to business plans will need to take
place to reflect changes in operations and direction.
The causes of these changes may be guided by external or internal influences. Some of
these were identified during the SWOT Analysis process.
Timing of business plan reviews
Whilst the frequency of business plan reviews will vary depending on the type of
organisation and requirements by management, however they may be based on:

Quarterly reviews

Business plan cycle

Performance reports

Major events triggering a review, e.g. Change in
market-place.
Activity 27
Draw up a timetable that shows how frequently you will review and amend your
Business Plan.
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4.2 Monitor activities detailed in the plan on an
ongoing basis
Introduction
This concept was initially discussed in Elements 2.2 - 2.6.
In order for a tourism organisation to be successful in being
able to provide the highest quality of service whilst still
making an adequate financial return for investors, it is vital
that every aspect of the operation is operating to the best of
its ability.
Therefore management must constantly assess and evaluate
the performance of all areas that contribute to the
implementation of business plans.
Given that staff are the greatest contributor of service in a hospitality organisation, it is
essential that management must ensure staff are performing to the best of their ability.
In order to do this, activities must be assessed and evaluated to find out:

What is being done correctly

What needs improvement, by identifying causes and remedies
Aim of monitoring business activities
Aims of monitoring business activities include:

Identifying areas which are being done well and rewarding accordingly

Identifying where areas of operations can be improved through:

Identification of problems

Understanding the cause

Finding suitable solutions

Selecting the correct solution

Implementing and monitoring the solution.
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Monitoring and evaluation methods
The methods chosen for monitoring and evaluating performance are generally built into the
planning process. It is a good idea when planning to keep in mind the reporting on the
success or otherwise of goals. It is frustrating to set a goal but not be able to say whether or
not it has been achieved.
There are many tools or methods available to monitor progress or outcomes of work
operations.
Some examples are:
This is where you decide how to measure your progress including:

Reports

Obtaining customer feedback

Using a pretend customer

Walking about the premises and observing what takes place

Use of checklists

Brainstorming sessions

Staff input and review

Observation

Surveys

Checklists

Flowcharts

Benchmarking.
Activity 28
Briefly describe (or use a table) how you will monitor the business’ activities,
and list the evaluation methods that you will use in each instance.
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4.3 Identify and analyse successes and
performance gaps on an ongoing basis
Introduction
This topic has been discussed in Elements 2.2 – 2.6.
The key concept is to review and analyse what’s actually happening against some
benchmark.
Quite simply this includes:

Comparing actual performance against key performance
indicators

Comparing actual performance against benchmark
indicators, which can include industry indicators or
performance levels of other branches.
Types of performance indicators
Organisation’s key performance indicators are a set of metrics which organisations can use
to measure their performance of service operations.
In this manual to date we have looked at many Key Performance Criteria that is used to
measure the success of business plan implementation. Again these can relate to:

Market share

Sales figures

Customer satisfaction

Growth

Profitability

Turnaround times

Output rates

Quality rates

Customer feedback

Equipment usage rates

Lead times and down times

Compliments-complaints ratio

Customer Satisfaction Index (CSI).
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Types of performance gaps
The types of performance gaps that may arise in an organisation are endless but common
examples include:

Product or service failures

Long wait times for service

High volume of customer traffic

Inaccurate or conflicting information provided to customers

Lack of follow-up action by customer care representatives

Aggressive cross-selling or up-selling by customer service
representatives or sales persons

Lack of resources required to implement service operations

Resource constraints

Conflicts in priorities

Lack of information

Supplier delays

Differences in opinion

Interpersonal conflict

Hazardous events

Time constraints

Electricity shortages

Bad weather

Shortfalls in expected outcomes

Poor staff performance.
Activity 29
After you have commenced trading and have evaluated the business’
performance, you find that some activities were successful, some were not.
List 2 possible successes and 2 possible disappointments and identify probable causes
and effects for each
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4.4 Implement agreed changes to plans promptly
Introduction
This involves making the necessary adjustments to improve the
level of service, productivity or customer satisfaction.
Depending on what is being monitored, involving staff in all or
some stages of the monitoring process is likely to achieve better
results.
Types of corrective actions
Quite simply, types of corrective actions taken to improve service operations may include:

Improvements in the design of products or services

Reviewing the allocation of resources for service operations

Tweaking standard operating procedures to improve efficiency.
Initiate corrective action
Corrective actions taken within an operation workplace context can be seen as either short
term action or long term action.
Where service is paramount, it is sometimes necessary to take short term action to solve a
problem until it can be looked at more closely and the problem dealt with more thoroughly.
Short term corrective action
Reasons for this include:

