Appendix

Case Study (Simulated Workplace)

Case Study Scenario - Establishing a Business Plan

Note: the following case scenario is directly relating to you with assumptive implications of the role.

You worked Caf 65 (simulated workplace) as a frontline manager for several years after graduating from TAFE in Melbourne with an Advanced Diploma of Business. Caf 65 owner is your friend who met at the TAFE while both were attending training for advanced diploma. Although you loved your job, your ambition had always been to start your own business. Your friend at Caf 65 agreed to help you open a restaurant in Melbourne. Over the past few years you have saved regularly, putting some amount of money aside from your earnings each month into a bank savings account. This had built up an investment capital of $35,000. So, with the help from your friend at caf 65, you opened up a restaurant in Melbourne CBD four months ago using your savings and borrowing $30,000 from your parents abroad. You used that money to secure the business premises, fixtures, fittings andequipment for the restaurant start up. You learnt that the businesspremises and the associated services were not cheap as you anticipated.

The business has been in operation for the past four months, but struggling to meet the overheads including staff salaries and other expenditures. Because, you opened the business with very tight budget and without establishing a clear business plan. However, you are fully aware that you will have to raise additional funding if you are to create a viable business that will support to realise your business dream. You estimated that you need at least another $35,000 working capital to develop and run your business. Since you have already borrowed money from your parents, you are not in a position to ask again. The only option left is to borrow money from the bank where you have the operating bank account with.

You approached your bank to get a loan. Bank manager went through your bank statements and seemed very helpful. He gave you some professional advice with encouraging notes such as how to determine business objectives and measures, the requirements of competitor analysis in the area, market analysis and customer profiling to develop marketing strategies, the importance of financials including projected income statement, cash flow forecast etc. Then he said the bank requires a business plan to consider to grant the loan. He very specifically said to include the specific elements in the business plan as required by the bank (format included in the appendix 2).

Although you are at the very early planning stage, you know that you must research and evaluate the financial, operational, marketing, legal and control aspects of this business venture in detail. You must also secure the various consents and adhere to the numerous laws and regulations, if you are to have any chance of securing additional finance for this venture. Now you need to start putting together your business plan. It is not only securing finances for the business, but you also need the business plan for guidance and implementation.

You analysed and found that you have already paid rental bond of $9,000, a three month rent bond. You bought restaurant equipment for $21,000. Legal fees of $5,000 and stock of $12,000. You pay monthly rent of $3,000. Monthly staff wages come to around $14,000. Average ingredient cost percentage is around 30-35% of sales price. Marketing expenses have been around $1200 per month and you are planning to increase it by another $800 targeting to advertise on local newspapers. Currently you outsource digital marketing activities such as social media (Facebook, LinkedIn and Twitter) for $500 monthly. You also have outsourced letterbox pamphlet drop for $370 a month.

The first month of operation, you had income of $18,000 and then sales increased at 15% the following month and 20% the following month due to your marketing efforts and the location, quality food and customer service you provide. You expect sales to increase in the coming months. With the sales increase, you need to hire more staffs including casual and part time staff to cover peak times.

Simulated workplace scenario

Note: The following scenario has the continuing information of task 2 case study

Performance objectives

1. To achieve sales of $36,000 for a month and with a projected growth rate of 10% p.m. for the first three months.2. To provide excellent customer service that increases the word of mouth marketing to increase the customer base and revenue.3. To manage operating expenses within $20,000 per month.4. To manage costs of sales to minimum of 32%.

Critical success factors (Key aspects of the business)

1. Customer service (speed of service, friendliness, care, interpersonal etc.)2. Food quality (taste, texture, freshness, portion size, presentation)3. Budgeting and cost management (forecasting, costing, purchasing)4. Cleanliness (hygiene, cleaning, sanitisation etc.)5. Ambience (lighting, decorations, color, space etc.)6. Teamwork (internal communication, workflow, support etc.)

Restaurant team

Name	Position	Skills level	Performance measurement system	Issues identified
Tanya White	Frontline Manager	Planning and organising, communication, budgeting, directing staff.	Effective budgeting Cost management staff management	Lack of purchasing strategies including negotiation skills to have costs to minimum of 32% of sales.
Wong Chu	Head Chef	Food Recipe development, Training staffs. interpersonal skills.	Recipe quality and customer appreciation	Lack of interpersonal skills. Staff complaints of his temperament.
Wu Sung	Cook	Cooking recipes.	Use of resources. Cooking speed and quality	Extravagant behaviour and wastage of ingredients.
Joe Kim	Cook	Cooking recipes.	Use of resources. Cooking speed and quality	None
Robert	Waiter	Customer service.	customer satisfaction	None
Emma	Waiter	Customer service.	customer satisfaction	Lack of communication skills to develop customer relationships.
Ellen	Cashier	Administration	Accuracy, finance and banking	None

Performance data (for the last three months)

