BSBOPS601 Student Guide

STUDENT
GUIDE
BSBOPS601
DEVELOP AND IMPLEMENT
BUSINESS PLANS
BSBOPS601 | Develop and Implement Business Plan | Student Guide I V2.0 | May 22
Macquarie Education Group Australia Pty Ltd t/a MEGA Education | RTO Code 91305 | CRICOS Code 02657J 1
First published 2021
Version 1.0
RTO Works
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Business Works is a series of training and assessment resources developed for qualifications within the Business
Services Training Package.
Contents
Overview 4
Topic 1: The process of developing a business plan 5
Topic 2: Implementing a business plan 20
Topic 3: Responding to performance data 24
Overview
The Student Guide should be used in conjunction with the recommended reading and any further
course notes or activities given by the trainer/assessor.
Application of the unit

This unit describes the skills and knowledge required to lead a business operation that covers the
steps required to develop and implement business plans.
The unit applies to individuals who are running an organisation or who take a senior role in
determining the effective functioning and success of the organisation. These individuals may
oversee the work of a number of teams and other managers.
No licensing, legislative or certification requirements apply to this unit at the time of publication.
Learning goals
Learning goals include:
• You are able to develop a business plan within organisational and legal frameworks, suited to
stakeholder needs.
• You are able to implement a business plan and prepare reports.
• You are able to respond to performance data and review the plan if needed.
Topic 1: The process of developing a business
plan
A business plan is a documented set of business goals, objectives, target market information
and financial forecasts. The business plan is usually relevant to a specific period of time such as
one or two years.
Preparation of a business plan is particularly important when establishing a business, although it
should also be regularly reviewed and updated as required.
How do you lay a foundation for success? By creating an effective business plan - it should
come together like a blueprint, providing clarity on all aspects of your business.
A business plan is usually developed to set up a business, whereas a strategic plan is used for
implementing and managing the strategic direction of the organisation.
Another type of plan is an operational plan. Operational plans are detailed plans used to provide a
clear picture of how a team, section or department will contribute to the achievement of the
organisation's strategic goals.
It is written by taking specific strategies from the company’s strategic plan, and adapting them to
short term goals. An operational plan is usually informed and defined by a strategic plan.
Image by Startup Stock Photos on Pexels
Legal and organisational frameworks
A business can be legally structured in several ways, with each structure having different
requirements. You need to decide which structure is right for your business – the one that best
suits your business needs. This will depend on the type of business you are going to run, the
stakeholders involved and your vision for the business. A business structure can be changed
during the life of your business.
Your business structure can determine:
• how liable you are in your personal capacity
• the amount of tax you will need to pay
• the licenses you require
• your role in the business and how much control you have
• ongoing costs and fees.

You should familiarise yourself with the four general structures:
Structure Description
Sole trader • Simplest structure.
• Gives the owner full control.
• Cheap to establish.
Company • Separate legal entity.
• Complex structure.
• More people involved.
Partnership • 2 or more people.
• Profits and losses are distributed.
Trust • The trustee is responsible.
• High setup cost.
• May have tax benefits.
Permits or licences
You may need an Australian Business Number, business name registration, trademark registration
and other requirements.
The business planning process needs to identify any permits or licences that may be required. For
example, if you were thinking of setting up a restaurant then you would need to enquire about what
requirements there are in terms of food safety and associated permits. Permits and licences are
key components of the planning phase as businesses often cannot legally operate without them.
The RTO where you are studying has a specific licence granted by the government in order to
operate as a training college and so when the business was established this needed to be factored
into the business planning process.
Activity: Research and discuss
Identify a business that needs a license or a permit to operate. Describe the

business, the licence or permit and why this is needed.
Apart from taking care of legal requirements, it is important to define the positions and job
responsibilities in the business. The structure may change as the business grows, but you need to
establish an organisational framework from the start.
A simple diagram or flowchart can be used to show the levels of management and the positions
within them, and can help to clarify the reporting structure.
Your lower-level staff will perform the day-to-day business activities, so you should think about the
type of person best suited to the role and what their qualifications should be. You may need to
make use of contractors, freelancers or consultants and they should be part of your planning.
You should include the following information in your business plan:
• the owners and legal structure of the business
• the management and what their responsibilities are, their background and compensation
• the board of directors, the position they hold and their background.
Vision, mission, values and objectives

