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BSBMGT617 Develop and Implement a Business Plan Assessment Answer

Australasian International Academy (AIA)

BSBMGT617 Develop and implement a business plan

Assessment Task 1: Written Questions

Assessment Task 1 Instructions

Provide answers to all of the questions below:

1. Outline three reasons why a company may choose to develop a business plan.

2. Outline the key steps involved in developing a business plan.

3. Outline five common components of a business plan.

4. Outline three areas that the initial business planning process may address:

5. Outline the purpose of a SWOT analysis in a business planning process.

6. Describe the relationship between performance objectives and key performance indicators in a business plan.

7. Explain why it is important for a business to use a range of performance measures within its business plan.

8. If a business plan has an objective of improving customer satisfaction, describe three performance measures that could be used to measure customer satisfaction.

9. Describe the balanced scorecard approach in relation to performance measurement

10. Outline key stakeholders who may be involved in business planning.

Assessment Task 2: Develop a business plan

Task summary

In this assessment task you are required in the role of the newly appointed Business Development Manager for Ozhouse Clean to participate in a meeting with Senior Management to discuss the development of the Business Plan, conduct research and develop and submit a business plan for the fictional business Ozhouse Clean based on the scenario information provided.

This assessment is to be completed in the simulated work environment in your RTO.

Required

  • Computer and Microsoft Office
  • Access to the internet for research
  • Access to sample business plans
  • Business Plan Template
  • Operational Plan
  • Space for a meeting
  • Role-play participant (your assessor)

Assessment Task 2 Instructions

Carefully read the following:

Ozhouse Clean is based in Melbourne and offers professional, residential cleaning services, including regular home cleans, as well as spring cleans. The company was established in 2005 and is a family business established and operated by James and Nancy Anderson. James and Nancy are the Directors of the company. Their daughters, Amanda and Sarah, are also employed by the company. Amanda is the Operations Manager and Sarah is the Administration Manager.

The company sees its point of difference from competitors as being a small family business, with a focus on quality and happy and contented staff and customers. The management team understands this point of difference may need to change as the business grows. There may need to be more management staff employed, for example, while Amanda manages marketing. She is not skilled in this area and is very busy with the operational side of the business, so a skilled marketing officer may be needed.

Currently target customers are consumers located in the greater Melbourne area. Target customers are people who want a professional, trustworthy and immaculate cleaning service. Pricing reflects that of competitors.

The company employs 15 cleaners, all of whom are part-time contract staff working between 10 and 15 hours a week. The company currently has approximately 70 regular clients, based around Melbourne inner city. These clients require regular home cleaning, either weekly or once every two weeks for 3 to 6 hours. A standard hourly rate of $40 is charged. Staff receive an hourly rate of $25 per hour. The cost of the products provided to staff for cleaning, including equipment and ongoing supplies such as cleaning products, works out to be approximately an additional $2 per hour on top of the rate paid to staff. The company is also considering whether it may be wiser to move to employing a number of full-time, permanent cleaning staff. This is partly because there is a high turnover of casual staff and little loyalty to the company. Staff costs for employing a full-time cleaner is $55,000 per year, including superannuation payments.

All ongoing cleaning supplies are currently purchased from Total Cleaning Supplies in Melbourne. However, as this company does not currently offer environmentally friendly products for use in cleaning, a different supplier needs to be identified. It is estimated that the purchase of these products will be an additional $10,000 per month. The products cost double the amount of the non-environmentally friendly products.

Sales revenue for the company for the financial year ending 2017 is $360,000 with a gross profit margin of

$40,000. Labour costs are a significant part of the business, representing 70% of total costs. Average debtor days are currently 40 days.

Currently, marketing is via a web site but a large proportion of the company’s work comes through word of mouth from existing customers. Social media is not used currently to market the business. The new business plan will need to reflect different ways of marketing, especially to attract commercial customers.

The company understand that in this period of growth and expansion it needs clear plans. While it has developed an operational priorities plan, the information in the plan is limited and is for the upcoming year only.

Complete the following activities:

1. Prepare to develop business plan

This part of the assessment requires you to participate in a meeting with the Senior Management Team to develop the Business Plan. Prior to the meeting, you are required to review and evaluate the scenario information and the current operational priorities plan. You should also review the business plan template.

Based on your review and evaluation, identify the business’ vision, mission, values and objectives as these will need to be discussed in detail with the Senior Management Team as a basis for developing the business plan.

Note that the management team has advised that the business vision, mission, values and objectives are not clearly advised in the operational plan and they would like you to develop these for discussion. They have also advised that they would like you to propose key performance indicators that can be used to measure performance against objectives identified.