Pressure of work often means there just isn’t time to stop and analyse the problem more
carefully and in more detail

To provide the necessary or expected services to the
customer

To meet OHS requirements

To deal with a complaint

To get staff working together again

To give you time to analyse and work through the problem at a later date.
Usually these stop-gap measures are not satisfactory in the long term as they are often more
costly and they do not prevent the problem from recurring.
As the manager of an area, it is important you consciously decide when to take short term
action and when this would be inappropriate.
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If you decide to take the short term approach, then it is a good idea to:

Make a definite time to look at it more thoroughly later on
and to decide who to involve in further problem solving

Inform staff and management it is a short term solution
which will be dealt with more thoroughly at a specified time

Cost the implications of tackling the problem this way.
Long-term corrective action
There may be a number of corrective changes to be made including, but certainly not limited
to:
Management changes

New management

Change in orientation to service

Setting of some new directions in relation to several
other factors

New management focus.
Organisational re-structures

Change of personnel structure

Elimination of positions

New job roles

Changes in job roles

New knowledge or skills.
Introduction of new equipment
New equipment means:

Possible interruptions to operations for installation

Training for staff

Requires that staff can explain the new equipment to
customers

Changes in job roles

Changes in procedures

Changes to workflow.
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Recruitment practices

Need to establish comprehensive job descriptions and job
specifications

Seeking of new knowledge and skills

Change advertising strategy

Revised interviewing and selection process

Revised selection criteria.
Activity 30
Briefly describe what corrective action/s you would take to overcome underperforming activities. How would you communicate these changes to all
stakeholders?
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4.5 Report performance in a transparent manner to
all stakeholders
Introduction
This topic has previously been introduced in Elements 1
and 2.
Periodically, there will be a need for you to provide your
team and management with feedback in regard to
achievement or non-achievement of business plan
initiatives.
This feedback must:

Be fair and accurate

Be based on facts

Not be personal in nature.
Methods to sharing performance related information
Share performance related information may include:

Holding team meetings

Providing hard copy information

Sharing information via the intranet

Disseminating information at staff briefings.
Explaining performance related information
There are many pieces of information that may be presented including, but not limited to:

Explaining if your business plan strategy and effort work

Identifying the reasons why they work or not work

Significant variations and the factors associated with the
changes

Unusual results and determine their causes

Patterns and trends in consumer behaviours, and the
factors that resulted in those behaviours

Strengths and marketing opportunities

Weaknesses and potential areas of improvement

Impact / implications of the results and conclusions on performance.
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Present recommendations for variation to business or operational
plans
As part of your review, you will need to occasionally make recommendations to
management/Board for variations to operational plans.
Reasons for recommendations
These recommendations will usually be on the basis of:

Unsatisfactory performance – basically, expenses being too high and/or income being
too low

A business opportunity – such as the opportunity to
capitalise on some significant occurrence, new idea or
emerging trend

Customer requests/feedback – demanding the
introduction, elimination or modification of some service or
facility

Significant alteration to the premises or operational
systems – this may be caused by some accident,
emergency or an unanticipated event that has caused
major disruptions to the normal way of trading.
Inclusions in a recommendation
The more important the cause and the possible effect, the more formal the recommendation
process is likely to be.
In general terms, the more costly the recommendation (in terms of funding and other
resources), the greater the need for a more formal style of recommendation such as
providing a proposal that:

Detail the problem that is at the root of the recommendation

Highlights any legal compliance requirements that may be included

Describes the negative impacts of the above situation – which may include, for example,
the need to lay off staff, the need to increase prices, the eventual result if the current
situation is allowed to continue for 12 months

Identifies specific revised targets – which should
reflect the initial targets set by the business and
operational plans that are facing difficulty such as
(as appropriate) income, expenditure,
percentages, items sold, etc.