A business plan must be based on a company’s vision, its mission, values and objectives. Each of
these is explored below.
Vision Statements
A company’s vision is a big-picture look at what it wants to achieve and where the company aspires
to be in the future.
Read more at the following link: https://www.thebalancesmb.com/vision-statement-2947999
Mission Statements
A mission statement is a general statement of how the company will achieve the vision. There is a
close relationship between the vision and mission statements.
The vision statement is a static mental picture of what you want to achieve. The mission statement
is a dynamic process of how the vision will be accomplished. An example could be that of a dairy
farm. The mission statement would include how the dairy farm would be financed, staffed, what
products it would make and how they would be marketed.
A company’s mission statement can tell you a lot about how it views the world.
Compare Apple’s mission statement when Steve Jobs was running the company to its current
mission statement. The most fundamental difference between Apple's current ideals and Jobs'
vision is that Jobs saw Apple products as a tool to improve the quality of life for mankind. In
contrast, Apple now sees its products not as a tool for advancement but as the purpose of the
company's existence.
Activity: Read
A business plan is different from a strategic plan. Read more about the differences
here:
https://onstrategyhq.com/resources/what-is-the-difference-between-a-business-plan-
and-a-strategic-plan/
https://www.bdc.ca/en/articles-tools/business-strategy-planning/define-
strategy/pages/business-plan-vs-strategic-plan-whats-difference.aspx
Take any notes to summarise what you have read and keep for future reference.
Activity: Watch
Watch the following video about how to write a good mission statement
Video: http://www.youtube.com/watch?v=LJhG3HZ7b4o (03:51)
• Why are most mission statements terrible?
• What are the 2 tips to writing a good mission statement?
Activity: Read
This blog describes 12 inspiring mission and vision statements:

https://blog.hubspot.com/marketing/inspiring-company-mission-statements
Core values and objectives

Core values define the organisation in terms of the principles and values the leaders will follow in
carrying out the activities of the organisation.
Objectives provide specific milestones with a specific timeline for achieving a goal. They are
therefore of crucial importance in a business plan. Objectives for a business can vary and address
financial objectives, market share objectives, human resources objectives and so on.
Review the information at the following link about important business objectives:
https://smallbusiness.chron.com/10-important-business-objectives-23686.html
Objectives should always be smart.
SMART is an acronym, giving criteria to guide in the setting of objectives.
The letters S and M usually mean specific and measurable.

Possibly the most common version has the remaining letters referring to achievable, relevant and
time-bound. However, the term's inventor had a slightly different version and the letters have meant
different things to different authors.
The principal advantage of SMART objectives is that they are easy to understand and to know
when they have been done.
SMART objectives (or goals) are discussed in greater detail at the following link:
http://www.j6design.com.au/setting-smart-goals/
In pairs, review the following web site and choose one business plan:
http://www.bplans.com/sample_business_plans.php
Identify the vision, mission, values and objectives from the business plan. Are they
clear? Are they well described?
Activity: Read
Work in pairs for this activity. Read the ultimate guide to business plans at the
following link:
https://www.shopify.com.au/guides/businessplan
Write down key points that relate to effective business planning.
Review the sample business plan. Do you think this is an effective business plan?
Business plan research / market analysis

A business plan should be informed by, and include research on the market for the product or
service that the business wishes to sell, as well as target customers and their needs. Businesses
need to analyse the environment in which they are operating and assess market conditions.
The research can be conducted using primary research methods such as surveys or interviews.
However, this can be costly and take a long time.
Often, the research will be conducted using available sources of information (secondary data), for
example:
• published data on the internet
• articles and advertisements of

competitors
• industry associations and trade media
• reports from trade or professional

associations
• statistics
• industry journals
• media sources
• chamber of commerce and industry Image by Fauxels on Pexels
• Australian Bureau of Statistics.