At the meeting with Senior Management, you are required to assume that the management team will need to be provided with general information about business planning, as well as exploring the business vision, mission, values and objectives for input into the plan.

At the meeting you are required to:

  • Provide all information in user-friendly terms.
  • Explain the purpose of a business plan and its benefits.
  • Explain components that will need to be included in the business plan.
  • Outline your interpretation of the business’ vision, mission and values based on your evaluation of existing information and for discussion.
  • Discuss proposed performance objectives and key performance indicators to assess achievement of the objectives.
  • Listen to the feedback provided by the management team (your assessor).
  • During the meeting, you must demonstrate effective communication skills including:
  • Asking questions to elicit feedback from the management team
  • Responding to questions from the management team
  • Active listening.

2. Develop business plan

Following the meeting, assume that you have been given approval to develop the business plan using the template provided. Your business plan that is written in clear and concise English and you will be assessed on this.

The actions that you include in the business plan should clearly show how the strategic objectives of the company will be achieved as discussed at the meeting and all of the resources will be needed.

Complete all of the following activities to develop a business plan including:

  • Identifying and analysing trends in demand for cleaning services, nationally as well as in the local Melbourne market.
  • Identifying competitors in the market for Ozhouse Clean. Include information about at least three competitors, providing a summary of their services, as well as explaining how their  services compete with Ozhouse Clean and any points of difference that will enable Ozhouse Clean to stand out.
  • Identifying and analysing target consumer needs for specific types of cleaning services e.g. environmentally friendly cleaning services. This may be through identifying secondary sources of data or through a review of social media, for example.
  • Identifying strengths, weakness, threats and opportunities (SWOT analysis) based on the scenario information and research.
  • Identifying and evaluating alternative pricing strategies to current pricing strategies as per the scenario information.
  • Identify potential marketing strategies for existing residential services, as well as commercial and environmentally friendly cleaning services. This may be through reviewing how competitors market their services, as well as identifying effective marketing strategies.
  • Identifying any permits or licences that are required for commercial cleaning and environmentally friendly cleaning services.
  • Identifying suppliers of environmentally friendly cleaning products that can provide Ozhouse Clean with products. Identify at least three options, including the supplier contact details and summary of products offered.
  • Identifying key activities and required financial, physical and human resources requirements based on analysis conducted (this will be documented in the action plan in the business plan).
  • Identifying the additional staff that will be required to manage the expansion into contract cleaning and environmentally friendly cleaning services. Actions included in the business plan should show how this will be achieved in terms of identifying staff needed and the qualifications and experience they require, recruiting the required staff, as well as inducting staff.
  • Identifying key performance indicators that can be used to assess both the financial and non- financial performance of the business.

3. Submit the business plan

Submit your completed business plan along with draft of an email to be sent to the management team (your assessor) explaining that this is the final business plan and providing a brief overview of the timelines for implementation of the business plan and key performance requirements.

4. Report on skilled staff requirements

Assume that the management team has approved your business plan but has expressed concerns about ensuring there is sufficient cleaning staff for the expansion. As you wish to appease their concerns, you are required to research and identify at least three ways in which you will be able to source enough skilled workers in order to meet workforce demands.

Submit a draft of an email to be sent to the management team outlining the sources you have identified.

Assessment Task 3: Business performance monitoring

Task summary

This assessment task requires you to monitor and evaluate the performance of the business, review performance indicators and evaluate the strengths and weaknesses of the business plan. You will be required to provide a report on your analysis to the management team.

This assessment is to be completed in the simulated work environment in your RTO.

Required

  • Computer and Microsoft Office
  • Access to the internet for research
  • Scenario information from Assessment Task 2

Assessment Task 3 Instructions

Carefully read the following:

It is one year since the business plan was implemented and as the Operations Manager, you are reviewing the performance of the business against the performance indicators identified in the plan, testing performance indicators used and recommending changes to performance indicators as provided.

You have also been asked to provide an overall evaluation of the strengths and weaknesses of the business plan to date (this will be the business plan you developed for Assessment Task 2).

Assume that the performance indicators identified in the business plan are as follows:

  • A 20% increase in total sales revenue.
  • A gross profit margin of 20%.
  • Reduction of 50% in debtor days
  • 10 new commercial customers in the first year of the business plan.
  • Reduction of 10% of workforce turnover based on employing two full-time permanent cleaners, as well as increasing wages to above award.