Sets revised flags to warn of unacceptable
deviations to the revised targets – this will help
identify revised circumstances when actual
performance has deviated unacceptably from
revised budgeted/projected figures

Presents options for rectifying the position – it is always useful to present more than one
possible solution wherever possible

Sets out implementation costs for each recommendation or option – this should include
training, ‘change over’ costs where staff, etc. are operating at less than optimum during a
transitional phase and have to be allowed time to get up to speed
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
Identifies the benefits of each recommendation or proposal – which can include savings,
extra earnings, maintenance of service standards, reducing staff turnover, meeting
compliance requirements, increased safety, raised public image/profile of the business

Supplies a formal cost-benefit analysis

Gives realistic timelines for introduction and implementation.
Types of recommendations
The nature of the recommendations you may make will depend on the type and scope of the
problem being faced with possibilities including

Raising prices

Reducing staff levels

Changing trading hours – increasing or decreasing them is an option

Offering an initiative or promotional campaign to
attract extra patrons

Changing target markets

Creating a niche market

Reviewing costs – with a view to making cost
savings in nominated areas, changing suppliers

Reviewing the service activities

Training staff – to better and more efficiently and effectively use the resources that exist

Purchasing new equipment or technology – to make the premises more attractive to the
marketplace or to assist in producing a more cost-effective service or product
Statistics should be included to support recommendations, and projections may be used to
indicate the situation if nothing is done, compared to the situation where the
recommendation is implemented.
Activity 31
Briefly explain how you intend on a regular basis to advise your stakeholders
(internal and external) of the business’ performance.
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Work Projects
It is a requirement of this Unit you complete Work Projects as advised by your Trainer. You
must submit documentation, suitable evidence or other relevant proof of completion of the
project to your Trainer by the agreed date.
4.1 Please complete the following activities relating to this Performance Criteria:

Activity 27
4.2. Please complete the following activities relating to this Performance Criteria:

Activity 28
4.3. Please complete the following activities relating to this Performance Criteria:

Activity 29
4.4. Please complete the following activities relating to this Performance Criteria:

Activity 30
4.5 Please complete the following activities relating to this Performance Criteria:

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Summary
Monitor the business plan
Review the business plan regularly and adjust in the light of changing circumstances

Timing of business plan reviews
Monitor activities detailed in the plan on an ongoing basis

Aim of monitoring business activities

Monitoring and evaluation methods
Identify and analyse successes and performance gaps on an ongoing basis

Types of performance indicators

Types of performance gaps
Implement agreed changes to plans promptly

Types of corrective actions

Initiate corrective action

Short term corrective action

Long-term corrective action
Report performance in a transparent manner to all stakeholders

Methods to sharing performance related information

Explaining performance related information

Present recommendations for variation to business or operational plans
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Presentation of written work
Presentation of written work
1. Introduction
It is important for students to present carefully prepared written work. Written presentation
in industry must be professional in appearance and accurate in content. If students
develop good writing skills whilst studying, they are able to easily transfer those skills to
the workplace.
2. Style
Students should write in a style that is simple and concise. Short sentences
and paragraphs are easier to read and understand. It helps to write a plan
and at least one draft of the written work so that the final product will be
well organised. The points presented will then follow a logical sequence
and be relevant. Students should frequently refer to the question asked, to
keep ‘on track’. Teachers recognise and are critical of work that does not
answer the question, or is ‘padded’ with irrelevant material. In summary,
remember to:

Plan ahead

Be clear and concise

Answer the question

Proofread the final draft.
3. Presenting Written Work
Types of written work
Students may be asked to write:

Short and long reports

Essays

Records of interviews

Questionnaires

Business letters

Resumes.
Format
All written work should be presented on A4 paper, single-sided with a left-hand margin. If
work is word-processed, one-and-a-half or double spacing should be used. Handwritten
work must be legible and should also be well spaced to allow for ease of reading. New
paragraphs should not be indented but should be separated by a space. Pages must be
numbered. If headings are also to be numbered, students should use a logical and
sequential system of numbering.
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Presentation of written work
Cover Sheet
All written work should be submitted with a cover sheet stapled to the front that contains:

The student’s name and student number

The name of the class/unit

The due date of the work

The title of the work

The teacher’s name

A signed declaration that the work does not involve plagiarism.
Keeping a Copy
Students must keep a copy of the written work in case it is lost. This rarely happens but it
can be disastrous if a copy has not been kept.
Inclusive language
This means language that includes every section of the population. For instance, if a
student were to write ‘A nurse is responsible for the patients in her care at all times’ it
would be implying that all nurses are female and would be excluding male nurses.
Examples of appropriate language are shown on the right:
Mankind
Humankind
Barman/maid
Bar attendant
Host/hostess
Host
Waiter/waitress
Waiter or waiting staff
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Recommended reading
Recommended reading
Abranhs, Rhonda; 2014 (6th edition); Successful Business Plan: Secrets & Strategies;
Planning Shop
Bangs, David; 2002 (9th edition); The Business Planning Guide; Kaplan Publishing
DeThomas, Arthur; 2008 (3rd edition); Writing a Convincing Business Plan; Barron's
Educational Series
Friend, Graham; 2010 (Kindle 2nd edition); The Economist Guide to Business Planning;
Economist Books
Maynard, Therese H; 2010 (1st edition); Business Planning; Aspen Publishers
Peterson, Steven; 2010 (3rd edition); Business Plans Kit for Dummies; For Dummies
Pinson, Linda; 2007 (7th edition); Anatomy of a Business Plan; Out Of Your Mind . . . And
into the Mark
Tiffany, Paul & Peterson, Steven; 2004 (2nd edition); Business Plans for Dummies; For
Dummies
Tokan, Boomy; 2013 (1st edition); How to Write Your First Business Plan; CreateSpace
Independent Publishing Platform
Williams, R.T; 2013 (Kindle edition); How to Write a Business Plan - A Complete Outline to
Create a Concise and Profitable Business; Williams, R.T
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Trainee evaluation sheet
Trainee evaluation sheet
Develop and implement a business plan
The following statements are about the competency you have just completed.
Please tick the appropriate box
Agree
Don’t
Know
Do Not
Agree
Does Not
Apply
There was too much in this competency to cover
without rushing.
Most of the competency seemed relevant to me.
The competency was at the right level for me.
I got enough help from my trainer.
The amount of activities was sufficient.
The competency allowed me to use my own
initiative.
My training was well-organised.
My trainer had time to answer my questions.
I understood how I was going to be assessed.
I was given enough time to practice.
My trainer feedback was useful.
Enough equipment was available and it worked well.
The activities were too hard for me.
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Trainee evaluation sheet
The best things about this unit were:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
The worst things about this unit were:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
The things you should change in this unit are:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
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Trainee self-assessment checklist
Trainee self-assessment checklist
As an indicator to your Trainer/Assessor of your readiness for assessment in this unit
please complete the following and hand to your Trainer/Assessor.
Develop and implement a business plan
Yes
No*
Element 1: Analyse the internal and external business environment
1.1
Determine information requirements and undertake research to deliver
relevant information
1.2
Consult with all internal and external stakeholders in the research
process
1.3
Use research to assist in the prediction of social, political, economic and
technological trends and developments
1.4
Identify and seek assistance and advice from appropriate experts when
necessary
1.5
Review and analyse the existing internal resources and capabilities
1.6
Document and analyse business opportunities and obstacles based on
valid and reliable comparative market information
1.7
Review and analyse current and emerging competitors for their potential
impact
Element 2: Formulate business plans and strategies
2.1
Create or confirm enterprise mission, vision and purpose as the starting
point for the business plan in consultation with stakeholders
2.2
Establish realistic, clearly stated and measurable objectives for the
business
2.3
Develop appropriate strategies and tactics to address objectives across
all areas of business operation
2.4
Identify and include opportunities for strategic business alliances
2.5
Develop all aspects of the business plan to ensure the business meets
relevant legal, social, environmental and ethical obligations
2.6
Include appropriate action plans and evaluation processes, including key
performance indicators
2.7
Consult with appropriate staff, management and other stakeholders to
encourage support for the planning process so that all perspectives are
taken into account in the development of the plan
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Trainee self-assessment checklist
Yes
No*
Element 3: Implement the business plan
3.1
Communicate the business objectives and content of plans in a timely
manner to facilitate a clear understanding of the plan and associated
activities and individual responsibilities
3.2
Use appropriate leadership techniques to encourage team commitment
to the business plan
3.3
Encourage staff to provide ongoing input into the business plan
3.4
Implement and organise actions detailed in the plan in a cost-efficient
manner and in accordance with schedule and contingencies
Element 4: Monitor the business plan
4.1
Review the business plan regularly and adjust in the light of changing
circumstances
4.2
Monitor activities detailed in the plan on an ongoing basis
4.3
Identify and analyse successes and performance gaps on an ongoing
basis
4.4
Implement agreed changes to plans promptly
4.5
Report performance in a transparent manner to all stakeholders
Statement by Trainee:
I believe I am ready to be assessed on the following as indicated above:
Signed: _____________________________
Date: ____________
Note:
For all boxes where a No* is ticked, please provide details of the extra steps or work you
need to do to become ready for assessment.
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