Regardless of whether the business chooses to use primary or secondary data, the business plan
should be able to justify that there is a market for the product or service.
An excellent way of finding out about market trends to inform the business plan is through a
PESTLE and a SWOT analysis.
PESTLE Analysis
PESTLE analysis describes a framework of macro-environmental factors used in strategic
management.
It is part of an external analysis when conducting a strategic analysis or doing market research,
and gives an overview of the different macro-environmental factors to be taken into consideration.
Macro-economic forces such as political, economic, social and technological factors can be
analysed by conducting a PESTLE analysis. A PESTLE analysis can be used to determine how
well your strategy fits into the broader environment.
Political
Political factors relate to how the government intervenes in the economy and includes politically
motivated factors that could impact the organisation. It also includes legislation and whether new
laws create opportunities or threats. These factors include tax policy, labour law, environmental
law, trade restrictions, tariffs, and political stability.
Economic
Economic factors include local, national and international economic forces like economic
growth, exchange rates, inflation rate, and interest rates that can affect the growth of an
organisation. Future trends and growing markets should also be considered. For example, interest
rates affect a firm's cost of capital and therefore to what extent a business grows and expands.
Exchange rates can affect the costs of exporting goods and the supply and price of imported goods
in an economy.
Social
Social factors include the cultural aspects, attitudes and trends that impact on your organisation
and target market. Changes in the age, race, gender, culture of customers/clients will affect the
organisation. Trends in social factors affect the demand for a company's products and how that
company operates. For example, the ageing population may imply a smaller and less-willing
workforce (thus increasing the cost of labour). Furthermore, companies may change various
management strategies to adapt to social trends caused from this (such as recruiting older
workers).
Technological
Technological factors include technological aspects like infrastructure, automation, legislation
around technology and how competitors are using technology. These can determine barriers to
entry, minimum efficient production levels and influence outsourcing decisions. Also, technological
shifts affect costs, quality, and lead to innovation.
Legal
Legal factors include discrimination law, consumer law, antitrust law, employment law, and health
and safety law. These factors can affect how a company operates, its costs, and the demand for its
products.
Environmental
Environmental factors include ecological and environmental aspects such as weather, climate, and
climate change, which may especially affect industries such as tourism, farming, and insurance.
Also, growing awareness of the potential impacts of climate change is affecting how companies
operate and the products they offer, both creating new markets and diminishing or destroying
existing ones.
The following website is also a good source of information on PESTLE analysis:
http://pestleanalysis.com/what-is-environmental-analysis/
Five Forces Model

Porter’s five forces model is an analysis tool that uses five industry forces to determine the intensity
of competition in an industry and its profitability level. This can be another useful tool to use when
deciding whether to set up a business.
These forces determine an industry structure and the level of competition in that industry. The
stronger the competitive forces in the industry are, the less profitable it is.
An industry with low barriers to enter, having few buyers and suppliers but many substitute
products and competitors will be seen as very competitive and thus, not attractive due to its low
profitability.
SWOT analysis
The purpose of a SWOT analysis is to create a list of the company’s internal strengths and
weaknesses, as well as its external threats and opportunities to inform the business plan.
SWOT analysis should help businesses improve on its strengths, eliminate weaknesses, pursue
opportunities, and avoid or prepare for threats.
By doing a SWOT (strengths, weaknesses, opportunities and threats) analysis, an organisation can
examine both internal and external risks and opportunities. Developing a fuller awareness of the
situation helps with both strategic planning and decision-making.
The SWOT method was originally developed for business and industry, but it is equally useful in
the work of community health and development, education, communication and even for personal
growth.
A SWOT analysis can be used to:
• Explore new ideas or solutions to problems.
• Help in decision making regarding future steps to take. When business opportunities for
success are considered in relation to threats to success, appropriate choices can be made.
• A stocktake of a business’s strengths and weaknesses can help determine priorities and
possibilities.
• Plans can be amended and expanded as new opportunities arise. Alternatively, threat can
close a pathway.
• A SWOT analysis can be a good way to organise information gathered from studies or
surveys.
Listing internal factors: Strengths and Weaknesses
These are the positive characteristics within your organisation that give
Strengths
you an advantage.
These are the negative characteristics within your organisation that put
Weaknesses
you at a disadvantage.
Consider the following:
• Human resources – staff, volunteers, board members. Also, the motivation, talent,
collaboration levels, effectiveness and efficiency.
• Leadership/management style – impact on the organisational culture.
• Physical resources – location, building, facilities, equipment.
• Financial – investments, grants, funding, fees, income streams.
• Activities and processes – programs, systems: employee programs, software systems, and
departmental structures.
• Past experiences – history of learning and success, reputation in the community.
Listing external factors: Opportunities and Threats
These are the positive characteristics that exist outside your

Opportunities
organisation that you can take advantage of.
These are the negative characteristics that exist outside your