Data provided by the accountant for this financial year show the following figures:

  • Total sales revenue: $450,000
  • Total cost of sales: $320,000
  • Debtor days: 30
  • 15 new commercial customers

The Administration Manager has advised you that at least 10 of the previous residential customers no longer use the company’s services, so while sales revenue has increased, the sales revenue attributable to residential sales has declined.

In addition, follow up emails to the customers who no longer used the services indicated the following responses to the question asked about why they no longer use the services:

  • Moved interstate: 1
  • Dissatisfied with the quality of cleaning services provided (not enough attention to detail, cleaner finishing earlier than time paid for): 5
  • Moved to a competitor as better service and price offered: 4

Complete the following activities:

1. Prepare to develop monitoring and evaluation report Review the scenario information.

Develop an outline for your report ensuring that:

  • Your report will address a balance of both financial and non-financial information on business performance as per the scenario information.
  • To assist in making the information as user friendly as possible, your report should include visual information to show how the business has performed such as graphs or charts.

Ensure that you provide your report according to the timelines set by your assessor to show that you can provide timely reports. You will be assessed on this.

2. Develop a business monitoring and evaluation report Develop a business monitoring and evaluation report that addresses:

  1. An overview of business performance based on the data provided for this year, as well as the data provided for the previous year (as documented in the scenario information for Assessment Task 2).
  2. An analysis of business performance to determine if the performance indicators have been achieved.
  3. An evaluation of the non-financial information gained from the survey, impact on the business and variations that could be made to the business plan based on this information.
  4. A review of additional performance measures that can be used to measure customer retention and customer satisfaction based on the decrease in residential customers as advised in the scenario information.

You will need to research the range of performance measures that could be used and report on performance indicators that you consider to be suitable.

Your report should include a clear explanation of the performance indicators and your rationale for using these indicators.

3. An evaluation of the strengths and weaknesses of the business plan (the plan you developed for Assessment Task 2) and recommended improvements.

Review the information at the link below and for each component of your business plan. Provide an assessment of your plan, noting that some areas may not have been covered.

Provide an overall assessment of the strengths and weaknesses of your plan based on your assessment.

4. Provide a summary of recommendations for the upcoming year based on your evaluation as above, as well as required changes to the business plan.

Assessment Task 4 Instructions

Carefully read the following:

A review of the business’s performance against the performance indicators included in the business plan identified that a number of residential customers no longer use the business because of lack of satisfaction with the quality of the service provided, specifically the level of cleanliness and attention to detail.

As the Operations Manager, you are investigating this situation in relation to the contract cleaners who were providing the cleaning for the customers who have ceased to use the services of the business. You decide to set up a meeting with each of the contractors to investigate the situation and to provide coaching on the expected level of performance. For this assessment task you only need to meet with one of the cleaners.

Ozhouse Clean has the following expected level of performance in relation to cleaning services:

  • All surfaces, including floors, bench tops and shelves cleaned so that they are free of dust and dirt.
  • Rubbish bins emptied and cleaned.
  • Shower screens and mirrors cleaned so they are free of soap build up and streaks.
  • Only cleaning products provided are used.
  • All cleaning services must be provided in the allocated time. These performance standards are included in each person’s contract.

Now complete the following activities:

1. Prepare for business performance meeting

Prepare a draft of an email to be sent to the contract cleaner (your assessor) advising that you would like to set up a meeting to discuss identified areas of concern. Identify the date and time of the meeting.

2. Conduct meeting

Conduct the meeting at the specified time on the specified date with the contract cleaner (your assessor will be playing this person), explaining to them what the problem is, why it is a problem and how it impacts on the business. This meeting should be treated as a coaching session to try and get the staff member to understand the issues and meet the required performance standards.

At the meeting you must:

  • Explain the purpose of the meeting
  • Explain to the contract cleaner what the problem is.
  • Discuss the level of performance expected by the company.
  • Demonstrate your interpersonal and communication skills by:
  • Keeping your communication clear and simple
  • Asking questions to identify reasons for underperformance and to confirm information provided.
  • Listening to the contract cleaner and confirming and clarifying information shared
  • Discuss and agree on a solution

Prepare a draft of an email to be sent to the contract cleaner for following up within 1 day of the meeting

summarizing the meeting and the solution agreed to.

3. Develop a report on actions and solutions

The final part of this assessment requires to you to submit a brief report along with the draft of an email to be sent to the management team, explaining the issues and the solutions you have identified.

You should also identify any changes you consider should be made to the business systems or process as well as to the business plan as applicable.

As a guide, your email should be approximately 3 paragraphs long.

Answer

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