Description	Category	Budget ($)	Actual ($)	Variance
Water Bill	Utilities	$6,600.00	$7,161.00	-$561.00
Electricity Bill	Utilities	$15,600.00	$16,239.00	-$639.00
Direct Operating Expenses	Other	$60,000.00	$69,000.00	-$9,000.00
Employee Benefits	Labour	$1,500.00	$1,407.00	$93.00
Hourly Staff	Labour	$34,500.00	$36,600.00	-$2,100.00
Management	Other	$27,300.00	$22,350.00	$4,950.00
Soft Drink Sales	Cost of Beverage Sales	$19,500.00	$16,200.00	-$3,300.00
Food Sales	Cost of Food Sales	$88,050.00	$80,199.00	-$7,851.00

Appendix 2

Formats and templates

Business plan template

Cover Page

Basic template that any business can use when developing its business plan:

Section 1: Executive Summary

1. Present the company's mission.2. Describe the company's product and/or service offerings.3. Give a summary of the target market and its demographics.4. Summarize the industry competition and how the company will capture a share of the available market.5. Give a summary of the operational plan, such as inventory, office and labour, and equipment requirements.

Section 2: Industry Overview

1. Describe the company's position in the industry.2. Describe the existing competition and the major players in the industry.3. Provide information about the industry that the business will operate in, estimated revenues, industry trends, government influences, as well as the demographics of the target market.

Section 3: Market Analysis and Competition

1. Define your target market, their needs, and their geographical location.2. Describe the size of the market, the units of the company's products that potential customers may buy, and the market changes that may occur due to overall economic changes.3. Give an overview of the estimated sales volume vis--vis what competitors sell.4. Give a plan on how the company plans to combat the existing competition to gain and retain market share.

Section 4: Sales and Marketing Plan

1. Describe the products that the company will offer for sale and its unique selling proposition.2. List the different advertising platforms that the business will use to get its message to customers.3. Describe how the business plans to price its products in a way that allows it to make a profit.4. Give details on how the company's products will be distributed to the target market and the shipping method.

Section 5: Management Plan

1. Describe the organizational structure of the company.2. List the owners of the company and their ownership percentages.3. List the key executives, their roles, and remuneration.4. List any internal and external professionals that the company plans to hire, and how they will be compensated.5. Include a list of the members of the advisory board, if available.

Section 6: Operating Plan

1. Describe the location of the business, including office and warehouse requirements.2. Describe the labour requirement of the company. Outline the number of staff that the company needs, their roles, skills training needed, and employee tenures (full-time or part-time).3. Describe the manufacturing process, and the time it will take to produce one unit of a product.4. Describe the equipment and machinery requirements, and if the company will lease or purchase equipment and machinery, and the related costs that the company estimates it will incur.5. Provide a list of raw material requirements, how they will be sourced, and the main suppliers that will supply the required inputs.

Section 7: Financial Plan

Describe the start-up costs, financial projections of the company, by including the projected income statement, projected cash flow statement, and the balance sheet projection.

Set Up Costs	$	Funding	$
Equipment/Purchase		Own Funds
Working Capital		Bank Guarantee
Rental Bond		Overdraft
Legal Fees		Loan
Stock Purchase		Other (please specify)
Other (please specify)		Other (please specify)
Total		Total

Projected Income Statement

Description	$
Sales
Other revenue
Cost of Sales
Gross Profit
Expenses
Wages
Rent
Marketing expenses
Materials and stock
Utilities
Other
Total expenses
Profit before tax
Income Tax Payments
Net Profit

Cash Flow Forecast

A cash flow forecast is an important tool for your business, especially for the first 12 months. Where possible you should structure your cash flow over a 12 month period so you can plan for the year ahead.

	Expected $ over next 12 months	Key Assumptions: 1. How did you calculate the sales figures you have entered? 2. What logic have you used to calculate the figures, e.g. How many sales per month? How much per sale? How many staff? What are their wages? 3. Lastly, is there any other information that you believe to be vital for your business? 4. Are there any other key assumptions that you have made that need to be outlined, so someone reading your business plan will have a clear idea of what you intend to do and how?
INCOME	$
Sales
Other revenue
Total receipts
Less PAYMENTS
Wages
Rent
Marketing expenses
GST Payments
Income Tax Payments
Drawings/Directors Fees
Materials and stock
Overheads
Other (please specify)
Total Cash Payments
NET CASHFLOW BEFORE TAX

Analysis of business plan - Template

Organisation Name
Analysis conducted by
Date of analysis
Business Plan Elements	Strengths	Weakness

Project work

1. Access simulated workplace policies and procedures and use the relevant policies and procedures to undertake this task. Ensure you take full responsibility for identifying and complying with legislative requirements applicable to self and the organisation.
2. Read the case study in appendix and analyse its performance data to monitor and respond to business performance including evaluation of performance against key results indicators.
3. Using the information in the appendix, analyse and confirm available skilled labour to implement the business plan to achieve its objectives. Identify at least three available skilled labour.
4. Analyse performance report in appendix 1 and test performance measurement and improve what need to be improved. Write the improvements in dot points.
5. Develop a variance analysis report and identify the gaps using the format provided in the appendix 2.
6. Develop report on key aspects of the business including system failures, product and service failures and variances to the business plan as they occur.
7. Review the performance indicators to test their appropriateness and provide your recommendations to improve to meet business plan objectives.
8. Identify at least one underperforming staff and develop a coaching plan to provide coaching to improve.
9. Develop an ongoing review process to ensure your business is achieving its objectives.