Threats
organisation that will hinder your success.
There are many external influences that affect an organisation at any given time like the behaviour
of your competitors and also macro-economic forces.
Activity: Research
Review the following McDonalds case study:

http://panmore.com/mcdonalds-pestel-pestle-analysis-recommendations
Make notes about how McDonalds is able to use a PESTLE analysis to inform its
strategy.
Activity: Research
In pairs, complete the following activity:
• Choose a business that you would be interested in setting up.
• Conduct a PESTLE analysis for that business.
• Based on your PESTLE analysis, decide whether this a favourable environment

for the business.
In pairs, complete the following activity:
• Choose a business that you would be interested in setting up.
• Conduct a SWOT analysis for that business.
• Based on your SWOT analysis would this potentially be a successful business?
Your competitors and your customers
Another external factor to consider are your competitors. You will have to focus on those
businesses that compete with you for sales in your geographic locality. These are the competitors
who offer a product or service that is interchangeable with yours in the eyes of the consumer. You
should know as much as you can about who your competitors are and the details of their
businesses, by studying their location, pricing, advertisements, and even their customers.
You will need to identify the following:
• Against whom do we compete? What are their objectives and strategies?
• What is the size of their business and market share?
• Who are our most intense competitors? What is their image and positioning strategy?
• Which are the most successful/unsuccessful competitors over time? Why?
• What are the strengths and weaknesses of each competitor?
• What is their ability and speed of innovation for new products and services?
• Their assets and competencies?

A scan of the external environment to assist in identifying trends and therefore the need for a
product or service is important but so too is identifying and understanding customer needs.
Researching customers to create a customer profile is important so that a business understands
who they are. Profiling customers provides the opportunity to understand a range of key
information about them, including their income level, location and buying behaviour.
Activity: Watch
Review the following information about identifying customer needs, a video is also
included for review:
https://www.business.qld.gov.au/starting-business/planning/market-customer-
research/researching-customers/customer-needs
Pricing options
Another key part of business planning is to identify pricing options for a business. In setting prices,
the business will need take into account the price at which it could acquire the goods, the
manufacturing cost, the marketplace, competition, market condition, brand, and quality of product.
Pricing is a fundamental aspect of financial modelling and is one of the four Ps of the marketing
mix.
Pricing is the process whereby a business sets the price at which it will sell its products and
services, and may be part of the business's marketing plan. In setting prices, the business will take
into account the price at which it could acquire the goods, the manufacturing cost, the marketplace,
competition, market condition, brand, and quality of product.
Importance of the pricing approach
Pricing is also important as the pricing approach is a key component of the organisation’s branding
approach. For example, a company may choose to be a price leader, offering the highest quality, or
becoming a luxury brand. If the business wants to be positioned as having the highest quality, it
would not want to sell its product at a cheaper price than others in the market.
• Competitive pricing: this is pricing that is very close to competitors. As pricing is close, the
consumer’s decision about which product to buy will probably not depend on price.
• Cost-based pricing: this type of pricing approach is based on pricing simply based on
production costs. No other factors are considered.
• Skim pricing: this type of pricing approach involves setting a high price for customers who are
less price sensitive.
• Penetration pricing: This type of pricing approach involves pursuing the objective of quantity
maximisation by means of a low price.
Marketing
The business plan should also outline the marketing approach of the business.
Marketing will ultimately depend on the overall marketing strategy that sets overall direction and
goals for marketing.
Types of marketing communications that a business could use include:
• Advertising: any paid form of communication using any form of mass media.
• Sales promotion: for example, special offers, money off coupons
• Direct mail i.e., sending publicity material to an individual or business.
• Internet marketing: selling products or services online.

Whatever approach the business chooses, it must be clearly outlined in the business plan.
Stakeholder engagement and consultation

During the development of a business plan, it is crucial to engage with stakeholders. Stakeholders
can be internal and external.
Internal stakeholders could include business partners, those providing finance for the business
(shareholders or sometimes banks – who would then be considered an external stakeholder) and
staff. External stakeholders could include customers and technical advisers.
Stakeholder engagement is the process by which an organisation involves people who may be
affected by the decisions it makes or can influence the implementation of its decisions.
They may support or oppose the decisions, be influential in the organisation or within the
community in which it operates, hold relevant official positions or be affected in the long term.
An underlying principle of stakeholder engagement is that stakeholders have the chance to
influence the decision-making process. This differentiates stakeholder engagement from
communications processes that seek to issue a message or influence groups to agree with a
decision that is already made.
During the development of a business plan, the stakeholders are likely to be those directly involved
in the business such as owners or senior management.
Financial, human and physical resources

When developing a business plan, it is important to identify the financial, human and physical
resource requirements for the business.
Finances
Financial requirements may be initial capital required to set up the business such as for equipment
that needs to be purchased. Finances may also be required to deal with cash flow issues during
the early phase of the business where potentially there may be lots of outgoings but little cash
coming in.
A business plan should include financial forecasts that set out the expected sales, as well as the
expected costs and therefore the anticipated profit or loss. The financial forecasts will show if
ultimately the business will be financially viable.
Review more information about financial projects and business planning at:
https://www.thebalancesmb.com/writing-a-business-plan-financial-projections-1200842
Human resources
Human resources are the people who are required in order to be able to run the business. The
business planning process should identify personnel required to run the business both in the short
term and long term.
It should also clearly identify the governance structure for the business include the owners of the
business and senior management, as well as any specific governance arrangements such as
management meetings and their frequency.
Review more information about human resources and business planning at:
https://www.thebalancesmb.com/writing-business-plan-hr-1200846
Physical resources
Physical resources are essentially the equipment that the business needs in order to be able to
operate. This may be quite specialised such as a specific machine to produce a product or general
such as office furniture, computers and phones. Again, the business needs to identify exactly what
resources are required and make sure these are in place in order for the business to function.
Activity: Brainstorm
Work in groups for this activity.

Brainstorm the financial, and physical resources that would be needed to implement
a business of your choice.
Take notes and keep them for future reference.
Key performance indicators
A key part of any business plan is to set performance objectives and measures.
Key Performance Indicators (KPIs) can be used to measure the performance of activities that are
critical to the success of an organisation as documented in the business plan. They are an
excellent measure of the contribution of a team or an individual to the organisation.
The purpose of a Key Performance Indicator is to provide an objective performance measure in a
key activity. This enables organisations to set and communicate their performance targets, and to
measure whether or not they are being achieved. Areas of improvement are identified and
highlighted making way for changes to be implemented that lead to measurable performance
improvements.
It is important not to have too many KPIs or the impact and importance of them is reduced.
KPIs will differ depending on the nature and objective of the organisation. They will also differ
depending on the focus, values and culture of the organisation. Therefore, it is important to take
care when selecting the KPIs of your team or organisation and ensure that they represent the
business.
Examples of KPIs:
• customer satisfaction • sales
• quality • unanswered calls
• speed • timely delivery to client.
Once you have selected the KPIs that represent the goals of your team you need to determine how
they will be measured. This is very important as it impacts on the validity of the entire exercise.
Let’s consider an example of the KPI of ‘Timely delivery to the client’. Suppose that the contract
that we have with an existing client outlines that your team needs to deliver a summary of all the
client’s transactions on the last Thursday of each month. In addition, the contract has a clause
which states that the fee the client pays for this service is reduced by 20% each day that the
statement is late and continues to accumulate even to the point where your company owes the
client money. In this case the KPI of ‘Timely delivery to the client’ is warranted. No doubt there are
a number of stages that the document needs to pass through before it is delivered to the client.
There should be a timeline for these stages and each timely completion should contribute to the
overall KPI.
Activity: Read
It is important to set the right measures for success. Read more at the link:
http://www.bgateway.com/business-guides/grow-and-improve/benchmark-business-
performance/setting-targets-and-key-performance-indicators
Developing a business plan
In pairs or small groups, spend some time researching different templates for
business plans.
You may review the following website about writing a business plan:
https://business.gov.au/Planning/Business-plans/How-to-develop-your-business-plan
Look at the headings and subheadings for each section. Make notes to share with
the group.
Come back as a group and discuss an ideal format for a business plan.
Effective communication
Good communication skills are vital in working effectively, building solid relationships and
preventing unnecessary misunderstandings, and navigating day-to-day deadlines.
Effective communication skills include:
Positivite body
Empathy Active listening Clarity Patience
language
Articulation and Emotional Asking

Feedback Respect
appropriate tone intelligence questions
Effective communication is important when communicating your business plan to the relevant
stakeholders.
Complete activities from the following link as directed by your trainer/assessor:

http://blog.trainerswarehouse.com/communication-and-listening-exercises/
The trainer/assessor will facilitate a discussion about the outcomes from the
research.
List down factors that may influence how you choose to present ideas. Also think
about how you communicate and your style of presentation.
This could include:
• Learning style of participants
• Type of material being presented
• Existing knowledge of those to whom ideas are being presented
• Equipment available.
research.
Activity: Group work
Divide into small groups. Ensure you divide the work equally.
The objective is to write a business plan as a group, which will give you practice for
your assessment.
As a group, come up with a business idea. It can be very simple such as setting up a
café in your local area.
Once you have decided on the business idea, as a group you are to write the
business plan. You could allocate different parts of the business plan to different
members of the group or work on all sections together. Either way, the business plan
is to be a group effort.
You will be required to present your business plan to the rest of the group at a time
allocated by your trainer/assessor. It is up to you how you present your business
plan. You could use Power Points or just speak to your plan. Make sure all members
of the group are involved in the presentation.
Topic 2: Implementing a business plan
A business plan is of little use to an organisation without a means of putting it into place. The
following information is a general overview of the implementation process.
Implementation is an essential part of the business planning process. The specific implementation
process can vary from organisation to organisation and largely depends on the business plan itself.
However, there are some key steps that can be followed to ensure that implementation is
successful and that the business plan is effective.
Step 1 – Evaluate the Business Plan.
The first step in the implementation process is to step back and evaluate the business plan before
implementing it.
It is important to carefully review the plan and highlight any elements of the plan that might be
especially challenging.
It is essential to recognise any parts of the plan that might be unrealistic or excessive in cost, either
of time or money. These should be highlighted and kept in mind as the business plan is
implemented with possible back up plans in case the original plan fails.
Step 2 – Create a vision for implementing the Business Plan.
This vision might be a series of goals to be reached, step by step, or an outline of items that need
to be completed.
It is important to let everyone know what the end result should be and why it is important.
Establish a clear image of what the Business Plan is intended to accomplish.
Step 3 – Select team members to help you implement the Business Plan.
The team should understand the purpose of the plan and the steps involved in implementing it.
Step 4 – Schedule meetings to discuss progress reports.
At the meeting, present the list of goals or objectives, and let the team know what has been
accomplished, for example, whether the implementation is on schedule, ahead of schedule, or
behind schedule. It is important to assess the schedule regularly to discuss any changes that need
to be made.
Step 5 – Involve owners if relevant.
Keep them informed on what is happening, and provide progress reports on the implementation of
the plan.
Letting owners know about the progress of implementation makes them a part of the process, and,
should problems arise, they will be better able to address concerns or potential changes.
Skilled workers
The business plan itself outlines staffing requirements as was identified in an earlier topic. It will
then be important to make sure all the staff required as outlined in the business plan are available
in order to implement the plan.
Ensuring skilled staff are in place may occur
through a range of methods such as:
• advertising in a newspaper or journal

• advertising on online jobsites, such as Seek
• advertising on social media such as

Facebook or LinkedIn
• direct mail to your networks

• making use of a recruitment agent.
Image you-x-ventures on Unsplash
Once staff are in place within the business, it may
also be necessary to provide training to these staff.
Training could include providing staff member with specific information relevant to the business and
operations such as how to operate a specific piece of equipment and it can also include providing
training in generic skills such as customer service.
Training can also happen in many diverse ways such as through on the job training or by
participating in courses offered by external providers.
Activity: Reflect
Reflect on the factors that may influence a business to choose one method of
advertising jobs over another.
• What information should be included in a job advertisement?

• How did you find your current or previous job?
• How can a business go about recruiting internally?
• What are the advantages and disadvantages of externally recruiting staff?
Activity: Read
Read more about ways to recruit staff at the link:

12 recruitment methods you need to know about - Recruitee
Also read the information about identifying skills needs and training at:
https://www.business.gov.au/People/Managing-and-developing-
staff/Training/Identify-your-skill-needs
Think of a possible role within any business of your choice.

Now think of all of the skills required to undertake that role.
Choose two of these skills and consider what kind of training might be appropriate for
a staff member if they did not have these skills.
Consider and make notes on the different ways that the training could be provided to
the staff member.
research.
Refining performance measurement systems

Once the business is up and running it will be important to test those performance objectives and
measures identified through the planning stage. It may be that the measures need to be refined.
For example, original performance measures such as expectations of profits may in the end be
unrealistic and therefore measures need to be updated to be more realistic.
It may also be that the measures identified were not specific enough and need to be more specific
or that the measures identified were not relevant.
In all the above cases, the business plan should be updated to include the refined performance
objectives and measures. All stakeholders should also be involved in this process.
Reporting
Using the refined measures, it is important to provide regular reports on the progress of the
business with regards to both financial and non-financial performance.
Financial reports can easily be generated using the business’ accounting software and can provide
regular information on sales, cost of sales and gross and net profit and much more.
It is important to not just focus on financial performance. For example, the performance of the
business in regard to customer perceptions will be very important. This will be particularly the case
for a new business.
Other non-financial performance measures that a business could report on could include marketing
performance such as brand awareness, the business’ environmental impact, the effectiveness of
the governance structure in place, the quality of the business’ products and/or services and staff
satisfaction.
The importance of financial versus non-financial measures should also be balanced. For example,
a business may choose to lower its expectation of a financial return if it can see that it can perform
higher on another objective such as environmental impact.
All reports on the performance of the business must include clear and concise information that can
easily be understood by anyone reading it.
The purpose of the report will be to provide information on how the business is performing, as well
as suggestions on how to improve performance as required.
A report should also be able to provide information on any aspects of the business that are not
going well or have failed and any variations that need to be made to the business plan.
A report usually has headings, such as the date, to, from and subject. The body of a report is
usually divided into sections and subsections, depending on its purpose. It usually starts with a
brief statement about the purpose of the report. It can also include data collection methods that
were used in gathering information for the report. Some reports are directed at problem solving and
can contain complex analytics and visual representations.
The longest section in a report contains a discussion of the findings. These details can be
organised into sub-sections and presented in a way that highlights the most important aspects of
the analyses.
It is important to summarise results and findings into the last section of a report. The conclusions
and/or recommendations resulting from the analysis should be listed in order of importance.
In general, a report should:
• address information requirements
• expose patterns, trends, problems and opportunities
• present information in way that is suited to different stakeholder interests.
Activity: Report
Choose a business and identify two non-financial performance measures for the
business to report on.
Prepare a short report about the business’ performance on the measures you have
chosen. Your report should be between 1–2 pages long and be written in clear and
concise English.
Submit your report to your assessor trainer/assessor for feedback.
Topic 3: Responding to performance data
Performance systems and processes are monitored to assess progress in achieving business plan
targets. It is important to know progress towards goals on a frequent basis so that adjustments and
improvements can be made quickly with least disruption to the achievement of targets.
For this purpose, it is essential to monitor a number of aspects of the business. What you monitor
will depend on the type of business that you conduct.
Monitoring gives control over the activities that are undertaken to produce the product or service for
the business.
The four key areas for monitoring are:
Capital asset
Finance Materials Humans
resources
Finance
Monitoring budgetary expenditure will indicate to you the activities that are being conducted, or not
being conducted, as the case may be. It is important to ask questions about budgetary expenditure
and ensure that your records are up to date and reflective of current activities.
Materials
When materials were bought and when they were used will indicate to you what work has been
carried out at what speed and what the next steps need to be.
Humans
The activities, quality and speed at which each individual performs will have significant impact on
the progress towards achieving your goals. It is important to monitor and have knowledge of this,
as it will impact on your planning and deadlines. Don't forget to allow for annual and sick leave in
your plans.
Capital Asset Resources

Equipment, transport, machinery and resources that were purchased in the past were purchased
on the basis on a cost analysis that took into account their usage. If presently the equipment is left
idle or is being under used then this is costing the organisation money and it is affecting your
performance.
Now that you know what to monitor it is a case of how to monitor. This can be done via observation
and documentation, by calculations and graphs, by reports and memos.
Budget and actual financial information is analysed and interpreted to monitor profit/productivity
performance
Unsatisfactory performance is identified, and prompt action is taken to rectify the situation.
The performance of the process applied, the machinery utilised, and the staff employed all need to
be constantly monitored in order to pick up inadequacies in early stages and to rectify problems
with least destruction to the achievement of the overall goal.
Benchmarking and trend analysis

Another way of monitoring business performance is through benchmarking.
Benchmarking a business is a way of measuring performance against similar-sized businesses

in an industry. It gives you essential information about how to improve a business.
There are many ways to benchmark a business including:
• buying financial benchmarking data to

o compare your business's income, expenses and profitability against your industry
averages
o examine the financial data of similar businesses
• contacting a business or industry association for information about industry standards to

measure performance against
• researching and comparing the business's products, services and practices with your
competitors.
Benchmarking helps to:
• see where is possible reduce costs and improve efficiency
• assess the productivity of the business compared to how many employees there are
• identify opportunities for improvement, new ideas and innovative practices
• highlight opportunities for making a business more competitive
• forecast the impact of any changes and see how to prepare for growth.
Trend analysis can also be used to check performance. Trend analysis is the process of comparing
business data over time to identify any consistent results or trends. You can then refine business
objectives and plans to respond to these trends in line with the business goals .
Read more about performing a trend analysis at the following link:

http://www.business.qld.gov.au/business/business-improvement/trend-analysis-business-
improvement
Activity: Watch
Benchmarking allows you to compare your business to industry best practice and
your competitors.
Video: https://www.business.qld.gov.au/starting-business/planning/market-customer-
research/benchmarking/video
Performance reports
Whatever method you choose to measure performance, the key is to analyse performance against
planned objectives.
So, for example, if a planned objective was to achieve a profit of 10% in the first year, then the
financial reports would need to be analysed to check whether this had been achieved or not.
Where the objective has not been achieved, it does not mean that the business was not a success.
It may mean that the objective was too ambitious or that unexpected events occurred meaning that
the business could not achieve the forecasted profits. Review of performance against objectives
may mean refining of the performance indicators.
Coaching and mentoring staff

Sometimes it may be the case that on analysis of performance, it was found that staff are
underperforming.
Image kobu on Unsplash
This may be because the staff were negligent in performing their roles but more often than not is
because they did not have the knowledge and skills to perform their roles adequately.
In this case it may be necessary to provide coaching or training to these staff members. We
discussed training in the last topic but let’s look more at what coaching involves.
We will also extend the term coaching to also include mentoring, as mentoring may also form part
of addressing underperforming staff.
Managers will need to be able to provide coaching and mentoring (or delegate the role) in order to
help staff, gain competency in their role.
Activity: Reflect
Consider a task that you are particularly good at.

How would you coach a fellow colleague so that they can gain skills from you?
How would you mentor a fellow colleague so that they can gain experience and
knowledge from you?
Changing the plan

Based on all the above, it may be necessary to make changes to a business plan. This may involve
any reviewing system processes and work methods regularly as part of continuous improvement
for the business.
For example, if the business was constantly under performing in regard to sales and it was found
that this was due to poor customer service, then the business’ customer service procedure would
need to be reviewed. This may also involve providing coaching and training to staff as indicated
above.
Activity: Brainstorm
In small groups, brainstorm the following:
• How easy is it to make changes to a business plan?
• A procedure/process to follow for changing a business plan.

The trainer/assessor will facilitate a discussion.

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STUDENT

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Application of the unit

• You are able to implement a business plan and prepare reports.

Image by Startup Stock Photos on Pexels

• how liable you are in your personal capacity

• the amount of tax you will need to pay

• the licenses you require

• ongoing costs and fees.

Sole trader • Simplest structure.

• Gives the owner full control.

Company • Separate legal entity.

• More people involved.

Partnership • 2 or more people.

• Profits and losses are distributed.

Trust • The trustee is responsible.

• High setup cost.

• May have tax benefits.

Activity: Research and discuss

Identify a business that needs a license or a permit to operate. Describe the

• the owners and legal structure of the business

Vision, mission, values and objectives

• Why are most mission statements terrible?

• What are the 2 tips to writing a good mission statement?

This blog describes 12 inspiring mission and vision statements:

Core values and objectives

Objectives should always be smart.

SMART is an acronym, giving criteria to guide in the setting of objectives.

The letters S and M usually mean specific and measurable.

Activity: Research and discuss

Business plan research / market analysis

• published data on the internet

• articles and advertisements of

• industry associations and trade media

• reports from trade or professional

• chamber of commerce and industry Image by Fauxels on Pexels

• Australian Bureau of Statistics.

Five Forces Model

• Explore new ideas or solutions to problems.

Listing internal factors: Strengths and Weaknesses

Consider the following:

• Leadership/management style – impact on the organisational culture.

• Physical resources – location, building, facilities, equipment.

• Financial – investments, grants, funding, fees, income streams.

• Past experiences – history of learning and success, reputation in the community.

These are the positive characteristics that exist outside your

These are the negative characteristics that exist outside your

Review the following McDonalds case study:

In pairs, complete the following activity:

• Choose a business that you would be interested in setting up.

• Conduct a PESTLE analysis for that business.

• Based on your PESTLE analysis, decide whether this a favourable environment

Activity: Research and discuss

In pairs, complete the following activity:

• Choose a business that you would be interested in setting up.

• Conduct a SWOT analysis for that business.

• Based on your SWOT analysis would this potentially be a successful business?

• Against whom do we compete? What are their objectives and strategies?

• What is the size of their business and market share?

• Which are the most successful/unsuccessful competitors over time? Why?

• What are the strengths and weaknesses of each competitor?

• Their assets and competencies?

• Internet marketing: selling products or services online.

Stakeholder engagement and consultation